Insurance (Prudential Standards) (Class 4 and 3B Solvency Requirements) Amendment Rules 2022

Summary

This is a Bermuda Monetary Authority (BMA) consultation notice proposing amendments to the Insurance (Prudential Standards) (Class 4 and 3B Solvency Requirement) Rules. It sets out two proposed changes affecting Class 4 and Class 3B insurers' regulatory reporting obligations and invites industry comment before the rules are finalised.

• New Schedule IVF: Introduces a new Schedule IVF 'Risk Exposure' requiring Class 4 and 3B insurers to report information on risk exposures, including number of subsidiaries, gross premium written, gross losses incurred, and reserve details by jurisdiction, during the financial period.
• Amended quarterly reporting: Expands existing quarterly filing requirements (Paragraph 6AB) to include the Enhanced Capital Requirement ratio, the Commercial Insurers Solvency Self-Assessment requirement, bonds broken down by Bermuda Solvency Capital Requirement rating, and details of qualifying catastrophe events (industry insured losses of US$5 billion or more, or as otherwise prescribed by the Authority) occurring during the quarter.
• Effective date: The Authority proposes the amendments take effect from 1 July 2022.
• Consultation deadline: Comments on the proposed amendments were invited by 16 January 2022, to be submitted to riskanalytics@bma.bm.

As a draft consultation document, the rules are not yet in force; they describe proposed obligations for Class 4 and 3B insurers pending finalisation by the BMA.

Key obligations

• Class 4 and 3B insurers would be required to complete and submit the new Schedule IVF, providing risk exposure data (number of subsidiaries, gross premium written, gross losses incurred, gross reserves) by jurisdiction on a consolidated basis for each financial period.
• Class 4 and 3B insurers would be required to include Enhanced Capital Requirement ratio, Commercial Insurer Solvency Self-Assessment requirement, bond holdings by BSCR rating, and qualifying catastrophe event details in their quarterly filings.
• Industry stakeholders were invited to submit comments on the proposed amendment rules to riskanalytics@bma.bm by 16 January 2022.

Applies to

Class 4 insurers, Class 3B insurers

Deadlines

• 16 January 2022: Deadline for submitting comments on the proposed amendment rules to riskanalytics@bma.bm.
• 1 July 2022: Proposed effective date for the amendments to the Class 4 and 3B Solvency Requirement Rules.