Notice - Insurance (Group Supervision) Amendment Rules 2013 (2013-07-01)

Summary

This is a Bermuda Monetary Authority (BMA) consultation notice proposing housekeeping amendments to the Insurance (Group Supervision) Rules 2011 via draft Insurance (Group Supervision) Amendment Rules 2013. The changes aim to align the Group Actuary's opinion and group statutory balance sheet instructions with equivalent requirements already applicable to solo insurers under the Insurance Returns and Solvency Regulations 1980, and to clarify certain eligible capital rules. The proposals are still in draft/consultation form and are not yet in force.

• Group Actuary's opinion: Updates Schedules I and II to bring the Group Actuary's opinion requirements into line with those already applying to solo insurers under the Insurance Accounts Regulations 1980.
• Eligible capital (Tier 1/Tier 2): Amends paragraph 21(3)(a) to add a consideration for the amount of encumbered assets transferred from Tier 1 to Tier 2 basic capital, and to clarify that assets pledged solely for risk management purposes should not be deducted.
• Preference shares loss absorbency: Amends paragraph 21(3)(c) to clarify the loss absorbency criteria (mandatory conversion to common stock on losses, or non-cumulative status) for preference shares qualifying as Tier 1 basic capital.
• Group statutory balance sheet instructions: Repeals and replaces Schedule 1 instructions for Lines 17 and 20 through 27 (loss and loss expense provisions, reported and unreported claims reserves, life and accident and health policy reserves, policyholders funds on deposit, future dividend liabilities, and gross long term business insurance reserves).
• Group actuary's opinion content: Replaces Schedule 2 paragraph 3 to require the group actuary's opinion to address compliance with lines 17(d) and 27(d) of the Group Statutory Balance Sheet and the procedures used to reach that opinion.

The BMA invited comments on these proposals by 6 September 2013, sent to policy@bma.bm, and proposed that all amendments would become effective from 1 January 2014 if adopted. As a consultation document, it does not itself impose binding obligations but signals forthcoming rule changes for insurance groups subject to group supervision.

Applies to

insurers subject to group supervision, insurance groups, group actuaries

Deadlines

• 6th September 2013: Deadline for interested parties to submit comments on the proposed amendments to policy@bma.bm
• 1st January 2014: Proposed effective date for the amendments if adopted

Related documents

• This document amends Insurance (Group Supervision) Rules 2011