Notice - Insurance (Group Supervision) Amendment Rules 2016 (2016-05-09)

Summary

This is a BMA consultation notice proposing two amendments to the Insurance (Group Supervision) Rules 2011, via the draft Insurance (Group Supervision) Amendment Rules 2016. The Authority is inviting industry comment before finalising the changes, which are intended to take effect from 1 January 2017.

• Tier 1 ancillary capital clarification: Restores wording in Paragraph 2(2)(a)(i) (deleted in error) clarifying that Tier 1 ancillary capital must be capable of absorbing losses on a going concern basis, including by write downs, until losses cease, or mandatory conversion to common stock.
• Risk Margin removed from encumbered assets calculation: Amends Paragraph 2(3)(a)(ii)(A)(1) to remove reference to the Risk Margin (Line 18 of the Statutory Economic Balance Sheet) from the calculation of encumbered assets supporting policyholder obligations, aligning reporting treatment for general and long term business.

The notice is a consultation draft, not a final rule: the commencement date in the draft Rules text is left blank, and the Authority states its intention for the amendments to become effective 1 January 2017, subject to the consultation outcome.

Key obligations

• Insurance groups subject to the Group Supervision Rules should review the proposed capital and encumbered asset reporting changes and, if wishing to comment, submit comments to riskanalytics@bma.bm by 23 June 2016.

Applies to

insurance groups subject to group supervision under the Insurance Act 1978, designated insurers/insurance groups reporting under the Insurance (Group Supervision) Rules 2011

Deadlines

• 23rd June 2016: Deadline for submitting comments on the proposed Insurance (Group Supervision) Amendment Rules 2016 to riskanalytics@bma.bm
• 1st January 2017: Proposed effective date for all amendments under the Rules, as previously advised by the Authority

Related documents

• This document amends Insurance (Group Supervision) Rules 2011