Stakeholder Letter - Prudential Rules CP (2021-07-05)

Summary

This is a stakeholder letter from the Bermuda Monetary Authority summarizing industry feedback on its March 2021 consultation paper on proposed amendments to the Prudential Rules (specifically revised investment reporting schedules, including Schedule VI) and setting out the Authority's responses. It does not itself impose new binding requirements but explains how the BMA intends to finalize and apply the proposed reporting changes.

• Reporting requirements: Registrants are expected to complete all columns of the new investment schedules and use sub-classes to identify asset type; where look-through data (e.g. for third-party funds) is unavailable, a note explaining the gap should be provided, reviewed case-by-case.
• Segregated accounts: Segregated accounts, sundry assets, and deposit assets/liabilities will each have dedicated schedules similar to the investment portfolio schedule.
• Asset jurisdiction: For unlisted bonds, securities or alternative investments, country of risk (principal place of business) is acceptable, alongside jurisdiction of exchange or custody; for alternative investments/structured securities lacking underlying exposure data, jurisdiction should be based on the fund or vehicle's domicile.
• Definition clarifications: The letter clarifies terminology for derivatives reporting (Position Held, Exposure), Fair Value (per Economic Balance Sheet rules), and Purpose of the Asset under Real Estate (owner-occupied versus investment).

The letter is addressed to insurers and other registrants subject to the Bermuda prudential reporting framework and signals how the BMA plans to incorporate feedback into the final amended Prudential Rules, but no specific effective date or filing deadline is given in this letter.

Applies to

insurers, registrants subject to BMA prudential rules