2018 Long-Term Business Capital and Solvency Return Instructions Handbook

Summary

This handbook provides detailed line-by-line instructions for completing the 2018 Bermuda Capital and Solvency Return (BSCR) model, the annual return that Bermuda long-term (life) insurers use to calculate their Enhanced Capital Requirement (ECR) and Target Capital Level (TCL) under Prudential Standard Rules made under section 6A of the Insurance Act 1978. It covers submission mechanics, required forms and schedules, and definitions used throughout the return, but is itself explanatory guidance rather than a rule imposing new obligations beyond those already set by the Rules and the Act.

• Who must file: Every Class 4, Class 3B, Class 3A, Class E, Class D and Class C insurer, and every Insurance Group, must submit a completed capital and solvency return to the BMA on or before its filing date.
• Required components: The return includes the Insurer Information Sheet, Financial Condition Report, Statutory Financial Statement forms (1SFS, 2SFS, 8SFS, 4EBS), and numerous supporting schedules covering investments, risk management, long-term insurance data, variable annuities, eligible capital, solvency self-assessment (CISSA), currency and concentration risk, and reinsurance ceded, among others.
• Submission process: Both electronic and printed versions of the return must be submitted by the specified filing date; insurers should not alter the model, must resolve validation checks before submission, and should retain supporting work papers for BMA examination.
• Declaration and sign-off: The capital and solvency return declaration must be signed and dated by two Directors and the insurer's principal representative, and the original signed declaration submitted with the printed return.
• New schedules for future years: Schedules IIB, IIC, IID, IIE, IIF, XIXA, XXA and XXIII are included for informational purposes only in the 2018 filing and become required for the 2019 year-end and beyond.
• Capital adequacy monitoring: Failure to hold eligible capital resources covering the Target Capital Level (120% of ECR) triggers additional reporting requirements, enhanced monitoring, and submission of a remediation plan to the BMA.

The document is a technical instruction handbook (a form/guidance document) rather than a standalone legal instrument; its obligations derive from and reference the Insurance Act 1978, the Prudential Standard Rules, and the Insurance Accounts Rules 2016.

Key obligations

• Every Class 4, Class 3B, Class 3A, Class E, Class D and Class C insurer and Insurance Group must submit a completed capital and solvency return to the BMA on or before its filing date.
• Insurers must submit both an electronic and a printed version of the capital and solvency return.
• The capital and solvency return declaration must be signed and dated by two Directors and the insurer's principal representative, with the original signed declaration submitted alongside the printed return.
• Insurers must review validation checks prior to submission and provide explanatory comments for any flagged errors on the Submission tab.
• Work papers and supporting documents used to prepare the BSCR submission must be retained and made available to the BMA upon request.
• Insurers whose eligible capital falls below the Target Capital Level must submit a remediation plan to restore capital above that level and are subject to additional reporting and enhanced monitoring.
• Insurers must not alter or modify the capital and solvency return model.
• From the 2019 year-end onward, insurers must complete additional Schedules IIB, IIC, IID, IIE, IIF, XIXA, XXA and XXIII, which are informational only for 2018.

Applies to

Class E insurers, Class D insurers, Class C insurers, Class 4 insurers, Class 3B insurers, Class 3A insurers, Insurance Groups, long-term (life) insurers licensed in Bermuda

Deadlines

• on or before its filing date: Each insurer/insurance group must submit its completed capital and solvency return to the BMA by its specified filing date.
• 2019 year-end and beyond: Schedules IIB, IIC, IID, IIE, IIF, XIXA, XXA and XXIII become required filing components (informational only for 2018 year-end).