2020 Year-end General Business Handbook

Summary

This is the Bermuda Monetary Authority's 2020 year end instruction handbook for the Capital and Solvency Return (the BSCR model), applicable to Class 4, Class 3B and Class 3A general business insurers (and referenced for Class E, D and C insurers and insurance groups). It explains how to complete and submit the annual capital and solvency return used to calculate an insurer's Enhanced Capital Requirement (ECR) and Target Capital Level (TCL) under Prudential Standard Rules made under section 6A of the Insurance Act 1978.

• Annual filing: 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 specified filing date.
• Electronic submission: For 2019 year end and beyond, insurers may file electronically only via the embedded submit macro; otherwise both electronic and printed copies must be forwarded by the filing date.
• No alteration: Insurers must not alter or modify the capital and solvency return form itself.
• Declaration and signatures: Class 4 and 3B insurers must have the declaration signed and dated by two directors (one of whom may be the CEO) and either the chief risk officer or chief financial officer; Class 3A insurers must have it signed by two directors and the principal representative, with the signed declaration attached to the BSCR model.
• Record retention: Insurers must retain work papers and supporting documents used to prepare the BSCR submission and make them available to the BMA on request.
• 2020 year end specific requirement: For the 2020 year end, insurers must complete both the 2018 year end methodology and the 2019 year end methodology for certain schedules unless they obtain BMA permission via email to apply only the 2019 year end methodology.

The handbook also sets out detailed line item guidance for the Insurer Information Sheet, Financial Condition Report, and the numerous statutory statement forms and BSCR schedules (fixed income and equity investments, loss and premium schedules, catastrophe risk, eligible capital, concentration and currency risk, etc), together with a glossary of defined terms used throughout the return.

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 not alter or modify the capital and solvency return or any part of it.
• Insurers must retain work papers and supporting documents used to prepare the BSCR submission for examination by the BMA if requested.
• The capital and solvency return declaration must be signed and dated by two directors and either the chief risk officer or chief financial officer (Class 4 and 3B) or by two directors and the principal representative (Class 3A), and included in the attachments section of the BSCR model.
• For the 2020 year end, insurers must complete both the 2018 and 2019 year end methodologies for the specified schedules unless they obtain BMA permission to file only the 2019 methodology, requested by email to RiskAnalytics@bma.bm.

Applies to

Class 4 insurers, Class 3B insurers, Class 3A insurers, Class E insurers, Class D insurers, Class C insurers, Insurance Groups

Deadlines

• on or before its filing date: Deadline for submission of the completed capital and solvency return to the BMA (specific date determined per insurer, not stated numerically in this document).