2020 Year-End Long-Term Instructions Handbook

Summary

This is the BMA's 2020 year end instruction handbook for the Capital and Solvency Return (the BSCR model) applicable to Long-Term (life) insurers. It explains how Class E, Class D and Class C insurers, and relevant insurance groups, must complete and submit the various forms, schedules and supporting reports that make up the annual capital and solvency return used to calculate the Enhanced Capital Requirement (ECR) and Target Capital Level (TCL).

• 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.
• What must be completed: Depending on whether the insurer files on an unconsolidated, consolidated or EBS basis, this includes the Insurer Information Sheet, AML and Sanctions Questionnaires, Financial Condition Report, Forms 1SFS/2SFS/8SFS and 4EBS, and numerous supporting schedules (II, IIA, IVB, V, VI, VII, VIII, VIIIA, IX, XII, XVI, XVII, XVIII, XIX, XX, XXI and related sub schedules).
• 2020 year end specific requirement: For Schedules IIB, IIC, IID, IIE, IIF, XIXA, XXI and XXIII, insurers must complete both the 2018 year end methodology and the 2019 year end methodology included in the latest BSCR model release; insurers wishing to file only the 2019 methodology must request permission by email to RiskAnalytics@bma.bm.
• Declaration and evidence retention: The capital and solvency return declaration must be signed and dated by two Directors and the insurer's Principal Representative and attached to the submission; work papers and supporting documents used to prepare the BSCR submission must be retained and made available to the BMA on request.
• Submission method: For 2019 year end and beyond, insurers may submit electronically only, using the embedded 'Submit' macro; otherwise both an electronic and printed copy must be forwarded to the BMA by the specified filing date, without altering the return format.

The handbook also contains detailed line by line guidance for each schedule (e.g. investment risk, currency risk, concentration risk, mortality, morbidity, longevity and variable annuity guarantee risk) and a glossary of defined terms used throughout the return, but these sections are technical completion guidance rather than freestanding obligations.

Key obligations

• 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
• Insurers must complete the Insurer Information Sheet in its entirety and prepare the Financial Condition Report per the handbook's requirements even though it is not embedded in the model
• For the 2020 year end, insurers must complete both the 2018 year end and 2019 year end methodologies for Schedules IIB, IIC, IID, IIE, IIF, XIXA, XXI and XXIII in the BSCR model, unless they obtain BMA permission via email to file only the 2019 methodology
• The capital and solvency return declaration must be signed and dated by two Directors and the insurer's Principal Representative and included as an attachment to the return
• Insurers must retain work papers and supporting documents used to prepare the BSCR submission and make them available to the BMA upon request
• Insurers must not alter or modify the capital and solvency return format when submitting it, and must submit both electronic and printed copies unless filing electronically only via the submit macro

Applies to

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

Deadlines

• on or before its filing date: Deadline for submitting the completed capital and solvency return to the BMA