2022 Year-End General Business Handbook

Summary

This is the BMA's 2022 Year-End Instruction Handbook for the Bermuda Capital and Solvency Return (BSCR), the annual return 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 is a technical filing guide explaining how to complete each form, schedule and declaration in the BSCR model rather than a standalone rule change.

• 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.
• Submission method: For 2019 year-end and beyond, insurers may file electronically only via the embedded 'submit' macro in the BSCR model; otherwise both an electronic and printed copy must be forwarded by the filing date. Insurers must not alter or modify the return.
• Declaration signatories: For Class 4 and 3B insurers, the capital and solvency return declaration must be signed and dated by two directors (one of whom may be the CEO) and either the chief risk officer or chief financial officer. For Class 3A insurers, it must be signed by two directors and the insurer's principal representative.
• Attachments required: Insurers must attach general purpose financial statements (audit report, statements and notes) as one document, a signed Declaration of Compliance under section 15A of the Act, and a Financial Condition Report as required under section 3 of the Insurance (Public Disclosure) Rules 2015.
• Recordkeeping: Work papers and supporting documents used to prepare the BSCR submission must be retained and made available to the BMA for examination on request.
• Validation checks: Insurers must review validation checks on the Contents tab before submission and provide a comment on the Submission tab explaining any confirmed error messages.

The bulk of the handbook (not fully reproduced here) provides line-by-line guidance for completing individual schedules covering investments, reinsurance, loss reserves, premiums, catastrophe risk, eligible capital, currency and concentration risk, and the Commercial Insurer Risk Assessment, plus a glossary of defined terms.

Key obligations

• Submit a completed capital and solvency return (including the BSCR model) to the BMA on or before the insurer's specified filing date
• File electronically via the BSCR model's 'submit' macro (from 2019 year-end onward), or otherwise submit both electronic and printed versions by the filing date
• Do not alter or modify the capital and solvency return or any part of it
• Have the capital and solvency return declaration signed and dated by two directors and either the CRO or CFO (Class 4 and 3B) or by two directors and the principal representative (Class 3A), and include it as an attachment
• Attach general purpose financial statements, a signed Declaration of Compliance under section 15A of the Act, and a Financial Condition Report under section 3 of the Insurance (Public Disclosure) Rules 2015
• Retain work papers and supporting documents used to prepare the BSCR submission and make them available to the BMA on request
• Review validation checks prior to submission and provide an explanatory comment for any confirmed error messages

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: Each Class 4, 3B, 3A, E, D and C insurer and Insurance Group must submit its completed capital and solvency return to the BMA by its specified filing date.
• 2019 year-end and beyond: From this point insurers may file only an electronic version via the BSCR model's submit macro; otherwise both electronic and printed versions are required.