2022 Year-End Long-Term Instructions Handbook

Summary

This is the Bermuda Monetary Authority's 2022 year end instruction handbook for the Bermuda Capital and Solvency Return (BSCR), specifically addressed to Class E, Class D and Class C long term (life) insurers. It explains how to complete and submit the annual capital and solvency return, including the BSCR model used to calculate an insurer's Enhanced Capital Requirement (ECR) and Target Capital Level (TCL), and sets out the forms, schedules and supporting documentation required.

• Annual filing: 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 must include, as applicable, the Insurer Information Sheet, Financial Condition Report, Forms 1SFS/2SFS/8SFS/4EBS, AML and Sanctions questionnaires, and numerous BSCR schedules (II, IIA, IVB, V, VI, VII, VIII, VIIIA, IX, XII, XVI, XVII, XVIII, XIX, XX, XXI, among others).
• Declaration and signatures: 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.
• No alteration of the model: Insurers must not alter or modify the capital and solvency return template or any part of it.
• Record retention: Work papers and supporting documents used to prepare the BSCR submission must be retained and made available to the BMA on request.
• 2022 dual methodology requirement: For the 2022 year end, insurers must complete both the 2018 and 2019 year end methodologies for certain schedules (IIB, IIC, IID, IIE, IIF, XXA, XXIA, XXIII), unless they obtain BMA permission via email to use the 2019 methodology only.
• Disclosure filings: The Financial Condition Report must be included as required under section 3 of the Insurance (Public Disclosure) Rules 2015, and the signed Declaration of Compliance must be included as required under section 15A of the Insurance Act 1978.

The handbook is procedural guidance rather than a standalone rule, but compliance with its instructions is necessary to satisfy the underlying filing obligations imposed by the Insurance Act 1978, the Prudential Standard Rules and the Insurance (Public Disclosure) Rules 2015.

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.
• The capital and solvency return declaration must be signed and dated by two directors and the insurer's principal representative and included in the attachments section of the submission.
• Insurers must not alter or modify the capital and solvency return or any part of it.
• Work papers and documents used to prepare the BSCR submission must be retained and kept available for examination by the BMA.
• For the 2022 year end, insurers must complete both the 2018 year end methodology and the 2019 year end methodology for specified schedules, unless BMA permission is obtained to use only the 2019 methodology.
• The Financial Condition Report must be submitted as required under section 3 of the Insurance (Public Disclosure) Rules 2015.
• A signed Declaration of Compliance under section 15A of the Insurance Act 1978 must be included with the return.

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: Each insurer or insurance group must submit its completed capital and solvency return to the BMA by its specified filing date.
• 2022 year end: Insurers must complete both the 2018 and 2019 year end methodologies for specified schedules for the 2022 year end return, unless permission is granted to use the 2019 methodology only.