2023 Year-End Insurance Group Instructions Handbook

Summary

This is the Bermuda Monetary Authority's instruction handbook for completing the 2023 year end Group Capital and Solvency Return (the BSCR model) for insurance groups. It explains how to calculate the group's Enhanced Capital Requirement (ECR), Target Capital Level (TCL) and Bermuda Solvency Capital Requirement (BSCR), and sets out line by line guidance for each form and schedule in the return.

• Who must file: Every Class 4, Class 3B, Class 3A, Class E, Class D and Class C insurer, and each Insurance Group, must submit a completed capital and solvency return to the BMA on or before its filing date.
• What the return covers: Cover Sheet and Solvency Certificate, Financial Condition Report, Forms 1, 2, 8 and 1EBS, and numerous supporting schedules covering investments, reserves, premiums, reinsurance, group structure, intra group transactions, catastrophe risk, concentration risk, currency risk and eligible capital.
• Submission method: For 2019 year end and beyond, insurers may file electronically only via the embedded submit macro in the BSCR model; otherwise both electronic and printed copies must be submitted by the filing date.
• 2023 specific transitional requirement: For the 2023 year end, insurance groups must complete Schedules IIB, IIC, IID, IIE, IIF, IVD, IVE, XXA, XXIA and XXIII under both the 2018 year end methodology and the 2019 year end methodology, unless permission to use only the 2019 methodology is obtained by email request to RiskAnalytics@bma.bm.
• Declaration and record keeping: 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 of the parent company; work papers supporting the BSCR submission must be retained and made available to the BMA on request.
• Consequences of shortfall: If eligible capital resources fall below the Target Capital Level, the insurance group faces additional reporting requirements, enhanced monitoring, and must submit a remediation plan to restore capital above the TCL.

The handbook is a technical, form level guidance document rather than a standalone rule; the underlying obligations to file and the capital requirements themselves derive from the Insurance Act 1978, the Prudential Standard Rules made under section 6A of that Act, and the Insurance (Group Supervision) Rules 2011 and Insurance (Public Disclosure) Rules 2015 referenced throughout.

Key obligations

• Every Class 4, Class 3B, Class 3A, Class E, Class D and Class C insurer, and each Insurance Group, must submit a completed capital and solvency return to the BMA on or before its filing date.
• Insurance groups must not alter or modify the capital and solvency return template itself when completing and submitting it.
• The capital and solvency return declaration must be signed and dated by two directors of the parent company (one of whom may be the CEO), and by either the chief risk officer or chief financial officer.
• Work papers and supporting documents used to prepare the BSCR submission must be retained and made available for BMA examination on request.
• For the 2023 year end, insurance groups must complete specified schedules (IIB, IIC, IID, IIE, IIF, IVD, IVE, XXA, XXIA, XXIII) under both the 2018 and 2019 year end methodologies, unless the BMA grants permission via email to use only the 2019 methodology.
• Where eligible capital falls below the Target Capital Level, the insurance group must submit a remediation plan to the BMA to restore capital above that level.
• The Financial Condition Report must be included as an attachment as required under section 3 of the Insurance (Public Disclosure) Rules 2015.

Applies to

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

Deadlines

• on or before its filing date: Each Class 4, 3B, 3A, E, D and C insurer and Insurance Group must submit the completed capital and solvency return to the BMA by its specified filing date.