2023 Year-End Long-Term Instructions Handbook

Summary

This is the BMA's 2023 year end instruction handbook for completing the Bermuda Capital and Solvency Return (the BSCR model) used by long term insurers to calculate their Enhanced Capital Requirement (ECR) and Target Capital Level (TCL). It sets out line by line guidance for populating each form and schedule of the annual capital and solvency return, rather than creating new substantive rules itself.

• 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 the return contains: An Insurer Information Sheet, Financial Condition Report, AML and Sanctions questionnaires, Forms 1SFS/2SFS/8SFS and Form 4EBS, and numerous BSCR schedules (II, IIA, IVB, V, VI, VII, VIII, VIIIA, IX, XII, XVI, XVII, XVIII, XIX, XX, XXI) covering investments, risk management, reinsurance, eligible capital and solvency.
• Submission method: Filing is via the electronic BSCR model using the embedded submit macro; insurers must not alter the return, and if submission problems arise they should consult the BSCR E Filing Manual or contact riskanalytics@bma.bm.
• Declaration and attachments: The Capital and Solvency Return Declaration must be signed and dated by two directors and the insurer's principal representative and attached; audited financial statements, the Declaration of Compliance under section 15A of the Insurance Act, and the Financial Condition Report under the Insurance (Public Disclosure) Rules 2015 must also be attached.
• 2023 specific transitional item: For the 2023 year end, insurers must complete both the 2018 and 2019 year end methodologies for Schedules IIB, IIC, IID, IIE, IIF, XXA, XXIA and XXIII, unless they obtain BMA permission by email to file only the 2019 methodology.
• Record keeping: Work papers and supporting documents used to prepare the BSCR submission must be retained and made available to the BMA on request.

The handbook is administrative guidance supporting an existing statutory filing obligation under the Insurance Act 1978 and related Prudential Standard Rules; it does not itself change licensing categories but clarifies how affected insurers must complete and submit their annual return.

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 (including the BSCR model) 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.
• Registrants must attach audited General Purpose Financial Statements, the signed Declaration of Compliance under section 15A of the Act, and the Financial Condition Report required under section 3 of the Insurance (Public Disclosure) Rules 2015.
• For the 2023 year end, insurers must complete both the 2018 and 2019 year end methodologies for specified schedules unless BMA permission is obtained to file only the 2019 methodology.
• Insurers must retain work papers and supporting documents used to prepare the BSCR submission for examination by the BMA if requested.
• Insurers must not alter or modify the capital and solvency return template.

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 insurer or insurance group must submit the completed capital and solvency return to the BMA on or before its specified annual filing date.
• 2023 year end: Insurers must complete both the 2018 and 2019 year end methodologies for Schedules IIB, IIC, IID, IIE, IIF, XXA, XXIA and XXIII for the 2023 year end return, unless permission is granted to use only the 2019 methodology.