2024 Interim Insurance Group Instructions Handbook

Summary

This is the Bermuda Monetary Authority's 2024 (Interim) Instruction Handbook for the Bermuda Capital and Solvency Return as it applies to insurance groups. It is a detailed technical guide explaining how to complete the Capital and Solvency Return, including the BSCR model, statutory statements, and supporting schedules used to calculate an insurance group's 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.
• Capital calculations: ECR is calculated at the end of the group's relevant year as the higher of the BSCR model result and any approved internal capital model, and must be at least equal to the Minimum Solvency Margin; TCL is set at 120% of ECR.
• Consequences of shortfall: If eligible capital falls below the TCL, the group faces additional reporting requirements, enhanced monitoring by the BMA, and must submit a remediation plan to restore capital above the TCL.
• Required forms and schedules: Groups must complete Forms 1, 2, 8 and 1EBS and numerous schedules (covering investments, reserves, premiums, risk management, group structure, intra-group transactions, catastrophe risk, capital deductions, eligible capital, etc.), with different requirements depending on whether reporting on a Consolidated or Economic Balance Sheet (EBS) basis.
• Dual methodology requirement for 2024: For the 2024 year-end, groups must complete certain schedules (IIB-IIF, IVD-IVE, XXA, XXIA, XXIII; VIIA-VIIB; and Schedule XA) under both the prior methodology and the newly released methodology, unless they obtain BMA permission by email to use only the new methodology.
• Filing mechanics: Returns should generally be submitted electronically via the model's 'submit' macro; groups may not alter or modify the return, must retain work papers for BMA examination, and must attach financial statements, audit reports and the Financial Condition Report (required under the Insurance (Public Disclosure) Rules 2015) as specified.

The handbook is primarily a technical reference for completing the annual filing rather than a standalone rule, but it operationalises obligations set out in the Insurance Act 1978, the Insurance (Group Supervision) Rules 2011, 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 every Insurance Group, shall submit a completed capital and solvency return to the BMA on or before its filing date.
• The insurance group's ECR must be calculated at the end of its relevant year as the higher of the BSCR model and an approved internal capital model, and must be equal to or exceed the Minimum Solvency Margin.
• Insurance groups are expected to hold eligible capital resources to cover the Target Capital Level (120% of ECR); failure to do so triggers additional reporting requirements, enhanced monitoring, and requires submission of a remediation plan.
• For the 2024 year-end, groups must complete both the prior and new methodologies for specified schedules (IIB-IIF, IVD-IVE, XXA, XXIA, XXIII, VIIA-VIIB, and Schedule XA) unless BMA grants permission via email to RiskAnalytics@bma.bm to use only the new methodology.
• Groups must not alter or modify the capital and solvency return or any part of it.
• Work papers and supporting documents used to prepare the BSCR submission must be retained and made available for BMA examination on request.
• Registrants must attach their audit report, financial statements and notes as one document, and include the Financial Condition Report required under section 3 of the Insurance (Public Disclosure) Rules 2015.
• The designated insurer's contact person must ensure amounts reported in the group capital and solvency return correspond to the group's statutory financial return, where appropriate.

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, Class 3B, Class 3A, Class E, Class D, Class C insurer and Insurance Group must submit the completed capital and solvency return to the BMA on or before its specified filing date.
• 2024 year-end: Insurance groups must complete dual methodologies for specified schedules (IIB-IIF, IVD-IVE, XXA, XXIA, XXIII, VIIA-VIIB, Schedule XA) for the 2024 year-end filing unless permission is obtained to use only the newer methodology.