2024 Year-end Insurance Group Instructions Handbook

Summary

This is the BMA's 2024 year-end instruction handbook explaining how insurance groups and certain classes of insurer must complete and submit the Bermuda Capital and Solvency Return, including the BSCR model used to calculate the Enhanced Capital Requirement (ECR) and Target Capital Level (TCL). It is a technical filing guide rather than a rule itself, walking through each form, schedule and glossary term used in the return.

• 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.
• What the return calculates: The BSCR model computes the ECR (higher of BSCR or an approved internal capital model, and the Minimum Solvency Margin) and the TCL, set at 120% of ECR.
• Consequence of falling below TCL: Groups that do not hold eligible capital to cover the TCL face additional reporting requirements, enhanced monitoring, and must submit a remediation plan to restore capital above the TCL.
• Forms and schedules: The handbook details required forms (1, 2, 8, 1A, 2A, 8A, 1EBS) and dozens of schedules covering investments, premiums, reserves, catastrophe risk, group structure, intra-group transactions, currency and concentration risk, and eligible capital, some required on a consolidated basis and others on an Economic Balance Sheet (EBS) basis.
• 2024 methodology overlap: For several schedules (IIB-IIF, IVD-IVE, XXA, XXIA, XXIII, VIIA, VIIB, XA), groups must complete both the prior year methodology and the newest 2024 methodology unless they obtain BMA permission by email to use the new methodology only.
• Submission mechanics: Groups must not alter the return template, must submit electronically via the embedded macro (with a printed copy also required unless filing electronically only), and must retain work papers used to prepare the submission for possible BMA examination.
• Attachments: Financial statements (audit report, statements and notes) must be combined into one attachment, and the Financial Condition Report required under the Insurance (Public Disclosure) Rules 2015 must be attached separately.

The handbook is aimed at accounting, finance and actuarial staff within an insurance group responsible for compiling the BSCR model, and designates a contact person responsible for the accuracy of the group's 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 to the BMA on or before its filing date
• Insurance groups must not alter or modify the capital and solvency return template
• Groups must retain work papers and supporting documents used to prepare the BSCR submission and make them available to the BMA on request
• For the 2024 year-end, groups must complete both the prior methodology and the new 2024/2023/2019/2018 methodology for specified schedules (IIB-IIF, IVD-IVE, XXA, XXIA, XXIII, VIIA, VIIB, XA) unless BMA grants permission via email to use the new methodology only
• Groups must attach their audited financial statements (audit report, statements and notes) as a single combined document
• Groups must attach a Financial Condition Report as required under section 3 of the Insurance (Public Disclosure) Rules 2015
• Groups experiencing capital below the Target Capital Level must submit a remediation plan to the BMA to restore capital above the TCL
• Groups must review model validation checks prior to submission and acknowledge or explain any errors on the Submission tab

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 insurer/insurance group must submit its completed capital and solvency return to the BMA by its specified filing date (annual return)