Asset and Liability Statement - Completion Instructions

Summary

This is a completion guide issued by the Bermuda Monetary Authority explaining how to fill out the 'Asset and Liability Statement', a public disclosure template covering investments and reserves. It follows a December 2024 consultation on enhancing public disclosure of assets and liabilities for commercial long-term insurers, and sets out field-by-field instructions for the template's various tabs.

• Scope: Applies to all Bermuda-regulated commercial long-term insurers (Classes C, D and E), excluding domestic insurers.
• General rules: Investments must be listed at CUSIP/ISIN or position level; assets and liabilities must be reported on a GAAP basis (as defined under Section 17A of the Insurance Act 1978) and reconcile to GAAP financial statements.
• Reserves tab: Requires product type, currency, gross reserves, reinsurance recoverable, net reserves and effective duration, entered as positive values (negative liabilities recorded as negative in the Reserves tab).
• Asset Appropriateness and ALM tab: All fields must be populated in sufficient detail covering asset allocation suitability, stress testing, liquidity, risk management, and changes in investment strategy, tailored to the insurer's size and complexity.
• Assets and Derivatives tabs: Detailed column-by-column instructions cover Bonds and Loans, Structured Assets, Commercial and Residential Mortgage Loans, Derivatives, Separate Account Assets and Other Assets, including a mapping to BSCR schedules.
• Formatting requirements: Figures must show full amounts (including zeros), be denominated in the insurer's reporting currency, and use built-in colour-coded data validation checks (grey, yellow, red) before submission.

The document is instructional in nature, guiding insurers on correct completion of the template rather than imposing new substantive requirements beyond those already established by the underlying disclosure regime.

Key obligations

• Insurers must complete the Asset and Liability Statement listing investments at CUSIP/ISIN or position level.
• Insurers must report assets and liabilities on a GAAP basis that reconciles to their GAAP financial statements.
• Insurers must record liabilities in the 'Liabilities in the Reserves' tab as positive values, recording negative liabilities as negative values in the 'Reserves' tab.
• Insurers must populate all fields in the 'Asset Appropriateness and ALM' tab in sufficient detail, tailored to their investment strategy, size, complexity and business profile.
• Insurers must enter figures as full amounts (including all zeros) and denominate numerical fields in the insurer's reporting currency.
• Insurers should review and resolve data errors flagged by the template's colour-coded validation checks (grey, yellow, red) before submitting to the Authority.
• Insurers are encouraged to use the 'Validation Report' sheet to address unresolved errors before submission.

Applies to

commercial long-term insurers (Classes C, D and E)