Condensed General Purpose Financial Statements Notes

Summary

This document is a schedule (Schedule X) prescribing the notes and disclosures that must accompany the Condensed Consolidated General Purpose Financial Statements filed by certain classes of Bermuda insurers. It sets out, line by line, what information must be disclosed in notes covering general corporate matters, capital and surplus, the balance sheet, and the statement of income.

• General notes: Disclosure of shareholder controllers, consolidated affiliates, changes to controllers or place of incorporation, nature of risks underwritten, accounting standards and policy changes, premium/investment/commission income recognition, foreign currency translation, foreign exchange restrictions, material contingencies or commitments, securities/credit defaults, arrears of preferred dividends, loans to directors/officers, retirement benefit obligations, fair value and fair value hierarchy of investments, investment maturity profiles, related party transactions, subsequent events, and any other information needed to avoid the statements being misleading.
• Capital and surplus notes: Details of authorized and issued share capital by class, dividend rates and liquidation values of preference shares, redemption and conversion terms, share repurchases, changes in contributed surplus, and details of dividends paid, share issuances, options, and redemptions during the year.
• Balance sheet notes (Class 3A, C, D): Disclosure requirements for cash and equivalents, quoted and unquoted investments, advances to affiliates, mortgage loans, policy loans, real estate valuation and encumbrances, collateral loans, receivables, reinsurance balances, funds held by ceding reinsurers, derivatives, unearned premium reserves, loss and loss expense provisions (including restricted assets and unsecured obligations), policy reserves, policyholder dividends, payables, loans and notes payable, amounts due to affiliates, and letters of credit/guarantees.
• Income statement notes (Class 3A, C, D): Disclosure of the nature of material items included in other insurance income, combined other income (deductions), and combined realized gains or losses.

The schedule functions as a checklist for preparers of these financial statements rather than a standalone rule with its own compliance dates; it applies whenever an insurer in the relevant classes prepares condensed general purpose financial statements for BMA reporting purposes.

Key obligations

• Disclose the name of shareholder controllers and the name and place of incorporation of consolidated affiliates, and any changes to these during the year
• Disclose accounting standards, principles and policies used, and the effect of any changes to those policies
• Disclose material contingencies, commitments, defaults on securities or credit agreements, arrears of preferred dividends, and loans to directors or officers
• Disclose fair value amounts and fair value hierarchy (Levels 1-3) for investments, and the contractual maturity profile of fixed maturity and short-term investments
• Disclose related party transactions, including nature, amounts, and balances due from or to related parties
• Disclose details of authorized and issued share capital, dividend rates, redemption terms, conversion provisions, and share transactions (issuances, redemptions, options) during the year
• Disclose any encumbrances on cash, quoted and unquoted investments, and the valuation methods used for each
• Disclose real estate valuation methods, encumbrances, and details of independent appraisals where used
• Disclose movements in loss and loss expense provisions for the current and prior year, reasons for changes related to prior years, and amounts of restricted assets and unsecured policyholder obligations
• Disclose methods used to determine reserves for reported and unreported claims, policy reserves (life and accident and health), policyholders' funds on deposit, and liability for future policyholders' dividends
• Disclose derivative use policies and market value/nominal exposure of derivatives exceeding 5% of total investments, separated by long and short positions
• Disclose the nature and valuation method of letters of credit, guarantees and other instruments, including parties involved, amounts and purpose
• Disclose the nature of material items included in other insurance income, combined other income (deductions), and combined realized gains or losses

Applies to

insurers (Class 3A), insurers (Class C), insurers (Class D)