Notes to Condensed Consolidated General Purpose Financial Statments (IFRS BASIS)

Summary

This document sets out the specific disclosure items that insurers must include in the notes to their condensed consolidated general purpose financial statements prepared on an IFRS basis, as filed with the Bermuda Monetary Authority. It functions as a disclosure checklist rather than a standalone reporting form, detailing what must appear in the general notes, the notes to the statement of capital and surplus, and the notes to the balance sheet for Class 3A, Class C and Class D insurers.

General note disclosures

• Ownership and structure: Names of shareholder controllers, affiliates consolidated in the statements, and any changes to controllers or affiliate place of incorporation during the year.
• Business and accounting basis: General nature of risks underwritten, the accounting standards used (e.g. IFRS, US GAAP), and any material changes to accounting policies and their effect.
• Income and currency: Basis for recognising insurance revenue, investment and other income, and the method and effect of translating foreign currency amounts.
• Risk and contingent items: Foreign exchange control restrictions, material contingencies or commitments, any default on securities or credit agreements, and arrears of preferred dividends.
• Related parties and governance: Loans to directors or officers outside the ordinary course of business, retirement benefit obligations, related party transactions, and material post year end events.
• Fair value and maturity data: Fair value amounts and hierarchy (Level 1, 2, 3) for investments, and the contractual maturity profile of fixed maturity and short term investments.
• Catch all disclosure: Any other information the board considers necessary so the financial statements are not misleading.

Capital, surplus and balance sheet notes

• Capital stock: Details of authorised and issued share capital by class, dividend rates, redemption terms, conversion provisions, called and uncalled amounts, and share repurchases.
• Contributed surplus and dividends: Nature of changes in contributed surplus and details of any non cash dividends paid.
• Share transactions: Changes in authorised share capital, share issuances, options, and share redemptions during the year, with values and consideration given.
• Balance sheet line items (Class 3A, C, D insurers): Disclosure of valuation methods and encumbrances for cash, quoted and unquoted investments, affiliate investments, mortgage loans, real estate, collateral loans, and accrued investment income.
• Insurance and reinsurance contract balances: Nature, terms and reconciliations of insurance, reinsurance and investment contract with DPF assets and liabilities, for both general and long term business.
• Other liabilities: Disclosure of commissions, taxes payable, loans and notes payable, amounts due to affiliates, accounts payable, dividends payable, sundry liabilities, and letters of credit or guarantees, including derivative exposures over 5 percent of total investments.

Key obligations

• Insurers must disclose the names of shareholder controllers and consolidated affiliates, and details of any changes to controllers or affiliate incorporation during the year.
• Insurers must describe the general nature of underwritten risks and the accounting standards used to prepare the condensed financial statements.
• Insurers must disclose any significant changes to accounting policies and their effect on the financial statements.
• Insurers must disclose the basis of recognition of insurance revenue, investment income and other income.
• Insurers must disclose the method used to translate foreign currency amounts and the treatment of resulting gains or losses.
• Insurers must disclose foreign exchange control restrictions affecting insurer assets.
• Insurers must disclose material contingencies, commitments, and any defaults on securities or credit agreements.
• Insurers must disclose arrears of dividends on preferred cumulative shares and the date last paid.
• Insurers must disclose loans made to directors or officers outside the ordinary course of business.
• Insurers must disclose retirement benefit obligations relating to employees and the basis for charging them.
• Insurers must disclose fair value amounts and the fair value hierarchy (Levels 1, 2, 3) for investments.
• Insurers must disclose the contractual maturity profile of fixed maturity and short term investments.
• Insurers must disclose related party transactions, including nature, amounts, and balances due.
• Insurers must disclose material events occurring between year end and financial statement approval.
• Insurers must disclose any other information needed so the financial statements are not misleading.
• Insurers must disclose authorised and issued share capital details, dividend and redemption terms, and share transactions during the year.
• Insurers must disclose changes in contributed surplus and any non cash dividends paid.
• Class 3A, Class C and Class D insurers must disclose valuation methods and encumbrances for cash, investments, affiliate advances, mortgage loans, and real estate.
• Insurers must disclose derivative policies and market value or nominal exposure of derivatives exceeding 5 percent of total investments.
• Insurers must disclose reconciliations of net changes in insurance and reinsurance contract assets and liabilities for general and long term business.
• Insurers must disclose loans and notes payable, amounts due to affiliates, income taxes payable, dividends payable, and letters of credit or guarantees with their terms.

Applies to

insurers, Class 3A insurers, Class C insurers, Class D insurers