Notice - Agreed Upon Procedures (AUP) for Segregated Account and Separate Account General Business Insurers (2026-09-23)

Summary

This notice issues a BMA Guidance Note setting out Agreed Upon Procedures (AUP) that approved auditors must perform for general business insurers that write business through segregated accounts or separate accounts (cells). The aim is to confirm that cell-level financial balances, collateral, reserves and letters of credit are properly attributed, recorded and reconciled, without the auditor expressing an audit opinion.

• Scope: Applies to both limited purpose and commercial insurers holding general business insurance licences that operate segregated accounts or separate accounts, with support expected from insurance managers.
• Reporting cycle: Procedures over segregated cells, reserves, collateral and letters of credit must be performed annually; certain additional procedures for collateral and LOCs are performed on a rotational basis so each is covered at least once in a rolling five year cycle.
• Filing: The AUP report must be prepared by the insurer's approved auditor, kept separate from the statutory audit opinion, and filed concurrently with the annual Statutory Financial Return as a separate attachment.
• Findings and attestations: The AUP report must document procedures and factual outcomes, flag ambiguous attribution, unavailable documentation or inconsistent disclosures, confirm correct tabulation of the Segregated Account Company schedule and completion of schedule drop-down fields, identify any cells in deficit (with deficit amounts and confirmation of a remediation plan), and confirm that the Principal Representative Attestation has been completed and signed.

The notice is effective immediately as guidance for the next reporting cycle and is intended to standardise how auditors, insurers and insurance managers evidence cell-level reconciliation against statutory financial statements.

Key obligations

• Approved auditors must perform the prescribed AUP procedures over segregated cells, reserves, collateral and letters of credit on an annual basis for each cell.
• Auditors must perform designated rotational procedures (e.g. inspecting governing collateral and LOC agreements) on a rolling five year cycle so each is covered at least once per cycle for each cell.
• The AUP report must be filed concurrently with the insurer's annual Statutory Financial Return as a separate attachment, distinct from the statutory audit opinion.
• The auditor must document procedures performed and factual outcomes, including any ambiguous attribution, missing documentation, or disclosure inconsistencies.
• The entire Segregated Account Company schedule must be reviewed and recast to confirm calculation accuracy and alignment with statutory financial statements.
• All drop-down options within the Schedule must be verified as completed.
• Cells in deficit must be identified with the deficit amount detailed, and auditors must confirm a remediation plan exists for each such cell.
• Auditors must confirm the Principal Representative Attestation has been completed and duly signed.

Applies to

limited purpose general business insurers, commercial general business insurers, insurers with segregated accounts or separate accounts (Segregated Account Companies), insurance managers, approved auditors

Deadlines

• concurrently with the annual Statutory Financial Return: The AUP report must be filed as a separate attachment at the same time as the insurer's annual Statutory Financial Return
• rolling five (5) year cycle: Rotational AUP procedures (e.g. certain collateral and letter of credit checks) must each be performed at least once within this cycle for every cell