Notice - Insurance (Prudential Standards) (Class 3A Solvency Requirement) Amendment Rules 2012 (2012-11-14)

Summary

This is a Bermuda Monetary Authority notice describing amendments to the Insurance (Prudential Standards) (Class 3A Solvency Requirement) Rules 2011, following a consultation on which no industry comments were received. The Authority identifies several housekeeping changes to the Rules, covering a new declaration requirement, updated schedules to align with the Authority's online filing model, and technical clarifications to the Eligible Capital Rules calculations.

• Declaration requirement: A new paragraph 6A requires every capital and solvency return filed under paragraph 6 to be accompanied by a declaration signed by two directors and the insurer's principal representative, confirming the return fairly represents the insurer's financial condition.
• Definition added: Paragraph 2 is amended to insert a definition of policyholder obligations, referencing specific lines of Form 1A under the Insurance Accounts Regulations 1980.
• Schedule revisions: Schedule I (BSCR-SME calculation) and Schedules VII, VIII and X are revoked and replaced; Schedule VI is amended to remove a redundant sub-paragraph, to reflect changes already made to the Authority's online filing model.
• Policy status: The Authority states the amendments are final unless substantive policy issues are later identified for review or revision.

The amendments apply to Class 3A insurers subject to the principal Rules and are stated to come into operation on 1 January 2013. As the source document is a draft rules text attached to a notice, its final form and commencement should be confirmed against the enacted version.

Key obligations

• Every capital and solvency return made under paragraph 6 of the principal Rules must be accompanied by a declaration signed by two directors of the insurer and by the insurer's principal representative confirming the return fairly represents the insurer's financial condition in all material respects.
• Insurers must calculate their Bermuda Solvency Capital Requirement for small and medium-sized entities (BSCR-SME) using the replaced Schedule I formula and capital charge tables set out in the amendment.
• Insurers must report fixed income, equity, premium, reserve, credit, catastrophe and operational risk charges in accordance with the specified Schedules and Form 1A/Schedule references, consistent with statutory financial reporting.

Applies to

Class 3A insurers, commercial insurers subject to the Insurance (Prudential Standards) (Class 3A Solvency Requirement) Rules 2011

Deadlines

• 1 January 2013: Date on which the amendment Rules (Insurance (Prudential Standards) (Class 3A Solvency Requirement) Amendment Rules 2012) come into operation.

Related documents

• This document amends Insurance (Prudential Standards) (Class 3A Solvency Requirement) Rules 2011