Draft Insurance (IIGB) Accounts Rules 2019

Summary

This is a draft rule made by the Bermuda Monetary Authority under section 6A of the Insurance Act 1978, setting out detailed requirements for the statutory financial returns of Class IIGB insurers (Innovative Insurer General Business insurers), including insurers dealing in digital assets. It prescribes the forms, content, notes, solvency margin and liquidity ratio calculations that these insurers must use when preparing and filing their annual statutory financial statements.

• Statutory financial return content: Each return must include an insurer information sheet, auditor's report, statutory balance sheet (Form 1SFS), statement of income (Form 2SFS), statement of capital and surplus (Form 8SFS), and notes to the financial statements.
• Insurer information sheet: Must disclose registration details, ownership and group structure, currency and exchange rates used, parent company information, compliance with registration conditions, and solvency/liquidity ratio status.
• Auditor's report: Must be signed by the insurer's approved auditor, addressed to the Authority, and must qualify the report where there are audit deficiencies, valuation disagreements, non-compliance, or going-concern doubts.
• Consolidation and forms: Insurers must consolidate affiliates over which they have control and also prepare unconsolidated statutory balance sheets and income statements.
• Minimum margin of solvency: Assets must exceed liabilities by the greatest of Figures A, B, C and D calculated per Schedule IV, and never less than Figure D.
• Minimum liquidity ratio: Relevant assets must be at least 75% of relevant liabilities, as defined by reference to specific lines on Form 1SFS.
• General preparation requirements: Returns must be prepared in English, in a single specified currency (converted to Bermudian dollars where required), and must show comparative figures for the prior financial year.

The Rules are stated to come into operation on 30 April 2020 and apply to financial years commencing on or after 31 December 2019, though the document remains in draft/consultation form as published by the BMA.

Key obligations

• Every Class IIGB insurer must file a statutory financial return for each financial year, comprising an insurer information sheet, auditor's report, statutory balance sheet, statement of income, statement of capital and surplus, and notes to the financial statements.
• The insurer information sheet must disclose specified registration, ownership, structure, currency, and compliance information as set out in Rule 5.
• The auditor's report must be signed by the insurer's approved auditor, addressed to the Authority, and must include qualifications where deficiencies, disagreements, non-compliance, or going-concern doubts arise.
• Insurers must consolidate affiliates over which they have control in consolidated statements and also prepare unconsolidated statutory balance sheets and income statements.
• Insurers must prepare statutory financial statements in accordance with the instructions in Schedule II.
• Insurers must maintain assets exceeding liabilities by the greatest of Figures A, B, C and D (and not less than Figure D) as calculated under Schedule IV for minimum margin of solvency.
• Insurers carrying on general business must maintain relevant assets of not less than 75% of relevant liabilities (minimum liquidity ratio).
• Statutory financial returns must be prepared in English, in a single specified currency, with corresponding comparative amounts for the preceding financial year.

Applies to

Class IIGB insurers (Innovative Insurer General Business insurers)

Deadlines

• 30 April 2020: Date on which the Rules are stated to come into operation.
• financial years commencing on or after 31 December 2019: Period to which the Rules apply.

Related documents

• This document is made under Insurance Act 1978