Insurance Account Rules 2015

Summary

The Insurance Account Rules 2015, made by the Bermuda Monetary Authority under section 6A of the Insurance Act 1978, set out the detailed form, content and preparation requirements for the statutory financial returns that insurers must file or make available under the Act. They prescribe the forms, notes, instructions and solvency and liquidity margin calculations that insurers must follow when preparing their statutory financial statements.

• Who is covered: The Rules apply to insurers registered as Class 3A, Class 3B, Class 4, Class C, Class D or Class E under the Insurance Act 1978.
• Statutory financial return content: Every insurer must prepare a statutory financial return comprising an insurer information sheet, an auditor's report, a statutory balance sheet, a statutory statement of income, a statutory statement of capital and surplus, and notes to the statutory financial statements.
• Insurer information sheet: Must disclose registration details, classes of registration, ownership and group structure, currency and exchange rate used, whether minimum solvency margin and liquidity ratio were met, any registration conditions and compliance with them, and any corrective action taken.
• Auditor's report: Must be signed by the insurer's approved auditor, address whether the audit was properly conducted and whether the statutory statements comply with the Act and Rules, and must be qualified where specified deficiencies, disagreements, non-compliance or going-concern doubts arise.
• Consolidation: Insurers must consolidate affiliates over which they have control in the statutory balance sheet and income statement, and also prepare unconsolidated versions of those statements.
• Solvency and liquidity margins: General business insurers must meet a minimum margin of solvency (the greatest of prescribed figures A to D, not less than figure D) and a minimum liquidity ratio (75% of relevant liabilities, or 100% for section 24(6) composites); long-term business insurers must meet the minimum margin of solvency set out in Schedule VII, subject to an MMS floor.
• General preparation requirements: Statutory financial returns must be prepared in English, in a single specified currency (converted to Bermudian dollars where required), and in accordance with the forms and instructions in Schedules I to X.

The Rules also create offences for non-compliance and set out commencement provisions, though the specific offence and commencement details are not fully reproduced in the excerpted text reviewed here.

Key obligations

• Every insurer must prepare statutory financial statements in accordance with section 18 of the Insurance Act 1978 and these Rules
• The statutory financial return must consist of an insurer information sheet, auditor's report, statutory balance sheet, statement of income, statement of capital and surplus, and notes to the statements
• The insurer information sheet must disclose specified registration, ownership, solvency and compliance information, including corrective action taken for any negative disclosures
• The auditor's report must be signed, addressed to the Authority, and qualified where deficiencies, disagreements, non-compliance or going-concern issues are identified
• The auditor must maintain audit working papers for the general purpose financial statements and statutory financial return in Bermuda
• Insurers must consolidate affiliates under their control in the statutory balance sheet and income statement, and also prepare unconsolidated versions
• General business insurers must maintain the prescribed minimum margin of solvency (greatest of figures A to D, not less than figure D)
• General business insurers must maintain a minimum liquidity ratio of 75% of relevant liabilities (100% for section 24(6) composites)
• Long-term business insurers must maintain the minimum margin of solvency specified in Schedule VII, not less than the MMS floor
• Statutory financial returns must be prepared in English and in the prescribed currency, converted to Bermudian dollars where required by the Authority

Applies to

Class 3A insurers, Class 3B insurers, Class 4 insurers, Class C insurers, Class D insurers, Class E insurers

Related documents

• This document is made under Insurance Act 1978