Insurance Account Rules 2016

Summary

These Rules, made by the Bermuda Monetary Authority under section 6A of the Insurance Act 1978, set out the detailed content, form and preparation requirements for statutory financial returns that insurers must file. They cover the insurer information sheet, auditor's report, statutory balance sheet, income statement, capital and surplus statement, accompanying notes, and minimum solvency and liquidity requirements.

• Statutory financial return content: Every insurer must file a statutory financial return each financial year comprising an insurer information sheet, auditor's report, statutory balance sheet, statutory statement of income, statutory statement of capital and surplus, and notes to the statutory financial statements.
• Insurer information sheet: Must disclose specified details including registration class, ownership and group structure, whether solvency margins and liquidity ratios were met, compliance with registration conditions, and any Authority directions or corrective actions.
• Auditor's report: Must be signed by the approved auditor, addressed to the Authority, confirm the audit was conducted to a recognized standard, and be qualified where deficiencies, disagreements, non-compliance, or going concern doubts arise.
• Financial statement forms: Balance sheet, income statement and capital and surplus statement must use Forms 1SFS, 2SFS and 8SFS, with consolidated statements for controlled affiliates and unconsolidated statutory statements otherwise, following instructions in Schedules III to VI.
• Solvency and liquidity minimums: General business insurers must meet a minimum margin of solvency (Schedule VII) and a minimum liquidity ratio (75% of relevant liabilities, or 100% for section 24(6) composites); long-term business insurers must meet a minimum margin of solvency per Schedule VIII, not less than the MMS floor.
• General preparation requirements: Returns must be prepared in English, in a single specified currency (converted to Bermudian dollars where directed), and must show corresponding prior-year amounts for comparison.
• Condensed general purpose financial statements: Where applicable, insurers must prepare condensed consolidated balance sheet, income statement, capital and surplus statement and notes per Schedules IX to XI, populated from the insurer's financial statements.

The Rules commenced on 15 March 2016 and apply to financial years beginning on or after 1 January 2016. Detailed Schedules I through XI, referenced throughout, are published separately on the BMA website rather than in the Rules themselves.

Key obligations

• Every insurer must file a statutory financial return in respect of its insurance business for each financial year, comprising the insurer information sheet, auditor's report, statutory balance sheet, statement of income, statement of capital and surplus, and notes.
• The insurer information sheet must disclose specified details including registration particulars, ownership and group structure, solvency margin and liquidity ratio compliance, and any corrective actions taken.
• The auditor's report must be signed by the insurer's approved auditor, addressed to the Authority, and qualified where specified deficiencies, disagreements, non-compliance, or going-concern doubts exist.
• Insurers must prepare the statutory balance sheet, statement of income and statement of capital and surplus using Forms 1SFS, 2SFS and 8SFS, consolidating controlled affiliates but presenting the statutory statements on an unconsolidated basis.
• Insurers must set forth in a general note to their statutory financial statements the matters required in Schedule II on an unconsolidated basis.
• Insurers must prepare their statutory balance sheet, income statement and capital and surplus statement in accordance with the instructions in Schedules IV, V and VI respectively.
• General business insurers must maintain the minimum margin of solvency calculated per Schedule VII and the minimum liquidity ratio (75% of relevant liabilities, or 100% for section 24(6) composites).
• Long-term business insurers must maintain the minimum margin of solvency specified in Schedule VIII, not less than the MMS floor.
• All statutory financial returns must be prepared in English, in a single specified currency, with prior-year comparative amounts shown for each item.
• Where applicable, insurers must prepare condensed general purpose financial statements (condensed consolidated balance sheet, income statement, capital and surplus statement and notes) per Schedules IX to XI.

Applies to

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

Deadlines

• 15 March 2016: Date these Rules come into operation.
• financial years commencing on or after 1 January 2016: Financial years to which these Rules apply.

Related documents

• This document is made under Insurance Act 1978