Insurance (Group Supervision) Rules 2011 - Schedules

Summary

These are the Schedules to the Insurance (Group Supervision) Rules 2011, which prescribe the detailed forms, line items and notes that an insurance group's parent company must use when preparing group statutory financial statements and its financial condition report. The Schedules do not create new supervisory concepts themselves but fill out, in prescribed format, the reporting obligations imposed elsewhere in the Rules.

• Group Statutory Balance Sheet (Form 1): Prescribes a detailed line-by-line balance sheet covering cash, quoted and unquoted investments, investments in and advances to affiliates, mortgage loans, real estate, receivables, reinsurance balances, letters of credit and guarantees, technical provisions (general and long-term business), other liabilities and statutory capital and surplus, plus required notes disclosing encumbered assets and reserve movements.
• Group Statutory Statement of Income (Form 2): Prescribes the required presentation of general business underwriting income and expenses, long-term business income and deductions, combined operating expenses, investment income, realized gains/losses, taxes and net income, with notes on material items.
• Group Statutory Statement of Capital and Surplus (Form 8): Prescribes disclosure of statutory capital (share capital, contributed surplus, hybrid instruments), movements in statutory surplus during the year, minority interest and total statutory capital and surplus.
• Financial Condition Report content: Sets out required disclosures on valuation bases for assets, technical provisions and other liabilities, reinsurance recoverables, capital management policy, eligible capital by tier, ECR and Minimum Margin of Solvency compliance, use of approved internal capital models, and reporting of significant events affecting the group.

In effect, the Schedules operate as the mandatory reporting templates and content checklists that insurance groups subject to group supervision must follow when filing their statutory financial statements and financial condition reports with the Authority.

Key obligations

• Insurance groups must prepare their group statutory balance sheet using the prescribed Form 1 line items and include the required explanatory notes (e.g., on encumbered assets and reserve movements).
• Insurance groups must prepare their group statutory statement of income using the prescribed Form 2 line items and notes on material items included in investment income, other income and realized gains/losses.
• Insurance groups must prepare their group statutory statement of capital and surplus using the prescribed Form 8 line items and notes on material changes to other statutory surplus.
• Insurance groups must include in their financial condition report particulars on valuation bases for assets, technical provisions, reinsurance recoverables and other liabilities.
• Insurance groups must disclose capital management information including capital management policy, eligible capital by tier, ECR and MSM compliance status, and details of any non-compliance and remedial measures.
• Where an approved internal capital model is used to derive the ECR, the insurance group must describe its scope, methods, aggregation methodology and data used, including comparison to the Group BSCR Model.
• Every insurance group must provide detailed particulars of any significant event, including its description, timing, and impact on the most recently filed financial condition report.

Applies to

insurance groups, designated insurers, parent companies of insurance groups subject to group supervision