Guidance Note for Licensed Insurers on the Completion and Submission of Annual Returns (November 2021)

Summary

This guidance note from the Guernsey Financial Services Commission explains how licensed insurers and their General Representatives should complete and submit the annual return (form 133) on the Commission's online portal. It follows a 2018 thematic review and is intended to improve the quality and accuracy of regulatory reporting, walking through each section of form 133 in order.

• Financial information: Upload signed audited financial statements, answer the qualified audit opinion or emphasis of matter question correctly, and upload the Regulatory Solvency Assessment (RSA) using the current version, ensuring it reconciles to the audited balance sheet without netting off items.
• Solvency documents: Upload the Own Solvency Capital Assessment (OSCA), or provide a reasoned explanation with supporting rationale if not uploaded, and upload a full ORSA where required; PCCs must provide RSA, OSCA and management accounts for the core and each cell.
• Key figures and reconciliation: Convert figures to Sterling correctly and ensure gross written premium, net earned premium, underwriting and non-underwriting expenses, profit before tax and shareholders equity figures reconcile to the audited financial statements.
• Business plan: Upload the most recent business plan if the Commission does not already hold it; use form 213, not the annual return, to notify material changes to the business plan.
• Statistical information: Report retail client status accurately (only Category 1 or 3 insurers are expected to answer yes) and disclose the number of complaints and significant complaints.
• Declaration by General Representative: Certify compliance with the business plan, conditions or directions, the Insurance Business Rules, AML legislation, and solvency requirements; confirm adequate books and records, a maintained complaints register, that the return is a full and fair reflection of the business, and directors' consideration of the Code of Corporate Governance.
• Late filing: Returns submitted late are automatically subject to an administrative financial penalty under the Financial Services Commission (Administrative Financial Penalties) (Bailiwick of Guernsey) Regulations 2016, and persistent lateness may trigger further supervisory or enforcement action.

The guidance does not itself set new deadlines but reinforces existing obligations under The Insurance Business Rules, 2021 and The Insurance Business (Solvency) Rules, 2021 regarding accurate and timely submission of annual returns.

Key obligations

• The General Representative is responsible for submitting the annual return (form 133) pursuant to rule 5.1(1)(b) of The Insurance Business Rules, 2021.
• Signed audited financial statements and the current version of the Regulatory Solvency Assessment (RSA) must be uploaded with the annual return.
• An Own Solvency Capital Assessment (OSCA) must be uploaded, or if not, a reason with supporting rationale must be provided as required by rule 8.2(3)(c) of the Insurance Business (Solvency) Rules, 2021.
• Life companies must upload the actuarial valuation report and annual declaration by the actuary where applicable.
• Basis adjustments to the regulatory balance sheet must be clearly explained per rule 6.1 of The Insurance Business (Solvency) Rules, 2021.
• Material changes to the business plan must be notified to the Commission using form 213, not through the annual return process.
• A breach of a condition or direction must be notified to the Commission immediately upon the General Representative becoming aware of it.
• Adequate books and records must be maintained in Guernsey, including for outsourced functions performed outside Guernsey.
• A complaints register must be maintained for all licensed insurers.
• The General Representative must certify in the declaration on compliance with the business plan, conditions/directions, the Insurance Business Rules, AML legislation, and solvency requirements, and confirm the return is a full and fair reflection of the business.
• Late annual returns are automatically subject to an administrative financial penalty under the Financial Services Commission (Administrative Financial Penalties) (Bailiwick of Guernsey) Regulations 2016.

Applies to

Licensed Insurers, General Representatives, Life companies, Protected Cell Companies (PCCs)