Statutory Financial Return Filings and
Other Regulatory Requests
Presented By:
The Insurance Division of
The Bermuda Monetary Authority
Fall 2008
Agenda
•
Licensing & Authorizations Team Organizational Chart
•
Critical Legislation
•
Statutory Financial Return Filings
•
Section 56 Directions
•
Other Regulatory Requests
•
General Tips/New Items for 2008
2
Insurance - Licensing & Authorizations
Team
Shelby Weldon
Director
Keisha Pitt
Senior Administrative
Assistant
Leslie Robinson
Assistant Director
Licensing
Charlene Martin
Principal
Vacant
Assistant Director
Authorizations
Charlene Martin
Principal
Shanai Swan
Principal
Mekeisha Hill
Senior Analyst
Winnette Trimm
Assistant
Shae-Tai
Smith
Senior Analyst
Ramona Douglas
Assistant
Sakera Spence
Assistant
Shonette Wilson
Principal
Nicole Henneberry
Senior Analyst
Sharon Kutosi
Senior Analyst
Melissa Morton
Senior Analyst
Nicole Hypolite
Senior Analyst
Steven Ng’ganga
Senior Analyst
3
Critical Legislation
• Insurance Act 1978 & Related Regulations
• Segregated Accounts Companies Act 2000
• Bermuda Monetary Authority Act 1969
4
Statutory Financial Return
Filings
5
Statutory Financial Return Filing
Requirements
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Auditors’ Report
Cover Sheet
General Business Solvency Certificate
Long-Term Business Solvency Certificate
Declaration of Statutory Ratios
Statutory Financial Statements (Forms 1, 2 and 8)
Notes to the Statutory Financial Statements
Loss Reserve Specialist Opinion
Actuarial Opinion
Schedule of Ceded Reinsurance (Class 4 only)
6
Statutory Filings – Auditor’s Report
– Ensure that the Auditor is approved by the BMA.
– Ensure that the Auditor’s Report is an original and not stamped
draft.
– Ensure the correct legal name is used on the Auditor’s Report.
– Ensure that the Auditor’s Report states the jurisdiction in which
the Audit was conducted in accordance with the generally
accepted auditing standards.
– Ensure that the figures in the Audit Report agree to the figures
throughout the Return. If certain figures do not agree, provide
disclosure in the opening cover letter or within the Notes.
7
Statutory Filings – Cover Sheet
– Ensure that the Conditions per the Company’s Certificate of
Registration are listed on the Cover Sheet in accordance with the
Insurance Returns & Solvency Amendment Regulation 2005.
Further, ensure that the Company complies with those
Conditions.
– Ensure that the Company’s Section 56 Directions are listed on
the Cover Sheet in accordance with the Regulation noted above.
Further, ensure that the Company complies with any conditions of
the Directions.
– Ensure that the correct legal name is used on all documents.
– Ensure that the Gross Premiums Written in item (v) on the Cover
Sheet are clearly classified and separated per business line
written.
8
Statutory Filings – General Business
Solvency Certificate
- Ensure that the correct service provider and address are included
on the GBSC.
- Ensure that the signatures on the GBSC are in accordance with
the Insurance Returns and Solvency Regulations 1980, and are
original signatures.
- Ensure the signatures for the GBSC are on the same page as the
information submitted. Signatures submitted on a separate page,
are considered to be a control weakness as there’s no verification
that the Directors and Principal Representative have seen the
Statutory Financial Return.
9
Statutory Filings – Long-Term Business
Solvency Certificate
- Ensure that the correct service provider and address are included
on the LTBSC.
- Ensure that the correct legal name is used on the LTBSC.
- Ensure that the signatures on the LTBSC are in accordance with
the Insurance Returns and Solvency Regulations 1980, and are
original signatures.
10
Statutory Filings – Declaration of
Statutory Ratios
- Ensure that the ratios agree to the ratios included in the Auditor’s
Report.
- Ensure that the correct legal name is used on the DSR.
- Ensure that the signatures on the DSR are originals.
- Ensure that the percentages and ratios are calculated accurately.
11
Statutory Filings – Statutory Financial
Statements
- Ensure that the figures in the Statutory Financial Statements
agree to the figures throughout the Return.
- Ensure that the correct legal name is used on the Statutory
Financial Statements.
- Ensure that the numbers from the prior year’s column agrees to
the previous year’s filing.
- Ensure that any significant and unexpected changes in the
comparative numbers are discussed in the Notes to the Statutory
Financial Statements.
- Verify the clerical accuracy of the Financial Statements.
12
Statutory Filings – Statutory Financial
Statements Continued
- Ensure that permission to use various line items has been
received and balances are recorded on the correct lines.
- Consider all Section 56 Directions and Line Approvals. Ensure
that all approvals are current and have not expired.
- Holders of both a general and long-term license need only submit
one Form 8, Statutory Statement of Capital and Surplus.
13
Statutory Filings – Notes to the Statutory
Financial Statements
- Ensure that the Notes are presented in accordance and in a
manner prescribed by the Insurance Accounts Regulations 1980.
eg. Note 1, the beneficial owner must be detailed.
- The insurer’s significant accounting policies disclosed under Part
1, Note 3, should also include reference to cash and cash
equivalents.
- Ensure that the correct legal name is used in the Notes.
14
Statutory Filings – Loss Reserve
Specialist Opinion
- Ensure that the figure(s) in the Opinion agree to the figure(s) in
the Auditor’s Report, GBSC and the Statutory Financial
Statements.
- Ensure that the Loss Reserve Specialist is currently approved by
the BMA.
- Ensure that the Opinion is in accordance with the Insurance
Guidance Note# 4.
- This opinion is not required for Class 1 Insurers unless they are
writing > 30% professional liability business or unless required by
the BMA.
- The Opinion is required every third year for Class 2 Insurers,
beginning with the year after registration.
15
Statutory Filings – Loss Reserve
Specialist Opinion Continued
- If a Class 2 Insurer writes > 30% professional liability, they must
file a Loss Reserve Specialist Opinion annually, or if otherwise
required by the BMA.
- Class 1 and 2 Insurers will be required to file a Loss Reserve
Specialist Opinion if they are not meeting their margins on an
undiscounted basis.
- Class 3 and 4 Insurers must file an Opinion annually.
- Ensure that the correct legal name is on the Opinion.
16
Statutory Filings – Actuarial Opinion
- Ensure that the figure(s) in the Opinion agree to the figure(s) in
the Auditor’s Report, the LTBSC and the Statutory Financial
Statements.
- Ensure that the Actuary is currently approved by the BMA.
- Ensure that the Opinion is in accordance with the Insurance
Guidance Note# 10.
- Ensure that the Actuarial Opinion is on original letterhead with
original signatures.
- Ensure that this Opinion is provided on an annual basis for LongTerm Insurers and Composites. No exemptions are permitted.
- Ensure that the correct legal name is on the Opinion.
17
Statutory Filings – Schedule of Ceded
Reinsurance Premium
- Ensure that the schedule is included with each Class 4 Statutory
Financial Return Filing.
- Ensure that for the 2008 year end, this schedule is included
with Class 3A, 3B and Class 4 filings.
18
Questions??
19
Section 56 Directions
20
Section 56 Directions
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It provides a regulatory vehicle through which the Bermuda Monetary
Authority can modify the provisions under Sections 1(4), 4 to 4F, 6, 15 to
18, 18B and 33 of the Insurance Act 1978.
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It allows the Bermuda Monetary Authority to modify the provisions of the
Insurance Accounts Regulations 1980 and the Insurance Returns and
Solvency Regulations as they relate to the above sections to avoid
contradictions.
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It can be
Subject to conditions,
Retroactive (i.e. apply to something that happened in the past),
Varied, and
Revoked at any time.
21
Section 56 Directions
Modification of Sections 15-18 “Accounts and Audit”
- Extended Period Filing
- Statutory Filing Exemption
- Deposit Accounting/Balance Sheet Accounting
Modification of Section 18B “Opinion of Loss Reserve Specialist”
- Loss Reserve Specialist Opinion Exemption
Modification of Sections 6 and 33 “Margin of Solvency”
- Minimum Solvency Margin Modification
22
Section 56 Directions
Modification of Sections 15-18
Extended Period Filing Direction
The Insurer requests approval to extend its reporting period in
excess of the 53 week financial year as defined in the Act.
Possible Reasons:
- The Insurer recently changed its financial year end from 31st
December to 31st March to correspond with its parent company,
as a result a 15 month reporting period is created.
- The Insurer was recently registered under the Act, that being prior
to the year end, and has not transacted any business to date, as
a result, a reporting period in excess of 53 weeks is created.
23
Section 56 Directions
Modification of Sections 15-18
Extended Period Filing Direction Continued
- Ensure that the request letter includes the basis for the request
with information to support why the application should be granted.
- Ensure that if the request is due to a change in year end, a copy
of the Board Minutes effecting this change are included.
- Ensure that year end management accounts are provided,
showing that the insurer has not transacted any business, or very
minimal business. If the request is being made months after the
year end has passed, yet prior to the filing deadline, ensure that
the most recent management accounts are provided showing that
the Insurer remains in compliance.
24
Section 56 Directions
Section 56 – Modification of Sections 15-18
Extended Period Filing Direction Continued
- Ensure that there are no current issues of non-compliance with
the Insurer.
- Ensure that when the Insurer eventually files its Statutory
Financial Return, they report from the date of incorporation.
- Ensure that the applicable fee is included.
25
Section 56 Directions
Section 56 – Modification of Sections 15-18
Statutory Filing Exemption Direction
The Insurer requests approval to waive the filing of its Statutory
Financial Return for a specific year end.
26
Section 56 Directions
Section 56 – Modification of Sections 15-18
Statutory Filing Exemption Direction Continued
- Ensure that the request letter includes the basis for the request
with information to support why the application should be granted.
- If an Insurer no longer writes any business and no longer has
insurance liabilities, please provide support for this (e.g.
Commutation agreements, novation agreements, etc.).
- Ensure that the most recent management accounts (3-6 months
depending on the class) are included and are showing that the
Insurer has not transacted any business, has no outstanding
insurance obligations, and is in statutory compliance at the
financial year end requested and at that specific time.
27
Section 56 Directions
Section 56 – Modification of Sections 15-18
Statutory Filing Exemption Direction Continued
- Ensure that the applicable fee is included.
- Ensure that all prior years Statutory Financial Returns have been
filed.
- Ensure that there are no current issues of non-compliance with
the Insurer.
- Ensure that these applications are received prior to the Insurers
required filing date.
28
Section 56 Directions
Modification of Sections 15-18
Deposit Accounting
The insurer requests permission to record specific insurance contract
in accordance with US GAAP, based on the provisions of Financial
Accounting Standard 113 (FAS 113).
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Ensure that the request letter includes the basis for the request with
information to support why the application should be granted.
Ensure that GAAP Accounts are included with this application, if available.
Copies of signed insurance contracts accompanied by an analysis by
management of those contracts how the specific insurance contracts met
the requirements of FAS 113.
Ensure that these applications are received prior to the Insurer’s use of
the preferred accounting treatment.
29
Section 56 Directions
Modification of Sections 15-18
Balance Sheet Accounting
The insurer requests permission to record contracts written in
Segregated Accounts that are fully funded on the Balance Sheet
versus via the income statement.
- Risk transfer is not necessarily an issue in this case
- Ensure that the request letter includes the basis for the request
with information to support why the application should be granted.
- Ensure details of how the contracts will be “fully funded” are
included
- Contracts should be fully funded to policy limits
30
Section 56 Directions
Modification of Section 18B
Loss Reserve Specialist Opinion Exemption
The Insurer requests approval to waive the requirement to file a
Loss Reserve Specialist Opinion.
31
Section 56 Directions
Modification of Section 18B
Loss Reserve Specialist Opinion Exemption Continued
- Ensure that the request letter includes a detailed basis for the
request with information to support why the application should be
granted.
- Ensure that an actuarial analysis/study is provided to support the
assertions made in the application.
- In the case of an Insurer in run-off, ensure that details of the runoff, including the stage of the run-off and how the Insurer rid itself
of its insurance obligations, accompanies the application.
32
Section 56 Directions
Modification of Section 18B
Loss Reserve Specialist Opinion Exemption Continued
- In the case of short-tail business, provide a reconciliation or
analysis of claims payments to loss reserves to demonstrate how
trends are consistent.
- Ensure that recent management accounts are provided showing
that the Insurer is in statutory compliance.
- Ensure the applicable fee is included.
- Ensure that there are no current issues of non-compliance with
the Insurer.
- Ensure that these applications are received prior to the Insurers
required filing date.
33
Section 56 Directions
Modifications of Sections 6 and 33
Section 6 – Margin of Solvency and Section 33 – Margin of Solvency
for General Business in Insolvency and Winding Up
These solvency modifications are particularly important in that they
allow certain companies which by definition are 3rd party writers but
may in substance retain no risk, to be relieved of the more stringent
minimum capitalization requirements of a typical Class 3 Insurer.
S.33 modification provides flexibility as the section calls for a
company to be wound up if they do not comply with the Regulations.
34
Section 56 Directions
Modifications of Sections 6 and 33
Section 6 – Margin of Solvency and Section 33 – Margin of Solvency
for General Business in Insolvency and Winding Up
The Insurer requests approval to modify the calculation of its
Minimum Solvency Margin.
35
Section 56 Directions
Modifications of Sections 6 and 33
Section 6 – Margin of Solvency and Section 33 – Margin of Solvency
for General Business in Insolvency and Winding Up
- Ensure that the request letter includes a detailed basis for the
request with information to support why the application should be
granted.
- If the basis is that the contract is fully funded, ensure that this is
demonstrated in the application.
- Ensure that where applicable, copies of signed insurance
contracts, preference shareholders agreements and
indemnification agreements, etc are provided.
36
Section 56 Directions
Modifications of Sections 6 and 33
Section 6 – Margin of Solvency and Section 33 – Margin of Solvency
for General Business in Insolvency and Winding Up
- Ensure that there are no current issues of non-compliance with
the Insurer.
- Ensure that these applications are received prior to the Insurers
required filing date.
- Ensure that the most recent management accounts are included
and are showing that the Insurer is in statutory compliance.
- Ensure that the applicable fee is included.
37
Questions??
38
Other Regulatory Requests
39
Regulatory Requests
Regulatory Approval – Relevant Asset
The Bermuda Monetary Authority has the ability to approve, on
application, certain admitted assets (i.e. allowed on the Statutory
Balance Sheet) as relevant assets (i.e. to be used in the calculation
of the Liquidity Ratio).
These generally include:
Line 4 – Investment in and Advances to Affiliates
Line 13 – Sundry Assets
Line 14 – Letters of Credit, Guarantees and Other Instruments
40
Regulatory Requests
Regulatory Approval – Relevant Asset
- Ensure that the request letter includes the basis for the request
with information to support why the application should be granted.
- Ensure that the most recent management accounts are included
with the application showing that this approval is required to
maintain the Insurer’s statutory compliance.
- In the case of a loan to an affiliate (parent), ensure that the
affiliate’s (parent’s) most recent audited financial statements are
included with the application. (to assess the recoverability of the
asset)
- Ensure that the signed and dated loan agreement is certified as a
true copy of an original or provide an original signed and dated
loan agreement, which can be returned if need be.
41
Regulatory Requests
Regulatory Approval – Relevant Asset
- Ensure that the loan (other instrument) is required in order to
maintain the Insurer’s compliance. A loan is an admitted asset
and is therefore allowed on the Statutory Balance Sheet, even
when not required for Liquidity Ratio purposes.
- Ensure that the loan (other instrument) agreement is effective /
was effected as at the year end / period requested for approval.
- Ensure that these applications are received prior to the expiry of
the previous approval, prior to issues of non-compliance or
immediately upon discovered non-compliance.
- Ensure there are no other current issues of non-compliance.
- Ensure that the applicable fee is included.
42
Regulatory Requests
Regulatory Approval – Other Fixed Capital
The Bermuda Monetary Authority has the ability to approve, on
application, certain instruments as other fixed capital that are not
normally included under GAAP. These may include letters of credit,
Parental guarantees and subordinated notes.
These are recorded on:
Line 1c – Other Fixed Capital
43
Regulatory Requests
Regulatory Approval – Other Fixed Capital
- Ensure that the request letter includes the basis for the request
with information to support why the application should be granted.
- Ensure that the most recent management accounts are included
with the application showing that the Insurer is in statutory
compliance or requires this approval to maintain the Insurer’s
statutory compliance.
- Ensure that certified copies of the signed and dated instruments
for approval have been included in the application. Originals
received can be returned if requested.
- Ensure there are no other current issues of non-compliance with
the Insurer.
44
Regulatory Requests
Regulatory Approval – Other Fixed Capital
- Ensure that these applications are received prior to the previous
expiry date or/and upon issues of solvency.
- Ensure that the applicable fee is included.
45
Regulatory Requests
Regulatory Approval – Reduction of Capital – Section 31C(4)
The Insurer requests approval to reduce its Statutory Capital by
more than 15% over the previous year’s ending Statutory Capital.
Statutory Capital is that which is recorded on Lines 1a, b and c only.
If it falls on Line 1a, b and c, it needs our approval to reduce it by
more than 15%.
Possible Reasons:
- A reduction in the amount of shares a company wishes to issue.
- A repayment of contributed surplus.
- The cancellation of a Letter of Credit or parental guarantee.
46
Regulatory Requests
Regulatory Approval – Reduction of Capital – Section 31C(4)
- Ensure that the request letter includes a detailed basis for the
request with information to support why the application should be
granted.
- Ensure the detailed letter includes why the reduction is required,
when, where the funds are going, specifically where the funds are
coming from, and the specific amount.
- Ensure an actuarial analysis supporting the loss reserve figure
(including information on development of reserves) is provided.
- Ensure that the most recent management accounts are included
with the application showing the Insurer’s current compliant
position.
- Ensure there are no other current issues of non-compliance with
the Insurer.
47
Regulatory Requests
Regulatory Approval – Reduction of Capital – Section 31C(4)
- Ensure that proforma management accounts demonstrating the
effect of the proposed reduction of capital are included, and
showing that the Insurer will remain in compliance after the
reduction.
- Ensure the reduction is from Statutory Capital as opposed to
Statutory Surplus (i.e. retained earnings), in which case the
BMA’s approval is not required.
- Ensure this application for approval is made prior to the reduction
taking place.
- Confirm that reduced Statutory Capital with Statutory Surplus can
support the worst case scenario.
- Ensure the applicable fee is included.
48
Regulatory Requests
Regulatory Approval – Reduction of Capital – Section 31C
A Class 4 Insurer requests approval to reduce its Statutory Capital
by more than 15% over the previous year’s ending Statutory Capital.
Statutory Capital is that which is recorded on Lines 1a, b and c only.
If it falls on Line 1a, b and c, it needs our approval to reduce it by
more than 15%.
Possible Reasons:
- A reduction in the amount of shares a company wishes to issue.
- A repayment of contributed surplus.
- The cancellation of a Letter of Credit or parental guarantee.
49
Regulatory Requests
Regulatory Approval – Reduction of Capital – Section 31C
- Ensure that the request letter includes a detailed basis for the
request with information to support why the application should be
granted.
- Ensure the detailed letter includes why the reduction is required,
when, where the funds are going, specifically where the funds are
coming from, and the specific amount.
- Ensure an actuarial analysis supporting the loss reserve figure
(including information on development of reserves) is provided.
- Ensure that the most recent management accounts are included
with the application showing the Insurer’s current compliant
position.
- Ensure there are no other current issues of non-compliance with
the Insurer.
50
Regulatory Requests
Regulatory Approval – Reduction of Capital – Section 31C
- Ensure that proforma management accounts demonstrating the
effect of the proposed reduction of capital are included, and
showing that the Insurer will remain in compliance after the
reduction.
- Ensure the reduction is from Statutory Capital as opposed to
Statutory Surplus (i.e. retained earnings), in which case the
BMA’s approval is not required.
- Ensure this application consists of an affidavit signed by at least
two Directors of the Insurer, one of whom must be a Director
resident in Bermuda, if the Insurer has a Director so resident and
by the Principal Representative.
51
Regulatory Requests
Regulatory Approval – Reduction of Capital – Section 31C
- This affidavit must state that in the opinion of those signing, the
proposed reduction of capital will not cause the Insurer to fail to
meet its relevant margin.
- Ensure this application for approval is made prior to the reduction
taking place.
- Confirm that reduced Statutory Capital with Statutory Surplus can
support the worst case scenario.
- Ensure the applicable fee is included.
52
Regulatory Requests
Regulatory Approval – Share Transfers and Allotments
This section allows for a new or existing person or entity to obtain a
shareholder interest in a company. The shareholder interest can be
obtained through a transfer from an existing shareholder to a new
or existing shareholder or from a new share issuance.
53
Regulatory Requests
Regulatory Approval – Share Transfers and Allotments
- Ensure that the request letter includes a detailed basis for the
request with information to support why the application should be
granted.
- Ensure that the most recent management accounts are included
with the application showing the Insurer’s current compliant
position.
- Ensure there are no other current issues of non-compliance with
the Insurer.
- In cases of complex share transfers, (i.e. where there may be
several subsidiary companies of a parent company involved in
the transfer), it would be helpful if an organizational/structure
chart is included in the application.
54
Regulatory Requests
Regulatory Approval – Share Transfers and Allotments
- For Share Transfers where notification and/or permission under
the Insurance Act 1978 (“Act”) is being requested, please ensure
that the relevant section(s) of the Act for such notification and/or
permission, is/are quoted in the application.
- Ensure that all Share Transfers involving notification and/or
permission under the Act are addressed to both Corporate
Authorizations and Licensing and Authorizations.
- Where Share Transfer applications indicate ‘see appendix
attached’, in many cases such appendices are not attached.
Please ensure all enclosures/attachments are included with all
applications, whether to Corporate Authorizations or Licensing
and Authorizations.
55
Regulatory Requests
Regulatory Approval – Share Transfers and Allotments
- Consider whether the transaction is a transfer which falls under
the Insurance Act prior to submitting it.
- Ensure that when transferring the shares of a Class 1 Insurer to
more than 1 owner, this will result in a change of Class if the
requirements of the Class 1 definition are no longer met.
56
Regulatory Requests
Regulatory Approval – Deregistrations
The Insurer may, subject to the provisions of Sections 41 and 42 of
the Act, request cancellation of the registration of an Insurer, or any
Insurance Intermediary. Cancellation (deregistration) may be at the
request of the Insurer or by order of the BMA.
Possible Reasons:
- The Insurer has terminated all contracts, commuted all remaining
business, has no insurance premiums or liabilities outstanding
and has no further need for the company. (Insurer’s request)
- The Insurer is out of compliance with its statutory filing, annual
business fees, its Directors and Officers and Principal
Representative have resigned and it is not meeting its minimum
solvency margin. ( By order of the BMA)
57
Regulatory Requests
Regulatory Approval – Deregistrations
- Ensure that the request letter includes the basis for the request
with information to support the application to ensure processing in
a timely manner.
- Ensure that the most recent (closing) management accounts are
included demonstrating that the Insurer has no insurance
premiums or liabilities on its books.
- Ensure that a Statutory Declaration signed by 2 Directors is
included.
- Ensure that signed and dated Commutation and/or Novation
agreements are included with the application.
58
Regulatory Requests
Regulatory Approval – Deregistrations
- Ensure that the original Certificate of Registration (Insurance
License) is included with the application.
- If a dual class of Insurer, state which license is being cancelled. If
both are being cancelled, return both licenses.
- Ensure that you state the effective date when the insurer stopped
writing business.
- Ensure that there are no current issues of non compliance and
that the Insurer is up-to-date with its statutory filings and fees.
59
Questions??
60
General Tips/New Items for 2008
- In order to have applications processed in a timely manner,
please provide COMPLETE applications.
- Call the BMA to confirm completeness or arrange a meeting to
discuss complex application prior to submitting the application.
- In order to have applications processed in a timely manner,
please submit multiple application requests on separate letters.
This will ensure that no applications are overlooked.
- Pending legislation re new Annual Business Fees/Transaction
Fees to be effective January 1, 2009
- Classes 3A and 3B will need to file a Schedule of Ceded
Reinsurance.
- Special Purpose Insurers will follow the filing requirements of
Composite Insurers.
61
General Tips/New Items for 2008
- Check whether there is no approval given or approval has
lapsed/expired for certain line items, such as,
Line 4 – Investment in and Advances to Affiliates
Line 13 – Sundry Assets
Line 14 – Letters of Credit, Guarantees and Other Instruments
Line 1c – Any Other Fixed Capital
- Line 37 items on Form 1 – Letters of Credit, Guarantees and
Other Instruments. Where these instruments do not relate to the
Company’s insurance operations, and encumber the insurers
assets, a liability shall be recorded and the Statutory Capital and
Surplus decreased by a corresponding amount. These should be
thoroughly discussed in the Notes.
62
General Tips/New Items for 2008
- Has the insurer changed service providers (e.g.. Auditor, Principal
Representative, Loss Reserve Specialist, Actuary) without
seeking the approval of the BMA.
- No prior permission has been received for a reduction in
Statutory Capital by more than 15%. (e.g.. Section 31C(4) –
repayment of contributed surplus or cancellation of a Letter of
Credit, parental guarantee, etc.)
- The Company is not in compliance with the Conditions of its
license or Section 56 Direction. (e.g.. Class 2 Insurer writing in
excess of 20% unrelated business, effecting new contracts of
Insurance when restricted from doing so, paying dividends when
restricted from doing so, etc.)
- Deposit Accounting treatment/Balance Sheet accounting is being
used without the consent and approval of the BMA.
63
General Tips/New Items for 2008
- Inadequate or omitted Note disclosures:
• Beneficial owner not detailed – Note 1 of Part 1 of Schedule II of
the Insurance Accounts Regulations 1980.
• Significant Accounting Policies not disclosed under Part 1 –
matters to be set forth in the general note to the Statutory
Financial Statements, Note 3, for cash and cash equivalents.
• Commissions and brokerage – omitted note disclosure.
• Form 2, Line 4 – Increase (decrease) in Unearned Premium –
when the change does not agree with the difference between
Form 1, Line 16 current and prior years, provide reconciliation
64
General Tips/New Items for 2008
• Loss and loss expense provisions – discount rates must be
disclosed.
• Sundry Assets/Liabilities, if material, should be disclosed.
• Provide copies of contracts, not just a high level description of
business written for all relevant applications.
65
Glossary
•
•
•
GBSC - General Business Solvency Certificate
LTBSC – Long-term Business Solvency Certificate
DSR – Declaration of Statutory Ratios
66
Additional Resources
– BMA website www.bma.bm
– www.bermudalaws.bm
– Regulatory approvals: Licensing and Authorization
– Compliance issues: Restoration, Run-Off & Monitoring
(Compliance)
67
Licensing & Authorizations
Contact Information
Shelby Weldon
Leslie Robinson
Shonette Wilson
Shanai Swan
Charlene Martin
Nicole Hypolite
Melissa Morton,
Nicole Henneberry
Sharon Kutosi
Shea Smith
Mekisha Hill
Stephen N’ganga
Keisha Pitt
Ramona Douglas
Sakera Spence
Winnette Trimm
Director
sweldon@bma.bm
Assistant Director
lrobinson@bma.bm
Principal
sawilson@bma.bm
Principal
sswan@bma.bm
Principal
cmartin@bma.bm
Senior Analyst
nhypolite@bma.bm
Senior Analyst
mmorton@bma.bm
Senior Analyst
nhenneberry@bma.bm
Senior Analyst
skutosi@bma.bm
Senior Analyst
ssmith@bma.bm
Senior Analyst
mhill@bma.bm
Senior Analyst
snganga@bma.bm
Senior Admin Assistant kpitt@bma.bm
Assistant
rdouglas@bma.bm
Assistant
sspence@bma.bm
Assistant
wtrimm@bma.bm
68
278-0209
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Questions??
69