Insurance Accounts Regulations 1980

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Year	1980
Category	Consolidated

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Table of Contents

1. Citation
2. Interpretation
3. Statutory financial statements
4. Balance sheet and statement of income for general business
5. Balance sheet and statement of income for long-term business
6. Balance sheet and statement of income for composites
6A. Balance sheet and statement of income for Special Purpose Insurers [revoked]
7. Statement of capital and surplus for all insurers
8. Notes to statutory financial statements
9. Instructions relating to statutory financial statements
10. Requirements relating to preparation of accounts generally
11. Offences
12. Commencement [omitted]
SCHEDULE — I
SCHEDULE — II
SCHEDULE — III
SCHEDULE — IV
SCHEDULE — V

QU OF NT AT A FE RU

BERMUDA

INSURANCE ACCOUNTS REGULATIONS 1980

BR 18 / 1980

[made by the Minister of Finance under the Insurance Act 1978 and brought into operation on 1 January 1980]

1 These Regulations may be cited as the Insurance Accounts Regulations 1980.

Interpretation

2 In these Regulations, except where the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say—

“account” includes any of the statements specified in regulation 3(2), and any note or other document annexed or attached to any such statement;

“the Act” means the Insurance Act 1978;

“affiliate”, in relation to an insurer, means a body forming part of a group with that insurer;

“association” has the meaning assigned thereto in the definition of “group”;

“composite” means an insurer which in the relevant year carried on both general business and long-term business;

“fair value determined in good faith”, in relation to an investment held by an insurer, means the value of that investment, being the value that in the opinion of the directors, exercising good faith, that investment would realize on a sale or other disposition of that investment within a reasonable period of time;

“Form” means any Form in Schedule I;

“funds held by ceding reinsurers” means funds held by ceding reinsurers under the terms of contracts of insurance;

“group” means any two or more bodies, whether corporate or unincorporate, that are in association, and two bodies shall for the purposes of these Regulations be deemed to be in association if one of them has control of the other or both are under the control of the same person or persons;

“independent”, in relation to an appraisal, means that the appraisal is made by a person who—

(a) makes such appraisals in the ordinary course of his business; and

(b) is not financially interested in any way in the business of the person whose property is being appraised, apart from the appraisal;

INSURANCE ACCOUNTS REGULATIONS 1980

“insurance” has the same meaning as the expression “insurance business” has in the Act;

“liability insurance business” means the business of effecting and carrying out contracts of insurance against risks of the persons insured incurring liabilities to third parties;

“non-admitted”, in relation to an asset, means an asset or portion of an asset that is not allowed by these Regulations to be taken into account in preparing the statutory balance sheet;

“policy” or “policy of insurance” means any contract of insurance (including any contract to pay an annuity on human life), whether or not there is in being any instrument in writing evidencing the contract;

“policy loan” means a loan made to a policyholder by an insurer carrying on long- term business on the security of the cash surrender value of the policyholder’s policy of insurance;

“policy reserve” means the amount by which the present value of any benefits due under a policy of insurance exceeds the present value of the net premiums payable under the policy;

“products liability insurance” means liability insurance business where the risks, the subject of the contract of insurance, are risks of the persons insured incurring liabilities in relation to the manufacture or sale by them of, or some other dealing by them in, products that are, or may be claimed to be, in some respect defective;

“professional liability insurance” means liability insurance business where the risks, the subject of the contract of insurance, are risks of the persons insured incurring liabilities in relation to the negligent or other exercise by those persons of some professional skill;

“quoted”—

(a) in relation to an investment, means an investment as respects which there has been granted a quotation or permission to deal on a stock exchange in Bermuda recognized by the Authority for the purposes of the Act, or on any stock exchange or over-the-counter market of repute outside Bermuda; and

(b) in relation to the value of an investment, means the market value of that investment, being the value listed on such an exchange or over-the- counter market as aforesaid on the last day of the relevant year, and “unquoted” shall have a corresponding meaning, so, however, that any investment by all insurer in an affiliate shall not for any purpose of these Regulations be taken to be either a quoted or an unquoted investment;

“regulations” means regulations made under section 53 of the Act;

“relevant year” has the meaning assigned thereto in paragraph (3) of regulation 3;

INSURANCE ACCOUNTS REGULATIONS 1980

“retrocessional contract” means a reinsurance contract whereby one reinsurer transfers all or part of the reinsurance risk that it has assumed or will assume to another reinsurer.

“section 24(6) composite” means an insurer to which section 24 of the Act does not apply by reason of subsection (6) of that section;

“statutory financial statements” has the meaning assigned thereto in paragraph

(2) of regulation 3:

“unearned premiums” means the amount set aside as at the end of an insurer’s financial year out of premiums in respect of risks to be borne by the insurer after the end of that year, and calculated pro rata, under contracts of insurance entered into before the end of that year. [Regulation 2 amended by 2001:27 effective 1 October 2001; “loss reserve specialist” deleted by BR 41/2005 effective 1 July 2005; “retrocessional contract” inserted by BR 1/2009 reg.3 effective 31 December 2008]

3. Statutory financial statements

(1) Except as provided otherwise in other rules the duties of every insurer in relation to the preparation of statutory financial statements within the meaning of section

15 of the Act shall be those prescribed in these Regulations.

(2) The said statutory financial statements consist of—

(a) a statutory balance sheet;

(b) a statutory statement of income;

(d) [revoked]

(3) Every Class 1, Class 2, Class 3, Class A, Class B insurer and innovative insurer shall have the duty to prepare in accordance with the requirements of these Regulations, in respect of its insurance business for each financial year, the statutory financial statements specified in sub-paragraphs (a) to (c) of paragraph (2), and the financial year in relation to which any particular set of financial statements have been, or are to be, prepared is in these Regulations referred to as “the relevant year”. [Regulation 3 paragraphs (1) and (3) amended by 2015 : 50 s. 15 effective 1 January 2016; paragraph

(2)(d) revoked by BR 41 / 2017 reg. 2 effective 22 April 2017; Regulation 3 paragraph (3) amended by

2018 : 35 Sch & s. 22 effective 23 July 2018]

4. Balance sheet and statement of income for general business

(1) The statutory balance sheet and the statutory statement of income of a Class 1, Class 2, Class 3 Insurer or innovative insurer which in the financial year carried on no insurance business other than general business shall respectively be in the forms set out in Forms 1A and 2A.

(1A) [revoked]

INSURANCE ACCOUNTS REGULATIONS 1980

(2) [revoked]

(3) [revoked] [Regulation 4 amended by BR 1/2009 reg.4 effective 31 December 2008; amended by BR 93 / 2010 reg.2 effective 31 December 2010; amended by 2011 : 44 Sch. 1 effective 31 December 2011; amended by 2015 : 50 s. 15 effective 1 January 2016; paragraph (1) amended and paragraphs (2) and (3) revoked by BR 41 / 2017 reg. 3 effective 22 April 2017; Regulation 4 paragraph (1) amended by 2018 :

35 Sch & s. 22 effective 23 July 2018]

Balance sheet and statement of income for long-term business

5 The statutory balance sheet and the statutory statement of income of a Class A or Class B insurer which in the relevant year carried on no insurance business other than long-term business shall respectively be in the forms set out in Forms 4 and 5. [Regulation 5 amended by 2015 : 50 s. 15 effective 1 January 2016; Regulation 5 amended by 2018 :

35 Sch & s. 22 effective 23 July 2018; Regulation 5 amended by 2022 : 41 s. 42 effective 20 December 2022]

6. Balance sheet and statement of income for composites

(1) Subject to paragraph (3)—

(a) the statutory balance sheet;

(b) the statutory statement of income; and

(c) where the case requires, the statutory open year business revenue statement, of every composite shall, in respect of its general business, respectively be in the forms called for by regulation 4.

(2) Subject to paragraph (3), the statutory balance sheet and the statutory statement of income of every composite shall, in respect of the composite’s long-term business, respectively be in the forms called for by regulation 5.

(3) Subject to paragraph (4), the requirements of paragraphs (1) and (2) shall not apply in relation to any section 24(6) composite, but instead—

(a) the statutory balance sheet and the statutory statement of income of a section 24(6) composite shall respectively be in the forms set out in Forms 1A, 2A, 4 and 5.

(b) [revoked]

(4) A section 24(6) composite may, if it thinks fit, comply with the requirements of paragraphs (1) and (2) voluntarily, and any section 24(6) composite which complies with those requirements need not comply with the requirements of paragraph (3). [Regulation 6 paragraph (3)(a) amended and paragraph (3)(b) revoked by BR 41 / 2017 reg. 4 effective

22 April 2017]

INSURANCE ACCOUNTS REGULATIONS 1980

Balance sheet and statement of income for Special Purpose Insurers

6A [Revoked by 2019 : 51 s. 4]

[Regulation 6A revoked by 2019 : 51 s. 4(1) effective 30 April 2020]

Statement of capital and surplus for all insurers

7 The statutory statement of capital and surplus of every insurer shall be in the form set out in Form 8.

8. Notes to statutory financial statements

(1) Every Class 1, Class 2, Class 3, Class A, Class B insurer and innovative insurer shall set forth in a general note to its statutory financial statements the matters called for in Part I of Schedule II.

(2) [revoked]

(3) Every Class 1, Class 2, Class 3, Class A, Class B insurer and innovative insurer, and section 24(6) composite shall also set forth—

(a) in notes to its statutory balance sheet the matters called for in Part V of

Schedule — II; and

(b) in notes to its statutory statement of income the matters called for in

PART VIof Schedule II; and

(c) in notes to its statutory capital and surplus the matters called for in Part IV of Schedule II. [Regulation 8 amended by BR 1/2009 reg.6 effective 31 December 2008; amended by BR 93 / 2010 reg.3 effective 31 December 2010; amended by 2011 : 44 Sch. 1 effective 31 December 2011; amended by 2015 : 50 s. 15 effective 1 January 2016; Regulation 8 amended by 2018 : 35 Sch & s. 22 effective

23 July 2018; Regulation 8 paragraph 3 amended by 2019 : 51 s. 4(1) effective 30 April 2020]

9. Instructions relating to statutory financial statements

(1) Every Class 1, Class 2, Class 3, Class A, Class B insurer and innovative insurer shall comply with the following provisions of this regulation (being provisions containing instructions affecting the preparation of the several statutory financial statements).

(2) In the preparation of the statutory balance sheet the instructions set forth in the several Parts of Schedule III shall have effect in accordance with the following rules, that is to say—

(a) [revoked]

(b) [revoked]

(c) every insurer to whom subparagraph (e) applies which in the relevant year carried on no insurance business other than long-term business shall, in addition to complying with the instructions in Part IV, comply with the instructions in Part III;

INSURANCE ACCOUNTS REGULATIONS 1980

(d) every section 24(6) composite shall, in addition to complying with the instructions in Part IV, comply with the instructions in Part III;

(e) every Class 1, Class 2, Class 3, Class A, Class B insurer and innovative insurer, and section 24(6) composite shall comply with the instructions in Part IV.

(3) In the preparation of the statutory statement of income the instructions set forth in the several Parts of Schedule IV shall have effect in accordance with the following rules, that is to say—

(a) [revoked]

(b) [revoked]

(d) every section 24(6) composite shall—

(i) in addition to complying with the instructions in Part IV, comply with the instructions in Part III.

(ii) [revoked]

(e) every Class 1, Class 2, Class 3, Class A, Class B insurer and innovative insurer, and section 24(6) composite, shall comply with the instructions in Part IV.

(4) In preparing its statutory statement of capital and surplus every insurer shall comply with the instructions in Schedule V.

(5) If any instruction in Schedule III, IV or V requires any amount to be shown or any information to be given in a line of a Form in Schedule I, that amount or information must be shown or given on that line notwithstanding that that line or that Form may not contain any express direction or indication where the amount or information is to be shown or given. [Regulation 9 amended by 1995:20 effective 29 April 1995; amended by BR 1/2009 reg.7 effective 31 December 2008; amended by BR 93 / 2010 reg.4 effective 31 December 2010; amended by 2011 : 44 Sch. 1 effective 31 December 2011; amended by 2015 : 50 s. 15 effective 1 January 2016; paragraph

(3)(d)(ii) revoked by BR 41 / 2017 reg. 6 effective 22 April 2017; Regulation 9 amended by 2018 : 35 Sch & s. 22 effective 23 July 2018; Regulation 9 amended by 2019 : 51 s. 4(1) effective 30 April 2020]

10. Requirements relating to preparation of accounts generally

(1) All accounts shall be prepared in the English language.

(2) All amounts which for any purposes of these Regulations are to be shown in any account of any insurer shall be shown in a single currency, and that currency shall be the currency in which the books and records of the insurer are kept in the insurer’s principal office in Bermuda or, where different books and records are kept in different

INSURANCE ACCOUNTS REGULATIONS 1980

currencies in that office, then the currency in which the majority of those books and records are kept: Provided that where the Authority pursuant to the power given to it by section 17(1) of the Act directs the production to it of statutory financial statements, and amounts in those statements are shown in a foreign currency. those amounts must be converted into their Bermudian equivalent before the said statements are so produced.

(3) For the purposes of paragraph (2), the Bermudian equivalent of an amount in a foreign currency shall be the Bermudian dollar equivalent of that amount as converted into Bermudian dollars at the rate of exchange used by any licensed Bank in Bermuda in relation to purchases by that Bank of that foreign currency on the last day of the relevant year.

(4) For all items shown in any account of any insurer (other than a statutory open year business revenue statement) there shall be shown the corresponding amounts for the immediately preceding financial year.

[Regulation 10 paragraph (2) amended by BR 93 / 2010 reg.5 effective 31 December 2010]

11. Offences

(1) Any person who—

(a) fails to comply with any duty or prohibition imposed upon him by these Regulations; or

(b) in or in relation to any account makes, or joins in making, any statement which he knows to be false or does not believe to be true, shall be guilty of an offence against these Regulations.

(2) In sub-paragraph (b) of paragraph (1), the expression “make a statement” includes, in relation to any statement made, a wilful omission to state something that is material.

Commencement

12 [omitted]

INSURANCE ACCOUNTS REGULATIONS 1980

SCHEDULE — I

(Regs. 2, 4, 5, 6, 7) PRESCRIBED FORMS OF STATUTORY FINANCIAL STATEMENTS

Form 1

[Form 1 revoked by 2015 : 50 s. 15 effective 1 January 2016]

Form 1A (Reg 4) STATUTORY BALANCE SHEET (General Business – Class 1, Class 2, or Class 3 insurer) [blank] name of Company as at [blank] (day/month/year) expressed in [blank] (currency used (vide Reg. 10(2))) ASSETS STMT. 20XX 20XX LINE No.

1. CASH AND TIME DEPOSITS XXX XXX

2. QUOTED INVESTMENTS:

(a) Bonds and Debentures

(i) Held to maturity XXX XXX

(ii) Other XXX XXX

(b) Total Bonds and Debentures XXX XXX

(i) Common stocks XXX XXX

(ii) Preferred stocks XXX XXX

(iii) Mutual funds XXX XXX

(d) Total equity investments XXX XXX

(e) Other quoted investments XXX XXX

(f) Total quoted investments XXX XXX

3. UNQUOTED INVESTMENTS:

(a) Bonds and Debentures

(i) Held to maturity XXX XXX

(ii) Other XXX XXX

(b) Total Bonds and Debentures XXX XXX

(i) Common stocks XXX XXX

(ii) Preferred stocks XXX XXX

(iii) Mutual funds XXX XXX

(d) Total equity investments XXX XXX

(e) Other unquoted investments XXX XXX

(f) Total unquoted investments XXX XXX

4. INVESTMENTS IN AND ADVANCES TO

AFFILIATES (EQUITY METHOD):

INSURANCE ACCOUNTS REGULATIONS 1980

(a) Unregulated entities that conduct XXX XXX ancillary services

(b) Unregulated non-financial operating XXX XXX entities

(d) Regulated non-insurance financial XXX XXX operating entities

(e) Regulated insurance financial XXX XXX operating entities

(f) Total investments in affiliates (equity XXX XXX method)

(g) Advances to affiliates XXX XXX

(h) Total investments in and advances to XXX XXX affiliates (equity method)

5. INVESTMENTS IN MORTGAGE LOANS ON

REAL ESTATE:

(a) First lienes XXX XXX

(b) Other than first liens XXX XXX

7. REAL ESTATE::

(a) Occupied by the company (less XXX XXX encumbrances)

(b) Other properties (less encumbrances) XXX XXX

8. COLLATERAL LOANS: XXX XXX

9. INVESTMENT INCOME DUE AND XXX XXX

10. ACCRUED:

RECEIVABLE:

(a) In course of collection XXX XXX

(b) Deferred – not yet due XXX XXX

(d) Total accounts and premiums XXX XXX receivable

11. REINSURANCE BALANCES RECEIVABLE

(a) Foreign affiliates XXX XXX

(b) Domestic affiliates XXX XXX

(d) All other insurers XXX XXX

(e) Total reinsurance balances receivable XXX XXX

12. FUNDS HELD BY CEDING REINSURERS:

(a) Affiliates XXX XXX

(b) Non-affiliated XXX XXX

13. SUNDRY ASSETS::

INSURANCE ACCOUNTS REGULATIONS 1980

(a) Derivative instruments XXX XXX

(b) Segregated accounts companies XXX XXX

(d) ___________ XXX XXX

(e) Total sundry assets XXX XXX

14. LETTERS OF CREDIT, GUARANTEES

AND OTHER INSTRUMENTS:

(a) Letters of credit XXX XXX

(b) Guarantees XXX XXX

(d) Total letters of credit, guarantees and XXX XXX other instruments

15. TOTAL: XXX XXX

GENERAL BUSINESS INSURANCE RESERVES, OTHER LIABILITIES AND STATUTORY CAPITAL AND SURPLUS STMT. 20XX 20XX LINE No. INSURANCE RESERVES

16. UNEARNED PREMIUMS

17. LOSS AND LOSS EXPENSE PROVISIONS

(a) Gross loss and loss expense provisions XXX XXX

(b) Less: Reinsurance recoverable balance XXX XXX

(i) Foreign affiliates XXX XXX

(ii) Domestic affiliates XXX XXX

(iii) Pools & associations XXX XXX

(iv) All other insurers XXX XXX

(d) Net loss and loss expense provisions XXX XXX

18. OTHER INSURANCE RESERVES— XXX XXX

19. GENERAL BUSINESS

28. INSURANCE RESERVES OTHER LIABILITIES

29. BALANCES PAYABLE

30. TAXES PAYABLE

31.

(a) INCOME TAXES PAYABLE XXX XXX

(b) DEFERRED INCOME TAXES XXX XXX

32. AMOUNTS DUE TO AFFILIATES XXX XXX

33. ACCOUNTS PAYABLE AND ACCRUED XXX XXX

34. LIABILITIES

CONTRACTS

(a) Affiliated XXX XXX

INSURANCE ACCOUNTS REGULATIONS 1980

(b) Non-affiliated XXX XXX

35. DIVIDENDS PAYABLE XXX XXX

36. SUNDRY LIABILITIES:

(a) Derivative instruments XXX XXX

(b) Segregated accounts companies XXX XXX

(d) ___________ XXX XXX

(e) Total sundry liabilities XXX XXX

37. LETTERS OF CREDIT, GUARANTEES

AND OTHER INSTRUMENTS

(a) Letters of credit XXX XXX

(b) Guarantees XXX XXX

(d) Total letters of credit, guarantees and XXX XXX other instruments

38. TOTAL OTHER LIABILITIES XXX XXX

39. TOTAL GENERAL BUSINESS INSURANCE XXX XXX

40. RESERVES AND OTHER LIABILITIES STATUTORY CAPITAL AND SURPLUS

41. SURPLUS

Form 2

[Form 2 revoked by 2015 : 50 s. 15 effective 1 January 2016]

Form 2A (Reg 4) STATUTORY STATEMENT OF INCOME (General Business – Class 1, Class 2, Class 3 insurer or IGB insurer) [blank] name of Company as at [blank] (day/month/year) expressed in [blank] (currency used (vide Reg. 10(2)))

1. STMT. 20XX 20XX LINE No. UNDERWRITING INCOME

(a) Direct gross premiums written XXX XXX

(b) Assumed gross premiums written XXX XXX

2. REINSURANCE PREMIUMS CEDED XXX XXX

3. NET PREMIUMS WRITTEN XXX XXX

4. INSURANCE ACCOUNTS REGULATIONS 1980

5. PREMIUMS

6. OTHER INSURANCE INCOME XXX XXX

7. XXX XXX

8. UNDERWRITING EXPENSES

9. EXPENSES INCURRED

10. OTHER UNDERWRITING EXPENSES

11. PERSONNEL COSTS XXX XXX

12. OTHER XXX XXX

13. XXX XXX

15. 14 UNDERWRITING PROFIT (LOSS) XXX XXX

YEARBUSINESS REVENUE STATEMENT

16 NET UNDERWRITING PROFIT (LOSS) XXX XXX

18. 17 GENERAL BUSINESS INVESTMENT XXX XXX INCOME—NET

37. ITEMS

38. INCOME BEFORE TAXES XXX XXX

39. INCOME TAXES (IF APPLICABLE):

(a) Current XXX XXX

(b) Deferred XXX XXX

40. INCOME BEFORE REALIZED GAINS XXX XXX

(LOSSES)

41. REALIZED GAINS (LOSSES) XXX XXX

42. NET INCOME XXX XXX

Form 3

[Form 3 revoked by BR 41 / 2017 reg. 7 effective 22 April 2017]

Form 4 STATUTORY BALANCE SHEET (Long-term Business) [blank] name of Company as at [blank] (day/month/year) expressed in [blank] (currency used (vide Reg. 10(2)))

INSURANCE ACCOUNTS REGULATIONS 1980

1. ASSETS STMT. LINE No. 20XX 20XX

2. QUOTED INVESTMENTS:

Bonds and Debentures

(a) Bonds and debentures

(i) Held to maturity XXX XXX

(ii) Other XXX XXX

(b) Total bonds and debentures XXX XXX

(i) Common stocks XXX XXX

(ii) Preferred stocks XXX XXX

(iii) Mutual funds XXX XXX

(d) Total equity investments XXX XXX

(e) Other quoted investments XXX XXX

(f) Total quoted Investments XXX XXX

3. UNQUOTED INVESTMENTS:

Bonds and Debentures

(a) Bonds and debentures

(i) Held to maturity XXX XXX

(ii) Other XXX XXX

(b) Total bonds and debentures XXX XXX

(i) Common stocks XXX XXX

(ii) Preferred stocks XXX XXX

(iii) Mutual funds XXX XXX

(d) Total equity investments XXX XXX

(e) Other quoted investments XXX XXX

(f) Total quoted investments XXX XXX

4. INVESTMENTS IN AND ADVANCES TO

AFFILIATES:

INSURANCE ACCOUNTS REGULATIONS 1980

(a) Unregulated entities that conduct ancillary services

(b) Unregulated non-financial operating entities

(d) Regulated non-insurance financial operating entities

(e) Regulated insurance financial operating entities

(f) Total investments in affiliates (equity method)

(g) Advances to affiliates

(h) Total investments in and advances to affiliates (equity method)

5. INVESTMENTS IN MORTGAGE LOANS ON REAL

ESTATE:

(a) First liens XXX XXX

(b) Other than first liens XXX XXX

6. POLICY LOANS

7. REAL ESTATE: XXX XXX

(a) Occupied by the company (less encumbrances) XXX XXX

(b) Other properties (less encumbrances) XXX XXX

8. COLLATERAL LOANS XXX XXX

9. INVESTMENT INCOME DUE AND ACCRUED XXX XXX

10. ACCOUNTS AND PREMIUMS RECEIVABLE

(a) In course of collection XXX XXX

(b) Deferred - not yet due XXX XXX

(d) Total accounts and premiums receivable XXX XXX

11. REINSURANCE BALANCES RECEIVABLE

(a) Foreign affiliates XXX XXX

(b) Domestic affiliates XXX XXX

INSURANCE ACCOUNTS REGULATIONS 1980

(d) All other insurers XXX XXX

(e) Total reinsurance balances receivable XXX XXX

12. FUNDS HELD BY CEDING REINSURERS XXX XXX

(a) Affiliated XXX XXX

(b) Non-affiliated XXX XXX

13. SUNDRY ASSETS:

(a) Derivative instruments XXX XXX

(b) Segregated accounts companies-variable annuities XXX XXX

(d) Deposit Assets XXX XXX

(e) ________ XXX XXX

(f) Total sundry assets XXX

14. LETTERS OF CREDIT, GUARANTEES AND

OTHER INSTRUMENTS

(a) Letters of credit XXX XXX

(b) Guarantees XXX XXX

(d) Total letters of credit, guarantees and other instruments XXX XXX

15. TOTAL XXX XXX

LONG-TERM BUSINESS INSURANCE RESERVES, OTHER LIABILITIES AND STATUTORY CAPITAL AND SURPLUS

20. STMT. LINE No. 20XX 20XX LONG-TERM BUSINESS INSURANCE RESERVES

21. INSURANCE ACCOUNTS REGULATIONS 1980

22. POLICY RESERVES — LIFE XXX XXX

23. POLICY RESERVES — ACCIDENT AND HEALTH XXX XXX

24. POLICYHOLDERS’ FUNDS ON DEPOSIT XXX XXX

25. LIABILITY FOR FUTURE POLICYHOLDERS’

26. DIVIDENDS XXX XXX

27. TOTAL LONG-TERM BUSINESS INSURANCE

RESERVES: XXX XXX

(a) Gross long-term business insurance reserves XXX XXX

(b) Less: Reinsurance recoverable balance:

(i) Foreign affiliates XXX XXX

(ii) Domestic affiliates XXX XXX

(iii) Pools & associations XXX XXX

(iv) All other insurers XXX XXX

(d) Net long-term business insurance reserves XXX XXX OTHER LIABILITIES

28. INSURANCE AND REINSURANCE BALANCES

29. PAYABLE XXX XXX

30. PAYABLE XXX XXX

31.

(a) INCOME TAXES PAYABLE XXX XXX

(b) DEFERRED INCOME TAXES XXX XXX

32. AMOUNTS DUE TO AFFILIATES XXX XXX

33. ACCOUNTS PAYABLE AND ACCRUED

LIABILITIES XXX XXX

34. INSURANCE ACCOUNTS REGULATIONS 1980

CONTRACTS:

(a) Affiliated XXX XXX

(b) Non-affiliated XXX XXX

35. DIVIDENDS PAYABLE XXX XXX

36. SUNDRY LIABILITIES:

(a) Derivative instruments XXX XXX

(b) Segregated accounts companies XXX XXX

(d) ___________ XXX XXX

(e) Total sundry liabilities XXX XXX

37. LETTERS OF CREDIT, GUARANTEES AND

OTHER INSTRUMENTS

(a) Letters of credit XXX XXX

(b) Guarantees XXX XXX

(d) Total letters of credit, guarantees and other instruments XXX XXX

38. TOTAL OTHER LIABILITIES XXX XXX

39. TOTAL LONG-TERM BUSINESS INSURANCE

RESERVES AND OTHER LIABILITIES XXX XXX

40. STATUTORY CAPITAL AND SURPLUS

41. TOTAL XXX XXX

Form 5 STATUTORY STATEMENT OF INCOME (Long-term Business) [blank] name of Company as at [blank] (day/month/year)

INSURANCE ACCOUNTS REGULATIONS 1980

expressed in [blank] (currency used (vide Reg. 10(2)))

19. STMT. LINE No. 20XX 20XX

CONSIDERATIONS:

(a) Direct gross premiums and other considerations XXX XXX

(b) Assumed gross premiums and other considerations XXX XXX

(d) REINSURANCE PREMIUMS CEDED XXX XXX

(e) NET PREMIUMS AND OTHER CONSIDERATIONS:

(i) Life XXX XXX

(ii) Annuities XXX XXX

(iii) Accident and Health XXX XXX

(iv) Total Net Premiums and Other Considerations XXX XXX

20. LONG-TERM BUSINESS INVESTMENT

21. INCOME — NET XXX XXX

22. XXX XXX

23. DEDUCTIONS

24. Policyholders’ Dividends XXX XXX

25. Surrenders XXX XXX

26. Maturities XXX XXX

27. Annuities XXX XXX

28. INSURANCE ACCOUNTS REGULATIONS 1980

29. Commissions XXX XXX

30. Other XXX XXX

31. XXX XXX

32. OPERATING EXPENSES XXX XXX

33. XXX XXX

34. INCREASE (DECREASE) IN POLICY RESERVES

(Actuarial Liabilities):

(a) Life XXX XXX

(b) Annuities XXX XXX

(d) Total (Increase) Decrease in policy reserves XXX XXX

35. INCOME BEFORE THE UNDERNOTED ITEMS XXX XXX

37. OTHER INCOME (DEDUCTIONS) XXX XXX

38. INCOME BEFORE TAXES XXX XXX

39. INCOME TAXES (IF APPLICABLE):

(a) Current XXX XXX

(b) Deferred XXX XXX

40. INCOME BEFORE REALIZED GAINS (LOSSES)

41. REALIZED GAINS (LOSSES) XXX XXX

42. NET INCOME XXX XXX

INSURANCE ACCOUNTS REGULATIONS 1980

Form 6

[Form 6 revoked by BR 41 / 2017 reg. 7 effective 22 April 2017]

Form 7

[Form 7 revoked by BR 41 / 2017 reg. 7 effective 22 April 2017]

Form 8 STATUTORY STATEMENT OF CAPITAL AND SURPLUS [blank] name of Company as at [blank] (day/month/year) expressed in [blank] (currency used (vide Reg. 10(2))) STMT. LINE No. 20XX 20XX

1. STATUTORY CAPITAL:

(a) Capital Stock

(i) Common Shares: authorized shares of par value each issued and fully paid shares XXX XXX

(ii) Preferred Shares: authorized shares of par value each issued and fully paid shares aggregate liquidation value for:

20xx XXX XXX XXX

(iii) Treasury shares Repurchased shares of par value each issued and fully paid XXX XXX

(b) Contributed surplus XXX XXX

(i) Hybrid capital instruments XXX XXX

(ii) Guarantees and others XXX XXX

(iii) Total any other fixed capital XXX XXX

(d) Total Statutory Capital XXX XXX

2. STATUTORY SURPLUS:

(a) Statutory Surplus — Beginning of Year XXX XXX

(b) Add: Income for the year XXX XXX

(d) Add (Deduct) change in unrealized appreciation (depreciation) of investments XXX XXX

INSURANCE ACCOUNTS REGULATIONS 1980

(e) Add (Deduct) change in non-admitted assets XXX XXX

(f) Add (Deduct) change in appraisal of real estate XXX XXX

(g) Add (Deduct) change in any other statutory surplus XXX XXX

(h) Statutory Surplus — End of Year XXX XXX

3. TOTAL STATUTORY CAPITAL AND SURPLUS XXX XXX

[Schedule 1 amended by BR 29/1989 effective 7th July 1989; Form 1A and Form 2A inserted and Form 6 and Form 7 amended by BR 1/2009 reg.8 effective 31 December 2008; Schedule 1 amended by BR 24 / 2010 reg.3 effective 31 December 2009; amended by BR 93 / 2010 reg.6 effective 31 December 2010; amended and Forms 4, 5, 6, 7 and 8 deleted and substituted by 2011 : 44 Sch. 1 effective 31 December 2011; Form 8 repealed and replaced by 2012 : 36 s. 21 effective 1 January 2013; Forms 4, 5, 6 and 7 amended by 2013 : 46 Sch. I effective 1 January 2014; Forms 1 and 2 revoked and Forms 1A, 2A, 5 and 7 amended by 2015 : 50 s. 15 effective 1 January 2016; Forms 5 and 7 amended by 2016 : 35 s. 17 effective 21 July 2016; Forms 3, 6 and 7 revoked by BR 41 / 2017 reg. 7 effective 22 April 2017; Forms 1A and 2A amended by 2018 : 35 Sch & s. 22 effective 23 July 2018; Form 1A amended by 2022 : 41 s. 42 effective 20 December 2022]

INSURANCE ACCOUNTS REGULATIONS 1980

SCHEDULE — II

(Reg. 8) NOTES TO STATUTORY FINANCIAL STATEMENTS

PART I

1 The name of the person or persons ultimately having power (whether directly or through having control of some other person or persons who directly or indirectly control the insurer) to control the insurer and, where the persons having that ultimate power are a body corporate, the place of incorporation of that body corporate.

2 The general nature of the risks underwritten by the insurer.

3 The insurer’s significant accounting policies, the nature of any change made during the relevant year in those policies and the effect, if determinable, of that change on the statutory financial statements.

4 The basis of recognition of premium, investment and commission income.

5 The method used to translate amounts denominated in currencies other than the currency of the statutory financial statements, the amounts, if material, gained or lost on such translation and the manner in which those gains or losses are treated in those statements.

6 Any foreign exchange control restrictions affecting assets of the insurer, with particular reference to money balances which cannot be transferred to the insurer because of reasons that are not insurance reasons.

7 Any contingencies or commitments calling for special mention (for example, a commitment involving an obligation requiring abnormal expenditure, or the conclusion of a long lease).

8 Any default made by the insurer in relation to the principal, interest, sinking fund or redemption provisions of any securities issue made, or any credit agreement entered into, by it.

9 The gross amount of arrears of dividends on preferred cumulative shares, and the date to which those dividends were last paid.

10 The amount of any loan made during the relevant year by the insurer, to any director or officer of the insurer, not being a loan made in the ordinary course of business.

11 The amount of any obligation in respect of retirement benefits relating to employees of the insurer arising from service prior to the end of the relevant year remaining to be charged against operations, and the basis on which the insurer proposes to charge that amount.

INSURANCE ACCOUNTS REGULATIONS 1980

12 Any transaction made or other event occurring between the end of the relevant year and the date of the auditor’s report and materially affecting the statutory financial statements, not being a transaction made or an event occurring in the ordinary course of business.

13 Any other information which in the opinion of the directors is required to be disclosed if the statutory financial statements are not to be misleading.

PART II[Part II revoked by 2015 : 50 s. 15 effective 1 January 2016]

PART III[Part III revoked by 2016 : 35 s. 17 effective 21 July 2016]

PART IVMatters to be set forth in Notes to the

Statutory Statement of Capital and Surplus Information required to be given [Note: The numerals in bold type and letters in bold type in parentheses refer to the numbers of the line of the statutory statement of capital and surplus]

1(a) Capital stock As respects authorized capital stock there shall be disclosed severally—

(a) the number of common shares and preferred shares of each class, the par value, if any, of each class and a brief description of each class;

(b) the dividend rates applicable to any preference shares, and whether the dividends are cumulative, including the liquidation values of the preference shares;

(d) any conversion provisions. As respects issued capital stock there shall be disclosed severally—

(a) the number of shares in, and the capital stock amounts for, each class of common and preferred shares;

(b) the amounts called and unpaid or otherwise due in respect of those shares;

(c) the amounts not called on those shares that will become receivable in due course when called. As respects issued capital stock there shall be disclosed severally—

INSURANCE ACCOUNTS REGULATIONS 1980

(a) the number of shares repurchased, and the capital stock amounts for, each class of common and preferred shares;

1(b) Contributed surplus The nature of any change in contributed surplus during the relevant year.

1(c) Any other fixed capital The nature, terms and conditions comprising any other fixed capital approved by the Authority, including any material change during the relevant year.

2(c) Dividends paid and payable The amount and nature of any dividend paid during the relevant year. B. There shall also be disclosed in notes the following information—

(a) details of any change in the authorized capital stock of the insurer during the relevant year;

(b) where an insurer has contracted to issue or re-issue shares or has given options to purchase shares, the class and number of shares affected, the price and date of the issue or re-issue of the shares or the exercise of the options and (shown separately) the total number of shares in respect of which options are held by directors and officers of the insurer;

(i) the number of shares of each class issued since the date of the last statutory balance sheet, giving the value attributed thereto and distinguishing—

(aa) shares issued for cash (showing separately shares issued pursuant to options or warrants);

(bb) shares issued directly or indirectly for services; and

(cc) shares issued directly or indirectly for other considerations;

(ii) the number of shares of each class redeemed since the date of the last statutory balance sheet and the consideration given and, where the consideration was other than cash, the nature of the consideration given and the value attributed thereto.

PART V(Reg 8(2)))

Matters to be set forth in Notes to the Statutory Statement of Income - Class 1, Class 2, Class 3, Class A, Class B, section 24(6) composite, and innovative insurer

INSURANCE ACCOUNTS REGULATIONS 1980

1. Line of statutory balance sheet Information required to be given

deposits must be disclosed. Examples of such encumbrances are: irrevocable letters of credit; amounts held for security or as collateral against a liability of the insurer or an affiliate; any other use restriction such that the funds in question are held in escrow or in a custodial account.

2. Quoted investments The method of valuation of quoted

investment must be described. Any encumbrance on quoted investments must be disclosed. Examples of such encumbrances are: irrevocable letters of credit; amounts held for security or as collateral against a liability of the insurer or an affiliate.

3. Unquoted investments The method of valuation of any

unquoted investment must be described. Any encumbrance on unquoted investments must be disclosed. Examples of such encumbrances are: irrevocable letters of credit; amounts held for security or as collateral against a liability of the insurer or an affiliate.

4. Investment in and advances to The method of valuation must be

affiliates described.

5. Repayment terms and the rates of interest applicable to advances must also be given.

estate range of maturity dates for mortgage loans on real estate must be disclosed.

INSURANCE ACCOUNTS REGULATIONS 1980

7. Line of statutory balance sheet Information required to be given

(a) (i) the method of valuation; and

(ii) where there are encumbrances, the value of the real estate before encumbrances, the amount and nature of the encumbrances and the repaying terms and interest rates applicable to the encumbrances, shall be disclosed;

(b) where an independent appraisal has been made, real estate may be valued at the appraisal value net of the amount of any encumbrances. In such a case, full details of the appraisal (including the date of the appraisal, the name of the appraiser, the basis of valuation and the disposition of any amounts added to or deducted from the book value) shall be disclosed;

(c) where other properties (ie properties not occupied by the insurer) are included in the statutory balance sheet, the nature of the investments represented by those properties (for example whether held for investment return, or as a result of default of mortgage, or for speculative gain) shall be disclosed.

8. Collateral loans Description and amount of the

10. collateral loans.

a note:

(a) Details of collateralized balances.

(b) The amount of the receivable balance with affiliates.

INSURANCE ACCOUNTS REGULATIONS 1980

11. Line of statutory balance sheet Information required to be given

a note-

(a) The name of the person granting the letter of credit and the name of the person in whose favour the letter of credit was granted.

(b) The amount of the letter of credit.

12. Funds held by ceding reinsurers The amount held by affiliates shall

13. be disclosed.

assets.

(b) For derivatives and embedded derivatives, if any, the following must be disclosed—

(i) a description of the policies surrounding the use of derivatives; and

(ii) market value and nominal exposure of each derivative by issuer with nominal exposure greater than 5% of the aggregate sum of the total quoted and unquoted investments. Disclosure should be separated between long and short positions.

INSURANCE ACCOUNTS REGULATIONS 1980

14. Line of statutory balance sheet Information required to be given

instruments a note -

(a) the name of the person granting the letter of credit, guarantee or other instrument, and the name of the person in whose favour the letter of credit, guarantee or other instrument was granted;

(b) the amount of the letter of credit, guarantee or other instrument;

16. Unearned premiums The method of calculating

unearned premiums.

INSURANCE ACCOUNTS REGULATIONS 1980

17. Line of statutory balance sheet Information required to be given

note-

(a) Movements in the loss and loss expense provisions for the current year and previous year as per the table below.

(b) Reasons for the change in the net losses incurred and net loss expenses incurred related to prior years and indicate whether additional premiums or return premiums have been accrued as a result of the prior year effects.

(i) total restricted assets - an amount equal to the value of all that are held for security or collateral against a liability or contingent liability; and

(ii) unsecured policyholder obligations - an amount equal to all policyholder obligations that are not secured by assets or collateral.

(d) Loss provisions may be discounted in any of the following cases, that is to say—

(i) where both the amount of the loss provisions and the payment dates of the losses are fixed;

(ii) where neither the amount of the loss provisions nor the payment dates of the losses are fixed but the

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Information required to be given

insurer’s approved auditor is of the opinion that that amount and those dates are reasonably ascertainable either in the records of the insurer itself or in those of any group of companies of which the insurer is a member;

(iii) where the loss provisions in question were discounted on or before

31st December 1988 in the insurer’s statutory financial statements;

(e) Where loss provisions are discounted as allowed by paragraph

(d) above, the directors of the insurer shall determine that an adequate amount has been set aside by the insurer for possible variations in the ultimate amount of the losses, the payment dates of the losses, and the applicable interest rates;

(f) Where an insurer’s loss provisions have been discounted as allowed by paragraphs (d) and (e) above but the insurer has not met its general business solvency margin on an undiscounted basis, the opinion of a loss reserve specialist shall be given on the loss and loss expense provisions;

(g) Where the gross premiums from professional liability insurance constitute more than 30% of the gross premiums written by the insurer during the relevant year, then the opinion of a loss reserve specialist must be given on the loss and loss expense provisions relating

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Information required to be given

to all professional liability insurance business; but if the loss provisions cannot be so separated then the opinion of the loss reserve specialist must be given on the whole amount of the loss provisions;

(h) Where, in relation to an insurer no longer effecting contracts of professional liability insurance, the opinion of a loss reserve specialist as to the matters described in paragraph (g) was required in either of the last two years during which it did effect contracts of professional liability insurance, then such an opinion must be given in every subsequent year. Other insurance reserves—general business.

Table (Line 17(a))

20XX 20XX Gross loss and loss expense provisions at beginning XXX XXX of year Less : Reinsurance recoverable at beginning of year (XXX) (XXX) Net loss and loss expense provisions at beginning of XXX XXX year Current year XXX XXX Prior years XXX XXX Total net incurred losses and loss expenses XXX XXX Net losses and loss expenses paid or payable related XXX XXX to: Current year XXX XXX Prior years XXX XXX Total losses and loss expenses paid or payable Foreign exchange and other XXX XXX Net loss and loss expense provisions at end of year XXX XXX Add: Reinsurance recoverable at end of year XXX XXX Gross loss and loss expense provisions at end of XXX XXX year

INSURANCE ACCOUNTS REGULATIONS 1980

For the long-term business insurance reserves the following must be disclosed, if any—

(a) Total restricted assets - an amount equal to the value of all assets that are held for security or collateral against a liability or contingent liability; and

(b) Unsecured policyholder obligations - an amount equal to all policyholder obligations that are not secured by assets or collateral

20. Reserves for report claims

21. Reserves for unreported claims

22. Policy reserves - life

23. Policy reserves accident and health

25. Liability for future policyholders’

26. dividends

28. term

30. payable shall be disclosed.

interest and the nature of collateral given, if any.

31 (a) Income taxes payable

(b) Deferred income taxes Details of the deferred income tax provision.

32. Amounts due to affiliates The repayment terms, rates of

34. interest and the nature of collateral given, if any.

contracts be disclosed.

36. INSURANCE ACCOUNTS REGULATIONS 1980

the repayment terms;

(b) For derivatives and embedded derivatives, if any, the following must be disclosed—

(i) a description of the policies surrounding the use of derivatives; and

37. Letters of credit, guarantees and (a) the name of the person

other instruments granting the letter of credit, guarantee or other instrument, and the name of the person in whose favour the letter of credit, guarantee or other instrument was granted;

(b) the amount of the letter of credit, guarantee or other instrument;

(Reg 8(2))

PART VIMatters to be set forth in Notes to the Statutory Statement of Income - Class 1,

Class 2, Class 3, Class A, Class B, section 24(6) composite, and innovative insurer

INSURANCE ACCOUNTS REGULATIONS 1980

6. Line of statutory statement of income Information required to be given

12. included.

37. The nature of material items that have been

41. The nature of material items that have been included.

included.

[Schedule II amended by BR 29/1989 effective 7th July 1989; Parts V and VI inserted by BR 1/2009 reg.9 effective 31 December 2008; Schedule II amended by BR 24 / 2010 reg. 4 effective 31 December 2009; amended by BR 93 / 2010 reg.7 effective 31 December 2010; amended by 2011 : 44 Sch. 1 effective 31 December 2011; Part II amended, and Part IV repealed and replaced by 2012 : 36 s. 21 effective 1 January 2013; Parts I and II revoked and Parts V and VI amended by 2015 : 50 s. 15 effective 1 January 2016; Part I inserted and Part III revoked by 2016 : 35 s. 17 effective 21 July 2016; Parts IV and V amended by BR 41 / 2017 reg. 8 effective 22 April 2017; Parts V and VI amended by

2018 : 35 Sch & s. 22 effective 23 July 2018; Schedule II Parts V and VI amended by 2019 : 51 s. 4(1) effective 30 April 2020]

INSURANCE ACCOUNTS REGULATIONS 1980

SCHEDULE — III

(Reg. 9(2)) INSTRUCTIONS AFFECTING THE STATUTORY BALANCE SHEET

PART I[Part I revoked by 2015 : 50 s. 15 effective 1 January 2016]

PART II[Part II revoked by 2015 : 50 s. 15 effective 1 January 2016]

PART IIIAdditional instructions for insurers carrying on

long-term business only Instructions

[Note: The numerals in bold type refer to the numbers of the line of statutory balance sheet]

6. Policy loans

These shall be carried at an amount that is the aggregate of the unpaid balances on policy loans and any unpaid interest, so, however, that, for each loan, that amount shall not exceed the cash surrender value of the policy or the applicable policy reserve.

20. Reserves for reported claims

This line shall disclose an adequate amount set aside by the insurer to meet claims unpaid at the end of the relevant year and made under contracts of insurance and reinsurance in respect of incidents occurring and reported to the insurer before the end of that year. The said amount shall be reduced by any amount recoverable under a contract of reinsurance in respect of the gross amount provided for. The directors shall make allowance for any such amount as is last-mentioned the collection of which is in their opinion doubtful and adjust the reserve by said amount.

21. Reserves for unreported claims

This line shall disclose an adequate amount set aside by the insurer to meet claims under contracts of insurance and reinsurance in respect of incidents occurring, but not reported to the insurer, before the end of the relevant year. The said amount shall be reduced by any amount recoverable under a contract of reinsurance in respect of the gross amount provided for. The directors shall make allowance for any such amount as is last-mentioned the collection of which is in their opinion doubtful and adjust the reserve by said amount.

22. INSURANCE ACCOUNTS REGULATIONS 1980

These shall be an amount, actuarially computed, which is considered adequate to provide future guaranteed benefits as they become payable under the provisions of life insurance policies in force. Amounts applicable to other life contract benefits (such as disability waiver of premium, disability income benefits and additional accidental death benefits) and to annuities and to supplemental contracts with life contingencies may also be included. The said amount—

(a) shall not include reserves in respect of accident and health policies; and

(b) shall be reduced by the amount of reserves ceded under reinsurance contracts. The directors shall make allowance for any amount the collection of which is in their opinion doubtful and adjust the reserve by said amount.

23. Policy reserves—accident & health

These reserves shall be an amount, actuarially computed, which are considered adequate, and shall consist of—

(a) an active life reserve, that is to say, that portion of due and collected premiums which has been set aside to be recognized as earned in the future consisting of—

(i) the unearned portion of the current premium;

(ii) additional reserves, that is to say, the reserves applicable to policies which provide for the payment of uniform rate premiums in respect of a risk the cost of which increases with the age of the insured;

(iii) reserves for rate credits;

(b) a claims reserve, that is to say, the present value of amounts not yet due on claims, provision for future contingent benefits being included in both cases. The said reserves shall not include the amount of any reserves ceded under reinsurance. The directors shall make allowance for any such amount the collection of which is in their opinion doubtful and adjust the reserve by said amount.

24. Policyholders’ funds on deposit

These funds shall consist of premiums paid in advance of the due date, whether or not interest is paid for early payment. These liabilities shall be valued at the amounts received by the insurer, plus any interest credited.

25. Liability for future policy-holders’ dividends

INSURANCE ACCOUNTS REGULATIONS 1980

This shall be the amount of dividends payable, as declared by the directors, on participating life policies which qualify for such dividends, and shall be recorded at the amount declared.

26. Other insurance reserves—long-term business

These shall consist of any other reserves required by the terms of life or accident and health contracts or as a result of special riders or options attaching to any such contracts, not being reserves provided for in lines 22 to

27. 25 inclusive of the statutory balance sheet. These must be actuarially determined and be considered adequate.

This line shall disclose the gross amount of reserves under contract of reinsurance in respect of the gross amount provided for. There shall be disclosed severally—

(a) Total gross long-term business insurance reserves: Total lines 20 through 26 before the said amounts are reduced by any amount recoverable under a contract of reinsurance in respect of the gross amount provided for;

(b) Less: Reinsurance recoverable balance on long-term business:

(i) Foreign affiliates reinsurance recoverable balance;

(ii) Domestic affiliates reinsurance recoverable balance;

(iii) Pools and associations;

(iv) All other insurers;

(d) Total net long-term business insurance reserves: The total of lines 20 to

26 inclusive, or the amount arrived at by subtracting line 27(c) from 27(a).

PART IV(Reg 9(2))

INSTRUCTIONS AFFECTING THE STATUTORY BALANCE SHEET Class 1, Class 2, Class 3, Class A, Class B, section 24(6) composite, and innovative insurer

1. Line of statutory balance sheet Instructions

included.

INSURANCE ACCOUNTS REGULATIONS 1980

2. Line of statutory balance sheet Instructions

severally -

(i) bonds and debentures (held to maturity and other);

(ii) equities (common stocks, preferred stocks, and mutual funds);

(iii) other quoted investments;

(iv) the total of (i), (ii) and (iii);

(b) held to maturity bonds and debentures shall be at cost or amortized cost, and adequate provision shall be made for any permanent diminution in value;

(d) equities (common stocks, preferred stocks, and mutual funds) shall be carried at their quoted value;

(e) other quoted investments shall be carried at their quoted value.

3. Unquoted investments (a) there shall be disclosed

severally—

(i) bonds and debentures (held to maturity and other);

(ii) equities (common stocks, preferred stocks and mutual funds);

(iii) the total of (i) and (ii);

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Instructions

(b) held to maturity bonds and debentures shall be carried either at cost or amortized cost and adequate provision shall be made for any permanent diminution in value;

(d) equities (common stocks, preferred stocks, and mutual funds) shall be carried at fair value determined in good faith.

INSURANCE ACCOUNTS REGULATIONS 1980

4. Line of statutory balance sheet Instructions

affiliates (Equity Methods) severally—

(i) Unregulated entities that conduct ancillary services

(ii) Unregulated non-financial operating entities

(iii) Unregulated financial operating entities

(iv) Regulated non-insurance financial operating entities

(v) Regulated insurance financial operating entities

(vi) Total investments in affiliates (equity method)

(vii) Advances to affiliates

(viii) Total investments in and advances to affiliates (equity method)

(b) amounts receivable or payable on account of policies of insurance or reinsurance with affiliates shall not be included. Such amounts shall be included in accounts and premiums receivable (line 10) and reinsurance balances payable (line 28), respectively;

(c) funds held by ceding reinsurers which are affiliates (line 12) and funds held under reinsurance contracts with affiliates (line 34) shall not be included;

(d) investments in affiliates shall be valued either by the cost method of valuation or the equity method of valuation: Provided that -

(i) if the value arrived at by the use of the equity method of valuation is less than the

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Instructions

value arrived at by the cost method of valuation, the value arrived at by the equity method shall be used;

(ii) the directors shall carry the said investments at a fair value determined in good faith if that value is less than the valuations under the cost method and the equity method of valuation;

(e) advances to affiliates shall be carry at fair value determined in good faith;

(f) if any amount is in the opinion of the directors uncollectible, that amount shall be deducted.

5. Investment in mortgage loans on Mortgages shall be carried at the

real estate value of the principal amount outstanding less any provision considered by the directors to be needed for doubtful collection, and there shall be disclosed severally -

(a) first liens;

(b) liens other than first liens; and

INSURANCE ACCOUNTS REGULATIONS 1980

7. Line of statutory balance sheet Instructions

buildings shall be included;

(b) the insurer’s title must be clear and incontestable;

(i) real estate occupied by the company (less encumbrances);

(ii) other properties (less encumbrances);

(iii) the total of (i) and (ii);

(d) except where carried at a value determined by an independent appraisal net of encumbrances, real estate shall be carried at the lower of -

(i) cost less accumulated depreciation; and

(ii) fair value determined in good faith,

less the amount of any encumbrances;

(e) where an independent appraisal has been made, real estate may be valued at the appraisal value net of the amount of any encumbrances.

8. Collateral loans If any amount is in the opinion of

9. the directors uncollectible, that amount shall be deducted.

accrued the directors uncollectible, that amount shall be deducted.

INSURANCE ACCOUNTS REGULATIONS 1980

10. Line of statutory balance sheet Instructions

receivable severally -

(i) in course of collection;

(ii) deferred – not yet due;

(iii) receivables from retrocessional contracts

(iv) the total of (i) to (iii);

(b) amounts receivable on account of policies of insurance from any person, whether an affiliate or not, shall be included;

(c) amounts due from reinsurers and funds held by ceding reinsurers (being amounts or funds which have been included in lines 11 and 12) shall not be included;

(d) if any amount is in the opinion of the directors uncollectible, that amount shall be deducted.

11. Reinsurance balances receivable (a) there shall be disclosed

severally -

(i) foreign affiliates;

(ii) domestic affiliates;

(iii) pools & associations;

(iv) all other insurers;

(v) the total of (i) to (iv);

(b) amounts receivable on account of policies of reinsurance from any person, whether an affiliate or not, shall be included;

12 shall not be included;

(d) if any amount is in the opinion of the directors uncollectible, that amount shall be deducted.

INSURANCE ACCOUNTS REGULATIONS 1980

12. Line of statutory balance sheet Instructions

severally -

(i) affiliated;

(ii) non-affiliated;

(iii) the total of (i) and (ii);

(b) funds held by ceding reinsurers (whether affiliates or not) shall be included;

11 shall not be included;

(d) if any amount is in the opinion of the directors uncollectible, that amount shall be deducted.

13. Sundry assets Any asset not accounted for in

lines 1 to 12 and 14 may be included here if it has a readily realisable value. Any other assets, prepaid and deferred expenses, goodwill and similar intangible assets, deferred acquisition costs, excess of book value over admitted asset value of stocks, and other investments shall be non-admitted assets.

INSURANCE ACCOUNTS REGULATIONS 1980

14. Line of statutory balance sheet Instructions

other instruments been secured to the insurer by

means of an irrevocable letter of

credit, a guarantee or any other

instrument, an asset may, with the

approval of the Authority obtained

on an application made for that

purpose, be recorded and the capital

increased by a corresponding

15. amount. Where such an asset is

recorded, it must be shown net of

any allowance for its collectibility;

(b) letters of credit, guarantees or

other instruments in favour of the

insurer which relate to insurance

operations shall not be recorded.

This shall be the total of lines 1 to

16. 14 inclusive.

adequate amount set aside for unearned premiums, which shall be shown net of the unearned portion of the reinsurance premiums ceded which are used for calculating net premiums written;

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Instructions

(b) where refunds are expected to be made under retrospective or experience rating plans, adequate provision must be made by an appropriate addition to the unearned premiums reserve;

17. Loss and loss expense (a) this line shall disclose an

provisions adequate amount set aside by an insurer to meet losses reported before, but not paid by, the last day of the relevant year, in respect of incidents occurring before that day, and to meet expenses likely to be incurred in connection with the investigation, adjustment and settlement of such losses. The said provisions shall include amounts in respect of losses reported. There shall be disclosed the adequate amount in respect of losses incurred but not reported to the insurer before the last day of the relevant year;

(b) the said amount shall not include any amount recoverable under a contract of reinsurance in respect of the gross amount provided for. The directors shall make allowance for any such amount as is last-mentioned, the collection of which is in their opinion doubtful, and the amount shall be shown net of any such provisions;

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Instructions

(i) gross loss and loss expense provisions;

(ii) foreign affiliates reinsurance recoverable balance;

(iii) domestic affiliates reinsurance recoverable balance;

(iv) pools & associations reinsurance recoverable balance;

(v) all other insurers reinsurance recoverable balance;

(vi) the total reinsurance recoverable balance of (ii) to (v);

(vii) net loss and loss expense provisions – the total of (i) and (vi).

18. Other insurance reserves - The balance from the open year

19. general business business revenue statement shall be included.

28. insurance reserves 17 and 18.

balances payable premiums and other balances, payable to insured persons and reinsurers (whether affiliates or not) under insurance and reinsurance contracts shall be included;

(b) funds held by the insurer under reinsurance contracts (shown on line 34) shall not be included.

INSURANCE ACCOUNTS REGULATIONS 1980

29. Line of statutory balance sheet Instructions

and taxes payable commissions (including profit commissions), underwriting expenses, fees and taxes (other than income taxes) shall be included. Where the insurer is primarily a reinsurer, the said liabilities may be included in line

30. 28.

31. person other than an affiliate shall be included here.

severally -

(a) income taxes currently payable;

(b) provision for deferred income taxes.

32. Amounts due to affiliates (a) All balances due to affiliates, not

33. being amounts payable under reinsurance contracts (shown on line 28 or line 34), shall be included here.

34. liabilities accounts payable and accrued liabilities shall be included here.

reinsurance contracts contracts shall be included here.

(b) There shall be disclosed severally—

(i) affiliated;

(ii) non-affiliated;

(ii) the total of (i) and (ii);

INSURANCE ACCOUNTS REGULATIONS 1980

35. Line of statutory balance sheet Instructions

to shareholders in the insurer declared prior to the last day of the relevant year and remaining unpaid on that day shall be included here.

36. Sundry liabilities Any liabilities (including

prospective and contingent liabilities) not assigned to another line of the statutory balance sheet shall be included here.

37. Letters of credit, guarantees (a) where letters of credit,

and other instruments guarantees and other instruments are given by the insurer in favour of another person, being letters of credit, guarantees or other instruments not relating to the insurer’s insurance operations and in effect encumbering the insurer’s assets, a liability shall be recorded and the statutory capital and surplus decreased by a corresponding amount, whether the insurer has pledged specific assets or not under the letters of credit, guarantees or other instruments;

(b) letters of credit, guarantees and any other instruments relating to insurance operations shall not be recorded.

38. Total other liabilities This shall be the total of lines 28

39. to 37 inclusive.

insurance reserves and other and 38, or of lines 27 and 38, or liabilities of lines 19, 27 and 38 as the case may require.

INSURANCE ACCOUNTS REGULATIONS 1980

40. Line of statutory balance sheet Instructions

surplus surplus total as at the end of the relevant year, as shown in the statutory statement of capital and surplus.

41. Total This shall be the total of lines 39

and 40.

[Schedule III amended by BR 29/1989 effective 7th July 1989; by 1995:20 effective 29 April 1995; by 2001:27 effective 1 October 2001; by BR 41/2005 effective 1 July 2005; by BR 1/2009 reg.10 effective

31 December 2008; amended by BR 24 / 2010 reg. 5 effective 31 December 2009; amended by BR

93 / 2010 reg.8 effective 31 December 2010; amended by 2011 : 44 Sch. 1 effective 31 December 2011; Part III and Part IV amended by 2012 : 36 s. 21 effective 1 January 2013; Part III amended by

2013 : 46 Sch.I effective 1 January 2014; Parts I and II revoked and Part IV amended by 2015 : 50 s.

15 effective 1 January 2016; Part IV amended by 2018 : 35 Sch & s. 22 effective 23 July 2018; Part IV amended by 2019 : 51 s. 4(1) effective 30 April 2020]

INSURANCE ACCOUNTS REGULATIONS 1980

SCHEDULE — IV

(Reg. 9(3)) INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF INCOME

PART I[Part I revoked by 2015 : 50 s. 15 effective 1 January 2016]

PART II[Part II revoked by 2015 : 50 s. 15 effective 1 January 2016]

PART IIIAdditional instructions for insurers carrying on

long-term business only Instructions [Note: The numerals in bold type refer to the numbers of the line of statutory statement of income

19. Gross premiums and other considerations

These shall be gross premiums and other considerations. The amount shall be disclosed severally in the following categories—

(a) direct gross premiums and other considerations;

(b) assumed gross premiums and other considerations;

(d) 19(c) shall be deducted by the total reinsurance ceded under contracts of reinsurance during the relevant year, net of related taxes. The result will be net premiums and considerations;

(e) this income derived from 19(d) shall be disclosed severally in the following categories—

(i) life;

(ii) annuities;

(iii) accident and health; and

(iv) the total of (a) to (c) inclusive.

20. Long-term business investment income—net

This income may be shown net of with-holding tax and any other directly related expenses, but shall not include realized gains or losses shown on line

41 of the statutory statement of income.

21. INSURANCE ACCOUNTS REGULATIONS 1980

This shall be the aggregate of all other income, such as commission and brokerage income, directly related to underwriting long-term business.

23. 22. This shall be the total of lines 19 to 21 inclusive.

This shall be the amount of claims incurred under life insurance policies (in respect, for example, of death or disability) during the relevant year, but shall not include claims ceded under reinsurance contracts. Surrenders, maturities, annuities and accident and health benefits which are disclosed in lines 25, 26, 27 or 28 shall not be included.

24. Policyholders’ dividends

These shall be amounts distributed or credited during the relevant year to policyholders with participating life policies.

25. Surrenders

This shall be amounts incurred during the relevant year as a result of the surrender by policyholders, either for cash or in exchange for some other consideration, of policies with cash surrender values.

26. Maturities

These shall be amounts incurred as a result of the maturing during the relevant year, after a specified period of time, of any endowment policy before the death of the insured. Amounts paid as a result of the death of an insured that is covered by an endowment policy shall be included in line 23.

27. Annuities

28. These shall be amounts incurred during the relevant year under the terms of any annuity contract.

These shall be amounts incurred in respect of claims under accident and health contracts, being claims arising out of incidents occurring during the relevant year.

29. Commissions

INSURANCE ACCOUNTS REGULATIONS 1980

These shall be the aggregate amounts of compensation paid or payable to agents or brokers in return for business procured by them for the insurer in the relevant year in respect of long-term business.

30. Other

These shall include any expenses related to long-term business during the relevant year that are not included in any of lines 23 to 29 inclusive or in line

32.

32. 31. This shall be the total of lines 23 to 30 inclusive.

These shall include the administrative and other general expenses of operating the insurer’s long-term business during the relevant year.

33. This shall be the gain (or loss) arrived at by deducting the aggregate of lines

34. 31 and 32 from the amount shown on line 22 (or vice versa).

This shall be the increase or decrease from the end of the immediately preceding financial year in policy reserves—life (line 22 of the statutory balance sheet), policy reserves—accident and health (line 23 of the statutory balance sheet), and, if applicable, that portion of other insurance reserves— long-term business (line 26 of the statutory balance sheet) which is actuarially determined. The increases (decreases) in the said policy reserves shall be disclosed severally in the following categories—

(a) life;

(b) annuities;

(d) the total of (a) to (c) inclusive.

35. Income before the undernoted items

This shall be the net total of lines 33 and 34. (Reg 9(3))

PART IVINSTRUCTIONS AFFECTING THE STATUTORY BALANCE SHEET

Class 1, Class 2, Class 3, Class A, Class B, section 24(6) composite, and innovative insurer

INSURANCE ACCOUNTS REGULATIONS 1980

1. Line of statutory statement of Instructions income

disclosed severally in the following categories -

(a) direct gross premiums written;

(b) assumed gross premiums written;

(c) the total of (a) and (b) inclusive. These shall be the sum of direct premiums written and reinsurance premiums assumed (net of return premiums in each case). Where reinsurance premiums are reported as a net amount (on either a written or an earned basis), that amount may, where further details are not available, be included as assumed gross premiums written.

2. Reinsurance premiums ceded These shall be premiums (less return

premiums) arising from any reinsurance contract under which part of the liability of the insurer under direct policies or assumed reinsurance is transferred to reinsurers.

3. Net premiums written This shall be arrived at by subtracting

4. line 2 from line 1.

premiums in the unearned premiums from the end of the immediately preceding financial year.

5. Net premiums earned This shall be the aggregate of lines 3 and

6. 4.

7. income (such as commission and brokerage income) directly related to the underwriting general business.

INSURANCE ACCOUNTS REGULATIONS 1980

8. Line of statutory statement of Instructions income

expenses incurred loss expenses actually paid during the relevant year plus (minus) the increase (decrease) in the reserve shown on line 17(d) of the statutory balance sheet over that of the immediately preceding financial year.

9. Commissions and brokerage This shall be the aggregate of

compensation paid or payable to agents or brokers in return for business procured by them for the insurer in the relevant year in respect of general business.

10. General and administrative These shall be general and

11. administrative expenses other than those described in line 11.

12. salaries, wages and benefits, including taxes applicable to salaries and wages.

13. not included in lines 10 and 11.

14. inclusive.

17. line 13 from line 7 (or vice versa).

income – net with-holding tax and of any other directly related expenses, but shall not include realized gains or losses shown on line 41 of the statutory statement of income.

18. Income before the undernoted This shall be the total of lines 16 and 17.

items

INSURANCE ACCOUNTS REGULATIONS 1980

37. Line of statutory statement of Instructions income

(deduction) items not assigned to any of the lines above. Income taxes (line 39) and realized gains (losses) (line 41) shall not be included.

38. Income before taxes This shall be the total of lines 37 and -

(a) in the case of an insurer engaged in general business, line 18;

(b) in the case of a section 24(6) composite, line 36.

39. Income taxes The following shall, if applicable, be

disclosed severally -

(a) the amount provided in respect of income taxes currently payable;

(b) the amount provided in respect of deferred income taxes;

40. Income before realized gains This shall be the total of lines 38 and 39.

(losses)

41. Realized gains (losses) This shall include gains or losses on the

sale of -

(a) investments, whether quoted or unquoted;

(b) investments in affiliates;

(d) real estate, and may be net of the taxes and other expenses affecting any such sales.

42. Net income This shall be the total of lines 40 and 41.

[Schedule IV amended by BR 1 / 2009 reg.11 effective 31 December 2008; Schedule IV amended by BR 93 / 2010 reg.9 effective 31 December 2010; amended by 2011 : 44 Sch. 1 effective 31 December 2011; Parts I and II revoked and Part IV amended by 2015 : 50 s. 15 effective 1 January 2016; Part IV amended by 2018 : 35 Sch & s. 22 effective 23 July 2018; Part IV amended by 2019 : 51 s. 4(1) effective 30 April 2020]

INSURANCE ACCOUNTS REGULATIONS 1980

SCHEDULE — V

(Reg. 9(4)) INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF CAPITAL AND SURPLUS

Instructions [Note: The numerals in bold type and letters in bold type in parentheses refer to the numbers of the line of statutory statement of capital and surplus]

1(a). Capital stock This shall comprise—

(a) where common shares, preferred shares and treasury shares have a par value, the par value;

(b) where common shares, preferred shares and treasury shares have no par value, the stated value, of shares issued and called. Where shares have only been partially called, only the called portion shall be included. Where any capital stock has been called but not received, a corresponding receivable shall be reflected in the statutory balance sheet. In this Schedule “stated value”, in relation to shares in an insurer, means the value attributed to the shares in the books of the insurer.

(b). Contributed surplus This shall comprise—

(a) any share premium, that is to say—

(i) where shares have a par value, the excess of any proceeds received or receivable over the par value;

(ii) where shares have no par value, the excess of proceeds received or receivable over the stated value, of shares issued and called. Where shares have only been partially called, only the said excess on the called portion shall be included;

(b) any credit resulting from the redemption or conversion of any shares at less than the amounts set up in respect of those shares as capital stock;

(c) any other capital contribution made to the insurer by any shareholder, not being a contribution required to be set up as capital stock.

INSURANCE ACCOUNTS REGULATIONS 1980

Where any contributed surplus amount has been called but not received, a corresponding receivable shall be reflected in the statutory balance sheet.

(c). Any other fixed capital This shall comprise any other fixed capital approved by the Authority which has not been allocated to line 1(a). or 1(b). and must take into account any amount required by the instruction in Part I of Schedule III relating to line 14 or line 37 of the statutory balance sheet to be credited to, or, as the case may be, charged against, capital—

(i) Hybrid capital instruments

(ii) Guarantees and others

(iii) Total any other fixed capital - the sum of (i) and (ii).

(d). Total statutory capital This shall be the total of lines 1(a), 1(b) and 1(c).

2(a). Statutory surplus—beginning of year Statutory surplus—beginning of the year means the statutory surplus as at the end of the immediately preceding financial year as computed in accordance with these Regulations.

(b). Income for the year This shall be the amount described in line 42 of the statutory statement of income.

(c). Dividends paid and payable This shall comprise—

(a) all dividends declared during the relevant year, being dividends payable to shareholders in the insurer during that year, whether those dividends were or were not in fact so paid before the end of the relevant year;

(b) any provision made for the payment during the relevant year of cumulative dividends in respect of shares of any class, being dividends due to have been paid before the commencement of the relevant year.

(d). Change in unrealized appreciation (depreciation) of investments This shall comprise any increase (decrease) occurring since the end of the immediately preceding financial year in the value of quoted investments (line

2 of the statutory balance sheet), to the extent that that increase (decrease) is not reflected in the statutory statement of income.

INSURANCE ACCOUNTS REGULATIONS 1980

(e). Change in non-admitted assets This shall comprise any (increase) or decrease occurring since the end of the immediately preceding financial year in the value of non-admitted assets.

(f). Change in appraisal of real estate This shall comprise any increase (or decrease) occurring since the end of the immediately preceding financial year in the value of real estate carried at appraisal value (see paragraph (B) of the requirement in Part II of Schedule II relating to line 7 of the statutory balance sheet).

(g). Change in any other statutory surplus This shall comprise any increase (or decrease) occurring since the end of the immediately preceding financial year in the value of unquoted investments, investments in and advances to affiliates and investments in mortgage loans on real estate (lines 3, 4 and 5 respectively of the statutory balance sheet), to the extent that that increase (decrease) is not reflected in the statutory statement of income.

(h). Statutory surplus—end of year This shall be the aggregate of lines 2(a), 2(b), 2(c), 2(d), 2(e), 2(f) and 2(g).

3. Total statutory capital and surplus

This shall be the total of lines 1(d) and 2(h). [Schedule V amended by BR 29/1989 effective 7th July 1989; amended by 2001:27 effective 1 October 2001; amended by 2012 : 36 s. 21 effective 1 January 2013]

[Amended by: BR 38 / 1981 BR 29 / 1989

1995 : 20

2001 : 27 BR 41 / 2005 BR 1 / 2009 BR 24 / 2010 BR 93 / 2010

2011 : 44

2012 : 36

2013 : 46

2015 : 50

2016 : 35

INSURANCE ACCOUNTS REGULATIONS 1980

BR 41 / 2017

2018 : 35

2019 : 51

2022 : 41]

No cases currently cite this legislation.