This article introduces the new requirements applicable to the statutory financial statements. In particular, it highlights certain substantial changes affecting the Insurers registered under the Segregated Account Companies Act 2000 (SAC Insurers).

Pursuant to these regulatory changes Insurers are required to prepare financial statements under section 17A of the Act. These financial statements will be used as the basis on which statutory financial statements will be prepared under the new Insurance Account Rules 2016 (2016 Rules). The statutory financial statements will have to comprise statements both on unconsolidated and consolidated bases.

Pursuant to this new regulatory framework, Insurers are required to prepare unconsolidated statutory financial statements and income statements on a GAAP basis (adjusted by certain prudential filters and reserves), which are then used to produce the following documents:

Statutory balance sheet.

Statutory income statement.

Statutory statement of capital and surplus.

The information contained in the unconsolidated statutory financial statements will be used to determine the insurer’s:

Minimum solvency margin, being 25 per cent of an Insurer’s Enhanced Capital Requirement (ECR) as determined from the Economic Balance Sheet (EBS).

Liquidity ratio (if applicable).

Class of registration.

For insurers with subsidiaries consolidated in their GAAP financial statements, the Bermuda Monetary Authority (BMA) must be provided with the necessary information on an unconsolidated basis to assess the Insurers’ liquidity position, minimum solvency margin and insurer class without migration of the subsidiaries’ financials.

Read More

Twitter LinkedIn Email Save as PDF
More Publications
5 Dec 2022

Business Crime and Investigations in Bermuda: Overview

A Q&A guide to business crime and investigations in Bermuda.

24 Nov 2022

Information Technology, Outsourcing, Privacy & Data Protection

All aspects of Bermuda's economy rely on information technology and data processing - an essential i...

Contributors: Duncan Card
22 Nov 2022

A Look Back on 2022 and What to Expect for 2023

As we approach the end of 2022, we are able to look back and say with certainty that the arena of la...

14 Nov 2022

When will the court enforce a promise?

As we all know, promises are made and broken all the time. What, if anything, can the law do to assi...

4 Nov 2022

Legally speaking: what not to do when outsourcing operations

In the course of my career, I have drafted, negotiated or otherwise provided commercial and legal ad...

1 Nov 2022

The Insolvency Review – Edition 10

The Insolvency Review offers an in-depth review of the most consequential features of the insolvenc...

25 Oct 2022

Bermuda: Mergers & Acquisitions Comparative Guide 2022

This country-specific Q&A provides an overview to Mergers & Acquisitions laws and regulati...

Contributors: Katie Blundy
24 Oct 2022

Directors’ duties on the eve of insolvency

It is common knowledge that directors of companies owe a duty to the company to act in its best inte...

Contributors: James Batten
13 Oct 2022

Employee probation periods: an update

The Employment Act 2000 is the island’s key piece of employment legislation, applicable to employe...

Contributors: Kiara Wilkinson
6 Oct 2022

Centre Stage: Bermuda’s Role In An Insurtech Revolution

Bermuda is rapidly becoming a focus for insurtechs seeking the island’s expertise, the accessibili...