Insurance Accounts Amendment Regulations 2008
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
1
BR 1/2009
INSURANCE ACT 1978
1978 : 39
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
In exercise of the powers conferred upon the Minister of Finance
by section 15(2) and 53 of the Insurance Act 1978, the following
Regulations are made:—
Citation and commencement
1 These Regulations may be cited as the Insurance Accounts
Amendment Regulations 2008 and shall come into operation on the 31
December 2008.
Interpretation
2 In these Regulations, “principal Regulations” means the
Insurance Accounts Regulations 1980.
Regulation 2 of principal Regulations amended
3 Regulation 2 of the principal Regulations is amended by
inserting the following definition in its proper place in alphabetical
order—
“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.”
Regulation 4 of principal Regulations amended
4 Regulation 4 of the principal Regulations is amended—
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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(a) in paragraph (1), by deleting “an insurer” and
substituting “a Class 1, Class 2, Class 3, Class 3A, or
Class 3B insurer”;
(b) by inserting the following paragraph after paragraph
(1)—
“(1A) Subject to paragraph (3), the statutory balance
sheet and the statutory statement of income of a Class 4
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.”;
(c) by deleting paragraph (2) and substituting the
following—
“(2) The statutory statement of income of an insurer
which in the financial year carried on no insurance
business other than general business, may have
annexed to it a statutory open year business revenue
statement in the form set out in Form 3, and any such
statement may relate to one or more, or all, classes of
that insurer’s general business.”
(d) in paragraph (3)—
(i) by deleting in subparagraph (a) “Form 1” and
substituting “Form 1 or, as the case may be,
Form 1A” ; and
(ii) by deleting in subparagraph (b) “Form 2” and
substituting “Form 2 or, as the case may be,
Form 2A”.
Regulation 6A of principal Regulations added
5 The principal Regulation is amended by adding the following
regulation after regulation 6—
“Balance sheet and statement of income for Special Purpose
Insurers
6A The statutory balance sheet and the statutory
statement of income of a Special Purpose Insurer for a relevant
year shall respectively be in forms set out in Forms 6 and 7.”
Regulation 8 of principal Regulations amended
6 Regulation 8(2) of the principal Regulations is revoked and the
following substituted—
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“(2) Every Class 1, Class 2, Class 3, Class 3A, Class 3B,
long-term insurer, section 24(6) composite, and Special Purpose
Insurer shall also set forth—
(a) in notes to its statutory balance sheet the matters
called for in Part II of Schedule II; and
(b) in notes to its statutory statement of income the
matters called for in Part III of Schedule II; and
(c) in notes to its statutory capital and surplus the
matters called for in Part IV of Schedule II.
(3) Every Class 4 insurer 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 VI of Schedule II; and
(c) in notes to its statutory capital and surplus the
matters called for in Part IV of Schedule II.”
Regulation 9 of principal Regulations amended
7 (1) Regulation 9(2) of the principal Regulations is amended—
(a) by deleting subparagraph (a) and substituting the
following —
“(a) every Class 1, Class 2, Class 3, Class 3A, Class 3B,
long-term insurer, section 24(6) composite, and
Special Purpose Insurer shall comply with the
instructions in Part I;”;
(b) in subparagraph (b), by inserting “to whom
subparagraph (a) applies” after “insurer”;
(c) in subparagraph (c), by inserting “to whom
subparagraph (a) applies” after “insurer”;
(d) by inserting in subparagraph (d) “and Special Purpose
Insurer” after “composite”;
(e) by inserting after subparagraph (d) the following
subparagraph––
“(e) every Class 4 insurer shall comply with the
instructions in Part IV.”
(2) Regulation 9(3) of the principal Regulations is amended—
(a) by deleting subparagraph (a) and substituting the
following—
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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“(a) every Class 1, Class 2, Class 3, Class 3A, Class 3B,
long-term insurer, section 24(6) composite, and
Special Purpose Insurer shall comply with the
instructions in Part I;”;
(b) in subparagraph (b), by inserting “to whom
subparagraph (a) applies” after “insurer”;
(c) in subparagraph (c), by inserting “to whom
subparagraph (a) applies” after “insurer”;
(d) by inserting in subparagraph (d) “Special Purpose
Insurer” after “composite”;
(e) by inserting the following after subparagraph (d)—
“(e) every Class 4 insurer shall comply with the
instructions in Part IV.”
Schedule I to principal Regulations amended
8 Schedule I to the principal Regulations is amended—
(a) by inserting after Form 1 the Form 1A set out in
Schedule 1 to these Regulations;
(b) by inserting after Form 2 the Form 2A set out in
Schedule 2 to these Regulations;
(c) in Form 6, by inserting “and Special Purpose Insurer”
after “(Section 24(6) Composite”;
(d) in Form 7, by inserting “and Special Purpose Insurer”
after “(Section 24(6) Composite”.
Schedule II to principal Regulations amended
9 Schedule II to the principal Regulations is amended by inserting
after Part IV, the Parts V and VI set out in Schedule 3 to these
Regulations.
Schedule III to principal Regulations amended
10 Schedule III to the principal Regulations is amended—
(a) by deleting the heading “Instructions for all Insurers” of
Part I and substituting “Class 1, Class 2, Class 3, Class
3A, Class 3B, long-term insurer, section 24(6)
composite, and Special Purpose Insurer”;
(b) by deleting “Insurers carrying on general business only”
in the heading of Part II and substituting “Class 1, Class
2, Class 3, Class 3A, Class 3B, section 24(6) composite,
and Special Purpose Insurer”;
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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(c) by inserting after Part III, the Part IV set out in
Schedule 4 to these Regulations.
Schedule IV to principal Regulations amended
11 Schedule IV to the principal Regulations is amended—
(a) by deleting the heading “Instructions for all Insurers” of
Part I and substituting “Class 1, Class 2, Class 3, Class
3A, Class 3B, long-term insurer, section 24(6)
composite, and Special Purpose Insurer”;
(b) by deleting “Insurers carrying on general business only”
in the heading of Part II and substituting “Class 1, Class
2, Class 3, Class 3A, Class 3B, section 24(6) composite,
and Special Purpose Insurer”;
(c) by inserting after Part III, the Part IV set out in
Schedule 5 to these Regulations.
SCHEDULE 1 (Reg 8)
Form 1A (Reg 4)
STATUTORY BALANCE SHEET
(General Business – Class 4 Insurer)
[blank] name of Company
as at [blank] (day/month/year)
expressed in [blank] (currency used (vide Reg. 10(2)))
ASSESTS
STMT.
LINE No.
20XX 20XX
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
(c) Equities 50
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(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
(c) Equities
(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:
(a) Investments in affiliates (cost or
equity)
XXX
XXX
(b) Advances to affiliates XXX XXX
(c) Total investments in and
advances to affiliates
XXX
XXX
5. INVESTMENTS IN MORTGAGE
LOANS ON REAL ESTATE:
(a) First lienes
XXX
XXX
(b) Other than first liens XXX XXX
(c) Total investment in mortgage
loans on real estate
XXX XXX
7. REAL ESTATE::
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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(a) Occupied by the company (less
encumbrances)
XXX
XXX
(b) Other properties (less
encumbrances)
XXX XXX
(c) Total real estate 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
(c) Receivables from retrocessional
contracts
XXX
XXX
(d) Total accounts and premiums
receivable
XXX
XXX
11. REINSURANCE BALANCES
RECEIVABLE
(a) Foreign affiliates XXX XXX
(b) Domestic affiliates XXX XXX
(c) Pools & associations 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
(c) Total funds held by ceding
reinsurers
XXX XXX
13. SUNDRY ASSETS::
(a) Derivative instruments XXX XXX
(b) Segregated accounts companies XXX XXX
(c) Deposit assets XXX XXX
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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(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
(c) Other instruments XXX XXX
(d) Total letters of credit, guarantees
and other instruments
XXX XXX
15. TOTAL: XXX XXX
GENERAL BUSINESS INSURANCE RESERVES, OTHER LIABILITIES
AND STATUTORY CAPITAL AND SURPLUS
STMT.
LINE No.
20XX 20XX
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
(c) Total reinsurance recoverable
balance
XXX XXX
(d) Net loss and loss expense
provisions
XXX XXX
18. OTHER INSURANCE RESERVES —
GENERAL BUSINESS
XXX XXX
19. TOTAL GENERAL BUSINESS — XXX XXX
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INSURANCE RESERVES
OTHER LIABILITIES
28. TOTAL GENERAL BUSINESS —
INSURANCE RESERVES
XXX XXX
29. COMMISSIONS, EXPENSES, FEES
AND TAXES PAYABLE
XXX XXX
30. LOANS AND NOTES 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. FUNDS HELD UNDER
REINSURANCE CONTRACTS
XXX XXX
(a) Affiliated XXX XXX
(b) Non-affiliated XXX XXX
(c) Total funds held under
reinsurance contracts
XXX XXX
35. DIVIDENDS PAYABLE XXX XXX
36. SUNDRY LIABILITIES:
(a) Derivative instruments XXX XXX
(b) Segregated accounts companies XXX XXX
(c) Deposit liabilities 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
(c) Other instruments XXX XXX
(d) Total letters of credit, guarantees
and other instruments
XXX XXX
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38. TOTAL OTHER LIABILITIES XXX XXX
39. TOTAL GENERAL BUSINESS
INSURANCE RESERVES AND
OTHER LIABILITIES
XXX XXX
STATUTORY CAPITAL AND SURPLUS
40. TOTAL STATUTORY CAPITAL AND
SURPLUS
XXX XXX
41. TOTAL
SCHEDULE 2 (Reg 8)
Form 2A (Reg 4)
STATUTORY STATEMENT OF INCOME
(General Business – Class 4 Insurer)
[blank] name of Company
as at [blank] (day/month/year)
expressed in [blank] (currency used (vide Reg. 10(2)))
STMT.
LINE No.
20XX 20XX
UNDERWRITING INCOME
1. GROSS PREMIUMS WRITTEN
(a) Direct gross premiums written XXX XXX
(b) Assumed gross premiums written XXX XXX
(c) TOTAL GROSS PREMIUMS
WRITTEN
XXX
XXX
2. REINSURANCE PREMIUMS CEDED XXX XXX
3. NET PREMIUMS WRITTEN XXX XXX
4. INCREASE (DECREASE) IN
UNEARNED PREMIUMS
XXX
XXX
5. NET PREMIUMS EARNED XXX XXX
6. OTHER INSURANCE INCOME XXX XXX
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7. XXX XXX
UNDERWRITING EXPENSES
8. NET LOSSES INCURRED AND NET
LOSS EXPENSES INCURRED
XXX
XXX
9. COMMISSIONS AND BROKERAGE XXX XXX
OTHER UNDERWRITING EXPENSES
10. GENERAL AND ADMINISTRATIVE
XXX
XXX
11. PERSONNEL COSTS XXX XXX
12. OTHER XXX XXX
13. XXX XXX
14 UNDERWRITING PROFIT (LOSS) XXX XXX
15. TRANSFERRED FROM (TO) OPEN
YEARBUSINESS REVENUE
STATEMENT
XXX XXX
16 NET UNDERWRITING PROFIT
(LOSS)
XXX XXX
17 GENERAL BUSINESS INVESTMENT
INCOME — NET
XXX
XXX
18. 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
(c) Total XXX XXX
40. INCOME BEFORE REALIZED GAINS
(LOSSES)
XXX XXX
41. REALIZED GAINS (LOSSES) XXX XXX
42. NET INCOME XXX XXX
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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SCHEDULE 3 (Reg 9)
Part V (Reg 8(2)))
Matters to be set forth in Notes to the Statutory Balance Sheet –
Class 4 Insurer
Line of statutory balance
sheet
Information required to be
given
1. Cash and time deposits
Any encumbrance on cash
or time 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
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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Line of statutory balance
sheet
Information required to be
given
as collateral against a
liability of the insurer or an
affiliate.
4. Investment in and advances
to affiliates
The method of valuation
must be described.
Repayment terms and the
rates of interest applicable
to advances must also be
given.
5. Investments in mortgage
loans on real estate
The range of interest rates
and the range of maturity
dates for mortgage loans on
real estate must be
disclosed.
7. Real estate As regards real estate -
(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
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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Line of statutory balance
sheet
Information required to be
given
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. Collateralized loans Description and amount of
the collateral loans.
10. Accounts and premiums
receivable
The following must be
disclosed in a note:
(a) Details of collateralized
balances.
(b) The amount of the
receivable balance with
affiliates.
11. Reinsurance balances
receivable
The following must be
disclosed in 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.
(c) The purpose for which
the letter of credit was
granted.
12. Funds held by ceding
reinsurers
The amount held by
affiliates shall be disclosed.
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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Line of statutory balance
sheet
Information required to be
given
13. Sundry assets The nature and terms of
these assets. Details of off
balance sheet arrangements
including derivatives and
embedded derivatives, if
any.
14. Letters of credit,
guarantees and other
instruments
The following must be
disclosed in 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;
(c) the purpose for
which the letter of credit,
guarantee or other
instrument was granted.
16. Unearned premiums The method of calculating
unearned premiums.
17. Loss and loss expense
provisions
The following must be
disclosed in a 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
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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Line of statutory balance
sheet
Information required to be
given
premiums have been
accrued as a result of the
prior year effects.
Table (Line 17(a))
20XX 20XX
Gross loss and loss expense provisions at
beginning of year
XXX XXX
Less : Reinsurance recoverable at beginning of
year
(XXX) (XXX)
Net loss and loss expense provisions at beginning
of year
XXX XXX
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 to:
XXX XXX
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
year
XXX XXX
28. Insurance and reinsurance
balances payable
The payable balance to
affiliates shall be disclosed.
30. Loans and notes payable The repayment terms, rates of
interest and the nature of
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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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
interest and the nature of
collateral given, if any.
34. Funds held under
reinsurance contracts
The amount held by affiliates
shall be disclosed.
36. Sundry liabilities The nature of these liabilities
and the repayment terms.
37. Letters of credit,
guarantees and other
instruments
(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;
(c) the purpose for which
the letter of credit, guarantee
or other instrument was
granted.
Part VI (Reg 8(2))
Matters to be set forth in Notes to the Statutory Statement
of Income – Class 4 Insurer
Line of statutory statement
of income
Information required to be given
6. Other insurance income The nature of material items that
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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Line of statutory statement
of income
Information required to be given
12. Other underwriting income
37. Other income
(deductions)
have been included.
The nature of material items that
have been included.
The nature of material items that
have been included.
41. Realized gains (losses) The nature of material items that
have been included.”
SCHEDULE 4 (Reg 10)
Part IV (Reg (2))
INSTRUCTIONS AFFECTING THE STATUTORY BALANCE SHEET
Class 4 Insurer
Line of statutory balance
sheet
Instructions
1. Cash and time deposits
Certificates of deposit shall be
included.
2. Quoted 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) other quoted
investments;
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Line of statutory balance
sheet
Instructions
(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;
(c) other bonds and
debenture shall be carried at their
quoted 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);
(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;
(c) other bonds and
debentures at fair value determined
in good faith;
(d) equities (common stocks,
preferred stocks, and mutual funds)
shall be carried at fair value
determined in good faith.
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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Line of statutory balance
sheet
Instructions
4. Investment in and advances
to affiliates
(a) there shall be disclosed
severally--
(i) investment in
affiliates (cost or equity);
(ii) advances to
affiliates;
(iii) the total of (i)
and (ii);
(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 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
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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Line of statutory balance
sheet
Instructions
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 real estate
Mortgages shall be carried at the
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
(c) the total of (a) and (b).
7. Real estate
(a) both land and buildings
shall be included;
(b) the insurer’s title must be
clear and incontestable;
(c) there shall be disclosed
severally -
(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 -
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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Line of statutory balance
sheet
Instructions
(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 the
directors uncollectible, that amount
shall be deducted.
9. Investment income due and
accrued
If any amount is in the opinion of the
directors uncollectible, that amount
shall be deducted.
10. Accounts and premiums
receivable
(a) there shall be disclosed
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;
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Line of statutory balance
sheet
Instructions
(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;
(c) any amount shown in
line 10 or 12 shall not be included;
(d) if any amount is in the
opinion of the directors
uncollectible, that amount shall be
deducted.
12. Funds held by ceding
reinsurers
(a) there shall be disclosed
severally -
(i) affiliated;
(ii) non-affiliated;
(iii) the total of (i)
and (ii);
(b) funds held by ceding
reinsurers (whether affiliates or not)
INSURANCE ACCOUNTS AMENDMENT REGULATIONS 2008
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Instructions
shall be included;
(c) any amount shown in
line 10 or 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.
14. Letters of credit,
guarantees and other
instruments
15. Total
(a) where additional fixed
capital has 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
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 14
inclusive.
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16. Unearned premiums (a) this line shall disclose an
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;
(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;
(c) acquisition costs shall
not be deducted in calculating the
amount of unearned premiums;
17. Loss and loss expense
provisions
(a) this line shall disclose an
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
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provisions;
(c) there shall be disclosed
severally -
(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 -
general business
The balance from the open year
business revenue statement shall be
included.
19. Total general business
insurance reserves
This shall be the total of lines 16, 17
and 18.
28. Insurance and reinsurance (a) amounts, including
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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.
29. Commissions, expenses,
fees and taxes payable
All liabilities in respect of
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 28.
30. Loans and notes payable Loans and notes payable to any
person other than an affiliate shall be
included here.
31. Income taxes There shall be disclosed severally -
(a) income taxes currently
payable;
(b) provision for deferred
income taxes.
32. Amounts due to affiliates
(a) All balances due to
affiliates, not being amounts payable
under reinsurance contracts (shown
on line 28 or line 34), shall be
included here.
(b) there shall be disclosed
severally -
(i) affiliated;
(ii) non-affiliated;
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(iii) the total of (i) and
(ii);
33. Accounts payable and
accrued liabilities
Any other (non-insurance) accounts
payable and accrued liabilities shall
be included here.
34. Funds held under
reinsurance contracts
Funds held under reinsurance
contracts shall be included here.
35. Dividends payable The amount of dividends payable 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 and other
instruments
(a) where letters of credit,
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.
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38. Total other liabilities This shall be the total of lines 28 to
37 inclusive.
39. Total general business
insurance reserves and other
liabilities
This shall be the total of lines 19 and
38, or of lines 27 and 38, or of lines
19, 27 and 38 as the case may
require.
40. Total statutory capital and
surplus
This shall be the capital and 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.”
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SCHEDULE 5 (Reg 11)
Part IV (Reg 9(3))
INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF
INCOME
Instructions for Class 4 Insurers
Line of statutory statement
of income
Instructions
1. Gross premiums written This gross premiums written
shall be 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
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reinsurance is transferred to
reinsurers.
3. Net premiums written This shall be arrived at by
subtracting line 2 from line 1.
4. Increase (decrease) in
unearned premiums
This shall be the net increase
(decrease) 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 4.
6. Other insurance income This shall be the aggregate of
all other income (such as
commission and brokerage
income) directly related to the
underwriting general
business.
7. This shall be the total of lines
5 and 6.
8. Net losses incurred and net
loss expenses incurred
These shall consist of net
losses and net 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 These shall be general and
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Instructions
administrative administrative expenses other
than those described in line
11.
11. Personnel costs These shall be the aggregate
amount of salaries, wages and
benefits, including taxes
applicable to salaries and
wages.
12. Other These shall be underwriting
expenses not included in lines
10 and 11.
13. This shall be the total of lines
8 to 12 inclusive.
14. Underwriting profit (loss) This shall be arrived at by
subtracting line 13 from line 7
(or vice versa).
17. General business
investment income – net
Investment income may be
shown net of 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 items
This shall be the total of lines
16 and 17.
37. Other income (deductions) These shall consist of all 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
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Instructions
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;
(c) the total of (a) and (b).
40. Income before realized
gains (losses)
This shall be the total of lines 38 and
39.
41. Realized gains (losses) This shall include gains or losses on
the sale of -
(a) investments, whether
quoted or unquoted;
(b) investments in affiliates;
(c) investments in mortgage
loans on real estate; and
(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.”
Made this 24th day of December, 2008
Minister of Finance
