Insurance Accounts Regulations 1980

1 Citation

2 Interpretation

3 Statutory financial state ments

4 Balance sheet and state ment of income for general business

5 Balance sheet and state ment of income for long-term business

6 Balance sheet and state ment of income for com posites

7 Statement of capital and surplus for all insurers

8 Notes to statutory finan cial statements

9 Instructions relating to statutory financial state ments

10 Requirements relating to preparation of accounts generally

11 Offences

12 Commencement

SCHEDULE I

PRESCRIBED FORMS OF STATUTORY FINANCIAL STATEMENTS

Form 1
Statutory Balance Sheet (General Business)

Form 2
Statutory Statement of Income (General Business)

Form 3
Statutory Open Year Business Revenue Statement (General Business)

Form 4
Statutory Balance Sheet (Long-term Business)

Form 5
Statutory Statement of Income (Long-term Business)

Form 6
Statutory Balance Sheet (Section 24(6) Composite)

Form 7
Statutory Statement of Income (Section 24(6) Composite)

Form 8
Statutory Statement of Capital and Surplus

SCHEDULE II
NOTES TO STATUTORY FI NANCIAL STATEMENTS

Part I
Matters to be set forth in a General Note to the Statutory Financial Statements

Part II
Matters to be set forth in Notes to the Statutory Balance Sheet

Part III
Matters to be set forth in Notes to the Statutory Statement of Income

Part IV
Matters to be set forth in Notes to the Statutory Statement of Capital and Surplus

SCHEDULE III
INSTRUCTIONS AFFECTING THE STATUTORY BALANCE SHEET

Part I
Instructions for all insurers

Part II
Additional Instructions for In surers carrying on general business only

Part III
Additional Instructions for In surers carrying on long-term business only

SCHEDULE IV
INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF INCOME

Part I
Instructions for all insurers

Part II
Additional Instructions for In surers carrying on general business only

Part III
Additional Instructions for In surers carrying on long-term business only

SCHEDULE V
INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF CAPITAL AND SURPLUS

Citation

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

Interpretation

2 In these Regulations, except where the context otherwise re quires, 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 dispo sition 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 un-incorporate, that are in association, and two bodies shall for the purposes of these Regulations be deemed to be in associ ation 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 ap praisal 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" 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;

"loss reserve specialist" means a person approved by the Minister for the purposes of the Act as a person qualified to assess the sufficiency of' insurance loss reserves;

"non-admitted", in relation to an asset, means an asset or por tion 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 pre sent 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 busi ness where the risks, the subject of the contract of insurance, are risks of the persons insured incurring liabilities in rela tion to the negligent or other exercise by those persons of some professional skill;

"quoted"—

(a) in relation to an investment, means an investment as re spects which there has been granted a quotation or permission to deal on a stock exchange in Bermuda rec ognized by the Minister 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 corres ponding 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;

"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.

Statutory financial statements

3 (1) Except as provided otherwise in other regulations. the du ties 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) where the case requires, a statutory open year business revenue statement.

(3) Every 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 spec ified 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".

Balance sheet and statement of income for general business

4 (1) Subject to paragraph (3), the statutory balance sheet and the statutory statement of income of an 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 1 and 2.

(2) The statutory statement of income of such an insurer as aforesaid 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.

(3) An insurer which annexes to its statutory statement of in come a statutory open year business revenue statement —

(a) shall, in preparing Form 1, include in line 18 thereof the balance from the statutory open year business revenue statement;

(b) shall not, in preparing Form 2, include in line 3, 8, 9, 10, 11, 12 or 17 any amount which would, were it not for this sub-paragraph, have to be included there, if that amount has been included in the insurer's statutory open year business revenue statement.

Balance sheet and statement of income for long-term business

5 The statutory balance sheet and the statutory statement of in come of an 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.

Balance sheet and statement of income for composites

6 (1) Subject to paragraph (3)—

(a) the statutory balance sheet;

(b) the statutory statement of income; and

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 in stead —

(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 6 and 7; and

(b) the statutory statement of income of a section 24(6) composite 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 composite's general business.

(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 com ply with the requirements of paragraph (3).

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.

Notes to statutory financial statements

8 (1) Every insurer shall set forth in a general note to its statu tory financial statements the matters called for in Part I of Schedule II.

(2) Every insurer shall also set forth—

(a) in notes to its statutory balance sheet;

(b) in notes to its statutory statement of income: and

(c) in notes to its statutory statement of capital and sur plus, the matters called for by Parts II, III and IV respec tively of that Schedule.

Instructions relating to statutory financial statements

9 (1) Every 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 in structions set forth in the several Parts of Schedule III shall have effect in accordance with the following rules, that is to say—

(a) every insurer shall comply with the instructions in Part I;

(b) every insurer which in the relevant year carried on no insurance business other than general business shall, in addition to complying with the instructions in Part I, comply with the instructions in Part II;

(c) every insurer 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 I, comply with the instructions in Part III;

(d) every section 24(6) composite shall, in addition to com plying with the instructions in Part I, comply with the instructions in Parts II and III.

(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) every insurer shall comply with the instructions in Part I;

(c) every insurer 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 I, comply with the instructions in Part III;

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

(i) in addition to complying with the instructions in Part I, comply with the instructions in Parts II and III; and

(ii) in addition include in line 36 of Form 7 the total of lines 18 and 35 of that Form,

(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 ex press direction or indication where the amount or information is to be shown or given.

[Regulation 9 amended by 1995:20 effective 29 April 1995]

Requirements relating to preparation of accounts generally

10 (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 cur rencies in that office, then the currency in which the majority of those books and records are kept:

Provided that where the Registrar pursuant to the power given to him by section 17(1) of the Act directs the production to him 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 equiva lent 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 finan cial year.

Offences

11 (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 mak ing, 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 omis sion to state something that is material.

Commencement

12 [omitted]

Form 2

STATUTORY STATEMENT OF INCOME (General Business)

[blank] name of Company

as at [blank] (day/month/year)

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

STMT.

LINE No. 19XX 19XX

UNDERWRITING INCOME

1. 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

7. _XXX _XXX

UNDERWRITING EXPENSES

8. NET LOSS 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 YEAR
BUSINESS 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

40. INCOME BEFORE REALIZED GAINS
(LOSSES) XXX XXX

41. REALIZED GAINS (LOSSES) _XXX _XXX

42. NET INCOME _XXX _XXX

Form 3

STATUTORY OPEN YEAR BUSINESS REVENUE STATEMENT
(General Business)

[temporarily omitted]

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)))

ASSETS

STMT.

LINE No. 19XX 19XX

1. CASH AND TIME DEPOSITS XXX XXX

2. QUOTED INVESTMENTS:

(a) Bonds and Debentures XXX XXX

(b) Equities (preferred and ordinary) XXX XXX

(d) Total quoted investments _XXX _XXX

3. UNQUOTED INVESTMENTS:

(a) Bonds and Debentures XXX XXX

(b) Equities (preferred and ordinary) _XXX _XXX

4. INVESTMENTS IN AND ADVANCES
TO AFFILIATES XXX XXX

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:

(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 XXX XXX

11. REINSURANCE BALANCES
RECEIVABLE XXX XXX

12. FUNDS HELD BY CEDING
REINSURERS XXX XXX

13. SUNDRY ASSETS:

(a) ___________ XXX XXX

(b) ___________ XXX XXX

14. LETTERS OF CREDIT, GUARAN TEES
AND OTHER INSTRU MENTS

(a) ___________ XXX XXX

(b) ___________ XXX XXX

15. TOTAL _XXX _XXX

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

STMT.

LINE No. 19XX 19XX

LONG-TERM BUSINESS
INSURANCE RESERVES

20. RESERVES FOR REPORTED CLAIMS XXX XXX

21. RESERVES FOR UNREPORTED
CLAIMS XXX XXX

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' DIVIDENDS XXX XXX

26. OTHER INSURANCE RESERVES —
LONG-TERM _XXX _XXX

27. TOTAL LONG-TERM BUSINESS
INSURANCE RESERVES _XXX _XXX

OTHER LIABILITIES

28. INSURANCE AND REINSURANCE
BALANCES PAYABLE 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

35. DIVIDENDS PAYABLE XXX XXX

36. SUNDRY LIABILITIES:

(a) ___________ XXX XXX

(b) ___________ XXX XXX

37. LETTERS OF CREDIT, GUARAN TEES
AND OTHER INSTRU MENTS _XXX _XXX

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 _XXX _XXX

Form 5

STATUTORY STATEMENT OF INCOME (Long-term Business)

[blank] name of Company

as at [blank] (day/month/year)

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

STMT.

LINE No. 19XX 19XX

19. PREMIUMS AND OTHER
CONSIDERATIONS:

(a) Life XXX XXX

(b) Annuities XXX XXX

(d) Total Premiums and
Other Considerations XXX XXX

20. LONG-TERM BUSINESS INVESTMENT
INCOME — Net XXX XXX

21. OTHER INSURANCE INCOME _XXX _XXX

22. _XXX _XXX

DEDUCTIONS

23. Claims — Life XXX XXX

24. Policyholders' Dividends XXX XXX

25. Surrenders XXX XXX

26. Maturities XXX XXX

27. Annuities XXX XXX

28. Accident and Health Benefits XXX XXX

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) XXX XXX

41. REALIZED GAINS (LOSSES) _XXX _XXX

42. NET INCOME _XXX _XXX

Form 6

STATUTORY BALANCE SHEET

(Section 24(6) Composite)

[blank] name of Company

as at [blank] (day/month/year)

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

ASSETS

STMT.

LINE No. 19XX 19XX

1. CASH AND TIME DEPOSITS XXX XXX

2. QUOTED INVESTMENTS:

(a) Bonds and Debentures XXX XXX

(b) Equities (preferred and ordinary) XXX XXX

(d) Total quoted investments _XXX _XXX

3. UNQUOTED INVESTMENTS:

(a) Bonds and Debentures XXX XXX

(b) Equities (preferred and ordinary) _XXX _XXX

4. INVESTMENTS IN AND ADVANCES
TO AFFILIATES XXX XXX

5. INVESTMENTS IN MORTGAGE LOANS
ON REAL ESTATE:

(a) First liens XXX XXX

(b) Other than first liens _XXX _XXX

6. POLICY LOANS XXX XXX

7. REAL ESTATE:

(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 XXX XXX

11. REINSURANCE BALANCES
RECEIVABLE XXX XXX

12. FUNDS HELD BY CEDING
REINSURERS XXX XXX

13. SUNDRY ASSETS:

(a) ___________ XXX XXX

(b) ___________ XXX XXX

14. LETTERS OF CREDIT, GUARAN TEES
AND OTHER INSTRU MENTS

(a) ___________ XXX XXX

(b) ___________ XXX XXX

15. TOTAL _XXX _XXX

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

STMT.

LINE No. 19XX 19XX

GENERAL BUSINESS INSURANCE RESERVES

16. UNEARNED PREMIUMS XXX XXX

17. LOSS AND LOSS EXPENSES
PROVISIONS XXX XXX

18. OTHER INSURANCE RESERVES —
GENERAL BUSINESS _XXX _XXX

19. TOTAL GENERAL BUSINESS
INSURANCE RESERVES _XXX _XXX

LONG-TERM BUSINESS
INSURANCE RESERVES

20. RESERVES FOR REPORTED CLAIMS XXX XXX

21. RESERVES FOR UNREPORTED CLAIMS XXX XXX

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' DIVIDENDS XXX XXX

26. OTHER INSURANCE RESERVES —
LONG-TERM _XXX _XXX

27. TOTAL LONG-TERM BUSINESS
INSURANCE RESERVES _XXX _XXX

OTHER LIABILITIES

28. INSURANCE AND REINSURANCE
BALANCES PAYABLE 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

35. DIVIDENDS PAYABLE XXX XXX

36. SUNDRY LIABILITIES:

(a) ___________ XXX XXX

(b) ___________ XXX XXX

37. LETTERS OF CREDIT, GUARAN TEES
AND OTHER INSTRU MENTS _XXX _XXX

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 _XXX _XXX

Form 7

STATUTORY STATEMENT OF INCOME
(Section 24(6) Composite)

[blank] name of Company

for the year ended [blank] (day/month/year)

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

STMT.

LINE No. 19XX 19XX

UNDERWRITING INCOME

1. 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

7. _XXX _XXX

UNDERWRITING EXPENSES

8. NET LOSS INCURRED AND NET LOSS
EXPENSES INCURRED XXX XXX

9. COMMISSIONS AND BROKERAGE XXX XXX

OTHER UNDERWRITING EXPENSES

10. GENERAL 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 YEAR
BUSINESS REVENUE STATEMENT XXX _XXX

16. NET UNDERWRITING PROFIT (LOSS) XXX XXX

17. GENERAL BUSINESS INVESTMENT
INCOME — NET _XXX _XXX

18. INCOME FROM GENERAL BUSINESS
BEFORE THE UNDERNOTED
ITEMS XXX XXX

19. PREMIUMS AND OTHER
CONSIDERATIONS:

(a) Life XXX XXX

(b) Annuities XXX XXX

(d) Total Premiums and
Other Considerations XXX XXX

20. LONG-TERM BUSINESS INVESTMENT
INCOME — Net XXX XXX

21. OTHER INSURANCE INCOME _XXX _XXX

22. _XXX _XXX

DEDUCTIONS

23. Claims — Life XXX XXX

24. Policyholders' Dividends XXX XXX

25. Surrenders XXX XXX

26. Maturities XXX XXX

27. Annuities XXX XXX

28. Accident and Health Benefits XXX XXX

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

COMBINED INCOME AND UNALLOCATED ITEMS

STMT.

LINE No. 19XX 19XX

INCOME BEFORE UNALLOCATED ITEMS

18. GENERAL BUSINESS XXX XXX

35. LONG-TERM BUSINESS _XXX _XXX

36. COMBINED INCOME 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) XXX XXX

41. REALIZED GAINS (LOSSES) _XXX _XXX

42. NET INCOME _XXX _XXX

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. 19XX 19XX

1. STATUTORY CAPITAL:

(a) Capital Stock

authorized shares of par
value each issued and
fully paid shares XXX XXX

(b) Contributed surplus 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

(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]

SCHEDULE II (Reg. 8)

NOTES TO STATUTORY FINANCIAL STATEMENTS

PART I

Matters to be set forth in a General Note
to the Statutory Financial Statements

1 The name of the person or persons ultimately having power (whether directly or through having control of some other person or per sons 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 curren cies 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 rea sons.

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, in terest, 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 cumula tive shares, and the date to which those dividends were last paid.

10 The amount of any loan made during the relevant year by the in surer, 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.

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 re quired to be disclosed if the statutory financial statements are not to be misleading.

PART II

Matters to be set forth in Notes to the
Statutory Balance Sheet

Information required to be given

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

1. Cash and time deposits

Any encumbrance on cash or time de posits must be dis closed. Examples of such encumbrances are: irrevocable letters of credit; amounts held for secu rity or as collateral against a liability of the insurer or an affiliate; any other use restriction such for example as that the funds in question are held in escrow or in a custodial account.

3. Unquoted in vestments

The method of valuation of any un quoted investment must
be described. Where a valuation is made‑

(a) of bonds or debentures at other than amortized cost; or

(b) of equities (whether preferred or ordinary) by any method other than the cost method or the equity method of valuation,

the reasons shall be stated.

4. Investment in mortgage loans on real estate

The method of valuation must be de scribed. Where a valua tion is made of any investment by any method other than the cost method or the equity method of valuation the reasons shall be stated.

Repayment terms and the rates of inter est applicable to ad vances must also be given.

5. Investment 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 encum brances, the value of the real estate before encumbrances, the amount and na ture 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 en cumbrances. In such a case, full de tails of the appraisal (including the date of the ap praisal, 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 (i.e. properties not occupied by the insurer) are included in the statutory balance sheet, the nature of the investments repre sented by those properties (for example whether held for in vestment re turn, or as a result of default of mortgage, or for specu lative gain) shall be dis closed.

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;

16. Unearned premiums

The method of calculating unearned premiums.

17. Loss and Loss expense provisions

The following must be dis closed in a note—

(a) the method of calculating loss and loss expense provisions and provisions for losses incurred but not reported;

(b) the amount by which loss and loss expense pro visions have been reduced by discounting for the time value of money, and the rates, or the range of rates, of interest used in any such discounting.

20. Reserves for reported claims

The method of determining the reserves for reported claims.

21. Reserves for unreported claims

The method of determining the reserves for unreported claims.

22. Policy reserves — life

The method of calculation, and the range of significant or material interest rates and mortality factors used in the cal culations.

23. Policy reserves accident and health

The method of calculation of the reserves.

25. Liability for future policyholders' dividends

The method of determining the policy-holders' dividends.

26. Other insurance reserves — long term

The method of calculation of these reserves.

30. Loans and notes payable

The repayment terms, rates of interest and the nature of col lateral 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 col lateral given, if any.

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;

PART III

Matters to be set forth in Notes to
the Statutory Statement of Income

Information required to be given

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

37. Other income (deductions)

The nature of material items that have been included.

41. Realized gains (losses)

The nature of material items that have been included.

PART IV

Matters 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 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;

(d) any conversion provisions.

As respects issued capital stock there shall be disclosed sev erally—

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

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

1(b) Contributed surplus

The nature of any change in contributed surplus during the relevant year.

2(c) Dividends paid and payable

The amount and nature of any dividend paid during the rele vant year that was other than a cash dividend.

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 war rants);

(bb) shares issued directly or indirectly for ser vices; 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 considera tion given and the value attributed thereto.

[Schedule II amended by BR 29/1989 effective 7th July 1989]

SCHEDULE III (Reg. 9(2))

INSTRUCTIONS AFFECTING THE STATUTORY BALANCE SHEET

PART I

Instructions for all insurers

Instructions

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

1. Cash and time deposits

Certificates of deposit shall be included.

2. Quoted investments

(a) there shall be disclosed several—

(i) bonds and debentures;

(ii) equities (preferred and ordinary);

(iii) other quoted investments;

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

(b) bonds and debentures shall be carried either at quoted value or at cost or amortized cost, and the basis of valu ation shall be shown;

(i) the quoted value shall be shown in brackets;

(ii) adequate provision shall be made for any perma nent diminution in value;

(d) equities (preferred and ordinary) 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;

(ii) equities (preferred and ordinary);

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

(b) bonds and debentures shall be carried either at cost or amortized cost or at fair value determined in good faith, and adequate provision shall be made for any permanent diminution in value;

4. Investment in and advances to affiliates

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

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

Provided that—

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

(d) if any amount is in the opinion of the directors uncol lectible, 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 di rectors to be needed for doubtful collection, and there shall be disclosed severally—

(a) first liens;

(b) liens other than first liens; and

7. Real estate

(a) both land and buildings shall be included;

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

(i) real estate occupied by the insurer;

(ii) other properties;

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

(d) except where carried at a value determined by an inde pendent 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 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) amounts receivable on account of policies of insurance from any person, whether an affiliate or not, shall be in cluded;

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

11. Reinsurance balances receivable

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

(b) any amount shown in line 10 or 12 shall not be in cluded;

12. Funds held by ceding reinsurers

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

(b) any amount shown in line 10 or 11 shall not be in cluded;

13. Sundry assets

Any asset not accounted for in lines 1 to 12 and 14 may be included here if it has a readily realizable value. Any other assets, prepaid and deferred expenses, goodwill and similar intangible assets, deferred acquisition costs and excess of book value over admitted asset value of stocks and other in vestments shall be non-admitted assets.

14. Letters of credit, guarantees and other instruments

(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 Min ister obtained on an application made for that purpose, be recorded and the capital increased by a corre sponding amount. Where such an asset is recorded, it must be shown net of any allowance for its collectibility;

(b) letters of credit, guarantees and other instruments in favour of the insurer which relate to insurance operations shall not be recorded.

28. Insurance and Reinsurance balances payable

(a) amounts, including premiums and other balances, payable to insured persons and reinsurers (whether af filiates or not) under insurance and reinsurance con tracts 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

All balances due to affiliates, not being amounts payable un der reinsurance contracts (shown on line 28 or line 34), shall be included here.

33. Accounts payable and accrued liabilities

Any other (non-insurance) accounts payable and accrued lia bilities 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 in surer 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 liabili ties) 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 and guarantees are given by the insurer in favour of another person, being letters of credit, a guarantee or any other instrument not relating to the insurer's insur ance 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, a guarantee or any other instrument;

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

38. Total other liabilities

This shall be the total of lines 28 to 37 inclusive.

39. Total general business insurance reserves and other liabili ties

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.

[Part 1 amended by 1995:20 effective 29 April 1995]

PART II

Additional instructions for Insurers
carrying on general business only

Instructions

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

16. Unearned premiums

(a) this line shall disclose a proper amount set aside for un earned premiums, which shall be shown net of the un earned portion of the reinsurance premiums ceded which are used for calculating net premiums written;

(b) where refunds are expected to be made under retrospec tive or experience rating plans, proper provision must be made by an appropriate addition to the unearned pre mium reserve;

17. Loss and Loss expense provisions

(a) this line shall disclose a proper 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, ad justment and settlement of such losses. The said provi sions shall include amounts in respect of losses re ported. There shall be disclosed the proper 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 recover able 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;

(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 insurer's approved auditor is of 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;

(d) where loss provisions are discounted as allowed by paragraph (c) above, the directors of the insurer shall determine that a proper 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;

(e) where an insurer's loss provisions have been discounted as allowed by paragraphs (c) and (d) 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;

(f) 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 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;

(g) 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 (f) 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.

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.

[Part II amended by 1995:20 effective 29 April 1995]

PART III

Additional 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 a proper amount set aside by the in surer 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 a proper amount set aside by the in surer to meet claims under contracts of insurance and rein surance 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 pro vided for. The directors shall make allowance for any such

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 in come benefits and additional accidental death benefits) and to annuities and to supplemental contracts with life contin gencies 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 col lection of which is in their opinion doubtful and adjust the reserve by said amount.

23. Policy reserves — accident & health

These reserves shall be actuarially computed and shall con sist 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 ap plicable 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 re serves 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

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 de clared.

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 25 inclusive of the statutory balance sheet.

These must be actuarially determined.

27. Total long-term business insurance reserves

These shall be the total of lines 20 to 26 inclusive.

[Schedule III amended by BR 29/1989 effective 7th July 1989]

SCHEDULE IV (Reg. 9(3))

INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF IN COME

PART I

Instructions for all Insurers

Instructions

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

37. Other income (deductions)

These shall comprise all income (deduction) items not as signed 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,

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.

PART II

Additional instructions for Insurers carrying on
general business only

Instructions

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

1. Gross premiums written

These shall be the sum of direct premiums written and rein surance 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 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 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 finan cial 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 com mission and brokerage income) directly related to underwrit ing general business.

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 actu ally paid during the relevant year plus (minus) the increase (decrease) in the reserve shown on line 17 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 busi ness.

10. General and administrative

These shall be general and 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.

PART III

Additional 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. Premiums and other considerations

These shall be gross premiums and other considerations, less amounts ceded under contracts of reinsurance during the relevant year, net of related taxes.

This income shall be disclosed severally in the following cate gories—

(a) life;

(b) annuities;

(d) 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. Other insurance income

This shall be the aggregate of all other income, such as com mission and brokerage income, directly related to underwrit ing long-term business.

22.

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

23. Claims — life

This shall be the amount of claims incurred under life insur ance 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

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

28. Accident and health benefits

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

29. Commissions

These shall be the aggregate amounts of compensation paid or payable to agents or brokers in return for business pro cured 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 busi ness during the relevant year that are not included in any of lines 23 to 29 inclusive or in line 32.

31.

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

32. Operating expenses

These shall include the administrative and other general ex penses 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 ag gregate of lines 31 and 32 from the amount shown on line 22 (or vice versa).

34. Increase (decrease) in policy reserves

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 — ac cident 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.

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 shares have a par value, the par value;

(b) where 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 in surer, 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 pro ceeds 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.

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

(c). Any other fixed capital

This shall comprise any other fixed capital approved by the Minister which has not been allocated to line 1(a) or 1(b), and must take into account any amount re quired 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.

(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 statu tory surplus as at the end of the immediately preceding fi nancial year as computed in accordance with these Regula tions.

(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 invest ments

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 re flected in the statutory statement of income.

(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

Bermuda Consolidated Legislation

Insurance Accounts Regulations 1980