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BERMUDA

INSURANCE ACCOUNTS REGULATIONS 1980

BR 18 / 1980

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

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

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

PART IIIAdditional instructions for insurers carrying on

long-term business only Instructions

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

6. Policy loans

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

20. Reserves for reported claims

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

21. Reserves for unreported claims

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

22. INSURANCE ACCOUNTS REGULATIONS 1980

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

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

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

23. Policy reserves—accident & health

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

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

(i) the unearned portion of the current premium;

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

(iii) reserves for rate credits;

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

24. Policyholders’ funds on deposit

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

25. Liability for future policy-holders’ dividends

INSURANCE ACCOUNTS REGULATIONS 1980

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

26. Other insurance reserves—long-term business

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

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

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

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

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

(i) Foreign affiliates reinsurance recoverable balance;

(ii) Domestic affiliates reinsurance recoverable balance;

(iii) Pools and associations;

(iv) All other insurers;

(c) Total reinsurance recoverable balance; the total of (i) through (iv); and

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

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

PART IV(Reg 9(2))

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

1. Line of statutory balance sheet Instructions

included.

INSURANCE ACCOUNTS REGULATIONS 1980

2. Line of statutory balance sheet Instructions

severally -

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

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

(iii) other quoted investments;

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

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

(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);

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Instructions

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

(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 REGULATIONS 1980

4. Line of statutory balance sheet Instructions

affiliates (Equity Methods) severally—

(i) Unregulated entities that conduct ancillary services

(ii) Unregulated non-financial operating entities

(iii) Unregulated financial operating entities

(iv) Regulated non-insurance financial operating entities

(v) Regulated insurance financial operating entities

(vi) Total investments in affiliates (equity method)

(vii) Advances to affiliates

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

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

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

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

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

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Instructions

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

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

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

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

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

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

(a) first liens;

(b) liens other than first liens; and

(c) the total of (a) and (b).

INSURANCE ACCOUNTS REGULATIONS 1980

7. Line of statutory balance sheet Instructions

buildings shall be included;

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

(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 -

(i) cost less accumulated depreciation; and

(ii) fair value determined in good faith,

less the amount of any encumbrances;

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

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

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

accrued the directors uncollectible, that amount shall be deducted.

INSURANCE ACCOUNTS REGULATIONS 1980

10. Line of statutory balance sheet Instructions

receivable severally -

(i) in course of collection;

(ii) deferred – not yet due;

(iii) receivables from retrocessional contracts

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

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

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

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

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

severally -

(i) foreign affiliates;

(ii) domestic affiliates;

(iii) pools & associations;

(iv) all other insurers;

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

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

(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.

INSURANCE ACCOUNTS REGULATIONS 1980

12. Line of statutory balance sheet Instructions

severally -

(i) affiliated;

(ii) non-affiliated;

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

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

(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.

INSURANCE ACCOUNTS REGULATIONS 1980

14. Line of statutory balance sheet Instructions

other instruments been secured to the insurer by

means of an irrevocable letter of

credit, a guarantee or any other

instrument, an asset may, with the

approval of the Authority obtained

on an application made for that

purpose, be recorded and the capital

increased by a corresponding

15. amount. Where such an asset is

recorded, it must be shown net of

any allowance for its collectibility;

(b) letters of credit, guarantees or

other instruments in favour of the

insurer which relate to insurance

operations shall not be recorded.

This shall be the total of lines 1 to

16. 14 inclusive.

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

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Instructions

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

(c) acquisition costs shall not be deducted in calculating the amount of unearned premiums;

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

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

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

INSURANCE ACCOUNTS REGULATIONS 1980

Line of statutory balance sheet Instructions

(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 - The balance from the open year

19. general business business revenue statement shall be included.

28. insurance reserves 17 and 18.

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

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

INSURANCE ACCOUNTS REGULATIONS 1980

29. Line of statutory balance sheet Instructions

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

30. 28.

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

severally -

(a) income taxes currently payable;

(b) provision for deferred income taxes.

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

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

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

reinsurance contracts contracts shall be included here.

(b) There shall be disclosed severally—

(i) affiliated;

(ii) non-affiliated;

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

INSURANCE ACCOUNTS REGULATIONS 1980

35. Line of statutory balance sheet Instructions

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

36. Sundry liabilities Any liabilities (including

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

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

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

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

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

39. to 37 inclusive.

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

INSURANCE ACCOUNTS REGULATIONS 1980

40. Line of statutory balance sheet Instructions

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

41. Total This shall be the total of lines 39

and 40.

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

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

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

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

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

INSURANCE ACCOUNTS REGULATIONS 1980

SCHEDULE — IV

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

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

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

PART IIIAdditional instructions for insurers carrying on

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

19. Gross premiums and other considerations

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

(a) direct gross premiums and other considerations;

(b) assumed gross premiums and other considerations;

(c) this shall be the total of 19(a) and 19(b);

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

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

(i) life;

(ii) annuities;

(iii) accident and health; and

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

20. Long-term business investment income—net

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

41 of the statutory statement of income.

21. INSURANCE ACCOUNTS REGULATIONS 1980

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

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

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

24. Policyholders’ dividends

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

25. Surrenders

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

26. Maturities

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

27. Annuities

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

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

29. Commissions

INSURANCE ACCOUNTS REGULATIONS 1980

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

30. Other

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

32.

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

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

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

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

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

(a) life;

(b) annuities;

(c) accident and health;

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

35. Income before the undernoted items

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

PART IVINSTRUCTIONS AFFECTING THE STATUTORY BALANCE SHEET

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

INSURANCE ACCOUNTS REGULATIONS 1980

1. Line of statutory statement of Instructions income

disclosed severally in the following categories -

(a) direct gross premiums written;

(b) assumed gross premiums written;

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

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

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

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

4. line 2 from line 1.

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

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

6. 4.

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

INSURANCE ACCOUNTS REGULATIONS 1980

8. Line of statutory statement of Instructions income

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

9. Commissions and brokerage This shall be the aggregate of

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

10. General and administrative These shall be general and

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

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

13. not included in lines 10 and 11.

14. inclusive.

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

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

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

items

INSURANCE ACCOUNTS REGULATIONS 1980

37. Line of statutory statement of Instructions income

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

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

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

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

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

disclosed severally -

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

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

(c) the total of (a) and (b).

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

(losses)

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

sale of -

(a) investments, whether quoted or unquoted;

(b) investments in affiliates;

(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.

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

INSURANCE ACCOUNTS REGULATIONS 1980

SCHEDULE — V

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

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

1(a). Capital stock This shall comprise—

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

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

(b). Contributed surplus This shall comprise—

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

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

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

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

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

INSURANCE ACCOUNTS REGULATIONS 1980

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

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

(i) Hybrid capital instruments

(ii) Guarantees and others

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

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

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

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

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

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

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

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

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

INSURANCE ACCOUNTS REGULATIONS 1980

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

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

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

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

3. Total statutory capital and surplus

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

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

1995 : 20

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

2011 : 44

2012 : 36

2013 : 46

2015 : 50

2016 : 35

INSURANCE ACCOUNTS REGULATIONS 1980

BR 41 / 2017

2018 : 35

2019 : 51

2022 : 41]