• CIB 7 CIB 7 ACTUARIAL REPORTING

    • CIB 7.1 CIB 7.1 Introduction

      • CIB 7.1.1

        A Captive Insurer that conducts Long-Term Insurance Business must prepare a written report as provided for in this Chapter on at least an annual basis.

      • CIB 7.1.2

        A Captive Insurer that conducts General Insurance Business must:

        (a) consider, on an annual basis, the need to prepare a written report as provided for in this Chapter; and
        (b) prepare a written report as provided for in this Chapter at least once every three years.

    • CIB 7.2 CIB 7.2 Obligations of Captive Insurers conducting General Insurance Business

      • CIB 7.2.1

        Subject to Rule 7.2.2, this Rule applies to Captive Insurers conducting General Insurance Business.

      • CIB 7.2.2

        Where a Captive Insurer attributes General Insurance Business to a Long-Term Insurance Fund in accordance with Rule 8.2.2(2), this Rule does not apply to that business.

      • CIB 7.2.3

        Every Captive Insurer must provide to the Regulator as at each reporting date a written report relating to its General Insurance Business, prepared by an Actuary who has the qualifications set out in Rule 7.6. This report must provide details in respect of each Class of Business, of:

        (a) significant aspects of the recent experience of the Captive Insurer;
        (b) the Actuary's estimate of the value of General Insurance Liabilities and of assets arising in respect of those liabilities, determined in accordance with Chapter 6;
        (c) where there has been a change in the assumptions or in valuation method from that adopted at the previous valuation, the effect of these changes on the General Insurance Liabilities and assets arising in respect of those liabilities, as at the reporting date;
        (d) the adequacy and appropriateness of data made available to the Actuary by the Captive Insurer;
        (e) procedures undertaken by the Actuary to assess the reliability of the data;
        (f) the model or models used by the Actuary;
        (g) the assumptions used by the Actuary in the valuation process including, without limitation, assumptions made as to inflation and discount rates, future expense rates and where relevant, future investment income;
        (h) the approach taken to estimate the variability of the estimate; and
        (i) the nature and findings of sensitivity analyses undertaken.

    • CIB 7.3 CIB 7.3 Obligations of Captive Insurers conducting Long-Term Insurance Business

      • CIB 7.3.1

        This Rule applies to Captive Insurers conducting Long-Term Insurance Business.

      • CIB 7.3.2

        Every Captive Insurer must arrange for an actuarial investigation to be made into its financial condition in respect of its Long-Term Insurance Business. Such investigation must include a determination of the liabilities of the Captive Insurer attributable to its Long-Term Insurance Business and an investigation of the assets and liabilities of every Long-Term Insurance Fund maintained or deemed to be maintained by it (including a determination of surplus in each such fund).

      • CIB 7.3.3

        An investigation of the type set out in Rule 7.3.2 must be performed at the end of every annual reporting period of the Captive Insurer.

      • CIB 7.3.4

        An actuarial investigation under this Rule must be performed by an Actuary who has the qualifications set out in Rule 7.6, and must be conducted according to principles approved by the Regulator.

      • CIB 7.3.5

        When a Captive Insurer arranges for an actuarial investigation under this Rule, the Captive Insurer must provide to the Regulator a written report of the investigation prepared by the Actuary conducting the actuarial investigation. Such report must be prepared no later than four months from the date of the actuarial investigation and must be submitted to the Regulator in accordance with Rule 7.4.2.

      • CIB 7.3.6

        This report must provide details of, in respect of each Class of Business:

        (a) the product range (including details of any significant changes in products during the period to which the report relates);
        (b) any discretionary charges and benefits, options and guarantees, and reversionary bonus entitlements, where such features are included in a product;
        (c) reinsurance arrangements;
        (d) significant aspects of the recent experience of the Insurer, including, where relevant, a commentary on significant deviations of actual experience compared to the assumptions made in the previous valuation;
        (e) the Actuary's estimate of the value of Long-Term Insurance liabilities, determined in accordance with Chapter 6;
        (f) the method and assumptions used by the Actuary in the valuation process, including, where relevant, a commentary on significant differences between the assumptions used and recent actual experience of the Insurer and a description of any non- standard method;
        (g) any expense reserves, mismatching reserves and any other special reserves included by the Actuary in the value of the Long-Term Insurance liabilities, or recommended by the Actuary to be maintained, although not included in the valuation;
        (h) a determination of the value of surplus in the Long-Term Insurance Fund, before any distribution of such surplus;
        (i) a description of the Invested Assets used to determine the risk-adjusted yield on which the discount rate used in the valuation was based;
        (j) the adequacy and appropriateness of data made available to the Actuary by the Captive Insurer;
        (k) procedures undertaken by the Actuary to assess the reliability of the data;
        (l) the model or models used by the Actuary;
        (m) the approach taken to estimate the variability of the estimate;
        (n) the sensitivity analyses undertaken;
        (o) any significant changes to the matters reported on during the period since the previous valuation, including in the case of the matters referred to in (f), and otherwise where relevant, an estimate of the effect of these changes on the Long- Term Insurance liabilities as at the Reference Date; and
        (p) commentary on any other factors affecting the valuation.

      • CIB 7.3.7

        Subject to Rule 7.3.8, where a Captive Insurer carries on Direct Long-Term Insurance Business, the report referred to in Rule 7.3.5 must include the information set out in Rule 7.3.6 segregated by the jurisdiction in which it is carried on.

      • CIB 7.3.8

        Where business in a jurisdiction is of limited significance, disclosures may, at the discretion of the Actuary, be aggregated for those jurisdictions.

    • CIB 7.4 CIB 7.4 Additional provisions relating to the report

      • CIB 7.4.1

        When appointing an Actuary to prepare a report under Rule 7.2 or 7.3, a Captive Insurer must ensure that there is an agreement in writing which legally binds the Actuary in accordance with the following provisions:

        (a) the contract must require the Actuary to prepare his report in accordance with the provisions of Rule 7.2 or 7.3 as the case may be;
        (b) the contract must require the Actuary to prepare the report using assumptions and methods that are appropriate for the purposes of the actuarial investigation and report and which comply with the requirements of these Rules;
        (c) the contract must require the Actuary to deliver the report to the Captive Insurer's Directors within such time as to give the Directors a reasonable opportunity to consider and use the report in preparing the Captive Insurer's annual Regulatory Return for the reporting period ended on the reporting date;
        (d) the contract must require and permit the Actuary to address the Directors of the Captive Insurer if the Actuary believes that there is a matter relating to the financial position or operations of the Captive Insurer that should be brought to the attention of the Directors; and
        (e) the contract must require and permit the Actuary to address the Regulator if the Actuary believes that a matter will not be adequately dealt with simply by bringing it to the attention of the Directors.
        Amended on (3 February, 2020).

      • CIB 7.4.2

        The Captive Insurer must submit the reports referred to in Rule 7.2 and Rule 7.3 to the Regulator at the same time as it submits its annual Regulatory Return for the reporting period ended on the reporting date.

        Amended on (3 February, 2020).

      • CIB 7.4.3

        Abbreviated details may be provided in a report prepared under the requirements of this Chapter in respect of a Class of Business that is not material.

    • CIB 7.5 CIB 7.5 Captive Insurers must ensure access to relevant data etc

      • CIB 7.5.1

        A Captive Insurer that has appointed an Actuary to provide a report under Rule 7.2 or 7.3 must make arrangements to enable the Actuary to undertake his functions, and in particular must:

        (a) keep the Actuary informed of the Captive Insurer's business and other plans;
        (b) ensure that the Actuary is fully informed of these Rules applicable to the Captive Insurer, as well as any other information that the Regulator has provided to the Captive Insurer that may assist the Actuary in performing his duties; and
        (c) ensure that the Actuary has access at appropriate times to all relevant data and people which the Actuary reasonably believes is necessary to fulfil his obligations to the Captive Insurer in respect of this Chapter.

    • CIB 7.6 CIB 7.6 Qualifications of the Actuary

      • CIB 7.6.1

        An Actuary appointed to provide an actuarial report under this Chapter must:

        (a) be experienced in determining liabilities in the Classes of Business dealt with in the actuarial report;
        (b) have the required skill and experience to perform his functions under the Rules and Regulations; and
        (c) not perform the function of Chairman or Chief Executive Office of the Captive Insurer or any other function on behalf of the Captive Insurer which could give rise to a significant conflict of interest.

      • CIB 7.6.2

        A Captive Insurer must notify the Regulator in writing of the name, professional qualifications and relevant experience of each person that the Captive Insurer proposes to appoint to provide an actuarial report under this Chapter.

      • CIB 7.6.3

        The Regulator may, if it does not believe that the Actuary proposed by the Captive Insurer possesses the qualifications set out in Rule 7.6.1, notify the Captive Insurer in writing that another Actuary must be appointed.