{"kind":"expression","expression":{"expr_id":"91","doc_id":"91","label":"2018 Revision","is_as_enacted":"f","commenced_on":null,"superseded_on":null,"valid_from":null,"valid_to":null,"is_current":"t","incorporating":null,"akn_expr_iri":"\/akn\/ky\/act\/sl\/2012\/84\/eng@2018-01-01","akn_envelope":"{\"_canary\": {\"iri\": {\"work\": \"\/akn\/ky\/act\/sl\/2012\/84\", \"expression\": \"\/akn\/ky\/act\/sl\/2012\/84\/eng@2018-01-01\", \"manifestation\": \"\/akn\/ky\/act\/sl\/2012\/84\/eng@2018-01-01.pdf\"}, \"pdf\": {\"md5\": \"cf386a945b0588023c613e129ac1c52a\", \"path\": \"\/Users\/q\/kyleg-data\/working\/SUBORDINATE\/2012\/2012-0084\/2012-0084_2018 Revision.pdf\", \"pages\": 14, \"filename\": \"2012-0084_2018 Revision.pdf\"}, \"errors\": [], \"extraction\": {\"model\": null, \"stats\": {\"word_count\": 2727, \"paragraph_count\": 11, \"text_char_count\": 18181}, \"usage\": null, \"method\": \"pymupdf-text\", \"version\": \"kyleg-akn-1.0\", \"extracted_at\": \"2026-06-22\"}, \"classification\": \"text_layer\", \"validation_flags\": [], \"docai_processor_id\": null}, \"akomaNtoso\": {\"act\": {\"body\": [{\"eId\": \"sec_n1\", \"num\": null, \"text\": \"Insurance Law, 2010 INSURANCE (CAPITAL AND SOLVENCY) (CLASSES B, C, AND D INSURERS) REGULATIONS (2018 Revision) PUBLISHING DETAILS Revised under the authority of the Law Revision Law (1999 Revision). The Insurance (Capital and Solvency) (Classes B, C and D Insurers) Regulations, 2012 made 12th December, 2012. Consolidated with - The Insurance (Capital and Solvency) (Classes B, C and D Insurers) (Amendment) Regulations, 2016 made 27th April, 2016. Consolidated and revised this 28th day of February, 2018. Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations Arrangement of Regulations Insurance Law, 2010 INSURANCE (CAPITAL AND SOLVENCY) (CLASSES B, C, AND D INSURERS) REGULATIONS (2018 Revision) Arrangement of Regulations Regulation 1. 2. 3. 4. 5. 6. 7. 8. 9.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_10\", \"num\": \"10.\", \"text\": \"SCHEDULE 1 PRESCRIBED CAPITAL REQUIREMENT AND MINIMUM CAPITAL REQUIREMENT SCHEDULE 2 CAPITAL REQUIREMENT TEMPLATE Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations Regulation 1 Insurance Law, 2010 INSURANCE (CAPITAL AND SOLVENCY) (CLASSES B, C, AND D INSURERS) REGULATIONS (2018 Revision)\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_1\", \"num\": \"1.\", \"text\": \"Citation 1. These Regulations may be cited as the Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations (2018 Revision).\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_2\", \"num\": \"2.\", \"text\": \"Interpretation 2. In these Regulations \u2014 \u201cadmissible assets\u201d includes class 1 assets, class 2 assets, class 3 assets, class 4 assets, class 5 assets, class 6 assets, class 7 assets and class 8 assets unless otherwise approved by the Authority; \u201cbank grade\u201d means bank obligations including securities issued by, loans made to, securities or loans guaranteed by, and accounts receivable from, any deposit taking institution; \u201ccapital\u201d means those amounts shown in shareholder equity or equivalent section of the insurer balance sheet; \u201ccatastrophe risk\u201d means the gross modelled loss for all risk associated with a 1 in 100 year event and a 1 in 10 year event; \u201cclass 1 assets\u201d means \u2014 Regulation 2 Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations (a) cash and cash equivalents including time deposits and money market funds rated AA or higher; (b) investment grade obligations of government or central banks rated AA or above; (c) incoming irrevocable letters of credit where acceptable by the Authority; (d) loans or notes receivable where supported by irrevocable letters of credit acceptable by the Authority; (e) income tax receivables; or (f) instalment premiums not yet due; \u201cclass 2 assets\u201d means \u2014 (a) high investment grade bonds or paper rated AA or higher (or equivalent); (b) exchange rate derivative contracts, designated and accounted for as hedging, with a maturity of one year or less and interest rate derivative contracts, designated and accounted for hedging, regardless of the maturity date; (c) receivables from insurers or highly rated reinsurers; (d) unearned premiums recoverable from insurers or highly rated reinsurers; (e) unpaid claims and adjustment expenses recoverable from insurers or highly rated reinsurers outstanding for less than one year; or (f) gold and other commodities acceptable to the Authority; \u201cclass 3 assets\u201d means \u2014 (a) bonds, and debentures (including commercial paper) rated investment or bank grade, that mature or are redeemable in less than one year; (b) accounts receivable outstanding ninety days or less from agents brokers, subsidiaries and policyholders, including installment premiums and other receivables; (c) investment income due and accrued; or (d) unpaid claims and adjustment expenses recoverable from licensed insurers or highly rated reinsurers, outstanding for over twelve months; \u201cclass 4 assets\u201d means \u2014 (a) term deposits, bonds, and debentures (including commercial paper) rated investment or bank grade, that mature or are redeemable in one year or more; (b) investment grade bonds or paper rated A (or equivalent); or (c) receivables and recoverables for medium rated reinsurers outstanding for less than twelve months; Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations Regulation 2 \u201cclass 5 assets\u201d means \u2014 (a) investment grade bonds or paper rated BBB; (b) investment grade obligations of government or central banks rated BBB (c) related party loans not yet called for; or (d) receivables and recoverables for medium rated reinsurers outstanding for twelve months or more; \u201cclass 6 assets\u201d means \u2014 (a) mortgage-backed securities rated A or higher; (b) common shares; (c) exchange traded funds (d) exchange traded derivatives (e) non-cumulative preference shares; (f) investments in collective investment schemes, unit trusts, hedge funds, mutual funds or other similar assets; or (g) real estate; \u201cclass 7 assets\u201d means \u2014 (a) accounts receivable outstanding over ninety days, from agents, brokers, subsidiaries, associates and policyholders, including installment, premiums and other receivables; (b) other recoverables including salvage and subrogation on unpaid claims; (c) residential mortgages; (d) cumulative preferred shares; (e) unlisted equity securities; (f) private equity funds; (g) limited partnerships; (h) mortgage-backed securities rated lower than A; or (i) commercial mortgages; \u201cclass 8 assets\u201d means \u2014 (a) deferred policy acquisition expenses; (b) commissions, net of an adjustment for unearned commissions (net value) and if the net value is negative, report zero; (c) other intangible and nonfinancial assets up to a limit of one per cent of total assets and for this purpose any excess over the limit is included in the amount deducted from capital available; (d) other loans; or Regulation 3 Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations (e) term deposits bonds and debentures (including commercial paper) rated not-investment grade, that mature or are redeemable in one year or more; \u201cfiling date\u201d means the date on which an insurer is required to submit the annual return required in the Law; \u201cgovernment grade\u201d means government obligations including securities issued by, loans made to, or securities or loans guaranteed by, and accounts receivable from the government of a country rated A or equivalent or higher in the latest rating issued by a recognised rating agency or other rating agency approved by the Authority; \u201cgross premium written\u201d means total written premiums prior to any deductions; \u201chighly rated reinsurer\u201d means reinsurance in which the counterparty is rated A- or higher or equivalent in the latest rating of a recognised rating agency or as approved by the Authority; \u201cinvestment grade\u201d means a security (excluding a security that is included in the government or bank grades) with a rating of, or in excess of, grade BBB (or equivalent); \u201cmedium rated reinsurer\u201d means reinsurance in which the counterparty is rated BBB or higher or equivalent in the latest rating of a recognised rating agency or as approved by the Authority; \u201cminimum capital requirement\u201d means the minimum capital that an insurer must maintain in order to operate in accordance with the Law as set out in Schedule 1; \u201cnet written premium\u201d means gross premium written, less reinsurance premium ceded; \u201cnet earned premium\u201d means net written premium applicable to the expired part of the policy period or reinsurance agreement period; \u201cnot-investment grade\u201d means any item not included in government grade, bank grade or investment grade; \u201cprescribed capital requirement\u201d means the total risk based capital that an insurer must maintain in order to operate in a safe and sound manner as set out in Schedule 1; \u201crecognised rating agency\u201d means A.M Best Company, Fitch, Moody\u2019s, Standard and Poor\u2019s and any other agency approved by the Authority; \u201creinsurance premium ceded\u201d means the premium ceded to reinsurers; and \u201cunearned premium reserve\u201d means an insurer\u2019s liability for its unearned premium as of any given valuation date.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_3\", \"num\": \"3.\", \"text\": \"Application 3. These Regulations apply to class B insurers, class C insurers and class D insurers. Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations Regulation 4\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_4\", \"num\": \"4.\", \"text\": \"Margin of solvency 4. For the purposes of the definition of \u201cmargin of solvency\u201d in section 2(1) of the Law \u2014 (a) assets are prescribed as admissible assets; and (b) liabilities are prescribed as liabilities, including minority interest, calculated and valued on the basis required by the accounting standards in accordance with which the insurer\u2019s financial statements are prepared and shall include all liabilities arising out of its contracts of insurance.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_5\", \"num\": \"5.\", \"text\": \"Prescribed capital requirement 5. (1) For the purposes of section 8(2)(a) of the Law, the minimum margin of solvency for each licence class is stipulated as the prescribed capital requirement, as set out in Schedule 1. (2) As an alternative to the prescribed capital requirement in Schedule 1, a class B(iii) or class D insurer may choose to use its own internal capital model subject to the approval of the Authority and for the purposes of this regulation, this will be deemed to be the prescribed capital requirement.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_6\", \"num\": \"6.\", \"text\": \"Margin of solvency for segregated portfolio 6. For the purposes of section 8(4)(a) of the Law, the margin of solvency in respect of a segregated portfolio is met where \u2014 (a) the segregated portfolio will be able to satisfy its liabilities in respect of, or attributable to, that particular segregated portfolio as they become due in the ordinary course of its business; and (b) the assets representing the share capital and reserves attributable to the segregated portfolio plus all other assets attributable to or held within the segregated portfolio, including incoming letters of credit, exceed the liabilities in respect of or attributable to that particular segregated portfolio.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_7\", \"num\": \"7.\", \"text\": \"Minimum capital requirement 7. (1) For the purposes of sections 4(5)(f) and 8(2)(c) of the Law, capital is prescribed as the minimum capital requirement and for each licence class shall be as set out in Schedule 1. (2) At each filing date a class B, class C or class D insurer shall calculate and record the minimum capital requirement and prescribed capital requirement, and if required the enhanced capital requirement, in the form prescribed in Schedule 2. (2A) Notwithstanding the amount set out in Schedule 1, the Authority may, in relation to an application for a class D insurer licence, prescribe that the applicant satisfies a reduced minimum capital requirement on such terms and Regulation 8 Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations conditions as the Authority may consider appropriate and shall set out the requirement to the applicant in writing. (2B) The prescribed reduction in minimum capital requirement referred to in regulation 7(2A) shall be the prescribed level for the respective applicant.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_8\", \"num\": \"8.\", \"text\": \"Requirement for higher level of capital 8. Notwithstanding the amounts prescribed, the Authority may prescribe that a class B insurer, class C insurer or class D insurer should maintain a higher level of capital based on risk factors specific to that class B insurer, class C insurer or class D insurer and the Authority may exclude from the calculations assets that the Authority deems inappropriate.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_9\", \"num\": \"9.\", \"text\": \"Requirement for solvency in excess of prescribed capital requirement 9. (1) Unless otherwise approved by the Authority, a Class B insurer, Class C insurer or Class D insurer shall keep solvency equal to or in excess of the total prescribed capital requirement. (2) Where the capital of a licensee falls below the prescribed capital requirement but is greater than minimum capital requirement the licensee shall meet with the Authority and present a remedial action plan to the Authority. (3) Where the capital of a licensee falls below the minimum capital requirement the Authority may consider regulatory actions available. 10. Capital and solvency return 10. (1) An insurer shall, on or before its filing date, furnish the Authority with the insurer\u2019s capital and solvency return. (2) An insurer shall keep a copy of its capital and solvency return at its principal office for a period of five years beginning with its filing date, and shall produce it to the Authority if so directed by it on or before a date specified in the direction. Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations SCHEDULE 1 SCHEDULE 1 (Regulations 5 and 7) PRESCRIBED CAPITAL REQUIREMENT AND MINIMUM CAPITAL REQUIREMENT Class of Insurance Minimum Capital Requirement (\u201cMCR\u201d) Prescribed Capital Requirement (\u201cPCR\u201d) Class B(i) General: US$100,000 Long-term: US$200,000 Composite: US$300,000 General: PCR = MCR Long-term: PCR = MCR Composite: PCR = MCR Class B(ii) General: US$150,000 Long-term: US$300,000 Composite: US$450,000 General: \uf0b7 10% of Net Earned Premium (\u201cNEP\u201d) to first US$5,000,000 \uf0b7 5% of additional NEP up to US$20,000,000 \uf0b7 2.5% of additional NEP in excess of US$20,000,000 Long term: PCR = MCR Composite: amount required to support the general business plus MCR Class B(iii) General: US$200,000 Long-term: US$400,000 General: \uf0b7 15% of NEP to first US$5,000,000 \uf0b7 7.5% of additional NEP up to US$20,000,000 \uf0b7 5% of additional NEP in excess SCHEDULE 1 Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations Composite: US$600,000 of US$20,000,000 Long-term: PCR = MCR Composite: amount required to support the general business plus MCR Class C General: US$500 General: PCR = MCR Long-term: US$500 Long-term: PCR = MCR Composite: PCR = MCR Composite: US$500 Class D General: Calculated as 100% of total of: US$50,000,000 Cpremium (except catastrophe risk): Non-life Premiums: 15.0% of Net Long-term: Written Premiums US$50, 000,000 Life Premiums: 15.0% of Net Written Premiums Composite: US$50,000,000 Creserve: Non-life Reserves: 10.0% of Gross Non-life Reserves Life Reserves: 5.0% of Gross Life Reserves Casset: Class 1 assets. 0.0% Class 2 assets. 0.5% Class 3 assets. 2.0% Class 4 assets. 4.0% Class 5 assets. 5.0% Class 6 assets. 10% Class 7 assets. 15% Class 8 assets. 35% Creinsurance: 5.0% of Total Ceded Unearned Premium Reserve Ccatastrophe: Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations SCHEDULE 1 20% of a 1 in 100 year event; and 100% of a 1 in 10 year event; Important In the event that a Company has reinsurance recoveries related to assumed reserves, a reduction to the Creserve will be allowed up to 100% of the any reinsurance recoveries if such recoveries are secured by letters of credit else a reduction of 95% for collateral approved by the Authority else a reduction of 90% if the recovery is from highly rated reinsurers else 50% for all other forms of reinsurance. In the event that a Company has ceded unearned premium reserves, a reduction to the Creinsurance will be allowed up to 100% of the any ceded unearned premium reserves if such recoveries are secured by letters of credit else a reduction of 95% for collateral approved by the Authority else a reduction of 90% if the recovery is from highly rated reinsurers else 50% for all other forms of reinsurance. In the event that a Company has ceded catastrophe risk, a reduction to the Ccatastrophe will be allowed up to 100% of the any reinsurance recoveries if such recoveries are secured by letters of credit else a reduction of 95% for collateral approved by the Authority else a reduction of 90% if the recovery is from highly rated reinsurers else 50% for all other forms of reinsurance. SCHEDULE 2 Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations SCHEDULE 2 (Regulation 7) CAPITAL REQUIREMENT TEMPLATE For CLASS B(i), B(ii), B(iii), C and D Capital ($'000) Capital Required for (where applicable to the Class of business): Total Prescribed Capital Requirement from Regulation or Total Prescribed Capital Requirement from an Internal Model (PCR) A. Total Minimum Capital Requirement (MCR) B. Total Capital Available C. Capital in Excess of PCR (C. minus A.) Publication in consolidated and revised form authorised by the Cabinet this 13th day of March, 2018. Kim Bullings Clerk of the Cabinet\", \"element\": \"section\", \"heading\": null}], \"meta\": {\"notes\": null, \"workflow\": null, \"lifecycle\": {\"source\": \"#cilegis\", \"eventRef\": [{\"eId\": \"e_commence_2018_01_01\", \"date\": \"2018-01-01\", \"type\": \"generation\", \"source\": \"#cilegis\"}]}, \"references\": {\"source\": \"#canary\", \"TLCRole\": [], \"TLCEvent\": [{\"eId\": \"ev_commencement\", \"href\": \"\/akn\/ontology\/canary\/event\/commencement\", \"showAs\": \"commencement\"}], \"TLCPerson\": [], \"TLCConcept\": [{\"eId\": \"inForce\", \"href\": \"\/akn\/ontology\/canary\/concept\/temporal\/in-force\", \"showAs\": \"in force\"}], \"TLCProcess\": [], \"TLCLocation\": [], \"TLCOrganization\": [{\"eId\": \"cilegis\", \"href\": \"\/akn\/ontology\/canary\/organization\/editor\/cilegis\", \"showAs\": \"Cayman Islands legislation mirror (kyleg)\"}]}, \"temporalData\": {\"source\": \"#cilegis\", \"temporalGroup\": [{\"eId\": \"tg_inforce_2018_01_01\", \"timeInterval\": 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\"eng\"}, \"FRBRManifestation\": {\"FRBRuri\": \"\/akn\/ky\/act\/sl\/2012\/84\/eng@2018-01-01.xml\", \"FRBRdate\": [{\"date\": \"2026-06-22\", \"name\": \"generation\"}], \"FRBRthis\": \"\/akn\/ky\/act\/sl\/2012\/84\/eng@2018-01-01.xml\", \"FRBRauthor\": [{\"as\": \"#editor\", \"href\": \"\/akn\/ontology\/canary\/organization\/editor\/cilegis\"}], \"FRBRformat\": \"application\/xml\"}}}, \"name\": \"act\", \"header\": {\"title\": \"Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations\", \"actNumber\": \"84 of 2012\", \"longTitle\": null}}, \"doc\": null, \"bill\": null, \"judgment\": null}}","akn_full_text":"CAYMAN ISLANDS\n\nInsurance Law, 2010\nINSURANCE (CAPITAL AND SOLVENCY)\n(CLASSES B, C, AND D INSURERS)\nREGULATIONS\n\n(2018 Revision)\nSupplement No. 7 published with Extraordinary Gazette No. 23 of 21st March, 2018.\n\nPage 2\nRevised as at 28th day of February, 2018\nc\n\nPUBLISHING DETAILS\nRevised under the authority of the Law Revision Law (1999 Revision).\nThe Insurance (Capital and Solvency) (Classes B, C and D Insurers) Regulations, 2012\nmade 12th December, 2012.\nConsolidated with -\nThe Insurance (Capital and Solvency) (Classes B, C and D Insurers) (Amendment)\nRegulations, 2016 made 27th April, 2016.\nConsolidated and revised this 28th day of February, 2018.\n\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\nArrangement of Regulations\n\nc\nRevised as at 28th day of February, 2018\nPage 3\n\nCAYMAN ISLANDS\n\nInsurance Law, 2010\nINSURANCE (CAPITAL AND SOLVENCY)\n(CLASSES B, C, AND D INSURERS)\nREGULATIONS\n(2018 Revision)\nArrangement of Regulations\nRegulation\nPage\n1.\nCitation ......................................................................................................................................5\n2.\nInterpretation .............................................................................................................................5\n3.\nApplication .................................................................................................................................8\n4.\nMargin of solvency .....................................................................................................................9\n5.\nPrescribed capital requirement ..................................................................................................9\n6.\nMargin of solvency for segregated portfolio ................................................................................9\n7.\nMinimum capital requirement .....................................................................................................9\n8.\nRequirement for higher level of capital ..................................................................................... 10\n9.\nRequirement for solvency in excess of prescribed capital requirement..................................... 10\n10.\nCapital and solvency return ..................................................................................................... 10\nSCHEDULE 1\n11\nPRESCRIBED CAPITAL REQUIREMENT AND MINIMUM CAPITAL REQUIREMENT\n11\nSCHEDULE 2\n14\nCAPITAL REQUIREMENT TEMPLATE\n14\n\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\nRegulation 1\n\nc\nRevised as at 28th day of February, 2018\nPage 5\n\nCAYMAN ISLANDS\n\nInsurance Law, 2010\nINSURANCE (CAPITAL AND SOLVENCY)\n(CLASSES B, C, AND D INSURERS)\nREGULATIONS\n(2018 Revision)\n\n1.\nCitation\n1.\nThese Regulations may be cited as the Insurance (Capital and Solvency) (Classes B,\nC, and D Insurers) Regulations (2018 Revision).\n2.\nInterpretation\n2.\nIn these Regulations \u2014\n\u201cadmissible assets\u201d includes class 1 assets, class 2 assets, class 3 assets, class\n4 assets, class 5 assets, class 6 assets, class 7 assets and class 8 assets unless\notherwise approved by the Authority;\n\u201cbank grade\u201d means bank obligations including securities issued by, loans\nmade to, securities or loans guaranteed by, and accounts receivable from, any\ndeposit taking institution;\n\u201ccapital\u201d means those amounts shown in shareholder equity or equivalent\nsection of the insurer balance sheet;\n\u201ccatastrophe risk\u201d means the gross modelled loss for all risk associated with\na 1 in 100 year event and a 1 in 10 year event;\n\u201cclass 1 assets\u201d means \u2014\n\nRegulation 2\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\n\nPage 6\nRevised as at 28th day of February, 2018\nc\n\n(a)\ncash and cash equivalents including time deposits and money market\nfunds rated AA or higher;\n(b) investment grade obligations of government or central banks rated AA or\nabove;\n(c)\nincoming irrevocable letters of credit where acceptable by the Authority;\n(d) loans or notes receivable where supported by irrevocable letters of credit\nacceptable by the Authority;\n(e)\nincome tax receivables; or\n(f)\ninstalment premiums not yet due;\n\u201cclass 2 assets\u201d means \u2014\n(a)\nhigh investment grade bonds or paper rated AA or higher (or equivalent);\n(b) exchange rate derivative contracts, designated and accounted for as\nhedging, with a maturity of one year or less and interest rate derivative\ncontracts, designated and accounted for hedging, regardless of the\nmaturity date;\n(c)\nreceivables from insurers or highly rated reinsurers;\n(d) unearned premiums recoverable from insurers or highly rated reinsurers;\n(e)\nunpaid claims and adjustment expenses recoverable from insurers or\nhighly rated reinsurers outstanding for less than one year; or\n(f)\ngold and other commodities acceptable to the Authority;\n\u201cclass 3 assets\u201d means \u2014\n(a)\nbonds, and debentures (including commercial paper) rated investment or\nbank grade, that mature or are redeemable in less than one year;\n(b) accounts receivable outstanding ninety days or less from agents brokers,\nsubsidiaries and policyholders, including installment premiums and other\nreceivables;\n(c)\ninvestment income due and accrued; or\n(d) unpaid claims and adjustment expenses recoverable from licensed\ninsurers or highly rated reinsurers, outstanding for over twelve months;\n\u201cclass 4 assets\u201d means \u2014\n(a)\nterm deposits, bonds, and debentures (including commercial paper) rated\ninvestment or bank grade, that mature or are redeemable in one year\nor more;\n(b) investment grade bonds or paper rated A (or equivalent); or\n(c)\nreceivables and recoverables for medium rated reinsurers outstanding for\nless than twelve months;\n\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\nRegulation 2\n\nc\nRevised as at 28th day of February, 2018\nPage 7\n\n\u201cclass 5 assets\u201d means \u2014\n(a)\ninvestment grade bonds or paper rated BBB;\n(b) investment grade obligations of government or central banks rated BBB\n(c)\nrelated party loans not yet called for; or\n(d) receivables and recoverables for medium rated reinsurers outstanding for\ntwelve months or more;\n\u201cclass 6 assets\u201d means \u2014\n(a)\nmortgage-backed securities rated A or higher;\n(b) common shares;\n(c)\nexchange traded funds\n(d) exchange traded derivatives\n(e)\nnon-cumulative preference shares;\n(f)\ninvestments in collective investment schemes, unit trusts, hedge funds,\nmutual funds or other similar assets; or\n(g) real estate;\n\u201cclass 7 assets\u201d means \u2014\n(a)\naccounts receivable outstanding over ninety days, from agents, brokers,\nsubsidiaries, associates and policyholders, including installment,\npremiums and other receivables;\n(b) other recoverables including salvage and subrogation on unpaid claims;\n(c)\nresidential mortgages;\n(d) cumulative preferred shares;\n(e)\nunlisted equity securities;\n(f)\nprivate equity funds;\n(g) limited partnerships;\n(h) mortgage-backed securities rated lower than A; or\n(i)\ncommercial mortgages;\n\u201cclass 8 assets\u201d means \u2014\n(a)\ndeferred policy acquisition expenses;\n(b) commissions, net of an adjustment for unearned commissions (net value)\nand if the net value is negative, report zero;\n(c)\nother intangible and nonfinancial assets up to a limit of one per cent of\ntotal assets and for this purpose any excess over the limit is included in\nthe amount deducted from capital available;\n(d) other loans; or\n\nRegulation 3\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\n\nPage 8\nRevised as at 28th day of February, 2018\nc\n\n(e)\nterm deposits bonds and debentures (including commercial paper) rated\nnot-investment grade, that mature or are redeemable in one year or more;\n\u201cfiling date\u201d means the date on which an insurer is required to submit the\nannual return required in the Law;\n\u201cgovernment grade\u201d means government obligations including securities\nissued by, loans made to, or securities or loans guaranteed by, and accounts\nreceivable from the government of a country rated A or equivalent or higher in\nthe latest rating issued by a recognised rating agency or other rating agency\napproved by the Authority;\n\u201cgross premium written\u201d means total written premiums prior to any\ndeductions;\n\u201chighly rated reinsurer\u201d means reinsurance in which the counterparty is rated\nA- or higher or equivalent in the latest rating of a recognised rating agency or\nas approved by the Authority;\n\u201cinvestment grade\u201d means a security (excluding a security that is included in\nthe government or bank grades) with a rating of, or in excess of, grade BBB\n(or equivalent);\n\u201cmedium rated reinsurer\u201d means reinsurance in which the counterparty is\nrated BBB or higher or equivalent in the latest rating of a recognised rating\nagency or as approved by the Authority;\n\u201cminimum capital requirement\u201d means the minimum capital that an insurer\nmust maintain in order to operate in accordance with the Law as set out in\nSchedule 1;\n\u201cnet written premium\u201d means gross premium written, less reinsurance\npremium ceded;\n\u201cnet earned premium\u201d means net written premium applicable to the expired\npart of the policy period or reinsurance agreement period;\n\u201cnot-investment grade\u201d means any item not included in government grade,\nbank grade or investment grade;\n\u201cprescribed capital requirement\u201d means the total risk based capital that an\ninsurer must maintain in order to operate in a safe and sound manner as set out\nin Schedule 1;\n\u201crecognised rating agency\u201d means A.M Best Company, Fitch, Moody\u2019s,\nStandard and Poor\u2019s and any other agency approved by the Authority;\n\u201creinsurance premium ceded\u201d means the premium ceded to reinsurers; and\n\u201cunearned premium reserve\u201d means an insurer\u2019s liability for its unearned\npremium as of any given valuation date.\n3.\nApplication\n3.\nThese Regulations apply to class B insurers, class C insurers and class D insurers.\n\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\nRegulation 4\n\nc\nRevised as at 28th day of February, 2018\nPage 9\n\n4.\nMargin of solvency\n4.\nFor the purposes of the definition of \u201cmargin of solvency\u201d in section 2(1) of\nthe Law \u2014\n(a)\nassets are prescribed as admissible assets; and\n(b) liabilities are prescribed as liabilities, including minority interest,\ncalculated and valued on the basis required by the accounting standards\nin accordance with which the insurer\u2019s financial statements are prepared\nand shall include all liabilities arising out of its contracts of insurance.\n5.\nPrescribed capital requirement\n5.\n(1) For the purposes of section 8(2)(a) of the Law, the minimum margin of\nsolvency for each licence class is stipulated as the prescribed capital\nrequirement, as set out in Schedule 1.\n(2) As an alternative to the prescribed capital requirement in Schedule 1, a class\nB(iii) or class D insurer may choose to use its own internal capital model\nsubject to the approval of the Authority and for the purposes of this regulation,\nthis will be deemed to be the prescribed capital requirement.\n6.\nMargin of solvency for segregated portfolio\n6.\nFor the purposes of section 8(4)(a) of the Law, the margin of solvency in respect of\na segregated portfolio is met where \u2014\n(a)\nthe segregated portfolio will be able to satisfy its liabilities in respect of,\nor attributable to, that particular segregated portfolio as they become due\nin the ordinary course of its business; and\n(b) the assets representing the share capital and reserves attributable to the\nsegregated portfolio plus all other assets attributable to or held within the\nsegregated portfolio, including incoming letters of credit, exceed the\nliabilities in respect of or attributable to that particular segregated\nportfolio.\n7.\nMinimum capital requirement\n7.\n(1) For the purposes of sections 4(5)(f) and 8(2)(c) of the Law, capital is\nprescribed as the minimum capital requirement and for each licence class shall\nbe as set out in Schedule 1.\n(2) At each filing date a class B, class C or class D insurer shall calculate and\nrecord the minimum capital requirement and prescribed capital requirement,\nand if required the enhanced capital requirement, in the form prescribed in\nSchedule 2.\n(2A) Notwithstanding the amount set out in Schedule 1, the Authority may, in\nrelation to an application for a class D insurer licence, prescribe that the\napplicant satisfies a reduced minimum capital requirement on such terms and\n\nRegulation 8\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\n\nPage 10\nRevised as at 28th day of February, 2018\nc\n\nconditions as the Authority may consider appropriate and shall set out the\nrequirement to the applicant in writing.\n(2B) The prescribed reduction in minimum capital requirement referred to in\nregulation 7(2A) shall be the prescribed level for the respective applicant.\n8.\nRequirement for higher level of capital\n8.\nNotwithstanding the amounts prescribed, the Authority may prescribe that a class B\ninsurer, class C insurer or class D insurer should maintain a higher level of capital\nbased on risk factors specific to that class B insurer, class C insurer or class D\ninsurer and the Authority may exclude from the calculations assets that the\nAuthority deems inappropriate.\n9.\nRequirement for solvency in excess of prescribed capital requirement\n9.\n(1) Unless otherwise approved by the Authority, a Class B insurer, Class C insurer\nor Class D insurer shall keep solvency equal to or in excess of the total\nprescribed capital requirement.\n(2) Where the capital of a licensee falls below the prescribed capital requirement\nbut is greater than minimum capital requirement the licensee shall meet with\nthe Authority and present a remedial action plan to the Authority.\n(3) Where the capital of a licensee falls below the minimum capital requirement\nthe Authority may consider regulatory actions available.\n10.\nCapital and solvency return\n10. (1) An insurer shall, on or before its filing date, furnish the Authority with the\ninsurer\u2019s capital and solvency return.\n(2) An insurer shall keep a copy of its capital and solvency return at its principal\noffice for a period of five years beginning with its filing date, and shall\nproduce it to the Authority if so directed by it on or before a date specified in\nthe direction.\n\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\nSCHEDULE 1\n\nc\nRevised as at 28th day of February, 2018\nPage 11\n\n SCHEDULE 1\n(Regulations 5 and 7)\nPRESCRIBED CAPITAL REQUIREMENT AND MINIMUM CAPITAL\nREQUIREMENT\nClass of\nInsurance\nMinimum Capital\nRequirement\n(\u201cMCR\u201d)\nPrescribed Capital Requirement (\u201cPCR\u201d)\nClass\nB(i)\nGeneral:\nUS$100,000\nLong-term:\nUS$200,000\nComposite:\nUS$300,000\nGeneral: PCR = MCR Long-term:\nPCR = MCR Composite: PCR =\nMCR\nClass\nB(ii)\nGeneral:\nUS$150,000\nLong-term:\nUS$300,000\nComposite:\nUS$450,000\nGeneral:\n\uf0b7\n10% of Net Earned Premium (\u201cNEP\u201d) to\nfirst US$5,000,000\n\uf0b7\n5% of additional NEP up to\nUS$20,000,000\n\uf0b7\n2.5% of additional NEP in excess of\nUS$20,000,000\nLong term: PCR = MCR\nComposite: amount required to support the\ngeneral business plus MCR\nClass\nB(iii)\nGeneral:\nUS$200,000\nLong-term:\nUS$400,000\nGeneral:\n\uf0b7\n15% of NEP to first\nUS$5,000,000\n\uf0b7\n7.5% of additional NEP up to\nUS$20,000,000\n\uf0b7\n5% of additional NEP in excess\n\nSCHEDULE 1\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\n\nPage 12\nRevised as at 28th day of February, 2018\nc\n\nComposite: US$600,000\nof US$20,000,000\nLong-term: PCR = MCR\nComposite: amount required to support\nthe general business plus MCR\nClass C\nGeneral: US$500\nGeneral: PCR = MCR\nLong-term: US$500\nLong-term: PCR = MCR\nComposite: PCR = MCR\nComposite:\nUS$500\nClass D\nGeneral:\nCalculated as 100% of total of:\nUS$50,000,000\nCpremium (except catastrophe risk):\nNon-life Premiums: 15.0% of Net\nLong-term:\nWritten Premiums\nUS$50, 000,000\nLife Premiums: 15.0% of Net\nWritten Premiums\nComposite:\nUS$50,000,000\nCreserve:\nNon-life Reserves: 10.0% of Gross\nNon-life Reserves\nLife Reserves: 5.0% of Gross Life\nReserves\nCasset:\nClass 1 assets.\n0.0%\nClass 2 assets.\n0.5%\nClass 3 assets.\n2.0%\nClass 4 assets.\n4.0%\nClass 5 assets.\n5.0%\nClass 6 assets.\n10%\nClass 7 assets.\n15%\nClass 8 assets.\n35%\nCreinsurance:\n5.0% of Total Ceded Unearned\nPremium Reserve\nCcatastrophe:\n\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\nSCHEDULE 1\n\nc\nRevised as at 28th day of February, 2018\nPage 13\n\n20% of a 1 in 100 year event; and\n100% of a 1 in 10 year event;\nImportant\nIn the event that a Company has reinsurance\nrecoveries related to assumed reserves, a\nreduction to the Creserve will be allowed up to\n100% of the any reinsurance recoveries if such\nrecoveries are secured by letters of credit else a\nreduction of 95% for collateral approved by the\nAuthority else a reduction of 90% if the\nrecovery is from highly rated reinsurers else\n50% for all other forms of reinsurance.\nIn the event that a Company has ceded unearned\npremium reserves, a reduction to the Creinsurance\nwill be allowed up to 100% of the any ceded\nunearned premium reserves if such recoveries\nare secured by letters of credit else a reduction\nof 95% for collateral approved by the Authority\nelse a reduction of 90% if the recovery is from\nhighly rated reinsurers else 50% for all other\nforms of reinsurance.\nIn the event that a Company has ceded\ncatastrophe risk, a reduction to the Ccatastrophe\nwill be allowed up to 100% of the any\nreinsurance recoveries if such recoveries are\nsecured by letters of credit else a reduction of\n95% for collateral approved by the Authority\nelse a reduction of 90% if the recovery is from\nhighly rated reinsurers else 50% for all other\nforms of reinsurance.\n\nSCHEDULE 2\nInsurance (Capital and Solvency) (Classes B, C, and D Insurers)\nRegulations\n\nPage 14\nRevised as at 28th day of February, 2018\nc\n\nSCHEDULE 2\n(Regulation 7)\nCAPITAL REQUIREMENT TEMPLATE\nFor CLASS B(i), B(ii), B(iii), C and D\nCapital\n\n($'000)\nCapital Required for (where applicable to the Class of business):\nTotal Prescribed Capital Requirement from Regulation\nor\nTotal Prescribed Capital\nRequirement from an Internal Model (PCR)\n\nA.\n\nTotal Minimum Capital Requirement (MCR)\nB.\n\nTotal Capital Available\nC.\n\nCapital in Excess of PCR (C. minus A.)\n\nPublication in consolidated and revised form authorised by the Cabinet this 13th\nday of March, 2018.\nKim Bullings\nClerk of the Cabinet","akn_extracted_at":"2026-06-22 15:38:43.272441+00","cms_id":"2012-0084","law_type":"subordinate","year":"2012","number":"84","title":"Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations","status":"in_force"},"provenance":{"files":[{"file_id":"4895","expr_id":"91","kind":"akn_xml","filename":"2012-0084_2018 Revision.akn.xml","source_url":null,"storage_path":"\/Users\/q\/kyleg-data\/working\/SUBORDINATE\/2012\/2012-0084\/2012-0084_2018 Revision.akn.xml","content_md5":"5b4e318f52b62a5b05d8fad7588f420c","byte_size":"20020","http_last_modified":null,"fetched_at":"2026-06-22 15:38:43.37647+00"},{"file_id":"181","expr_id":"91","kind":"pristine_pdf","filename":"2012-0084_2018 Revision.pdf","source_url":"\/cms\/images\/LEGISLATION\/SUBORDINATE\/2012\/2012-0084\/2012-0084_2018 Revision.pdf","storage_path":"\/Users\/q\/kyleg-data\/pristine\/SUBORDINATE\/2012\/2012-0084\/2012-0084_2018 Revision.pdf","content_md5":"cf386a945b0588023c613e129ac1c52a","byte_size":"474204","http_last_modified":null,"fetched_at":"2026-06-21 23:09:35.656621+00"},{"file_id":"182","expr_id":"91","kind":"working_pdf","filename":"2012-0084_2018 Revision.pdf","source_url":"\/cms\/images\/LEGISLATION\/SUBORDINATE\/2012\/2012-0084\/2012-0084_2018 Revision.pdf","storage_path":"\/Users\/q\/kyleg-data\/working\/SUBORDINATE\/2012\/2012-0084\/2012-0084_2018 Revision.pdf","content_md5":"cf386a945b0588023c613e129ac1c52a","byte_size":"474204","http_last_modified":null,"fetched_at":"2026-06-21 23:09:35.656621+00"}],"paragraph_count":2,"latest_history":null},"quality":{"expr_id":"91","doc_id":"91","quality_state":"needs_review","quality_score":"76","needs_human_review":"t","deterministic_categories":"{duplicate_text,page_header_footer_noise}","llm_categories":"{truncated_text,other}","repair_actions":"{collapse_duplicate_text,manual_review,reextract_full_text,strip_page_furniture}","finding_severity_counts":"{\"low\": 1, \"medium\": 1}","finding_summary":"Sample shows likely truncation of a definition and contains omission markers; 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