Regulations No 147of theFinancial and Capital Market Commission
Riga, 31 August 2016
(Minutes No 29 p.2 of the meeting of the Board of the Financial and Capital Market Commission)
Regulations on the Preparation of Public Quarterly Reports for the Insurers
Issued in accordance with Article 41(8) and Article 91 (4) of the Insurance and Reinsurance Law
I. General provisions
1. "Regulations on the Preparation of Public Quarterly Reports for the Insurers" (hereinafter – the Regulations) shall be binding on insurance undertakings and branch offices of non-Member State insurance undertakings (hereinafter – the insurer), as well as branch offices of the Member State insurers.
2. The Regulations have been prepared with the aim of increasing the transparency of the activities of the insurers and branches of the insurers of the Member States and to facilitate market discipline by timely providing market participants, insurance policy holders, investors and other interested parties with the comparative information on the insurer'sfinancial position and performance results for the accounting period.
3. The Regulations prescribe the minimal content of the information to be included in the public quarterly reports (hereinafter – the report) of the insurers and branches of the insurers of the Member States, as well as the procedure for the publishing of such reports.
4. The insurer shall prepare the report, in which the information on its financial position and performance from the beginning of the accounting year until 31 March, 30 June, 30 September and 31 December (hereinafter - the accounting period) shall be reflected, and it shall ensure the publishing of the report on the internet website of the insurer.The report shall be published no later than within two months of the end of the accounting period.
5. Information to be included in the report shall meet the following criteria, it shall be:
5.1. significant for decision making;
5.2. timely;
5.3. available to the general public without additional costs;
5.4. sufficient for the assessment of the financial position, performance results and risks related to the activity of the insurer;
5.5. credibleand reliable, by preferring audited information, if such can be provided. If a sworn auditor or sworn auditing firm has performed a financial report audit during the accounting period, the insurer shall in addition provide information about the auditor thereof;
5.6. comparative by accounting periods and appropriately explained;
5.7. consistent in reflecting the methods and assumptions used as well as the influence thereof.
6. The currency used by the insurer in the report shall be the currency of the Republic of Latvia. The report shall specify the degree of accuracy of the figuresprovided, except indicators for which the degree of accuracy is specified in paragraph 13 of the Regulations.
7. The management of the insurer (in insurance joint stock companies and in mutual insurance co-operative societies – the board of the directors, in branch offices of non-Member States – head of the branch office) shall be responsible for the preparation of the report and timely publishing as well as for updating the information if necessary.
8. The branch office of the Member Stateinsurer shall publish the last available public report on the performance and financial indicators of the insurer of the Member State prepared by the insurer of the Member State the branch office of which it isin accordance with the effective laws and regulations of the registration country of the insurer of the Member State.The branch office of the Member State shall make the report available in the national language of the Republic of Latvia. By way of derogation from above requirements, the branch office of the Member State shall evaluate effectiveness and publish quarterly data on the extent of its operations in the Republic of Latvia, e.g., on the insurance premiums written and claims paid broken the types of insurance.
II. Information to be included in the report
9. The report shall provide information at least on:
9.1. the financial position and performance results, updating it every accounting period;
9.2. performanceratio, updating it every accounting period;
9.3. the risk analysis, updating it where necessary;
9.4. the management and administration, updating it where necessary;
9.5. composition of the group, updating it where necessary;
9.6. calculation of requirements for own funds and solvency capital, updating it every accounting period.
10. Where information referred to in paragraphs 9.3, 9.4 and 9.5 of the Regulations has not changed since its last publication, the insurer upon public disclosure of regular quarterly report shall clearly inform where such up-to-date public information is available, indicating that there have been no significant changes in it.
11. The content and valuation requirements for the items of the balance sheet and profit and loss account shall meet the requirements prescribed in the Regulations No 201 of the Financial and Capital Market Commission of 29 November 2016; ''Regulations on the Preparation of Annual Accounts and Consolidated Annual Accounts for Insurance and Reinsurance Undertakings and Branch Offices of Non-Member State Insurers”. Layout of items of the balance sheet and profit and loss account is provided in the Annexes 1 and 2 of the Regulations.
(Amended by the FCMC Regulations No 203 of 29 November 2016)
12. In addition to the information provided in the profit and loss account the insurer shall specify gross premiums written, gross insurance claims paid and net operating expenses (Annex 3) broken down by the following types of insurance, where a licence for the provision of insurance services is obtained:
12.1. non-life insurance:
12.1.1. accident insurance,
12.1.2. health insurance,
12.1.3. roadtransport insurance,
12.1.4. rail transportinsurance,
12.1.5. aircraft insurance,
12.1.6. shipinsurance,
12.1.7. freightinsurance,
12.1.8. property insurance against fire and natural disasters and other losses,
12.1.9. civil liability insurance for owners of road transport,
12.1.10. civil liability insurance for owners of aircraft,
12.1.11. civil liability insurance for owners of ships,
12.1.12. general civil liability insurance,
12.1.13. credit insurance,
12.1.14. suretyship insurance,
12.1.15. insurance of various financial losses,
12.1.16. insurance of legal expenses,
12.1.17. assistanceinsurance,
12.1.18. mandatory third party liability insurance of owners of road transport;
12.2. life insurance in the types of insurance laid down in Article 19 (2) of the Insurers and Reinsurers Law.
13. The insurer shall indicate the following insurance performance ratio(Annex 4), expressed as percentage to two decimal places:
13.1. broken by the types of insurance as laid down in paragraph 12.1:
13.1.1. the loss ratio(net claims incurred/net earned premiums),
13.1.2. the expense ratio(net operating expenses + other technical expenses, net/earned premiums, net),
13.1.3. the combined ratio(loss ratio+ expense ratio);
13.2. The life insurer shall specify the return on investments(net return on investments /average amount of investments in the period).
14. In providing information on the risk analysis the insurer shall provide information at least on the following:
14.1. describingoverall strategy and practices for risk management, including risk occurrence reasons, risk management and control, as well as specifying whether and how reinsurance, derivatives and alternative risk transfer or replacement mechanisms are applied in the risk management;
14.2. assessing exposure to each significant risk category by the insurer.
15. In providing information on management and administration the insurer shall provide information at least on the following:
15.1. the shareholders of insurance joint stock companies or members of mutual insurance co-operative societies and their participation in share capital, specifying the face value of shares or stocks and the number of votes;
15.2. a list of the chairperson of the council and chairperson of the board of directors of insurance joint stock company, chairperson of the executive body of mutual insurance co-operative societies, head of the branch office of non-Member State insurer, as well as members of the council, members of the board of directors of the insurance joint stock company and members of the executive body of the mutual insurance co-operative society indicating the given name, surname and position of the officials;
15.3. the structural units and their addresses, including the insurer’s seats, branches, representations and agencies;
15.4. operational strategy and objectives;
15.5. significant co-operation partners, including insurance and reinsurance intermediaries, re-insurers, outsource service providers who ensure making investments, underwriting insurance risk and adjustment of insurance claims.
16. The insurer to whom supervision at a group level is applicable in accordance with Article 197 (2) of the Insurers and Reinsurers Law, shall disclose information about each company of the group referred to in Annex 5 of the Regulation:
16.1. name and registration number;
16.2. ISO 3166 in accordance with the is the international standard ISO 3166 "Country codes and codes for their subdivisions" and registration address;
16.3. type of commercial company (insurance or reinsurance undertaking, Member State insurer or reinsurer, non-Member State insurer or reinsurer,Member State insurance holding company or mixed financial holding company, non-Member State insurance holding company or mixed financial holding company, multi-activity insurance holding company, other company);
16.4. the share of own funds or voting rights directly or indirectly owned by the insurer or its parent company;
16.5. the grounds for inclusion in group supervision (subsidiary, subsidiary of subsidiary, parent company, subsidiary of parent company, other company).
17. The insurer shall perform the calculation of own funds and solvency capital requirementsin line with the provisions of Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)and disclose information indicated in Annex 6 of the Regulations.
III. Reporting procedure
18. Simultaneously with publishing of reports on the insurer's website the insurer shall submit to the Financial and Capital Market Commission the reports referred to in Annexes 1,2,3,4and6 of the Regulations. The Financial and Capital Market Commission shall use the data contained in the reports for preparing information for publication on its website.
19. In preparing information for publication on its website, the Financial and Capital Market Commission shall use the data contained in the quarterly reporting template L.01 for the branch of Member State insurer prepared and submitted to the Financial and Capital Market Commission in accordance with the provisions of Regulations No 58 of Financial and Capital Market Commission "Regulations on the Preparation of Reports for the Insurers and Reinsurers" of 9 March 2016.
20. The reports to be submitted to the Financial and Capital Market Commission shall be prepared in accordance with the procedure laid down in the "Regulations on Electronic Reporting" approved by the Financial and Capital Market Commission.
21. If the Financial and Capital Market Commission ascertains that a report submitted by the insurer is compiled erroneously, the submitter of the report shall be notified thereof. If the Financial and Capital Market Commission has not set another time limit, the corrected report shall be submitted no later than the next business day upon receipt from the Financial and Capital Market Commission of the notification regarding the existence of errors.
IV. Closing provisions
22. The Regulations, except for paragraphs 18 and 19, shall be applied by the insurer in preparing public quarterly reports starting with the second quarter of 2016. Information for the accounting period from 1 January 2016 to 30 June 2016may be published by the insurer no later than within three months of the end of the accounting period.
23. Requirements laid down in paragraph 18 of the Regulations shall be appliedby the insurer in preparing public quarterly reports, starting with the fourth quarter of 2016.
24. Requirements laid down in paragraph 19 of the Regulations shall be applied by the Financial and Capital Market Commission to the branch offices of Member State insurers,starting with the fourth quarter of 2016.
25. Consultations on preparation of reports shall be provided by the Regulations and Statistics Department of the Financial and Capital Market Commission.
26. With the coming into force of the Regulations, the Financial and Capital Market Commission Regulation No61 of 24March 2006 "Regulations on the Preparation Public Quarterly Reports for Insurers" shall become null and void.
Chairman of the Financial and Capital Market Commission P.Putniņš
Annex 1to the Financial and Capital Market Commission
Regulations No 147 of 31.08.2016
Balance sheet
as of______
(last date of the accounting period)
Tangible assets
Investments in land and buildings
Intangible assets
Investments in share capital of related companies
Investments in share capital of associated companies
Financial assets held for trading
Financial assets designated at fair value through profit and loss
Financial assets available-for-sale
Held-to-maturity investments
Loans and receivables
Accrued income and prepayments
Tax assets
Reinsurance contracts
Cash and claims on demand on credit institutions
Total assets
Capitaland reserves
Insurance liabilities
Financial liabilities held for trading
Financial liabilities designated at fair value through profit and loss
Financial liabilities at amortized cost
Provisions
Tax liabilities
Accrued expenses and deferred income
Total liabilities
Total capital and reserves, and liabilities
Annex 2 to the Financial and Capital Market Commission
Regulations No 147 of 31.08.2016
Profit and loss account
as of______
(last date of the accounting period)
Earned premiums
Other technical income, net
Net claims incurred
Changes in technical provisions of life assurance, net
Changes in other technical provisions
Bonuses and rebates, net
Net operating expenses
Other technical expenses, net
Changes in equalisation provisions
Investment management charges / income and commission payable
Net interest income and dividend income
Net realised profit/loss from the financial assets and financial liabilities valued at amortised cost
Net realised profit/loss from the financial assets available for sale
Net realized profit/loss from financial assets and financial liabilities held for trading
Net realised profit/loss from the financial assets and financial liabilities designatedat fair value through profit and loss
Revaluation result of the foreign currencies
Profit/losses on derecognition of tangible assets, building investment for own functioning, investment property and intangible assets
Depreciation
Impairment losses
Negative goodwill
Profit/loss of accounting period before the calculation of corporate income tax
Corporate income tax
Profit/loss of the accounting period
Annex 3to the Financial and Capital Market Commission
Regulations No 147 of 31.08.2016
Insurer's report on premiums written, claims paid and net operational expenses by insurance type
as of ______
(last date of the accounting period)
expenses
Total / Contracts signed in Latvia / Total / Contracts signed in Latvia
including contracts entered into with natural persons / including contracts entered into with natural persons
Non-life insurance
Accident insurance
Health insurance
Road transport insurance
Rail transport insurance
Aircraft insurance
Ship insurance
Freight insurance
Property insurance against fire and natural disasters and other losses
Civil liability insurance for owners of road transport
Civil liability insurance for owners of aircraft
Civil liability insurance for owners of ships
General civil liability insurance
Credit insurance
Suretyship insurance
Insurance of various financial losses
Insurance of legal expenses
Assistance insurance
Mandatory third party liability insurance of owners of road transport
Life insurance
Unit-linked life insurance
Life insurance with savings
Life insurance without savings
Annuity insurance
Marriage and child birth insurance
Tontines
Capital redemption operations
Annex 4to the Financial and Capital Market Commission
Regulations No 147 of 31.08.2016
Insurer's performance indicators broken by insurance type
as of ______
(last date of the accounting period)
period / Insurance type where insurer has obtained licence
Loss ratio(%)
Expense ratio(%)
Combined ratio(%)
Life insurer's return on investments
as of ______
(last date of the accounting period)
Return on investments (%)
Annex 5to the Financial and Capital Market Commission
Regulations No 147 of 31.08.2016
Composition of the group
as of ______
(last date of the accounting period)
(%) / Share of voting rights in commercial company
(%) / Grounds for inclusion in group **
* IU – insurance undertaking, RU – reinsurance undertaking, MSIU – Member State insurer, NMSIU – non-Member State insurer, MSRU – Member State reinsurer, NMSRU– non-Member State reinsurer, MSIHC – Member State insurance holding company, NMSIHC – non-Member State insurance holding company, MSMFHC –Member State mixed financial holding company, NMSMFHC – non-Member State mixed financial holding company, MAIHC – multi-activity insurance holding company, OC – other company.
** S – subsidiary, SS –subsidiary of subsidiary, PC – parent company, SPC – subsidiary of parent company, OC – other company.
Annex 6to the Financial and Capital Market Commission
Regulations No 147 of 31.08.2016
Report on the calculation of insurer's own funds and solvency capital requirements
as of ______
(last date of the accounting period)
1. / Basic own funds
2. / Deductions for participation in financial institutions and credit institutions
3. / Total basic own funds after deductions (1-2)
4. / Total ancillary own funds
5. / Available and eligible own funds
5.1. / Total available own funds to comply with the solvency capital requirement
5.2. / Total available own funds to comply with the minimum capital requirement
5.3. / Total eligible own funds to comply with the solvency capital requirement
5.4. / Total eligible own funds to comply with the minimum capital requirement
6. / Solvency capital requirement
7. / Minimum capital requirement
8. / Eligible own funds to solvency capital requirement
9. / Eligible own funds to minimum capital requirement