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2010-07-05 | cba-blob-10413

Prudential Supervision Manual for Insurance Companies

The Centrale Bank van Aruba issued this manual to establish prudential supervision standards for licensed life and non-life insurance companies. It mandates specific guidelines for compiling annual statements and quarterly reports, including digital submission requirements, solvency margin calculations, and technical provision maintenance. The document further outlines supervisory directives on asset management, corporate governance, and the admission policies for new insurance licenses.

Aruba

Centrale Bank van Aruba

CENTRALE BANK VAN ARUBA

Prudential Supervision Manual Insurance Companies Issued by: The Centrale Bank van Aruba July 2003

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES TABLE OF CONTENTS I. Guidelines for the composition and compilation of the annual statements and quarterly reports for insurance companies I.1 General guidelines I.2 Annual statements Life insurance companies I.3 Annual statements Nonlife insurance companies I.4 Quarterly reports Life insurance companies I.5 Quarterly reports Nonlife insurance companies II. Insurance Supervisory Guidelines and Directives II.1 Asset Management II.2 Appointment of an External auditor II.3 Actuarial report and certification for Life Insurance Companies II.4 Publication of the audited Financial Statements II.5 Guidelines on the Coverage Test II.6 Guidelines on the Solvency Margin II.7 Guidelines with regards to the transfer of rights and obligations from insurance agreements II.8 Managing Directors and Members of the Supervisory Board II.9 Prospective (In-) Direct Shareholders – Natural Persons II.10 Directive on the appointment of a certifying actuary Annex 1 Questionnaire for Prospective Director(s) or Members of the Supervisory board and for Prospective (In-) Direct Shareholders – Natural Persons Annex 2 Questionnaire for appointment of or change in External Auditor

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES TABLE OF CONTENTS III. Policy Papers III.1 Corporate Governance practices for Insurance Companies III.2 Outsourcing Arrangements IV. Admission policy Application forms IV.1 Application form for a license for a Life Insurance Company IV.2 Application form for a license for a Non-Life Insurance Company IV.2 Application form for a license for a Captive Insurance Company V. Legislation Landsverordening toezicht verzekeringsbedrijf (AB 2000 no. 82) Unofficial translation of the State Ordinance Supervision Insurance Business Landsbesluit bijzondere bedrijfsrisicoverzekeraars (AB 2002 no. 50) Unofficial English translation of the State Decree Captive Insurance Companies Landsbesluit vertegenwoordiging verzekeringsbedrijf (AB 2003 no. 12) Unofficial English translation of the State Decree Representative Insurance Companies

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I/i Part I Guidelines for the composition and compilation of the annual statements and quarterly reports for insurance companies I.1 General guidelines I.2 Annual statements Life insurance companies I.3 Annual statements Nonlife insurance companies I.4 Quarterly reports Life insurance companies I.5 Quarterly reports Nonlife insurance companies

I/ii CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I/iii Version overview Version Appendix Date Effective as of Amendments 1.0 All November 23, 2018 January 1, 2018 • Addition of the Quarterly reporting requirements • Digital submission of the regulatory reports • Revision of the Coverage Test Report 1.1 Appendices K. and M. on the Solvency Margin Requirement of the annual statements and quarterly reports May 2, 2019 July 1, 2019 • Revision of the calculation of the solvency margin requirement 1.2  Appendix B of the annual statements and quarterly reports November 2, 2020 January 1, 2021 • Removal of items 11.00 Shareholders’ dividend and Net earnings from form B. Income Statement  Section 13 “Annual filings” • Updated with the amendments made to Supervisory directive “II.4 Directive on the publication of the Audited Annual Financial Statements” and the electronic submission of the annual filings Version management The Guidelines for the composition and compilation of the annual statements and quarterly reports for the insurance companies (the Guidelines) may change over time. The version overview only contains content changes. Editorial changes are not included in this overview.

I/iv CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.1/1 I.1 General guidelines

Introduction The Guidelines for the composition and compilation of the annual statements and quarterly reports for the insurance companies (the Guidelines) apply to all licensed insurance companies. The annual statements and quarterly reports are primarily used for prudential supervision purposes. The Guidelines form part of the Prudential Supervision Manual Insurance Companies and should be used in conjunction with the other parts of the Prudential Supervision Manual Insurance Companies, namely, the Supervisory Guidelines, Policy Papers, Admission policy, Application forms, and Legislation.
Legal basis The legal basis for the issuance of the Guidelines is grounded in article 10, paragraphs 1 and 2, article 11, paragraph 4, article 13, paragraph 2, and article 14, paragraph 3, of the State Ordinance on the Supervision of the Insurance Business (AB 2000 no. 82) (SOSIB), and article 8, paragraph 2, of the State Ordinance on Foreign Exchange Transactions (AB1990 no. GT6) (SOFET).
Structure of the reporting framework The annual statements and quarterly reports should reflect the operations conducted in or from Aruba. If it is difficult to classify a particular item, it should be included under the heading that is most suitable to the situation and a brief explanatory note should be provided to the CBA in hard copy and via e-mail address supreports@cbaruba.org. If the nature, complexity, and the size of the reporting institution’s operations warrant this, pursuant to article 25, paragraph 3a of the SOSIB, the CBA may require additional reports, or may no longer require some or all of the reports.
Reporting frequency and submission due dates The reporting period of the annual statements must be from January 1 to December 31 of the corresponding year. Upon request, the CBA may grant an insurance company permission to change its reporting period. In such case, the CBA may request the insurer to submit additional information. The annual statements are due within six months after the end of each financial year. The quarterly reports are submitted on a quarterly basis and are due within fifteen calendar days after the end of each quarter. The reporting period of the quarterly reports are: First quarter: January 1 – March 31; Second quarter: April 1 – June 30; Third quarter: July 1 – September 30; Fourth quarter: October 1 – December 31.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.1/2 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES 5. Electronic submission via the DMZ Login Portal Both the annual statements (CBA-format) and quarterly reports must be submitted via the DMZ Login Portal (https://webapp.cbaruba.org). The templates hereof are available on the DMZ Login Portal and must be uploaded (in Excel-format) within the due dates mentioned under paragraph 4 above. To submit the excel files, the following minimum requirements must be met:

All amounts should be rounded to thousand Florins and amounts below Afl. 500 must be rounded to zero.
Yellow cells must be filled in.
Orange cells must be filled in (only applicable to annual statements).
Gray cells should not be filled in.
All sheets (in the Excel file) must be completed. If there is no information to report on a specific item, the value of zero should be entered.
If the file is uploaded successfully, the insurance company will receive an e-mail with the following text: From: NoReply@cbaruba.org Re: Data Loaded Successfully Dear [username], Data Loading of [name of the] report, for the period [ddmmmyyy] uploaded at [date and time], PASSED, submission is completed. Uploaded file name: [File.xlsx].
If the file failed to upload, the insurance company will receive an e-mail with the following text: From: NoReply@cbaruba.org Re: Data Loaded Failed Dear [username], Data Loading of [name of the] report, for the period [ddmmmyyy] uploaded at [date and time], FAILED, please resubmit the input form. Please log in to the web portal and download the trouble shooting guide for assistance. Uploaded file name: [File.xlsx].
The program will run a number of validations when uploading the excel files to the data warehouse of the CBA: a. A hard validation is a minimum requirement for the file to be uploaded, e.g. “total assets” are equal to “total liabilities and shareholders’ equity”. b. When a value does not comply with the minimum requirements (e.g. the coverage ratio is less than 100%) the file will still be uploaded (soft validation). c. Cross validations are validations between the different reporting files, e.g. the total investments reported in the fourth quarter must be equal to the total investments reported in the annual filings. d. If the uploaded file did not pass the required validation, the reporter must review the file and resubmit the report.
The following minimum computer requirements are needed:  Excel 2007 and above (Excel 2013 and above recommended).  Microsoft Internet Explorer (IE) 9 and above (IE 11 recommended).

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.1/3  Browser cookies should be enabled.  HTTPS should be allowed/enabled in IE browser settings.  File upload should be enabled/allowed through IE browser.  E-mail address "noReply@cbaruba.org" and "noReply-cbaruba@setar.aw" should not be blocked. Reference is also made to the “Troubleshooting guide” available online via the DMZ Login Portal. 6. Applicable standards It is recommended to apply the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB). 7. Offsetting Offsetting of debit and credit balances of a similar nature is not allowed. Debit and credit balances must be reported at their corresponding amounts (i.e. gross). 8. Rounding of figures All amounts must be rounded to thousand Florins. Only whole numbers are to be filled in. The rounding should be effected in such a way that the total assets equal the total liabilities. Amounts below Afl. 500 must be rounded to zero; the relevant item should then show “0” (zero). 9. Currency conversion All amounts must be reported in Aruban florin (Afl.) Foreign currency balances must be converted to their Afl. equivalent. Foreign currencies officially quoted by the CBA should be converted using the average of the buying and selling rate quoted by the CBA on the reporting date. Foreign currencies not quoted by the CBA should be converted using Afl. 1.79 per USD 1.00 as a cross-rate. 10. Technical provisions According to article 13, paragraph 1, of the SOSIB, an insurer must maintain adequate technical provisions, which are fully covered by admissible assets. Pursuant to the second paragraph of article 13, an insurance company must also take into account the Actuarial Guidelines for Insurance Companies issued by the CBA. The CBA may raise objections against the nature and valuation of these assets, which objections shall be promptly addressed by the insurer. 11. Solvency requirements Life insurance companies According to article 14, paragraph 1, of the SOSIB an insurer engaged in the life insurance business must have a solvency margin equal to eight percent of the provision for insurance obligations at the end of the preceding financial year, without taking the reinsurance portion of these obligations into account.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.1/4 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES Nonlife insurance companies According to article 14, paragraph 2, of the SOSIB an insurer engaged in the nonlife insurance business must have a solvency margin equal to the highest outcome of one of the following calculations:  fifteen percent of the gross premiums booked in the preceding financial year; or  fifteen percent of the average gross claims incurred in the last three financial years. The amount of intercompany current accounts receivable exceeding the 5 percent of Total investments must be deducted from the Shareholders’ Equity in the calculation of the solvency margin requirement. This does not apply to branches or agencies. Furthermore, pursuant to the third paragraph of article 14 of the SOSIB, an insurer must comply with the Solvency Guidelines issued by the CBA. 12. Fine Article 16, paragraphs 1 and 2, of the SOSIB states that, if an insurer does not (timely) comply with the reporting requirement set by the CBA, the CBA can impose an administrative sanction, i.e. a penalty charge order and/or an administrative fine. 13. Annual filings Within six months after the end of each financial year an insurer must submit the following documents as part of its annual filings:  The audited annual statements (CBA-format), which provide a clear picture of the management carried out by the insurer and its financial position. It must be accompanied by the auditors’ report stating that the audited annual statements have been prepared in accordance with the guidelines of the CBA, and the management letter issued by the external auditor. The management certification (form 1) must be signed by the management of the insurance company.  Each page of the annual statements must be certified by the external auditor as evidence that the annual statements have been audited (by the external auditor).  The actuarial report and actuarial certification for life insurance companies. Reference is made to the Actuarial Guidelines for Insurance Companies.  The audited financial statements together with the auditor’s opinion. Branches and agencies must submit the audited financial statements of the group of which they form part of.  The audited financial statements of the group to which the reporting institution forms part of.  A reconciliation between the equity and the result reported in the financial statements and the equity and result reported in the audited annual statements must be submitted in case that there is a difference.  If there have been important changes in the concerning year, a separate written explanation in case there have been important changes in the concerning year. With

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.1/5 important changes we refer to all changes in the balance sheet and income statement items greater than 10 percent and/or Afl. 1 million compared to the amount reported in the preceding year.  Confirmation of compliance with the requirements set in Supervisory directive “II.4 Directive on the publication of the Audited Annual Financial Statements”.  The annual filings are submitted only digitally in an electronic readable format. This electronic version should be in color and have a minimum document quality of 300 DPI.  The audited annual statements (CBA-format) must be uploaded through the DMZ Login Portal (https://webapp.cbaruba.org).  If, based upon the results of the audit, significant changes have been made vis-à-vis the submitted unaudited quarterly reports, the revised quarterly reports over these periods must also be submitted through the DMZ Login Portal (https://webapp.cbaruba.org). 14. Quarterly reports As of the first quarter of 2018, the quarterly reports are submitted only digitally via the DMZ Login Portal. Consequently, the management certification, management report, and accounting and valuation principles no longer form part of the quarterly reports. The quarterly reports are due within fifteen calendar days after the end of each reporting quarter and should be submitted only electronically via the DMZ Login Portal (https://webapp.cbaruba.org). Note that the management of each institution remains ultimately responsible for the correctness and completeness of the (digitally) submitted quarterly reports and annual statements (CBAformat) to the CBA. Revised quarterly reports must be digitally resubmitted through the DMZ Login Portal, for example, in case changes have been made based on the results of the external audit. All insurance companies must provide the CBA with a written explanation on significant changes (larger than 10% and/or Afl. 1 million) when compared to the previous quarter. This information must be submitted to the CBA in hard copy, and an electronic readable version hereof must also be submitted via e-mail address supreports@cbaruba.org. 15. Residency The balance sheet and notes to the balance sheet of the quarterly reports have been expanded with a resident and non-resident column. The classification of the residency of a balance sheet item is according to the definition of resident and non-resident in article 1 of the SOFET. Article 1 of the SOFET defines residents as: A. Natural persons residing in Aruba and registered in the population register of the Civil Registry, or those who actually have been living in Aruba for a period exceeding one year after the date of their arrival in Aruba, as soon as that year has lapsed; B. Legal entities, partnerships, and limited partnerships domiciled in Aruba; C. Branches, branch offices, enterprises and agencies domiciled in Aruba, and not covered under b;

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.1/6 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES D. Persons, legal entities and other institutions designated by the CBA, and not covered under a, b and c. Nonresidents are: natural persons, legal entities, partnerships, branches, agencies and enterprises not covered by the definition of “residents”.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/1 I.2 ANNUAL STATEMENTS LIFE INSURANCE COMPANIES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/2 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES

MANAGEMENT CERTIFICATION We, the undersigned, hereby certify as follows:
That the attached balance sheet, income statement, and other forms are true and correct.
That all assets, liabilities, income and expenditures for the period ending December 31, 20xx are included in these financial statements.
That all the assets reported are the property of the company, free of liens and claims, unless stated otherwise in these financial statements.
That all known capital and or surplus commitments and contingent liabilities are disclosed appropriately in these financial statements. Name and position : __________________________________ Signature : __________________________________

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/3 2. MANAGEMENT REPORT In this report senior-management of the company must elaborate on the most important developments occurred during the reporting year and present the company’s projections on the operations of the company for the immediate future.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/4 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES A. BALANCE SHEET CURRENT PREVIOUS YEAR YEAR ASSETS 1.00 Investments 2.00 Fixed Assets 3.00 Affiliated Companies 4.00 Current Assets 5.00 Intangibles

TOTAL ASSETS

LIABILITIES AND SHAREHOLDERS’ EQUITY

6.00 Technical Provisions 7.00 Long Term Liabilities 8.00 Current Liabilities

TOTAL LIABILITIES

9.00 Shareholders' Equity 1 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1 The assigned capital in the case of a branch or agency.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/5 B. INCOME STATEMENT

CURRENT YEAR AFL PREVIOUS YEAR AFL

INCOME

1.00 Net earned premiums 2.00 Investment income 3.00 Other income

TOTAL INCOME EXPENDITURES 4.00 Net claims incurred 5.00 Commissions and other acquisition costs 6.00 General and administrative expenses 7.00 Change in technical provisions 8.00 Policyholders’ dividends 9.00 Other expenditures TOTAL EXPENDITURES NET INCOME (LOSS) BEFORE TAXES

10.00 Less: Corporate taxes

NET INCOME (LOSS) AFTER TAXES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/6 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES C. ACCOUNTING AND VALUATION PRINCIPLES Summarize the accounting and valuation principles used to prepare the statements and disclose any significant change in the principles applied in comparison with previous year.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/7 D. NOTES TO THE BALANCE SHEET CURRENT YEAR AFL PREVIOUS YEAR AFL 1.00 INVESTMENTS 1.10 Shares 1.20 Bonds 1.30 Real Estate 1.40 Time Deposits 1.50 Mortgage Loans 1.60 Policy Loans 1.70 Other Loans 1.71 - Secured 1.72 - Unsecured 1.80 Other-specify Total

2.00 FIXED ASSETS 2.10 Real Estate 2.20 Office Furniture and Equipment 2.30 Other-specify Total

3.00 AFFILIATED COMPANIES 3.10 Shares 3.20 Loans 3.30 Current Accounts Total 4.00 CURRENT ASSETS 4.10 Cash on Hand 4.20 Due from other depository corporations 4.30 Agents' and Brokers' Debit Balances 4.40 Uncollected Premiums from Direct Business 4.50 Investment Income Due Or Accrued 4.60 Amounts Receivable from Reinsurers 4.70 Amounts Due from Members (Mutual Companies) 4.80 Other–specify Total

5.00 INTANGIBLES Specify

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/8 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES D. NOTES TO THE BALANCE SHEET (Continued) CURRENT YEAR AFL PREVIOUS YEAR AFL 6.00 TECHNICAL PROVISIONS 6.10 Previous Year 6.20 Additions 6.30 Deductions Total

7.00 LONG TERM LIABILITIES 7.10 Loans form Financial Institutions 7.20 Members’ Loan/Loans affiliates 7.30 Other-specify Total

8.00 CURRENT LIABILITIES 8.05 Premiums Paid in Advance 8.10 Premiums in Suspense 8.15 Agents' and Brokers' credit balances 8.20 Benefits Payable 8.25 Bank Overdrafts and Loans 8.30 Amounts due to Reinsurers 8.35 Corporate Taxes Payable 8.40 Dividends Payable to Policyholders 8.45 Dividends Payable to Shareholders 8.50 Amounts Payable to Affiliates 8.55 Other-specify Total

9.00 SHAREHOLDERS’ EQUITY 9.10 Issued and paid-in Capital 9.20 Reserves-specify 9.30 Retained Earnings Total OFF BALANCE SHEET Contingent Liabilities (provide details) Commitments (provide details) Related Party Transactions (provide details)

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/9 E. NOTES TO THE INCOME STATEMENT CURRENT YEAR AFL PREVIOUS YEAR AFL 1.00 NET EARNED PREMIUMS 1.10 Direct Written Premiums 1.20 Assumed Reinsurance Premiums Gross Written Premiums 1.30 Less: Ceded Reinsurance Premiums Total

2.00 INVESTMENT INCOME 2.10 Direct Investment Income 2.11 Dividend Income 2.12 Interest on Bonds 2.13 Income from rent 2.14 Interest on Time Deposits 2.15 Interest on Mortgage Loans 2.16 Interest on Policy Loans 2.17 Interest on Other Loans 2.18 Other-specify Sub-total

2.20 Indirect Investment Income 2.21 Revaluation Adjustments 2.22 Capital Gain / (Loss) On Sales 2.23 Other-specify Sub-total TOTAL INVESTMENT INCOME

3.00 OTHER INCOME Specify

4.00 NET CLAIMS INCURRED 4.10 Deaths Claims 4.20 Maturities / lapses 4.30 Surrenders 4.40 Other-specify 4.50 Less: Ceded Claims Recovered Total

6.00 GENERAL AND ADMINISTRATIVE EXPENSES 6.10 Personnel costs (including social premiums) 6.20 Other-specify Total

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/10 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES F. OTHER ITEMS-NOTES TO THE BALANCE SHEET

CURRENT YEAR Other item description Other item specified AFL 1.80 Investments other 2.30 Fixed assets other 4.80 Current assets other 5.00 Intangibles 7.30 Long term liabilities other 8.55 Current liabilities other 9.20 Reserves Contingent Liabilities Commitments Related Party Transactions Items pertaining to form D. Notes to the balance sheet for which further specification is required.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/11 G. OTHER ITEMS-NOTES TO THE INCOME STATEMENT

CURRENT YEAR Other item description Other item specified AFL 2.18 Direct investment income other 2.23 Indirect investment income other 3.00 Other income 4.40 Net claims incurred other 6.20 General and administrative expenses other Items pertaining to form E. Notes to the income statement for which further specification is required.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/12 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES H. BREAK-DOWN OF THE INVESTMENTS AFL LOCAL INVESTMENTS 1) Afl. Fc FOREIGN INVESTMENTS TOTAL

1.00 INVESTMENTS

1.10 Shares

1.20 Bonds

1.30 Real estate 1.31 - Own use 1.32 - Other

1.40 Time deposits

1.50 Mortgage loans

1.60 Policy loans

1.70 Other loans 1.71 - Secured 1.72 - Unsecured

1.80 Other-specify TOTAL INVESTMENTS

Local investments denominated in local currency (Afl.) and foreign currencies (Fc).

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/13 I. THE 40-60% INVESTMENT RULE Table I % of Total liabilities insurance companies 1) Required amount in Local Investments Total liability 40% First 10 million 4 million

50% Second 10 million 5 million 60% Remainder 60% of the remainder TOTAL 9 million + 60% of the remainder Table II AFL Total Liabilities 1) Required local investments (40%)

Required local investments (50%) Required local investments (60%) Total required local investments (A) Actual local investments 2) (B) Surplus/Deficit (B-A)

Excluding shareholders’ equity (paid-in capital, reserves and retained earnings) or assigned capital.
Local investments denominated in Aruban Florins and foreign currencies. It should be emphasized that no rights can be derived from the 40–60% investment rule, which is merely one of the criteria the CBA uses to evaluate requests from institutional investors for a foreign exchange license. Account is also taken, among other things, of the monetary policy stance and the development in the official reserve position.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/14 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES J. COVERAGE TEST 1 ADMISSABLE ASSETS Outstanding Amount Weight Factor Weighted Assets 1.00 Investments 1.10 Shares ............... 80% ................ 1.20 Bonds Government Bonds ............... 100% ................ Corporate-High credit quality ............... 95% ................ Corporate-Medium to low grade quality ............... 85% ................ 1.30 Real Estate ............... 90% ................ 1.40 Time Deposits ............... 100% ................ 1.50-1.60 Mortgage and Policy Loans ............... 100% ................ 1.71 Other Loans – secured ............... 100% ................ 1.72 Other loans – unsecured ............... 95% ................ 1.80 Other investments ............... 65% ................

2.00 Fixed Assets: 2.10 Real Estate-in own use ............... 90% ................ 2.20-2.40 Other Fixed Assets ............... 65% ................

3.00 Affiliated companies 2 ............... 90% ................

4.00 Current assets: 4.10 Cash on Hand ............... 100% ................ 4.20 Due from other depository corporations ............... 100% ................ 4.30 Agents’/brokers’ balances, 90 days and under ............... 100% ................ 4.40 Uncollected Premiums, 90 days and under ............... 100% ................ 4.50 Investment Income due, 90 days and under ............... 100% ................ 4.60 Reinsurance Receivables ............... 100% ................ 4.70 Amounts due from Members 3 ............... 100% ................ 4.80 Other ............... 100% ................

Total weighted assets ...............

8.00 Less: Current liabilities 4 ................

Assets available to cover Technical Provisions ................

6.00 Less: Technical Provisions ................

Surplus or (Deficit) ................ Coverage ratio (in percent) ................ For further guidance please refer to the CBA’s guidelines on the coverage test.

In case the company sells insured investment products, whereby the policyholder bears the complete investment risk, the investments and technical provisions associated with these products should not be included in the coverage test calculation. In such case an explanatory note should be added to the coverage test sheet.
Only branches and agencies of life insurance companies are allowed to include claims on affiliated companies under this line item.
Only applicable to mutual insurance companies.
Excluding liabilities to affiliated companies.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/15 K. SOLVENCY MARGIN REQUIREMENT According to article 14, paragraph 1 of the SOSIB, an insurer engaged in the life insurance business must have a solvency margin equal eight percent of the provision for insurance obligations at the end of the preceding financial year, without taking the reinsurance portion of these obligations into account. Furthermore, pursuant to the third paragraph of this article, an insurer must comply with the Solvency Guidelines issued by the CBA. In the case of a life insurer AFL 400,000 if the insurer is doing strictly doing life insurance or AFL 500,000 if the insurer has been doing both life, accident & sickness insurance prior to July 2001 within the same legal entity. Solvency Margin Calculation Life Insurance Company Amounts in AFL 9.00 Shareholders’ Equity (= available solvency margin) A ……………… 5% of Total investments ……………… Excess intercompany current accounts receivable1 B ……………… 6.00 Technical Provisions ……………….. 8% thereof or ……………….. a minimum of AFL 400,000 or AFL 500,000 ……………….. Required solvency margin2 C ……………… Surplus/(Deficit) (A-B-C) ………………

The outstanding amount of intercompany current accounts receivable that exceeds 5% of Total investments. Not applicable to branches or agencies. Branches or agencies should fill out 0 (zero) under this line item.
The highest outcome of either:  8% of the “Provision for Insurance Obligations” in the preceding financial year, or  AFL 400,000 if the insurer is doing strictly doing life insurance, or  AFL 500,000 if the insurer has been doing both life, accident & sickness insurance prior to July 2001 within the same legal entity.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/16 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES L. ADMISSIBLE ASSETS TO COVER THE MINIMUM SOLVENCY MARGIN OF AFL 400,000 or AFL 500,000 Assets to cover the minimum Solvency Margin of AFL 400,000 or AFL 500,000 Amounts in AFL 1 Treasury Bonds issued by the Government of Aruba 2 Shares certificates, debentures, profit-sharing certificate and other similar securities 3 Proof of Partnership rights 4 Certificates of the assets as referred to in points 2 and 3 5 Scrip certificates of the assets as referred to in points 1 up to and including 3 6 Acknowledgement of debt towards the insurer, not being treasury bills or debentures, issued by or guaranteed by the Government of Aruba or other public entities in Aruba 7 Acknowledgement of debt towards the insurer, not being debentures, issued by companies incorporated in Aruba or issued by companies incorporated in Aruba for which a license pursuant to article 4 or 24 of the State Ordinance on the Supervision on the Credit System (AB 1998 no.16) has been granted TOTAL For further guidance please refer to the CBA’s Guidelines on the Solvency Margin.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/17 I. AUDITORS’ REPORT

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/18 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES

II. ACTUARIAL REPORT Refer to the actuarial guidelines for life insurance companies issued by the CBA.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.2/19 III. ACTUARIAL CERTIFICATION Refer to the actuarial guidelines for life insurance companies issued by the CBA.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.2/20 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/1 I.3 ANNUAL STATEMENTS NONLIFE INSURANCE COMPANIES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/2 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES

MANAGEMENT CERTIFICATION We, the undersigned, hereby certify as follows:
That the attached balance sheet, income statement, and other statements are true and correct.
That all assets, liabilities, income and expenditure for the period ending December 31, 20xx are included in these financial statements.
That all the assets reported are the property of the company, free of liens and claims, unless stated otherwise in these financial statements.
That all known capital and or surplus commitments and contingent liabilities are properly disclosed in these financial statements. Name and position: _____________________________ Signature: _____________________________

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/3 2. MANAGEMENT REPORT In this report senior-management of the company must elaborate on the most important developments occurred during the reporting year and present the company’s projections on the operations of the company for the immediate future.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/4 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES A. BALANCE SHEET CURRENT YEAR AFL PREVIOUS YEAR AFL ASSETS 1.00 Investments 2.00 Fixed Assets 3.00 Affiliated Companies 4.00 Current Assets 5.00 Intangibles TOTAL ASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY 6.00 Technical Provisions 7.00 Long Term Liabilities 8.00 Current Liabilities TOTAL LIABILITIES 9.00 Shareholders' Equity 1 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1 The assigned capital in the case of a branch or agency.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/5 B. INCOME STATEMENT CURRENT YEAR AFL PREVIOUS YEAR AFL

INCOME 1.00 Net earned premiums 2.00 Investment income 3.00 Other income TOTAL INCOME EXPENDITURES 4.00 Net claims incurred 5.00 Commissions and other acquisition costs 6.00 General and administrative expenses 7.00 Change in technical provisions 8.00 Policyholders’ dividends 9.00 Other expenditures TOTAL EXPENDITURES NET INCOME (LOSS) BEFORE TAXES 10.00 Less: Corporate taxes NET INCOME (LOSS) AFTER TAXES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/6 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES C. INCOME STATEMENT BY INDEMNITY GROUP Current year in AFL Accident & Health Motor Vehicle Marine Transport & Aviation Property Other Total

INCOME 1.00 Net Earned Premiums 2.00 Investment Income 3.00 Other Income TOTAL INCOME EXPENDITURES 4.00 Net Claims Incurred 5.00 Commissions and other Acquisition costs 6.00 General and Administrative Expenses 7.00 Changes in Technical Provisions 8.00 Policyholders’ Dividend 9.00 Other Expenditure TOTAL EXPENDITURES NET INCOME (LOSS) BEFORE TAXES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/7 D. ACCOUNTING AND VALUATION PRINCIPLES

Summarize the accounting and valuation principles used to prepare the statements and disclose any significant change in the principles applied in comparison with previous year.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/8 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES E. NOTES TO THE BALANCE SHEET CURRENT YEAR AFL PREVIOUS YEAR AFL 1.00 INVESTMENTS 1.10 Shares 1.20 Bonds 1.30 Real Estate 1.40 Time Deposits 1.50 Loans 1.51 - Secured 1.52 - Unsecured 1.60 Other-specify Total

2.00 FIXED ASSETS 2.10 Real Estate 2.20 Office Furniture and Equipment 2.30 Motor Vehicles 2.40 Other-specify Total

3.00 AFFILIATED COMPANIES 3.10 Shares 3.20 Loans 3.30 Current Accounts 3.40 Other-specify Total

4.00 CURRENT ASSETS 4.10 Cash in Hand 4.20 Due from other depository corporations 4.30 Agents' and Brokers' debit balances 4.40 Uncollected Premiums from Direct Business 4.50 Investment Income due or accrued 4.60 Amounts receivable from Reinsurers 4.70 Amounts due from members (Mutual Companies) 4.80 Other-specify Total

5.00 INTANGIBLES Specify

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/9 E. NOTES TO THE BALANCE SHEET (Continued) CURRENT YEAR AFL PREVIOUS YEAR AFL

6.00 TECHNICAL PROVISIONS 6.10 NET UNEARNED PREMIUM PROVISION 6.11 Accident and Health 6.12 Motor Vehicle 6.13 Marine, Transport and Aviation 6.14 Property 6.15 Other-specify Subtotal 6.20 NET CLAIMS PROVISION 6.21 Accident and Health 6.22 Motor Vehicle 6.23 Marine, Transport and Aviation 6.24 Property 6.25 Other-specify Subtotal 6.30 FUNDS PROVISION 6.31 Accident and Health 6.32 Motor Vehicle 6.33 Marine, Transport and Aviation 6.34 Property 6.35 Other-specify Subtotal 6.40 OTHER TECHNICAL PROVISIONS 6.41 Accident and Health 6.42 Motor Vehicle 6.43 Marine, Transport and Aviation 6.44 Property 6.45 Other-specify Subtotal TOTAL

7.00 LONG TERM LIABILITIES 7.10 Loans from Financial Institutions 7.20 Members' Loans/Loans Affiliates 7.30 Other-specify TOTAL

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/10 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES E. NOTES TO THE BALANCE SHEET (Continued) CURRENT YEAR AFL PREVIOUS YEAR AFL 8.00 CURRENT LIABILITIES 8.05 Premiums Paid in Advance 8.10 Premiums in Suspense 8.15 Agents' and Brokers' credit balances 8.20 Claims Outstanding 8.25 Bank Overdrafts and Loans 8.30 Amounts due to Reinsurers 8.35 Corporate Taxes Payable 8.40 Dividends Payable to Policyholders 8.45 Dividends Payable to Shareholders 8.50 Amounts Payable to Members (Mutual Companies) 8.55 Amounts Payable to Affiliated Companies 8.60 Other-specify TOTAL

9.00 SHAREHOLDERS’ EQUITY 9.10 Issued and paid-in Capital 9.20 Reserves-specify 9.30 Retained Earnings TOTAL

OFF-BALANCE SHEET ITEMS Contingent Liabilities-specify Commitments-specify Related Party Transactions-specify

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/11 F. OTHER ITEMS-NOTES TO THE BALANCE SHEET

CURRENT YEAR Other item description Other item specified AFL 1.60 Investments other 2.40 Fixed assets other 4.80 Current assets other 5.00 Intangibles 7.30 Long term liabilities other 8.60 Current liabilities other 9.20 Reserves Items pertaining to form E. Notes to the balance sheet for which further specification is required.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/12 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES G. OTHER ITEMS-NOTES TO THE INCOME STATEMENT

CURRENT YEAR Other item description Other item specified AFL 2.16 Direct investment income other 2.24 Indirect investment income other 3.00 Other income 6.20 General and administrative expenses other

Items pertaining to form H. Notes to the income statement for which further specification is required.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/13 H. NOTES TO THE INCOME STATEMENT CURRENT YEAR AFL PREVIOUS YEAR AFL 1.00 NET EARNED PREMIUMS 1.10 Direct Written Premiums 1.20 Assumed Premiums Gross Written Premiums 1.30 Less: Ceded Premiums Net Written Premiums 1.40 Change In Unearned Premium Provision TOTAL

2.00 INVESTMENT INCOME 2.10 DIRECT INVESTMENT INCOME 2.11 Dividend 2.12 Interest Bonds 2.13 Income from rent 2.14 Interest Time Deposits 2.15 Interest Loans 2.16 Other-specify Subtotal

2.20 INDIRECT INVESTMENT INCOME 2.21 Revaluation Adjustments 2.22 Capital Gain/(Loss) On Sales 2.23 Capital Gain/(Loss) On Exchange Rates 2.24 Other-specify Subtotal TOTAL

3.00 OTHER INCOME-specify

4.00 NET CLAIMS INCURRED 4.10 Direct Claims Paid 4.20 Assumed Claims Paid Gross Claims Paid 4.30 Less: Ceded Claims Recovered Net Claims Paid 4.40 Change In Net Claims Provision TOTAL

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/14 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES H. NOTES TO THE INCOME STATEMENT (Continued)

CURRENT YEAR AFL PREVIOUS YEAR AFL 6.00 GENERAL AND ADMINISTRATIVE EXPENSES 6.10 Personnel costs (including social premiums) 6.20 Other-specify TOTAL

7.00 CHANGES IN TECHNICAL PROVISIONS 7.10 Change in Funds Provision 7.20 Change in other Technical Provisions TOTAL

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/15 I. NOTES TO THE INCOME STATEMENT BY INDEMNITY GROUP Direct written premium Assumed premiums Gross Written premiums Ceded premiums Net written premiums Change in unearned premiums provisions Net earned premium 1.10 Accident & health

1.11 Accident 1.12 Medical 1.13 Disability 1.14 Other Subtotal 1.20 Motor Vehicle 1.21 All risk 1.22 Third party liability 1.23 Disability 1.24 Other Subtotal 1.30 Marine, transport and aviation

1.31 Ocean Marine 1.32 Inland Marine 1.33 Aircraft 1.34 Other Subtotal 1.40 Property 1.41 Fire 1.42 Homeowners multiple peril

1.43 Commercial multiple peril 1.44 Business interruption 1.45 Burglary and theft 1.46 Other Subtotal 1.50 Other 1.51 Other-specify Subtotal TOTAL

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/16 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES J. BREAK-DOWN OF THE INVESTMENTS AFL LOCAL INVESTMENTS 1) Afl. Fc FOREIGN INVESTMENTS TOTAL

1.00 INVESTMENTS

1.10 SHARES

1.20 BONDS

1.30 REAL ESTATE 1.31 - OWN USE 1.32 - OTHER

1.40 TIME DEPOSITS

1.50 OTHER LOANS 1.51 - SECURED 1.52 - UNSECURED

1.60 OTHER-SPECIFY TOTAL INVESTMENTS

Local investments denominated in local currency (Afl.) and foreign currencies (Fc).

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/17 K. THE 40-60% INVESTMENT RULE Table I % of Total liabilities insurance companies 1) Required amount in Local Investments Total liability 40% First 10 million 4 million

50% Second 10 million 5 million 60% Remainder 60% of the remainder TOTAL 9 million + 60% of the remainder Table II AFL Total Liabilities 1) Required local investments (40%)

Required local investments (50%) Required local investments (60%) Total required local investments (A) Actual local investments 2) (B) Surplus/Deficit (B-A)

Excluding shareholders’ equity (paid-in capital, reserves and retained earnings) or assigned capital.
Local investments denominated in Aruban Florins and foreign currencies. It should be emphasized that no rights can be derived from the 40–60% investment rule, which is merely one of the criteria the CBA uses to evaluate requests from institutional investors for a foreign exchange license. Account is also taken, among other things, of the monetary policy stance and the development in the official reserve position.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/18 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES L. COVERAGE TEST AFL Admissible assets Outstanding amount Weight Factor Weighted Assets 1.00 Investments % 1.10 Shares ............... 80% ............... 1.20 Bonds Government bonds ............... 100% ............... Corporate: Highest or strong credit quality ............... 95% ............... Corporate: Upper medium to medium low quality ............... 85% ............... 1.30 Real estate ............... 90% ............... 1.40 Time deposits ............... 100% ............... 1.51 Loans-secured ............... 100% ............... 1.52 Loans-unsecured ............... 95% ............... 1.60 Other ............... 65% ...............

2.00 Fixed assets 2.10 Real estate ............... 90% ............... 2.20/2.30/2.40 Other fixed assets ............... 65% ............... 3.00 Affiliated Companies 1 ............... 90% ............... 4.00 Current assets 4.10 Cash in Hand ............... 100% ............... 4.20 Due from other depository corporations ............... 100% ............... 4.30 Agents’/brokers’ balances, 90 days and under ............... 100% ............... 4.40 Uncollected premiums, 90 days and under ............... 100% ............... 4.50 Investment income due, 90 days and under ............... 100% ............... 4.60 Amounts receivable from reinsurers ............... 100% ............... 4.70 Amounts due from members 2 ............... 100% ............... 4.80 Other ............... 100% ...............

Total weighted assets ............... 8.00 Less: Current liabilities 3 ............... Assets available to cover Technical provisions ...............

6.00 Less: Technical provisions ...............

Surplus or (Deficit) ............... Coverage ratio (in percent) ............... For further guidance please refer to the CBA’s guidelines on the coverage test.

Only branches and agencies of nonlife insurance companies are allowed to include claims on affiliated companies under this line item.
Only applicable to mutual insurance companies.
Excluding liabilities to affiliated companies.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/19 M. SOLVENCY MARGIN REQUIREMENT According to article 14, second paragraph of the SOSIB, an insurer engaged in the general (non-life) insurance business must have a solvency margin equal to the highest outcome of one of the following calculations: a. 15% of the gross premiums booked in the preceding financial year, or b. 15% of the average gross claims incurred in the last three financial years. However, there is a minimum solvency requirement of Afl. 300,000. Solvency Margin Calculation Nonlife Insurance Companies Amounts in AFL 1,000 9.00 Shareholders’ Equity (= available solvency margin) A ………………..

5% of Total investments ………………..

Excess intercompany current accounts receivable1 B ………………..

15% gross premium income; or ………………..

15% of the average gross claims incurred ……………….. or a minimum of AFL 300,000 300 Required solvency margin2 C ……………….. Surplus/(Deficit) (A-B-C) ………………..

The outstanding amount of intercompany current accounts receivable that exceeds 5% of Total investments. Not applicable to branches or agencies. Branches or agencies should fill out 0 (zero) under this line item.
Highest outcome of either:  15% of the gross premiums booked in the preceding financial year, or  15% of the average gross claims incurred in the last three financial years, or  a minimum of Afl. 300,000.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/20 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES N. ADMISSIBLE ASSETS TO COVER THE MINIMUM SOLVENCY MARGIN OF AFL 300,000 Assets to cover minimum Solvency Margin of AFL 300,000 Amounts in AFL 1 Treasury Bonds issued by the Government of Aruba 2 Shares certificates, debentures, profit-sharing certificate and other similar securities 3 Proof of Partnership rights 4 Certificates of the assets as referred to in points 2 and 3 5 Scrip certificates of the assets as referred to in points 1 up to and including 3 6 Acknowledgement of debt towards the insurer, not being treasury bills or debentures, issued by or guaranteed by the Government of Aruba or other public entities in Aruba 7 Acknowledgement of debt towards the insurer, not being debentures, issued by companies incorporated in Aruba or issued by companies incorporated in Aruba for which a license pursuant to article 4 or 24 of the State Ordinance on the Supervision on the Credit System (AB 1998 no. 16) has been granted TOTAL For further guidance please refer to the CBA’s guidelines on the solvency margin.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/21 I. AUDITORS’ REPORT

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/22 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II. ACTUARIAL REPORT

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.3/23 III. ACTUARIAL CERTIFICATION

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.3/24 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.4/1 I.4 QUARTERLY REPORTS LIFE INSURANCE COMPANIES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.4/2 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES A. BALANCE SHEET CURRENT QUARTER AFL Resident Non-resident Total ASSETS 1.00 Investments 2.00 Fixed Assets 3.00 Affiliated Companies 4.00 Current Assets 5.00 Intangibles

TOTAL ASSETS

LIABILITIES AND SHAREHOLDERS’ EQUITY

6.00 Technical Provisions 7.00 Long Term Liabilities 8.00 Current Liabilities

TOTAL LIABILITIES

9.00 Shareholders' Equity 1 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1 The assigned capital in the case of a branch or agency.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.4/3 B. INCOME STATEMENT

CURRENT QUARTER AFL

INCOME

1.00 Net earned premiums 2.00 Investment income 3.00 Other income

10.00 Less: Corporate taxes NET INCOME (LOSS) AFTER TAXES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.4/4 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES D. NOTES TO THE BALANCE SHEET CURRENT QUARTER AFL Resident Non-resident Total 1.00 INVESTMENTS 1.10 Shares 1.20 Bonds 1.30 Real Estate 1.40 Time Deposits 1.50 Mortgage Loans 1.60 Policy Loans 1.70 Other Loans 1.71 - Secured 1.72 - Unsecured 1.80 Other-specify Total

2.00 FIXED ASSETS 2.10 Real Estate 2.20 Office Furniture and Equipment 2.30 Other-specify Total

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.4/5 D. NOTES TO THE BALANCE SHEET (Continued) CURRENT QUARTER AFL Resident Non-resident Total 6.00 TECHNICAL PROVISIONS 6.10 Previous Quarter 6.20 Additions 6.30 Deductions Total

7.00 LONG TERM LIABILITIES 7.10 Loans form Financial Institutions 7.20 Members’ Loan/Loans affiliates 7.30 Other-specify Total

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.4/6 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES E. NOTES TO THE INCOME STATEMENT CURRENT QUARTER AFL 1.00 NET EARNED PREMIUMS 1.10 Direct Written Premiums 1.20 Assumed Reinsurance Premiums Gross Written Premiums 1.30 Less: Ceded Reinsurance Premiums Total

2.20 Indirect Investment Income 2.21 Revaluation Adjustments 2.22 Capital Gain / (Loss) On Sales 2.23 Other-specify Sub-total TOTAL INVESTMENT INCOME

3.00 OTHER INCOME Specify

4.00 NET CLAIMS INCURRED 4.10 Deaths Claims 4.20 Maturities / lapses 4.30 Surrenders 4.40 Other-specify 4.50 Less: Ceded Claims Recovered Total

6.00 GENERAL AND ADMINISTRATIVE EXPENSES 6.10 Personnel costs (including social premiums) 6.20 Other-specify Total

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.4/7 F. OTHER ITEMS-NOTES TO THE BALANCE SHEET CURRENT QUARTER AFL Other item description Other item specified Resident Non-resident Total 1.80 Investments other 2.30 Fixed assets other 4.80 Current assets other 5.00 Intangibles 7.30 Long term liabilities other 8.55 Current liabilities other 9.20 Reserves

Items pertaining to form D. Notes to the balance sheet for which further specification is required.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.4/8 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES G. OTHER ITEMS-NOTES TO THE INCOME STATEMENT CURRENT QUARTER Other item description Other item specified AFL 2.18 Direct investment income other 2.23 Indirect investment income other 3.00 Other income 4.40 Net claims incurred other 6.20 General and administrative expenses other Items pertaining to form E. Notes to the income statement for which further specification is required.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.4/9 H. BREAK-DOWN OF THE INVESTMENTS AFL LOCAL INVESTMENTS 1) Afl. Fc FOREIGN INVESTMENTS TOTAL

1.00 INVESTMENTS

1.10 Shares

1.20 Bonds

1.30 Real estate 1.31 - Own use 1.32 - Other

1.40 Time deposits

1.50 Mortgage loans

1.60 Policy loans

1.70 Other loans 1.71 - Secured 1.72 - Unsecured

1.80 Other-specify

TOTAL INVESTMENTS

Local investments denominated in local currency (Afl.) and foreign currencies (Fc).

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.4/10 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I. THE 40-60% INVESTMENT RULE Table I % of Total liabilities insurance companies 1) Required amount in Local Investments Total liability 40% First 10 million 4 million

50% Second 10 million 5 million 60% Remainder 60% of the remainder TOTAL 9 million + 60% of the remainder

Excluding shareholders’ equity (paid-in capital, reserves and retained earnings) or assigned capital. Table II AFL Total Liabilities 1)

Required local investments (40%)

Required local investments (50%)

Required local investments (60%)

Total required local investments (A)

Actual local investments 2) (B)

Surplus/Deficit (B-A) 2) Local investments denominated in Aruban Florins and foreign currencies. It should be emphasized that no rights can be derived from the 40–60% investment rule, which is merely one of the criteria the CBA uses to evaluate requests from institutional investors for a foreign exchange license. Account is also taken, among other things, of the monetary policy stance and the development in the official reserve position.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.4/11 J. COVERAGE TEST 1 ADMISSABLE ASSETS Outstanding Amount Weight Factor Weighted Assets 1.00 Investments 1.10 Shares ............... 80% ................ 1.20 Bonds Government Bonds ............... 100% ................ Corporate-High credit quality ............... 95% ................ Corporate-Medium to low grade quality ............... 85% ................ 1.30 Real Estate ............... 90% ................ 1.40 Time Deposits ............... 100% ................ 1.50-1.60 Mortgage and Policy Loans ............... 100% ................ 1.71 Other Loans – secured ............... 100% ................ 1.72 Other loans – unsecured ............... 95% ................ 1.80 Other investments ............... 65% ................

2.00 Fixed Assets: 2.10 Real Estate-in own use ............... 90% ................ 2.20-2.40 Other Fixed Assets ............... 65% ................

3.00 Affiliated companies2 ............... 90% ................

8.00 Less: Current liabilities 4 ................

Assets available to cover Technical Provisions ................

6.00 Less: Technical Provisions ................

Surplus or (Deficit) ................ Coverage ratio (in percent) ................ For further guidance please refer to the CBA’s guidelines on the coverage test.

In case the company sells insured investment products, whereby the policyholder bears the complete investment risk, the investments and technical provisions associated with these products should not be included in the coverage test calculation. In such case an explanatory note should be added to the coverage test sheet.
Only branches and agencies of life insurance companies are allowed to include claims on affiliated companies under this line item.
Only applicable to mutual insurance companies.
Excluding liabilities to affiliated companies.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.4/12 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES K. SOLVENCY MARGIN REQUIREMENT According to article 14, paragraph 1 of the SOSIB, an insurer engaged in the life insurance business must have a solvency margin equal eight percent of the provision for insurance obligations at the end of the preceding financial year, without taking the reinsurance portion of these obligations into account. Furthermore, pursuant to the third paragraph of this article, an insurer must comply with the Solvency Guidelines issued by the CBA. In the case of a life insurer AFL 400,000 if the insurer is doing strictly doing life insurance or AFL 500,000 if the insurer has been doing both life, accident & sickness insurance prior to July 2001 within the same legal entity Solvency Margin Calculation Life Insurance Company Amounts in AFL 1,000 9.00 Shareholders’ Equity (= available solvency margin) A ………………..

5% of Total investments ………………..

Excess intercompany current accounts receivable1 B ………………..

6.00 Technical Provisions ……………….. 8% thereof or ……………….. a minimum of AFL 400,000 or AFL 500,000 ……………….. Required solvency margin2 C ……………….. Surplus/(Deficit) (A-B-C) ………………..

The outstanding amount of intercompany current accounts receivable that exceeds 5% of Total investments. Not applicable to branches or agencies. Branches or agencies should fill out 0 (zero) under this line item.
The highest outcome of either:  8% of the “Provision for Insurance Obligations” in the preceding financial year, or  AFL 400,000 if the insurer is doing strictly doing life insurance, or  AFL 500,000 if the insurer has been doing both life, accident & sickness insurance prior to July 2001 within the same legal entity.

DIGITAL SUBMISSION OF THE GUIDELINES REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.5/1 I.5 QUARTERLY REPORTS NONLIFE INSURANCE COMPANIES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.5/2 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES A. BALANCE SHEET CURRENT QUARTER AFL Resident Non-resident Total ASSETS 1.00 Investments 2.00 Fixed Assets 3.00 Affiliated Companies 4.00 Current Assets 5.00 Intangibles

TOTAL ASSETS

LIABILITIES AND SHAREHOLDERS’ EQUITY

6.00 Technical Provisions 7.00 Long Term Liabilities 8.00 Current Liabilities

TOTAL LIABILITIES

9.00 Shareholders' Equity 1 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1 The assigned capital in the case of a branch or agency.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.5/3 B. INCOME STATEMENT CURRENT QUARTER AFL INCOME 1.00 Net earned premiums 2.00 Investment income 3.00 Other income

10.00 Less: Corporate taxes NET INCOME (LOSS) AFTER TAXES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.5/4 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES C. INCOME STATEMENT BY INDEMNITY GROUP Current quarter in AFL Accident & Health Motor Vehicle Marine Transport & Aviation Property Other Total

INCOME 1.00 Net Earned Premiums 2.00 Investment Income 3.00 Other Income TOTAL INCOME

EXPENDITURES

4.00 Net Claims Incurred 5.00 Commissions and other Acquisition costs 6.00 General and Administrative Expenses 7.00 Changes in Technical Provisions 8.00 Policyholders’ Dividend 9.00 Other Expenditure TOTAL EXPENDITURES NET INCOME (LOSS) BEFORE TAXES

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.5/5 E. NOTES TO THE BALANCE SHEET CURRENT QUARTER AFL Resident Non-resident Total 1.00 INVESTMENTS 1.10 Shares 1.20 Bonds 1.30 Real Estate 1.40 Time Deposits 1.50 Loans 1.51 - Secured 1.52 - Unsecured 1.60 Other-specify Total

2.00 FIXED ASSETS 2.10 Real Estate 2.20 Office Furniture and Equipment 2.30 Motor Vehicles 2.40 Other-specify Total

3.00 AFFILIATED COMPANIES 3.10 Shares 3.20 Loans 3.30 Current Accounts 3.40 Other-specify Total

5.00 INTANGIBLES Specify

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.5/6 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES E. NOTES TO THE BALANCE SHEET (Continued) CURRENT QUARTER AFL Resident Non-resident Total 6.00 TECHNICAL PROVISIONS 6.10 NET UNEARNED PREMIUM PROVISION 6.11 Accident and Health 6.12 Motor Vehicle 6.13 Marine, Transport and Aviation 6.14 Property 6.15 Other-specify Subtotal 6.20 NET CLAIMS PROVISION 6.21 Accident and Health 6.22 Motor Vehicle 6.23 Marine, Transport and Aviation 6.24 Property 6.25 Other-specify Subtotal 6.30 FUNDS PROVISION 6.31 Accident and Health 6.32 Motor Vehicle 6.33 Marine, Transport and Aviation 6.34 Property 6.35 Other-specify Subtotal 6.40 OTHER TECHNICAL PROVISIONS 6.41 Accident and Health 6.42 Motor Vehicle 6.43 Marine, Transport and Aviation 6.44 Property 6.45 Other-specify Subtotal TOTAL

7.00 LONG TERM LIABILITIES 7.10 Loans from Financial Institutions 7.20 Members' Loans/Loans Affiliates 7.30 Other-specify TOTAL

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.5/7 E. NOTES TO THE BALANCE SHEET (Continued) CURRENT QUARTER AFL Resident Non-resident Total 8.00 CURRENT LIABILITIES 8.05 Premiums Paid in Advance 8.10 Premiums in Suspense 8.15 Agents' and Brokers' credit balances 8.20 Claims Outstanding 8.25 Bank Overdrafts and Loans 8.30 Amounts due to Reinsurers 8.35 Corporate Taxes Payable 8.40 Dividends Payable to Policyholders 8.45 Dividends Payable to Shareholders 8.50 Amounts Payable to Members (Mutual Companies) 8.55 Amounts Payable to Affiliated Companies 8.60 Other-specify TOTAL

9.00 SHAREHOLDERS’ EQUITY 9.10 Issued and paid-in Capital 9.20 Reserves-specify 9.30 Retained Earnings TOTAL OFF-BALANCE SHEET ITEMS Contingent Liabilities-specify Commitments-specify Related Party Transactions-specify

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.5/8 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES F. OTHER ITEMS-NOTES TO THE BALANCE SHEET

CURRENT QUARTER Other item description Other item specified AFL 1.60 Investments other 2.40 Fixed assets other 4.80 Current assets other 5.00 Intangibles 7.30 Long term liabilities other 8.60 Current liabilities other 9.20 Reserves Items pertaining to form E. Notes to the balance sheet for which further specification is required.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.5/9 G. OTHER ITEMS-NOTES TO THE INCOME STATEMENT

CURRENT QUARTER Other item description Other item specified AFL 2.16 Direct investment income other 2.24 Indirect investment income other 3.00 Other income 6.20 General and administrative expenses other

Items pertaining to form H. Notes to the income statement for which further specification is required.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.5/10 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES H. NOTES TO THE INCOME STATEMENT CURRENT QUARTER AFL 1.00 NET EARNED PREMIUMS 1.10 Direct Written Premiums 1.20 Assumed Premiums Gross Written Premiums 1.30 Less: Ceded Premiums Net Written Premiums 1.40 Change In Unearned Premium Provision TOTAL

2.00 INVESTMENT INCOME 2.10 DIRECT INVESTMENT INCOME 2.11 Dividend 2.12 Interest Bonds 2.13 Income from rent 2.14 Interest Time Deposits 2.15 Interest Loans 2.16 Other-specify Subtotal

2.20 INDIRECT INVESTMENT INCOME 2.21 Revaluation Adjustments 2.22 Capital Gain/(Loss) On Sales 2.23 Capital Gain/(Loss) On Exchange Rates 2.24 Other-specify Subtotal TOTAL

3.00 OTHER INCOME-specify

4.00 NET CLAIMS INCURRED 4.10 Direct Claims Paid 4.20 Assumed Claims Paid Gross Claims Paid 4.30 Less: Ceded Claims Recovered Net Claims Paid 4.40 Change In Net Claims Provision TOTAL

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.5/11 H. NOTES TO THE INCOME STATEMENT (Continued)

CURRENT QUARTER AFL 6.00 GENERAL AND ADMINISTRATIVE EXPENSES 6.10 Personnel costs (including social premiums) 6.20 Other-specify TOTAL

7.00 CHANGES IN TECHNICAL PROVISIONS 7.10 Change in Funds Provision 7.20 Change in other Technical Provisions TOTAL

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.5/12 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I. NOTES TO THE INCOME STATEMENT BY INDEMNITY GROUP Direct written premium Assumed premiums Gross Written premiums Ceded premiums Net written premiums Change in unearned premiums provisions Net earned premium 1.10 Accident & health

1.11 Accident 1.12 Medical 1.13 Disability 1.14 Other Subtotal 1.20 Motor Vehicle 1.21 All risk 1.22 Third party liability 1.23 Disability 1.24 Other Subtotal 1.30 Marine, transport and aviation

1.31 Ocean Marine 1.32 Inland Marine 1.33 Aircraft 1.34 Other Subtotal 1.40 Property 1.41 Fire 1.42 Homeowners multiple peril

1.43 Commercial multiple peril 1.44 Business interruption 1.45 Burglary and theft 1.46 Other Subtotal 1.50 Other 1.51 Other-specify Subtotal TOTAL

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.5/13 J. BREAK-DOWN OF THE INVESTMENTS AFL LOCAL INVESTMENTS 1) Afl. Fc FOREIGN INVESTMENTS TOTAL

1.00 INVESTMENTS

1.10 SHARES

1.20 BONDS

1.30 REAL ESTATE 1.31 - OWN USE 1.32 - OTHER

1.40 TIME DEPOSITS

1.50 OTHER LOANS 1.51 - SECURED 1.52 - UNSECURED

1.60 OTHER-SPECIFY TOTAL INVESTMENTS

Local investments denominated in local currency (Afl.) and foreign currencies (Fc).

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.5/14 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES K. THE 40-60% INVESTMENT RULE Table I % of Total liabilities insurance companies 1) Required amount in Local Investments Total liability 40% First 10 million 4 million

50% Second 10 million 5 million 60% Remainder 60% of the remainder TOTAL 9 million + 60% of the remainder Table II AFL Total Liabilities 1)

Required local investments (40%)

Required local investments (50%)

Required local investments (60%)

Total required local investments (A)

Actual local investments 2) (B)

Surplus/Deficit (B-A)

Excluding shareholders’ equity (paid-in capital, reserves and retained earnings) or assigned capital.
Local investments denominated in Aruban Florins and foreign currencies. It should be emphasized that no rights can be derived from the 40–60% investment rule, which is merely one of the criteria the CBA uses to evaluate requests from institutional investors for a foreign exchange license. Account is also taken, among other things, of the monetary policy stance and the development in the official reserve position.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES I.5/15 L. COVERAGE TEST AFL Admissible assets Outstanding amount Weight Factor Weighted Assets 1.00 Investments % 1.10 Shares ............... 80% ............... 1.20 Bonds Government bonds ............... 100% ............... Corporate: Highest or strong credit quality ............... 95% ............... Corporate: Upper medium to medium low quality ............... 85% ............... 1.30 Real estate ............... 90% ............... 1.40 Time deposits ............... 100% ............... 1.51 Loans-secured ............... 100% ............... 1.52 Loans-unsecured ............... 95% ............... 1.60 Other ............... 65% ...............

Total weighted assets ............... 8.00 Less: Current liabilities 3 ............... Assets available to cover Technical provisions ...............

6.00 Less: Technical provisions ...............

Surplus or (Deficit) ............... Coverage ratio (in percent) ............... For further guidance please refer to the CBA’s guidelines on the coverage test.

Only branches and agencies of nonlife insurance companies are allowed to include claims on affiliated companies under this line item.
Only applicable to mutual insurance companies.
Excluding liabilities to affiliated companies.

GUIDELINES FOR THE COMPOSITION AND COMPILATION OF THE ANNUAL STATEMENTS AND QUARTERLY REPORTS I.5/16 CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES M. SOLVENCY MARGIN REQUIREMENT According to article 14, second paragraph of the SOSIB, an insurer engaged in the general (non-life) insurance business must have a solvency margin equal to the highest outcome of one of the following calculations: a. 15% of the gross premiums booked in the preceding financial year, or b. 15% of the average gross claims incurred in the last three financial years. However, there is a minimum solvency requirement of Afl. 300,000. Solvency Margin Calculation Nonlife Insurance Companies Amounts in AFL 1,000 9.00 Shareholders’ Equity (= available solvency margin) A ………………..

5% of Total investments ………………..

Excess intercompany current accounts receivable1 B ………………..

15% gross premium income; or ………………..

15% of the average gross claims incurred ……………….. or a minimum of AFL 300,000 300 Required solvency margin2 C ……………….. Surplus/(Deficit) (A-B-C) ………………..

The outstanding amount of intercompany current accounts receivable that exceeds 5% of Total investments. Not applicable to branches or agencies. Branches or agencies should fill out 0 (zero) under this line item.
Highest outcome of either:  15% of the gross premiums booked in the preceding financial year, or  15% of the average gross claims incurred in the last three financial years, or  a minimum of Afl. 300,000.

Part II Supervisory Guidelines and Directives

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.1/1 II.1 Guidelines on Asset Management

Preamble This guideline containing “best practices” with respect to asset management is largely based on the supervisory standard on Asset Management by Insurance Companies issued by the International Association of Insurance Supervisors (IAIS). The objective of this guideline is to describe the essential elements of a sound asset management system and reporting framework across the full range of investment activities. Given the wide variation in the nature of companies, it is acknowledged that the extent of the application of the practices described in this guideline by any given insurer may differ according to the size and structure of an insurance company and the type of business it conducts. However, the basic principles of sound corporate governance, the need for an investment policy, segregation of duties and control are applicable to all insurance companies.
Introduction 2.1 Asset Liability Management A key driver of the asset strategy adopted by an insurer will be its liabilities profile, and the need to ensure that it holds sufficient assets of appropriate nature, term and liquidity to enable it to meet the liabilities as they become due. Detailed analysis and management of this asset/liability relationship will therefore be a pre-requisite to the development and review of investment policies and procedures, which seek to ensure that the insurer adequately manages the investment-related risks to its solvency. 2.2 The Investment Process Depending upon the nature of their liabilities insurers will typically hold, in varying proportions, four main types of financial assets either directly, via other investment vehicles, or through third party investment managers: a. Bonds and other fixed income instruments; b. Equities and equity type investments; c. Debts, deposits and other rights; d. Property. The holding of a given asset portfolio carries a range of investment-related risks to technical provisions and solvency which insurers need to monitor, measure, report and control.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.1/2 The main risks are market risk (adverse movements in, for example, stocks, bonds and exchange rates), credit risk (counterparty failure), liquidity risk (inability to unwind a position at or near market price), operational risk (system/internal control failure), and legal risk. The actual composition of an asset portfolio at any given moment should be the product of a well-structured investment process itself, which for the purposes of this standard is regarded as a circular movement characterized by the following steps: a. Formulation and development of a strategic and tactical investment policy; b. Implementation of the investment policy, in a suitably equipped investment organization, and on the basis of a clear and precise investment mandate(s); c. Control, measurement and analysis of the investment results which have been achieved and the risks taken; d. Feedback to the appropriate level of authority on points a, b and c.

The insurers should develop and operate overall asset management strategies, which take account of the need to ensure the existence of: a. The definition of a strategic investment policy by the Board in consultation with senior-management, based on an assessment of the risks incurred by the company and its risk appetite; b. On-going Board and senior management oversight of, and clear management accountability for, investment activities; c. Comprehensive, accurate and flexible systems that allow the identification, measurement and assessment of investment risks, and the aggregation of those risks at various levels, and for any given time. d. Key control structures, such as the segregation of duties, approvals, verifications, reconciliations; e. Adequate procedures for the measurement and assessment of investment performance; f. Adequate and timely communication of information on investment activities between all levels within the insurance company; g. Internal procedures to review the appropriateness of the investment policies and procedures in place; h. Effective audit procedures and monitoring activities to identify and report weaknesses in investment controls and compliance. i. Procedures to identify and control the dependence on and vulnerability of the insurer to key personnel and systems. The following sections further develop the above principles, recognizing that less formalized structures and procedures than those described herein may be applicable depending on the size and nature of the business of an individual insurer.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.1/3 3. Definition of the Investment Policy and Procedures 3.1 Supervisory Board The Board in consultation with senior management is responsible for the designing of the strategic investment policy, taking account of the analysis of the asset/liability relationship, the insurer’s overall risk tolerance, its long-term risk-return requirements, its liquidity requirements and its solvency position. The Board should authorize senior management to implement the overall established investment policy. The Board should, however, retain ultimate responsibility for the company’s investment policy and procedures, regardless of the extent to which associated activities and functions are delegated or, outsourced. As part of the development of the asset management strategy, the Board must also ensure that adequate reporting and internal control systems of the insurer are in place, and designed to monitor that assets are being managed in accordance with the investment policy and mandate(s), and legal and legal and regulatory requirements. The Board must ensure that: a. They receive regular information, including feedback from the company’s risk management function, on asset exposures, and the associated risks, in a form which is understood by them and which permits them to make an informed judgement as to the level of risk on a mark-to-market basis; b. The systems provide accurate and timely information on asset risk exposure and are capable of responding to ad hoc requests; c. The internal controls include an adequate segregation of the functions responsible for measuring, monitoring and controlling investment activities from those conducting day to day asset transactions; Where external asset managers are used, the Board must ensure that senior management is in a position to monitor the performance of the external managers against Board approved policies and procedures. External managers should be engaged under a contract that, inter alia, sets out the policies, procedures and quantitative limits of the investment mandate. The insurer must retain appropriate expertise and ensure that, under the terms of the contract, it regularly receives sufficient information to evaluate the compliance of the external asset manager with the investment mandate. The Board should collectively have sufficient expertise to understand the important issues related to investment policy and should ensure that all individuals conducting and monitoring investment activities have sufficient levels of knowledge and experience.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.1/4 At least annually, the Board in consultation with senior management should review the adequacy of its overall investment policy in the light of the insurance company’s activities, and its overall risk tolerance, long-term risk-return requirements and solvency position.

3.2 Senior Management Senior management should be responsible for the preparation of written operational policies and procedures for implanting the overall investment policy established by the Board. The precise content of these policies and procedures will be different for each insurance company but the level of detail should be consistent with the nature of any regulatory constraint and complexity and volume of investment activity, and should specify as approciate: a. The investment objective and the determination of the strategic asset allocation, that is, the long-term asset mix over the main investment categories; b. The establishment of limits for the allocation of assets by geographical area, markets, sectors, counterparties and currency; c. The formulation of an overall policy on the selection of individual securities and other investment titles; d. The adoption of passive or more active investment management in relation to each level of decision making; e. In the case of active management, definition of the scope for investment flexibility, usually through the setting of quantitative asset exposure limits; f. The extent to which the holding of some types of assets is ruled out or restricted where, for example, the disposal of the asset could be difficult due to the illiquidity of the market or where independent (i.e. external) verification of pricing is not available; g. An overall policy on the use of financial derivatives as part of the general portfolio management process or of structured products that have the economic effect of derivatives; h. The framework of accountability for all asset transactions; Senior management should also be responsible for establishing policies on related issues of a more operational nature, including: a. The choice between internal or external investment management, and, for the latter, the criteria for selection of the manager(s). Also, in case of external management, a choice usually needs to be made between having a segregated (discretionary) portfolio managed, or participating in a collective or pooled fund, or other indirect investment vehicle; b. The selection and the use of brokers; c. The nature of custodial arrangements; d. The methodology and frequency of the performance measurement and analysis.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.1/5 Supporting internal management procedures should be documented and include: a. Procedures for seeking approval for the usage of new types of investment instruments: the desirability of retaining the flexibility to utilize new investment instruments should be balanced with the need to identify the risks inherent in them and ensure that they will be subject to adequate controls before approval is given for their acquisition. The principles for measuring such risk, and the methods of accounting for the new investments should be clarified in detail prior to approval being given for their acquisition; b. Procedures for the selection and approval of new counterparties and brokers; c. Procedures covering front office, back office, measurement of compliance with quantitative limits, control and reporting; d. Details of the action which will be taken by senior management in cases of noncompliance; e. Valuation procedures for risk management purposes; f. Identification of who should be responsible for the valuation. Valuations should be carried out by individuals independent of those responsible for trade execution or, if this is not possible, valuations should be independently checked or audited on a timely basis. Accounting and taxation rules should be taken into consideration in developing the above operational policies and procedures. Senior management should ensure that all individuals conducting, monitoring and controlling investment activities are suitably qualified and have appropriate levels of knowledge and experience. At least annually, senior management should review the adequacy of its written operational procedures and allocated resources in the light of the insurance company’s activities and market conditions. 4. Monitoring and Control 4.1 Risk Management Function Insurers should be capable of identifying, monitoring, measuring, reporting and controlling the risks connected with investment activities. This process should be performed by a risk management function with responsibility for: a. Monitoring compliance with the approved investment policy; b. Formally noting and promptly reporting breaches;

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.1/6 c. Reviewing asset risk management activity and results over the past period; d. Reviewing the asset/liability and liquidity position. The risk management function should also assess at least on an annual basis the appropriateness of the asset allocation limits. The risk management function should also regularly report to appropriate levels of senior management and, as appropriate, to the Board. The reports should provide aggregate information as well as sufficient detail to enable management to assess the sensitivity of the company to changes in market conditions and other risk factors. The frequency of reporting should provide these individuals with adequate information to judge the changing nature of the insurer’s assets profile, the risks that stem from it and the consequences for the company’s solvency. 4.2 Internal Controls Adequate systems of internal control must be present to ensure that investment activities are properly supervised and that transactions have been entered into only in accordance with the insurer’s approved policies and procedures. Internal control procedures should be documented. The extent and nature of internal controls adopted by each insurer will be different, but procedures to be considered should include: a. Reconciliations between front office and back office and accounting systems; b. Procedures to ensure that any restrictions on the power of all parties to enter into any particular asset transaction are observed. This will require close and regular communication with those responsible for compliance, legal and documentation issues in the insurer; c. Procedures to ensure all parties to the asset transaction agree with the terms of the deal. Procedures for promptly sending, receiving and matching confirmations should be independent of the front office function; d. Procedures to ensure that formal documentation is completed promptly; e. Procedures to ensure reconciliation of positions reported by brokers; f. Procedures to ensure that positions are properly settled and reported, and that late payments or late receipts are identified; g. Procedures to ensure asset transactions are carried out in conformity with prevailing market terms and conditions; h. Procedures to ensure that authority and dealing limits are not exceeded and all breaches can be immediately identified; i. Procedures to ensure the independent checking of rates or prices: the systems should not solely rely on dealers for rate/price information.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.1/7 The functions responsible for measuring, monitoring, settling and controlling asset transactions should be distinct from the front office functions. These functions should be adequately resourced. Regular and timely reports of investment activity should be produced which describe the company’s exposure in clearly understandable terms and include quantitative and qualitative information. The reports should, in principle, be produced on a daily basis for senior management purposes; less frequent reporting may be acceptable depending on the nature and extent of asset transactions. Upward reporting by senior management is recommended on at least a quarterly basis. Reports should at least include the following areas: a. Details of, and commentary on, investment activity in the period and the relevant period end position; b. Details of positions by asset type; c. An analysis of credit exposures by counterparty; d. Details of any regulatory or internal limits breached in the period and the actions taken thereto; e. Planned future activity; f. Details of the relative position of assets and liabilities.

SUPERVISORY DIRECTIVES CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.2/1 II.2 Appointment of an external auditor Directive on the appointment of an external auditor by virtue of article 10 in conjunction with article 15a of the State Ordinance on the Supervision of the Insurance Business (AB 2000 no. 82) (SOSIB) for insurance companies licensed by the Centrale Bank van Aruba (the CBA).

Introduction It is important that supervisors obtain the information they need to properly form an opinion on the financial strength of the operations of each insurance company. This information is obtained, amongst others, from the financial reports that are filed, supported by information obtained through communication with the external auditor. As such, supervisors have a clear interest in ensuring that external audits performed are acceptable and that an adequate relationship between them and the insurance companies’ external auditors exists, essentially based on the principles and guidance formulated by the International Association of Insurance Supervisors. In this respect, high standards of auditing are indispensable. As such, the audit performed should be carried out by external auditors who: • are properly licensed and in good standing; • have relevant professional experience and competence; • are subject to a quality assurance program. In this regard, the external audit firm must have policies and procedures in place on the appointment and eligibility of the engagement quality reviewer, the performance of the engagement quality review(er), and the documentation of the quality review. Said policies and procedures must comply with paragraphs 14 up to and including 30 of the International Standard on Quality Management 2, issued by the International Auditing and Assurance Board; • are independent in fact and in appearance; • are objective and impartial; and • comply with relevant ethical requirements. Relevant ethical requirements are defined as the principles of professional ethics and ethical requirements that are applicable to a professional accountant when undertaking the engagement quality review (e.g., International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) related to audits or reviews of financial statements. As defined under article 1 of the SOSIB an external auditor is: ‘a person who is not employed by the company or institution, being a “registeraccountant” or an “accountantadministratieconsulent” registered pursuant to article 36, paragraph 2, item i, of the Dutch Law on the accounting profession (Stb. 2012, 680)’.
Directive Any appointment of or change in external auditor needs the CBA’s prior written approval. In order to assess the intended appointment or change, the institution concerned and the external auditor are required to complete the “Questionnaire External Auditor” (Annex 2). Reference is also made to the Guidance notes associated with the Questionnaire External Auditor.

SUPERVISORY DIRECTIVES CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.2/2 In case of a change of external auditor, the CBA should also be informed on the reason(s) for the intended change. The CBA will grant its approval if the external auditor complies with the requirements as stipulated in article 1 of the SOSIB and if there are no circumstances that, in the opinion of the CBA, would make the external auditor unfit for the assignment. With regard to the independence in fact and appearance, there may not be any material financial interest, loans and guarantees, business relationships, and family and personal relationships between i) the insurance company, its Managing Board or a member thereof, its Supervisory Board or a member thereof, its direct or indirect shareholder(s), and (ii) the external auditor, the audit firm of the external auditor or a member/partner thereof. The CBA maintains at all times the right to revoke its approval if there are circumstances that in the opinion of the CBA justify such an action. The provision of information to the CBA by the external auditors of insurance companies is covered in article 11, paragraph 2, of the SOSIB. Pursuant to this section, when granting the auditor the assignment to audit the annual accounts, the insurance company shall instruct its auditor in writing to: a. after consultation with the insurance company that granted the assignment, provide the CBA forthwith with a copy of the auditor’s report to the Supervisory Board, of the management letter and of the correspondence that relates directly to the auditor’s report, in so far as these documents are considered to be necessary in reason for the proper fulfillment of the CBA’s supervisory tasks; b. after consultation with the insurance company, inform the CBA in writing forthwith of circumstances that could hinder the issue of an auditor’s report stating that the annual accounts give a true and fair view of the financial position of the insurance company; c. after consultation with the insurance company that granted the assignment, inform the CBA in writing forthwith of circumstances which could endanger the continuity of the insurance company, or from which it appears that there is a serious suspicion of an extensive fraud; and d. furnish the CBA, if required, with additional information on the documents referred to under a. and on the circumstances referred to under b. and c. Subject provisions should be included in the engagement letter. A copy of the draft engagement letter must be attached to the request for the appointment of an external auditor. Upon the CBA’s approval of the external auditor, the final and signed engagement letter must be submitted to the CBA. This directive enters into force as of July 1, 2023.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.3/1 II.3 Guidelines for the actuarial report and the actuarial certification for Life Insurance Companies

Introduction These guidelines must be taken into account for the preparation of the actuarial report and the actuarial certification of the adequacy of the technical provisions disclosed in the Annual Statements of life Insurance Companies.
Guidelines
The certifying actuary shall draw up an actuarial report on his analysis of the financial position of the life insurance company (hereafter: the company) in accordance with the instructions contained in item 2.
The Actuarial Report shall contain the following items: (a) The objective of the report; (b) Substantiated conclusions with regard to the financial position; (c) The methods and principles applied; (d) The methods and techniques used to evaluate the financial position; (e) Comments on the activities of the company and the commercial and institutional environment in which it operates, in so far as this has a bearing on the risk profile of the company; (f) Comments, an opinion and recommendations with regard to the operations, based on an actuarial analysis of all possible factors that may threaten the solvency of the institution in the near future. In addition, the measures or management instruments should be stated which the management of the company may take or use to avert these threats; (g) The declaration, as referred to in section 11 paragraph 3 of the State Ordinance on the Supervision of the Insurance Business (AB 2000 No. 82); (h) Information on financially significant reinsurance agreements (including financial reinsurance) and implicit and explicit options contained therein, with an opinion on the purpose and feasibility of these agreements and the extent of the counterparty risk.
If deemed necessary, the draft of the report to be issued shall be discussed first with the external auditor. The outcome of these discussions with the external auditor shall be disclosed in a separate addendum to the report. Any remarks made by the auditor shall be taken into account. In the event that the actuary does

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.3/2 not wish to incorporate the remarks made by the accountant into the report, he shall include these as a separate addendum and shall provide a commentary. 3. Explanatory notes to items 2(b), (c), (d), (f), (g) and (h) Item 2(b) substantiated conclusions with regard to the financial position The following aspects should be dealt with in the report: (1) Determine the degree of adequacy of the technical provisions as at the balance sheet date for the insurance portfolio as of that date. Furthermore, in determining the adequacy of the provisions, an assessment will have to be made of the sensitivity of changes in the assumptions used. (2) The analyses of the development of the adequacy of the provisions referred to under item (1) compared to the previous year. (3) If the assets to cover the technical provisions are not sufficient (refer to form H: “coverage test” of the annual statements for life insurance companies) the actuarial report must contain notes explaining how this situation arose, the measures that must be taken to remedy the situation and recommendations aimed at preventing such situation in the future. Item 2(c) the methods and principles applied For the evaluation of the financial position it is important to know how the technical provision has been determined. In this regard the following explanation should be provided in the report: (1) The method used to establish the technical provision:

prospective or retrospective;
entry age basis used to determine age at balance sheet date and period until retirement;
individual or aggregate approach. (2) The actuarial principles used to establish the technical provision:
mortality table used;
family structure;
age difference;
actuarial interest rate;

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.3/3 (3) A description of the quality (nature and reliability) of the assumptions used. The relevant assumptions used should be compared to recent, internal and external experience data. In case the assumptions used deviate significantly this should be explained. For example verify the yearly mortality within the portfolio and compare this figure with the expected mortality (used to establish the technical provision). Item 2(d) the methods and techniques used in evaluating the financial position of the company The following information should be provided in the report: (1) The methods, techniques and assumptions used for the evaluation;

Static or dynamic: In case of the static method, the coverage test (as stipulated in the annual filings) can be derived from the balance sheet, whereby the value of the assets are compared to the technical provision. This test should be performed yearly and should be compared with previous year. Significant changes in the outcome of the coverage test should be analyzed;
Changes in the methods applied; (2) Changes in these compared to the previous report; (3) Information on any limitations on the evaluation as a result of a lack of data, shortcomings in the administrative organization and systems, and the qualification that the certifying actuary makes as a consequence of this. Item 2(f) comments, an opinion and recommendations with regard to the operations, based on an actuarial audit of all possible factors that may threaten the solvency of the institution in the future. This relates to risks insofar as these have a bearing on the risk profile of the company, from the perspective of the actuary. The risks that can have a direct influence on the performance of life insurance business are for example changes in the mortality assumptions as well as changes in the investments results as a consequence of for example epidemics or war. Item 2(g) declaration as referred to in section 11 sub 3 of the SOSIB The declaration of the certifying actuary should consist of the following parts:

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.3/4 (1) A description of the relationship of the certifying actuary to the company (internal or external actuary). (2) The professional qualifications of the certifying actuary. (3) The items to which the declaration relates, such as the correct determination of the technical provisions. (4) The extent to which use is made of the work of other experts in the area of administrative data, models and assumptions. (5) The opinion of the certifying actuary with regard to the adequacy of the company’s finances in relation to the settlement of all liabilities arising from the current insurance agreements. (6) Any qualifications in relation to the opinion referred to under point (5). (7) Any deviations from legislation and regulations or from the guidelines issued by the Central Bank van Aruba in respect to the assessment of the financial position of the company, with a statement of the acceptability of and a statement of any risks arising from these deviations. (8) Dating and signing of the report with the personal signature and the name of the actuary; the name of the firm is not sufficient. Item 2(h) information on financially significant reinsurance agreements Financially significant reinsurance agreements shall be understood to be agreements, which, in the event that they were not entered into, would result in clear deviations in the provision and/or the capital adequacy and/or the result and/or the balance-sheet position of the company in question.

SUPERVISORY DIRECTIVES PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.4/1 II.4 Directive on the publication of the Audited Annual Financial Statements

Introduction In order to promote the soundness and integrity of the financial sector, it is necessary that stakeholders (including the public in general) have access to sufficient information to evaluate the financial position and performance of insurance companies. Transparency plays an important role in the constant improvement of the quality of the financial sector. In view thereof, a requirement on public disclosure of relevant, comprehensive and adequate information on a timely basis, in order to give policyholders and market participants a clear view of the insurer’s business activities, risks, performance and financial position, is included in the Insurance Core Principles (ICPs) issued by the International Association of Insurance Supervisors (IAIS).
Legal framework ‘Directive on the Publication of the Audited Annual Financial Statements’ is issued, by virtue of section 10 of the State Ordinance on the Supervision of the Insurance Business (AB 2000 no. 82) (SOSIB) for insurance companies licensed by the Centrale Bank van Aruba. Pursuant to Article 2:116, paragraph 6 and Article 2:171, paragraph 4 of the Civil Code of Aruba (AB 2021 no. 137) (CCA), all insurance companies that are incorporated under Aruban law with the legal status of a public limited company or a limited liability company should, within 8 days after their financial statements have been approved, file complete transcripts of these documents and the accompanying notes with the Aruban Chamber of Commerce. If the insurance company has the legal status of a mutual insurance company (onderlinge waarborgmaatschappij), it must declare in its articles of association that Article 2:120 of the CCA is applicable mutatis mutandis1 . Pursuant to Article 2:120, paragraph 8 of the CCA, it must therefore meet the requirements laid down in Article 2:116, paragraph 6 of the CCA and file complete transcripts of their financial statements and the accompanying notes with the Aruban Chamber of Commerce within 8 days after these documents have been approved.
Directive With due regard to the aforementioned, an insurance company must, within six (6) months after the end of each financial year, publish its audited financial statements by filing subject statements with the Aruban Chamber of Commerce and post these statements on its website. Insurance companies are allowed to exclude information on the compensation of management and the Supervisory Board from the information that is made public. This in view of privacy considerations. Branches and agencies of insurance companies must publish the audited annual financial statements of the legal entity of which they form part by filing subject statements with the Aruban Chamber of Commerce within six (6) months after the end of each financial year and post these statements on their website. This directive enters into force as of February 27, 2023. 1 Reference is made to article 2:94, paragraph 6 of the CCA.

SUPERVISORY DIRECTIVES II.5/1 II.5 Guidelines on the Coverage Test

Legal framework According to article 13 paragraph 1 of the State Ordinance Supervision Insurance business (AB 2000 no. 82) (SOSIB) an insurer is required to maintain adequate technical provisions which are fully covered by assets. The Centrale Bank van Aruba (CBA) may raise objections against the nature and valuation of these assets, which objections shall be promptly met by the insurer. According to article 13 paragraph 2 of the SOSIB, the CBA can provide general guidelines with regard to the contents and the magnitude of the technical provisions.
Purpose The purpose of article 13 of the SOSIB is to ensure that the technical provisions are at all times fully covered by sufficient and acceptable assets in order to guarantee that an insurer can meet its actual and future obligations.
Policy In exhibit 1 (life insurance companies) and 2 (nonlife insurance companies) the CBA has listed the categories of assets that can be maintained to cover the technical provisions with their respective weight factors. In order to address specific risk issues, such as the risk that assets could lose value, the CBA has applied the assets-risk method. This method is part of the so-called “risk-based capital” standards. According to this method a risk factor will be assigned to each assets category. This factor is related to the riskiness of the assets. The riskiness is associated with the insurer’s assets losing value and therefore no longer being adequate to cover the liabilities. In order to determine the required amount needed to cover the risk, individual groups of assets are examined separately. The balance sheet values of the relevant assets categories used are multiplied by factors (percentages), which after they have been multiplied by a risk factor are to reflect the special risk of the asset group (excluding the interest rate risk). The lower the risk, the lower the risk factor applied. Government paper for example bears a 0% risk factor while shares bear a 20% risk factor.
Coverage test The coverage test report is used to assess whether an insurance company has sufficient assets to meet its actual and future obligations. The “total weighted assets” is derived by adding up the sum of the assets multiplied by their respective weight factor. An insurance company is not allowed to include claims (including loans and current account receivables) on affiliated companies when calculating the “total weighted assets”, unless it concerns a branch or agency. The “total weighted assets” less “current liabilities” (excluding liabilities to affiliated companies) are the “Assets available to cover the Technical Provisions”. The “Assets available to cover the Technical Provisions” of an insurance company divided by its “technical provisions” is defined as the Coverage Test Ratio (CTR).

SUPERVISORY DIRECTIVES II5/2 5. The minimum requirement Insurers are required to comply with the minimum CTR at all times. In case of a failure to comply with the minimum CTR, the CBA must be notified immediately. Furthermore, a remediation plan must be prepared and submitted to the CBA for its approval. Life insurance companies Life insurance companies are required to maintain the following coverage ratio: Effective date Minimum CTR January 1, 2025 102 percent January 1, 2026 104 percent January 1, 2027 106 percent January 1, 2028 108 percent January 1, 2029 110 percent Non-life insurance companies The minimum CTR for non-life insurance companies is 100 percent. December 19, 2024

SUPERVISORY DIRECTIVES II.5/3 Exhibit 1: COVERAGE TEST1 FOR LIFE INSURANCE COMPANIES ADMISSABLE ASSETS Outstanding Amount Weight Factor Weighted Assets 1.00 Investments 1.10 Shares ............... 80% ................ 1.20 Bonds Government Bonds ............... 100% ................ Corporate-High credit quality ............... 95% ................ Corporate-Medium to low grade quality ............... 85% ................ 1.30 Real Estate ............... 90% ................ 1.40 Time Deposits ............... 100% ................ 1.50-1.60 Mortgage and Policy Loans ............... 100% ................ 1.71 Other Loans – secured ............... 100% ................ 1.72 Other loans – unsecured ............... 95% ................ 1.80 Other investments ............... 65% ................ 2.00 Fixed Assets: 2.10 Real Estate-in own use ............... 90% ................ 2.20-2.40 Other Fixed Assets ............... 65% ................ 3.00 Affiliated companies 2 ............... 90% ................ 4.00 Current assets: 4.10 Cash on Hand ............... 100% ................ 4.20 Due from other depository corporations ............... 100% ................ 4.30 Agents’/brokers’ balances, 90 days and under ............... 100% ................ 4.40 Uncollected Premiums, 90 days and under ............... 100% ................ 4.50 Investment Income due, 90 days and under ............... 100% ................ 4.60 Reinsurance Receivables ............... 100% ................ 4.70 Amounts due from Members3 ............... 100% ................ 4.80 Other ............... 100% ................ Total weighted assets ............... 8.00 Less: Current liabilities4 ................ Assets available to cover Technical Provisions ................ 6.00 Technical Provisions ................ Coverage Test Ratio (CTR) 5 ................ 1 In case the company sells insured investment products, whereby the policyholder bears the complete investment risk, the investments and technical provisions associated with these products should not be included in the coverage test calculation. In such case an explanatory note should be added to the coverage test sheet. 2 Only branches and agencies of life insurance companies are allowed to include claims on affiliated companies under this line item. 3 Only applicable to mutual insurance companies. 4 Excluding liabilities to affiliated companies. 5 The minimum CTR is as follows: January 1, 2025: 102%, January 1, 2026: 104%, January 1, 2027: 106%, January 1, 2028: 108%, January 1, 2029: 110%.

SUPERVISORY DIRECTIVES II5/4 Exhibit 2: COVERAGE TEST FOR NONLIFE INSURANCE COMPANIES AFL Admissible assets Outstanding amount Weight Factor Weighted Assets 1.00 Investments % 1.10 Shares ............... 80% ............... 1.20 Bonds Government bonds ............... 100% ............... Corporate: Highest or strong credit quality ............... 95% ............... Corporate: Upper medium to medium low quality ............... 85% ............... 1.30 Real estate ............... 90% ............... 1.40 Time deposits ............... 100% ............... 1.51 Loans-secured ............... 100% ............... 1.52 Loans-unsecured ............... 95% ............... 1.60 Other ............... 65% ............... 2.00 Fixed assets 2.10 Real estate ............... 90% 2.20/2.30/2.40 Other fixed assets ............... 65% 3.00 Affiliated Companies 1 ............... 90% 4.00 Current assets 4.10 Cash in Hand ............... 100% 4.20 Due from other depository corporations ............... 100% 4.30 Agents’/brokers’ balances, 90 days and under ............... 100% 4.40 Uncollected Premiums, 90 days and under ............... 100% 4.50 Investment Income due, 90 days and under ............... 100% 4.60 Amounts receivable from reinsurers ............... 100% 4.70 Amounts due from members 2 ............... 100% 4.80 Other ............... 100% Total weighted assets ............... 8.00 Less: Current liabilities 3 ............... Assets available to cover Technical provisions ............... 6.00 Technical provisions ............... Coverage Test Ratio (CTR) 4 ............... 1 Only branches and agencies of nonlife insurance companies are allowed to include claims on affiliated companies under this line item. 2 Only applicable to mutual insurance companies. 3 Excluding liabilities to affiliated companies. 4 The minimum CTR is 100%.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.6/1 II.6 Guidelines on the Solvency Margin

Legal framework Life insurance companies According to article 14, paragraph 1, of the State Ordinance on the Supervision of the Insurance Business (AB 2000 no. 82) (SOSIB) an insurer engaged in the life insurance business must have a solvency margin equal to eight percent of the provision for insurance obligations at the end of the preceding financial year, without taking the reinsurance portion of these obligations into account. Nonlife insurance companies According to article 14, paragraph 2, of the SOSIB an insurer engaged in the nonlife insurance business must have a solvency margin equal to the highest outcome of one of the following calculations:

fifteen percent of the gross premiums booked in the preceding financial year; or
fifteen percent of the average gross claims incurred in the last three financial years. Pursuant to article 14, paragraph 3, of the SOSIB, the Centrale Bank van Aruba (CBA) can give general guidelines with regard to the solvency margin. The CBA may also determine the minimum solvency margin amount that needs to be maintained by an insurer.

Purpose The solvency margin serves as a buffer to ensure that the obligations under the insurance contracts can be met at any time and that the insurer has free financial means (own funds) at its disposal in order to absorb discrepancies between the anticipated and actual expenses and profits.
Definition The following capital elements form the available solvency margin:
“Paid-in capital”;
“Statutory and general reserves”;
“Retained earnings”;
“Asset revaluation reserves”;
“Net income current year”. In case of a mutual insurance company the paid-in capital is considered the policyholders’ surplus. A branch office or an agency does not have “paid-in capital”, in such case the capital assigned to the Aruban operations may be considered as paid-in capital.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.6/2 4. Policy The minimum solvency margin should at all times be held or invested in Aruba. The minimum solvency margin that an insurer must have at its disposal amounts to:

AFL 400,000 if it is engaged in the life insurance business (exhibit 1).
AFL 300,000 if it is engaged in the nonlife insurance business (exhibit 2).
AFL 500,000 for an insurer as referred to in section IX of the Implementation Ordinance on the Supervision of Insurance Business (AB 2001, No. 91) (exhibit 3). The admissible assets to cover the minimum solvency margin are:
Treasury bonds issued by the Government of Aruba;
Shares certificates, debentures, profit-sharing certificate and other similar securities;
Proof of partnership rights;
Certificates of the assets as referred to in points 2 and 3;
Scrip certificates of the assets as referred to in points 1, 2 and 3;
Acknowledgement of debt towards the insurer, not being treasury bills or debentures, issued by or guaranteed by the Government of Aruba or other public entities in Aruba;
Acknowledgement of debt towards the insurer, not being debentures, issued by companies incorporated in Aruba or issued by companies incorporated in Aruba for which a license pursuant to article 4 or 24 of the State Ordinance on the Supervision of the Credit System has been granted. The appraisal and distribution of these assets require the CBA’s prior approval. Furthermore, these assets should be pledged to the CBA and kept in custody of a credit institution supervised by the CBA. Finally, the amount of intercompany current accounts receivable exceeding the maximum of 5 percent of Total investments must be deducted from the Shareholders’ Equity in the calculation of the solvency margin requirement. This does not apply to branches or agencies. The solvency calculation is also part of the annual statements (CBA format) and quarterly reports that all insurers should submit to the CBA (refer to exhibit 1 to 3). These guidelines enter into force as of July 1, 2019.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.6/3 Exhibit 1 Solvency Margin Calculation Life Insurance Company Amounts in AFL 1,000 9.00 Shareholders’ Equity (= available solvency margin) A ……………… 5% of Total investments ……………… Excess intercompany current accounts receivable1 B ……………… 6.00 Technical Provisions ……………….. 8% thereof or ……………….. a minimum of AFL 400,000 ……………….. Required solvency margin2 C ……………… Surplus/(Deficit) (A-B-C) ……………… Assets to cover minimum Solvency Margin of AFL 400,000 Amount in AFL 1,000 1 Treasury bonds issued by the Government of Aruba; ……………… 2 Shares certificates, debentures, profit-sharing certificate and ……………… other similar securities; 3 Proof of partnership rights; ……………… 4 Certificates of the assets as referred to in points 2 and 3; ……………… 5 Scrip certificates of the assets as referred to in points 1 up to ……………… and including 3; 6 Acknowledgement of debt towards the insurer, not being ……………… treasury bills or debentures, issued by or guaranteed by the Government of Aruba or other public entities in Aruba; 7 Acknowledgement of debt towards the insurer, not being ……………… debentures, issued by companies incorporated in Aruba or issued by companies incorporated in Aruba for which a license pursuant to article 4 or 24 of the State Ordinance on the Supervision of the Credit System has been granted; Total ____________ 1 The outstanding amount of intercompany current accounts receivable that exceeds 5% of Total investments. Not applicable to branches or agencies. Branches or agencies should fill out 0 (zero) under this line item. 2 The highest outcome of either: · 8% of the “Provision for Insurance Obligations” in the preceding financial year, or · AFL 400,000 if the insurer is strictly doing life insurance.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.6/4 Exhibit 2 Solvency Margin Calculation Nonlife Insurance Companies Amounts in AFL 1,000 Shareholders’ Equity (= available solvency margin) A ……………….. 5% of Total investments ……………….. Excess intercompany current accounts receivable1 B ……………….. 15% gross premium income; or ……………….. 15% of the average gross claims incurred ……………….. or a minimum of AFL 300,000 300 Required solvency margin2 C ……………….. Surplus/(Deficit) (A-B-C) ……………….. Assets to cover minimum Solvency Margin of AFL 300,000 Amount in AFL 1,000 1 Treasury bonds issued by the Government of Aruba; ……………… 2 Shares certificates, debentures, profit-sharing certificate and ……………… Other similar securities; 3 Proof of partnership rights; ……………… 4 Certificates of the assets as referred to in points 2 and 3; ……………… 5 Scrip certificates of the assets as referred to in points 1 up to ……………… and including 3; 6 Acknowledgement of debt towards the insurer, not being ……………… treasury bills or debentures, issued by or guaranteed by the Government of Aruba or other public entities in Aruba; 7 Acknowledgement of debt towards the insurer, not being ……………… debentures, issued by companies incorporated in Aruba or Issued by companies incorporated in Aruba for which a license pursuant to article 4 or 24 of the State Ordinance on the Supervision of the Credit System has been granted; Total ____________ 1 The outstanding amount of intercompany current accounts receivable that exceeds 5% of Total investments. Not applicable to branches or agencies. Branches or agencies should fill out 0 (zero) under this line item. 2 Highest outcome of either: · 15% of the gross premiums booked in the preceding financial year, or · 15% of the average gross claims incurred in the last three financial years, or · a minimum of Afl. 300,000.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.6/5 Exhibit 3 Solvency Margin Calculation Composite Insurance Companies Amounts in AFL 1,000 Shareholders’ Equity (= available solvency margin) A ……………… 5% of Total investments ……………… Excess intercompany current accounts receivable1 B ……………… Technical Provisions ……………….. 8% thereof or ……………….. a minimum of AFL 500,000 ……………….. Required solvency margin2 C ……………… Surplus/(Deficit) (A-B-C) ……………… Assets to cover minimum Solvency Margin of AFL 500,000 Amount in AFL 1,000 1 Treasury bonds issued by the Government of Aruba; ……………… 2 Shares certificates, debentures, profit-sharing certificate and ……………… other similar securities; 3 Proof of partnership rights; ……………… 4 Certificates of the assets as referred to in points 2 and 3; ……………… 5 Scrip certificates of the assets as referred to in points 1 up to ……………… and including 3; 6 Acknowledgement of debt towards the insurer, not being ……………… treasury bills or debentures, issued by or guaranteed by the Government of Aruba or other public entities in Aruba; 7 Acknowledgement of debt towards the insurer, not being ……………… debentures, issued by companies incorporated in Aruba or issued by companies incorporated in Aruba for which a license pursuant to article 4 or 24 of the State Ordinance on the Supervision of the Credit System has been granted; Total ____________ 1 The outstanding amount of intercompany current accounts receivable that exceeds 5% of Total investments. Not applicable to branches or agencies. Branches or agencies should fill out 0 (zero) under this line item. 2 The highest outcome of either: · 8% of the “Provision for Insurance Obligations” in the preceding financial year, or · AFL 500,000 if the insurer has been doing both life, accident & sickness insurance prior to July 2001 within the same legal entity.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.7/1 II.7 Guidelines with regard to the transfer of rights and obligations from insurance agreements Guidelines on the execution of Section 22, third paragraph of the State Ordinance on the Supervision of Insurance Business (AB 2000 no. 82) Introduction Under the present law the insureds’ cooperation is required for the transfer of debts. This does not make it easy for an insurer to transfer its portfolio in whole or in part to another insurer, as this requires the consent of each individual policyholder. Therefore a special arrangement is necessary, because a transfer is often the most expedient way to ensure the interests of the insured parties. Before amplifying this, it should be pointed out that there may be question of a voluntary or a compulsory transfer of rights and obligations. A transfer is compulsory when, at the request of the Centrale Bank van Aruba (the Bank), the court of first instance orders that the emergency regulation (section 20, first paragraph of the state ordinance) be applied to an insurer and authorizes one or more administrators to transfer all or part of the rights and obligations of the insurer. A transfer is voluntary if the insurer, at the Bank’s instigation or not, requests so, or if an individual policyholder requests for a transfer. In practice a transfer of rights and obligations from insurance agreements is effected for various reasons. It may be that the lack of growth in a certain portfolio induces the insurer to transfer the rights and obligations in question. It is also possible that an insurer wishes to get rid of the part of its portfolio that is not profitable or wishes to sell part of its portfolio in order to use the proceeds to improve its financial position. By a transfer an insurer in difficulties can not only serve the interests of the “transferred” insured persons, but also safeguard the interests of the remaining insured persons and possible creditors by means of the proceeds of the sale. Particularly in the life insurance business it is not in the insured persons interest to liquidate an insurer, even if the insurer is still solvent at that time. In such a case they will only receive the cash value of their claims, which will seldom correspond with the object for which they concluded the insurance. The purpose of these guidelines is to facilitate the transfer of rights and obligations by one insurer to the other and at the same time to protect the interests of the insured. In view of the special nature of the life insurance business chapter I, part 1, sub a stipulates that for the transfer of rights and obligations from life insurance agreements the Bank’s permission is always required. Only at the written request of an individual

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.7/2 policyholder this person’s life insurance may be transferred to another insurer without the permission of the Bank. The difference in character between the life and general insurance business is also apparent in the different procedures laid down in these guidelines with regards to obtaining permission from the Bank. In the case of the transfer of rights and obligations from life insurance agreements the decision is not left exclusively in the hands of the Bank, but the policyholders also have a say in this (chapter I, part 3). For practical reasons it was decided not to opt for a positive declaration of permission by three-fourths of the policyholders, but to reject the transfer when one fourth of the policyholders opposes such a transfer. When assessing the draft agreement to transfer, the Bank in the first place will have to check if the transfer is in the interest of the insured persons. The Bank will reject the transfer of rights and obligations to a financially weak insurer. Moreover, the Bank must ensure that the policy conditions do not undergo substantial changes. Another consequence of the difference in character between the life and general insurance business is that for the life insurance business no provision is necessary in chapter I, like the one laid down in chapter II, part 3, point c for the general insurance business. Under that provision policyholders who, for whatever reason, object to the transfer of their general insurance are offered the opportunity to terminate their insurance agreement within 60 days subsequent to the publication of the transfer. Such a provision is not necessary for the life insurance business, as the policyholder can terminate the life insurance agreement at all times. Chapter I Transfer of rights and obligations life insurance agreements Part 1 a. An insurer may only transfer his rights and obligations from all or part of the life insurance agreements to another insurer by written agreement and with the Bank’s written permission. b. In deviation from the stipulations under point a, an insurer is allowed to transfer his rights and obligations from an individual life insurance agreement to another insurer at the written request of the individual policyholder. Part 2

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.7/3 a. The application to obtain permission from the Bank for the transfer of rights and obligations shall be accompanied by a draft agreement together with all the explanatory documents. The insurer shall also supply the Bank with any supplementary data it requires. b. If the Bank has no initial objections to the draft agreement for the transfer it shall notify the insurer thereof as soon as possible in writing. If it does have initial objections, it shall likewise as soon as possible notify the insurer of its objections in writing. Part 3 a. If the Bank has no initial objections to the proposal, or if these objections have been acted upon, the insurer shall publish its intentions to transfer the rights and obligations in the publication containing official government announcements and by other means to be determined by the Bank, in the interests of the policyholders. The announcement shall state a term to be determined by the Bank, within which the policyholders involved may inform the Bank, in writing, of their objections to the transfer. b. If policyholders, representing one fourth or more of the insured sum5 involved, have raised objections to the transfer within the term stipulated under point a above, a transfer is not permitted. The Bank shall notify the insurer accordingly in writing. c. If the Bank still has objections against the transfer, it shall notify the insurer of these objections in writing, as soon as possible after the term stipulated under point a above, has expired, stating the reasons for these objections. d. If within the stipulated term, policyholders representing one fourth or more of the insured sum involved have not raised objections to the transfer and also the Bank has no objections, the Bank shall grant the insurer a written permission to effect the transfer. The transfer may then take place and shall be effective with regard to all interested parties. e. The insurer that has transferred its rights and obligations shall announce the transfer in the publication containing official government announcements and by other means to be determined by the Bank, in the interests of the policyholders.

5 The insured sum shall be understood to be the insured capital increased by ten times the insured annual interests.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.7/4 The contents of said publications shall require the previous written approval of the Bank.

Chapter II Transfer of rights and obligations general insurance agreements Part 1 By written agreement and with written permission from the Bank, an insurer may transfer its rights and obligations from or pursuant to general insurance agreements to another insurer, without permission of those who may derive rights from said agreements. The transfer may involve all or part of the general insurance agreements. Part 2 a. Chapter I, part 2, point a, similarly applies to the application to obtain permission from the Bank for a transfer. b. The Bank shall notify the insurer as soon as possible, in writing of its decision. A refusal must be motivated. Part 3 a. If, with the Bank’s permission, a transfer of rights and obligations from general insurance agreements has taken place, the respective insurer shall announce that transfer in the publication containing official government announcements and by other means to be determined by the Bank in the interest of those who may derive rights from the indemnity agreements in question. The contents of said announcements require the previous written approval of the Bank. b. With regard to all persons involved, other than the insurers in question, the transfer shall become effective as from the day following the date of publication of the announcements referred to in point a. c. During a period of sixty days following the date of publication of the announcement referred to in point a, the policyholders in question shall be entitled to terminate their general insurance agreement in writing. The insurer shall refund the prepaid premium for the part proportional to the part of the period not yet lapsed.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.8/1 II. 8 Managing Directors and members of the Supervisory Board The day–to-day policy of an insurance company must be determined by at least one natural person, while it should have a supervisory board or a comparable body of at least three natural persons in so far it concerns a legal entity. In order to safeguard the good reputation of the financial sector of Aruba, the Centrale Bank van Aruba (the Bank) in its licensing procedure, applies certain requirements as to the integrity, knowledge and experience of directors of the insurance company. These criteria are also applied in cases where new directors are appointed. In view of these requirements, the Bank may object to the appointment of one or more persons who determine the day-today policy of a supervised institution because his, her or their knowledge is considered inadequate to engage in the insurance business. Likewise, the Bank may object one or more persons accepting a post involving the (co-) determination of the policy of a supervised institution if, based on the intentions or the past history of that person or those persons, the Bank holds the opinion that the interests of the policy holders of the institution could be jeopardized. Pursuant to section 7, sub a and b, and section 17 of the SOSIB any appointment of a new managing director and/or member of the supervisory board, needs the Bank's prior written approval. In order to assess the intended appointment in the light of the criteria above, the candidate is required to complete the Bank’s questionnaire (Annex 1), sign and return it to the Bank via the institution concerned. A formal request together with the filled-out questionnaire and requested documents should be send to the Bank. Reference is made to paragraph 2 of the Directive on Sound Business Operations for further information on the integrity and suitability assessment conducted by the Bank. The questions must be answered truthfully and as fully as possible. Questions relating to legal proceedings, convictions, refusal of licenses, supervision of payment or bankruptcy must be answered regardless of whether these facts occurred in Aruba or elsewhere and regardless of the nature of the facts (economic or other offenses). The Bank's decision is taken on the basis of all available information, including that about the nature of the position and of the institutions. The answers to the questionnaire are merely one among many considerations. Together with the filled out questionnaire the applicant must submit a declaration of good conduct. The Bank informs the institutions concerned of its decision.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.8/2 The information obtained is covered by the secrecy obligation provided for in Article 23 of the State Ordinance on the Supervision of the Insurance Business.

SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.9/1

II.9 Prospective (In-) Direct Shareholders - Natural Persons

Change in shareholding (Section 31 of the SOSIB/ section 3 of the State Degree regulating changes in ownership) Pursuant to section 3 of the State Degree regulating changes in ownership any natural person or legal entity needs the Bank’s prior written approval to hold, acquire or increase a qualifying holding in An insurance company or to exercise any control attaching to a qualifying holding. The prospective shareholder should fill in the Bank’s questionnaire for prospective shareholder (annex 1). A formal request together with the filled-out questionnaire and requested documents should be send to the Bank. Reference is made to paragraph 2 of the Directive on Sound Business Operations for further information on the integrity and suitability assessment conducted by the Bank. If such an interest or control could lead to any influence on the insurance business, which is contrary to sound insurance policy, the Bank may refuse authorization. According to section 1 of the SOSIB a qualifying holding is defined as: a direct or indirect holding of more than ten percent of the issued share capital of an insurer or the ability to exercise directly or indirectly more than 10 percent of the voting rights in an insurer or the ability to exercise directly or indirectly a comparable degree of control.

II.10 Directive on the appointment of a certifying actuary Directive on the appointment of a certifying actuary by virtue of articles 10 and 15a of the State Ordinance on the Supervision of the Insurance Business (AB 2000 no. 82) (SOSIB) for (life) insurance companies licensed by the Centrale Bank van Aruba (CBA).

Introduction It is important that supervisors obtain the information they need to properly form an opinion on the minimum required technical provision: the assumptions, methods and principles applied; potential factors that threaten the solvency; financially significant reinsurance agreements; and compliance with related statutory and regulatory requirements. This information is obtained, amongst others, from the actuarial declaration/certification and actuarial report that must be filed, on a yearly basis, at the CBA. As such, supervisors have a clear interest in ensuring that the actuarial valuation is performed in a diligent way, taking into account the principles and guidance issued by the International Association of Insurance Supervisors (IAIS). In this respect, high standards of actuarial duties are essential for the proper operation of an insurer and play a key role in the insurers’ overall systems of risk management and internal controls1 . As such, the actuarial valuation performed must be carried out by an actuary who: • is properly licensed and in good standing; • has relevant professional experience and competence; • is independent in fact and in appearance; • is objective and impartial; and • complies with all ethical requirements.
Certifying and advising actuary The certifying and advising actuary is an expert in actuarial science and is also chartered by a professional body, such as the “Koninklijk Actuarieel Genootschap” in the Netherlands, the Society of Actuaries in the United States of America, or the Canadian Institute of Actuaries in Canada. The certifying and advising actuary is a professional trained in evaluating the financial implications of contingency events and has an understanding of the stochastic nature of insurance and other financial services, the risks inherent in assets and the use of statistical models (Insurance Core Principles, IAIS). The CBA distinguishes between a certifying actuary and an advising actuary. The certifying actuary is the actuary that issues an actuarial report, based on his/her analysis of the minimum 1 Insurance Core Principles, November 2017 (IAIS). SUPERVISORY DIRECTIVES

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.9/1

required technical provisions of the insurance company, and an actuarial certification or declaration. The actuarial report and actuarial certification/declaration must be submitted to the CBA each year not later than 6 months after the end of the fiscal year, as required by article 11, paragraph 3 of the SOSIB. In this regard, reference is made to supervisory directive II.3. “Actuarial report and certification of a Life Insurance Company”. The advising actuary may assist the insurance company in different areas. The certifying actuary and advising actuary may not be performed by the same person or the same actuary office/group. 3. Directive The CBA’s prior written approval is required for any appointment of, or change in the certifying actuary. The request for approval must be submitted to the CBA together with, at least, the following information/documents: a. Name of the proposed certifying actuary who will sign the actuarial report and declaration; b. Proof of the certifying actuary’s registration at a professional body for actuaries; c. Detailed resume/curriculum vitae of the signing actuary, including an overview of the financial institutions to which he/she provided actuarial services during his/her career; d. A copy of the draft engagement letter; e. Confirmation from the proposed certifying actuary that no disciplinary measures have been taken against him/her, or that a disciplinary complaint has been filed against him/her which is pending a decision; and f. A statement from the insurance company and a statement from the actuary firm must be submitted stating that there are no material business interests as described under paragraph 4 below. 4. Independence of a certifying actuary There may not be any material business interest between i) the insurer, its management or a member thereof, its Supervisory Board or a member thereof, its direct or indirect shareholder(s), and ii) the certifying actuary and the members of the actuary team, and other entities part of the same group of the firm of the certifying actuary. In case of a change of the certifying actuary, the CBA should be informed on the reasons of the intended change. The CBA will grant its approval if the proposed certifying actuary complies with the requirements as stipulated in this directive and if there are no circumstances that, in the opinion of the CBA, would make the proposed actuary unfit for the assignment. The CBA maintains at all times the right to revoke its approval if there are any circumstances that, in the opinion of the CBA, justify such action. This directive enters into force as of February 2019.

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES II.10/2 SUPERVISORY DIRECTIVES

Annex 1 CENTRALE BANK VAN ARUBA PERSONAL QUESTIONNAIRE & ASSOCIATED GUIDANCE NOTES April 1, 2020 J.E. Irausquin Boulevard 8 P.O. Box 18 Oranjestad Aruba www.cbaruba.org

2 GUIDANCE NOTES PURPOSE AND SCOPE The Centrale Bank van Aruba (‘CBA’) is, amongst other things, responsible for the integrity and suitability testing of prospective Key Persons (Candidates) in relation to an entity under its supervision pursuant to:

the State Ordinance on the Supervision of the Credit System (Landsverordening toezicht kredietwezen or ‘SOSCS’)1 ;
the State Ordinance on the Supervision of the Insurance Business (Landsverordening toezicht verzekeringsbedrijf or ‘SOSIB’)2 ;
the State Ordinance on the Supervision of Money Transfer Companies (Landsverordening toezicht geldtransactiebedrijven or ‘SOSMTC’)3 ; and
the State Ordinance on the Supervision of Trust Service Providers (Landsverordening toezicht trustkantoren or ‘SOSTSP’)4 ;
the State Ordinance on Company Pension Funds (Landsverordening ondernemingspensioenfondsen or ‘SOCPF’)5 ;
the State Ordinance on the Supervision of the Securities Business (Landsverordening toezicht effectenverkeer or ‘SOSSB’).6
the State Decree on the Supervision of Insurance Brokers (Landsbesluit toezicht assurantiebemiddelaars or ‘SDSIB’)7 ; (henceforth referred to as the ‘Supervisory Laws’) Pursuant to the Supervisory Laws, the CBA’s prior approval is required to appoint or become a Key Person. In this respect, relevant information must be submitted to enable the CBA to assess the integrity and suitability of the Candidate. These guidance notes seek to assist Applicants and Candidates by clarifying areas of uncertainty that may arise when completing or answering questions contained within this Personal Questionnaire (‘PQ’). When assessing integrity the CBA looks at facts and circumstances that are relevant to ascertain if the behaviour of the Candidate is in line with a sound execution of the key position. When assessing suitability the CBA looks at the knowledge, experience and professional conduct of the Candidate as evident from, for instance, education, work experience, competences and their practical application. Suitability testing takes into account the key position, the nature, scope, complexity, and risk profile of the Regulated Entity, and the composition8 and functioning of the respective managing or supervisory body as a whole. If the integrity of the Candidate is not beyond doubt and/or the suitability is not sufficient to fulfil the function in question, the CBA can refuse the request for approval of the Candidate in a key position. 1 Article 5, paragraph 1, subsections a, b and c; and article 9 of the SOSCS. 2 Article 6, paragraph 1, subsections a and b; and article 17 of the SOSIB. 3 Article 4, paragraph 1, subsections a, b and c; and article 5, paragraphs 2 and 3 of the SOSMTC. 4 Article 3, paragraph 1, subsections b, c and d; and article 5; and article 5a of the SOSTSP. 5 Article 4 of the SOCPF. 6 Article 19 and article 20 of the SOSSB. 7 Article 6 of the SDSIB. 8 In the assessment of the composition of the Supervisory Board, the CBA also takes into account the independence requirements as laid down in the Corporate Governance Policy Papers.

3 For the purpose of this PQ and associated guidance notes: Applicant includes the Regulated Entity which has filed an application for approval to appoint a Key Person or, in case the application relates to a qualifying holding9 in a Regulated Entity, the person who holds or will hold the qualifying holding. Candidate means the prospective Key Person. CBA means Centrale Bank van Aruba. Key Person is a. a natural person who is a managing director or a person who otherwise (co)-determines the policy of a Regulated Entity; b. a natural person who is a member of the supervisory board or a comparable body of a Regulated Entity; c. a holder (natural person) of a qualifying holding in a Regulated Entity (excluding company pension funds) or, in case the holder of the qualifying holding is a legal person, the persons who determine the policy of this legal person. Regulated Entity includes an entity that is regulated under any of the Supervisory Laws and supervised by the CBA. PROCESS FOR APPROVAL The process for approval usually involves at least three parties:

the Applicant;
the Candidate;
the CBA. After the Candidate and the Applicant have completed the PQ, the Applicant must submit the PQ and all other requested documents to the CBA for its review and approval. Upon completion of the assessment and after the CBA has reached a conclusion on the integrity and suitability of the Candidate (which may take up to thirteen weeks once all requested information and documents are in the CBA’s possession), the CBA sends its decision to the Applicant. It is very important that the CBA be informed of the proposed commencing date. In this regard it is noteworthy to mention that the Candidate may not exercise the proposed function without the CBA’s prior approval. The CBA’s decision is subject to objection and appeal by both the Applicant and the Candidate in accordance with the provisions of the State Ordinance on Administrative Proceedings (Landsverordening administratieve rechtspraak). 9 A qualifying holding is a direct or indirect holding of ten percent or more of the issued share capital or the ability to exercise directly or indirectly ten percent or more of the voting rights or comparable control.

4 Notwithstanding legal procedures regarding the CBA’s decision, the Candidate concerned may not act as a Key Person until the CBA has given its written approval. It should be noted that approval by the CBA always concerns a specific position in relation to a specific Regulated Entity in specific circumstances. If circumstances change (e.g. the Regulated Entity becomes active in a new field of business), or the person concerned is to be appointed in a new Key Person position or in a Key Position at a different Regulated Entity, a new application must be filled out and submitted to the CBA (see section “Continuing obligation to advise the CBA of changes” below). The CBA reserves the right to request a PQ to be completed if, in the CBA’s opinion, the person is considered to be a Key Person. REQUIRED INFORMATION In addition to the PQ, the following documents must be submitted to the CBA as part of the application. Documents and information to be provided by the Applicant:

a formal request for the appointment of the proposed Candidate, including the reason(s) for the proposed appointment;
the Regulated Entity’s recruitment and selection policy and procedures. This concerns in any case the actual assessment that was followed for the recruitment and selection of the Candidate. If a suitability matrix of the body at which the Candidate will become a member is available this must also be submitted;
the profile of the function concerned. This profile must at least contain information on the tasks and responsibilities (focus areas) and the expected time expenditure, the required knowledge, experience and competences for the function concerned; and
the Regulated Entity’s decision-making process regarding the selection of a Candidate and the considerations that led to the outcome of the selection process. The considerations must indicate the extent to which the Candidate meets the function profile, in terms of knowledge, experience, competences and professional conduct, taking into account the composition and functioning of the body of which the Candidate will become a member. Documents and information to be provided by the Candidate:
a certified true copy of the photograph and signature page(s) of the Candidate’s passport ensuring that the photograph is clear and the signature legible;10
an extract (uittreksel) from the Civil Registry (Bevolkingsregister) regarding the Candidate not older than two (2) months;
a declaration of good conduct (Verklaring omtrent het gedrag) or an equivalent declaration from the relevant judicial authority from where the Candidate is domiciled, not older than three (3) months;
a declaration of good standing of the tax authority (Verklaring van fiscaal gedrag) from where the Candidate is domiciled, not older than three (3) months.
copies of the test results of any assessment with respect to the Candidate’s integrity or suitability by a regulator (in Aruba or elsewhere) in charge with financial supervision; 10 This copy must be certified by a Key Person approved by the CBA or a civil notary. The Key Person certifying the copy of the passport should state, “I certify that this is a true copy of the original page(s) of the passport of [individual’s name] presented to me on [date].” The Key Person certifying should also sign and date the copy and print their name and capacity in which they have signed.

copies of the Candidate’s certificated qualifications (including proof of relevant courses attended);
the Candidate’s curriculum vitae; and
if the Candidate holds any direct or indirect financial and/or controlling interest of ten percent or more in another institution, a copy of the articles of incorporation, the shareholders’ register, an extract from the Chamber of Commerce, and the most recent financial statements of that institution. If the CBA deems it necessary, it may ask the Applicant or Candidate for additional information. Furthermore, the CBA may invite the Candidate for an interview. The CBA may also consult with third parties, such as the references provided by the Candidate, the Chamber of Commerce and Industry Aruba, law enforcement agencies, foreign regulators in charge with financial supervision, tax authorities and any other agencies or persons that may be able to provide relevant information on the Candidate. By submitting and signing this PQ both the Applicant and the Candidate provide their consent to the information gathering by the CBA from third parties. CONTINUING OBLIGATION TO ADVISE THE CBA OF CHANGES On an on-going basis, the CBA is to be informed of any changes to information previously submitted in the PQ and all other circumstances that can reasonably be considered relevant to the CBA’s assessment of the Key Person involved. This obligation lies with the Applicant. On the basis of the new information, or other new facts or circumstances, the CBA may decide to conduct a reassessment of the Key Person’s integrity and suitability. RESIGNATIONS Should a Key Person cease to fulfill this role, the CBA should be advised by the Regulated Entity of the date that the Key Person ceased acting in this capacity and the reason for such cessation. However, should a person be a Key Person by way of his or her qualifying holding in the Regulated Entity, the CBA should be informed of any change in the qualifying holding by the person holding the (qualifying) holding. COMMUNICATION WITH KEY PERSONS The CBA will in principle communicate with the Applicant. However, the CBA may invite the Candidate for an interview and thus have direct contact with this person. Also for clarifications on matters that regard the Applicant’s antecedents, the CBA may decide to contact the Applicant directly. GENERAL POINTS This PQ comprises of 13 sections and each section contains a number of questions. All questions contained in the PQ must be answered. All responses should be typed or written in blue ink. Incomplete PQs will be returned to the Applicant for completion and resubmission. The Key Person should initial all amendments to confirm they are correct. All (other) facts and circumstances that can reasonably be considered relevant to the CBA’s assessment must be disclosed in the application. Withholding such information may be considered as providing misleading information and as such may have consequences for this application and future applications.

6 If you have any further questions concerning the completion of this form, you can contact the CBA via email address: informationcenter@cbaruba.org. SUBMISSION OF THE PQ After completion, the PQ should be signed by both the Applicant and the Candidate. The Applicant must submit its request for the appointment of the proposed Candidate, including the filled-out PQ and required documents, to the CBA in hardcopy and provide the CBA with an electronic readable version (pdf format) via e-mail address informationcenter@cbaruba.org.

7 CENTRALE BANK VAN ARUBA PERSONAL QUESTIONNAIRE All questions must be answered. Please refer to the Guidance Notes to aid completion of this Personal Questionnaire. All responses should be typed or written in blue ink. Any attachments should be clearly referenced to the relevant question(s) and signed by the individual completing the Personal Questionnaire, as confirmation that they are complete and accurate. The CBA reserves the right to seek references from organizations and individuals named in this Personal Questionnaire, including foreign regulatory authorities. It is important, therefore, to ensure that full and accurate names, addresses, and contact information are provided. J.E. Irausquin Boulevard 8 P.O. Box 18 Oranjestad Aruba www.cbaruba.org

8 CENTRALE BANK VAN ARUBA Information to be provided by the Applicant All responses should be typed or written in blue ink. SECTION 1 1.1 Name and address of the Regulated Entity at which the Candidate will become a Key Person: 1.2 In which function will the Candidate become a Key Person: Please provide the job title and a brief description of the role to be undertaken. If the Candidate is to fulfil more than one role, please specify. 1.3 Please state the main tasks and responsibilities in respect of the function in which the Candidate will become a Key Person: 1.4 Proposed commencement date of the Key Person’s duties: Please note that the proposed commencement is a date in the future and cannot be the same date as the Application form due to the fact that only after the CBA’s approval the Key Person is allowed to exercise the proposed function. Day: Month: Year:

9 1.5 Provide an overview of the new composition of the Managing Board or Supervisory Board after the appointment and approval of the proposed Candidate. Please state for each Supervisory Board member whether he/she is independent. 1.6 Mark the relevant boxes to indicate the legislation under which you are seeking approval: State Ordinance on the Supervision of the Credit System State Ordinance on the Supervision of the Insurance Business State Ordinance on the Supervision of Money Transfer Companies State Ordinance on the Supervision of Trust Service Providers State Ordinance on the Supervision of the Securities Business State Ordinance on Company Pension Funds State Decree on the Supervision of Insurance Brokers

10 Information to be provided by the Candidate All responses should be typed or written in blue ink. Please refer to the Guidance Notes to aid completion of this PQ. If you need more writing space to answer a question than provided by this PQ, please provide the requested details on a clearly referenced attachment. The answers provided must be legible. SECTION 2 – Personal Details 2.1 Surname: Title(s): 2.2 Given name(s): 2.3 Place of birth: Town/City: Country 2.4 Date of birth: Day: Month: Year: 2.5 Nationalities and how acquired: Nationality: Acquired: 2.6 Private address (including, if applicable, postal code):

11 Home telephone number: Country/area code: Number: Personal mobile number: Private email address: 2.7 Business telephone number: Country/area code: Number: Business fax number: Country/area code: Number: Business email address: 2.8 Passport: Number: Expiry date: Issuing country:

12 2.9 Have you ever changed your name? Please include details of any changes to your name, including forenames and surnames, e.g. through marriage. *YES / NO *If YES, please list all previous names (given names and surnames), the dates on which they were changed and reasons for the change. Previous full name(s) & title Date changed Registry at which details are recorded Reason for change 2.10 Have you changed your private address at any time in the previous ten years? *YES / NO *If YES, please give details of each address and the date (mm/yy) on which it changed. Previous address(es) Date changed

13 2.11 Have you ever changed your nationality? *YES / NO *If YES, please list all previous nationalities, the date, how they were acquired/lost. Previous nationalit(y)(ies) Date changed Acquired by Lost through 2.12 Please provide the name(s) and address(es) of all banks where you hold accounts. Name(s) of bank(s) Address(es) 2.13 Are you a ‘Politically Exposed Person’ (PEP)? A PEP or Politically Exposed Person means a person who holds or held a prominent public position, as well as direct family members and direct associates of such a person. *YES / NO *If YES, please give details.

14 SECTION 3 – Experience Not applicable in case the application relates to a (qualifying) holding in a Regulated Entity. 3.1 Please state the number of contracted hours per week or month that you anticipate dedicating to this position. If this position is not full-time, please explain what other roles and activities will be occupying your time. Answers such as ‘as much time as is necessary’ or similar are not acceptable and actual indicative hours are required. 3.2 Will you be acting as a Managing Director or Supervisory Board Member? *YES / NO *If YES, please provide full details on your role and what particular contribution you will bring. Please use clearly referenced attachments if needed. *If YES, please also give details of your current day-to-day employment position(s). 3.3 Employment history Please provide details of your current employment position and your employment history. Your reasons for leaving should be categorised as follows:

Resignation;
Redundancy;
Retirement;
Termination/dismissal;
End of contract; and
Other (please provide details).

15 Please provide as much contact information as possible on any relevant regulator in order to accelerate the inter-regulatory checks process undertaken by the CBA. Should you, or the Regulated Entity in relation to whom you will become a Key Person, maintain or have previously maintained a business relationship with any of your previous employers listed, please give details using a clearly referenced attachment. Name / address of employer and nature of business Name of regulator Position(s) held Relevant dates (mm/yy) Reason(s) for leaving 3.4 Please provide details of any employment or otherwise important positions, whether paid or unpaid, including memberships of a board or a committee, which you will not resign from when you will become a Key Person. Name / address of organization and nature of business or activities Name of regulator Position(s) held Relevant dates (mm/yy) Task and responsibilities Total number of contracted hours per week or month that is dedicated to the position 3.5 Please provide details of relevant professional qualifications, degrees, etc. Please state the awarding body (to include full name and address), the date the qualification was obtained and provide a copy of the awarding certificate. Qualification(s) Date awarded (dd/mm/yy) Name & address of awarding body

16 3.6 Please provide details of past and current membership of any relevant professional body or organization and the year of admission. If applicable, please provide details of why your membership ceased. Membership details Date of admission (dd/mm/yy) Name and address of professional body or organization A relevant professional body or organization would in any case include an organization of fellow professionals. 3.7 Please provide details of your specific experience (knowledge, capabilities, competences, etc.) relevant to the position. 3.8 Please provide three independent references and further details, including their names, positions, addresses, telephone numbers, e-mail addresses and relationship to you (not applicable in case the application relates to a (qualifying) holding in a Regulated Entity). The references should preferably have affinity with the financial or trust sector and (used to) work as your direct superior(s) or fellow (co-)policymaker(s). At least one of the three references should work for your last/current employer. Persons who cannot act as references include persons related by consanguinity in a direct or indirect line up to and including relations in the third degree, your (former) spouse or partner.

17 Listed references must be notified in advance and be prepared to act in such a capacity. Name Position Address, telephone number(s), e-mail address(es) Relationship to you

18 SECTION 4 – Criminal antecedents 4.1 At any time, have you been considered a suspect in a criminal investigation in Aruba or elsewhere, or do you expect to be considered as such? *YES / NO *If YES, please specify and explain the criminal offence, the state of affairs and the outcome of each case, e.g. still under investigation, conviction, acquittal, discharge from further prosecution, a settlement or (conditional) dismissal of charges. For each case, please provide details, including relevant dates, courts, current status of the proceedings (if still pending), etc. Please also include traffic offences (minor traffic violations may be excluded). Traffic offences include: · joyriding; · driving under the influence of alcohol or drugs; · hit-and-run driving; · driving while under a disqualification order; · driving during suspension of driving license; · involuntary manslaughter; · driving with false license plates. 4.2 Has any institution whose policy is or was (co-)determined by you, e.g. as a managing director or supervisory board member, ever been a suspect in a criminal investigation? *YES / NO *If YES, please specify and explain the criminal offence, state of affairs and the outcome of each case, e.g. still under investigation, conviction, acquittal, discharge from further prosecution, a settlement or (conditional) dismissal of charges. For each case, please provide details, including relevant dates, courts, whether or not proceedings are pending or final, etc. Where applicable, please explain how you were involved or how the offence related to your responsibilities. This question includes the indirect (co-)determination of policies of companies through the provision of trust services as defined in Article 1 of the SOSTSP.

19 4.3 Are you/ have you been involved in any criminal related matters not covered by the previous questions? *YES / NO *If YES, please provide details.

20 SECTION 5 – Personal financial antecedents 5.1 Do your personal financial liabilities stand in a sound relationship, by general standards, to your income and/or personal assets? *YES/NO *If NO, please explain. 5.2 Have you been in any financial problems or personal financial difficulties? *YES/NO *If YES, please explain if these problems have led to any legal, debt collecting or debt recovery proceedings and how this situation was resolved (e.g. suspension of payments petition filed/declared, bankruptcy petition filed/declared, debts rescheduled, agreement with creditors). 5.3 Do you expect, within a year from today, to run into financial difficulties leading to legal, debt collecting or debt recovery steps? *YES/NO *If YES, please explain.

21 5.4 Are there any other facts or circumstances on your personal financial position that could be of relevance for the integrity assessment? *YES/NO *If YES, please provide details.

22 SECTION 6 – Supervisory antecedents 6.1 Have you, or has any institution whose policy is or was (co-)determined by you, ever had a permission, an authorization, a license, an exemption, a dispensation or a registration withdrawn or refused by a (financial) regulator or other authorization-granting entity? *YES/NO *If YES, please provide details. 6.2 Have you, or has any institution whose policy is or was (co-)determined by you, ever had a conflict with a foreign or domestic (financial) regulator that led to a regulatory measure, or do you expect such a situation to develop within the next twelve months? *YES/NO *If YES, please explain. 6.3 Are there any other facts or circumstances with a foreign or domestic (financial) regulator or other authorization-granting entity that could be of relevance for the integrity assessment? Examples would be: warning letters, normative conversations, settlement agreements with a foreign or domestic (financial) regulator and withdrawn nomination(s) for appointment. *YES/NO *If YES, please provide details.

23 SECTION 7 – Tax related antecedents 7.1 Have you ever received a tax punitive fine (fiscale vergrijpboete) that became irrevocable? *YES/NO *If YES, please provide details. 7.2 Are you currently involved in a procedure that might lead to the imposition of a tax punitive fine? *YES/NO *If YES, please provide details (including the current status of the proceedings). 7.3 Has a tax subject whose policy is or was (co-)determined by you ever received a tax punitive fine that became irrevocable? This question includes the indirect (co-)determination of policies of companies through the provision of trust services as defined in Article 1 of the SOSTSP. *YES/NO *If YES, please provide details.

24 7.4 Is a tax subject whose policy is or was (co-)determined by you currently involved in a procedure that might lead to the imposition of a tax punitive fine? This question includes the indirect (co-)determination of policies of companies through the provision of trust services as defined in Article 1 of the SOSTSP. *YES/NO *If YES, please provide details (including the current status of the proceedings). 7.5 Are there any other facts or circumstances on tax related matters that could be of relevance for the integrity assessment? *YES/NO *If YES, please provide details.

25 SECTION 8 – Business related financial antecedents 8.1 Do you have a direct or indirect interest or relationship with the Regulated Entity as referred to under section 1.1, other than your proposed Key Person position? A direct or indirect interest may in this case be related by consanguinity or affinity in a direct or indirect line up to and including relations in the third degree, your (former) spouse or cohabitant. *YES/NO *If YES, please provide details. 8.2 Has any institution whose policy is or was (co-)determined by you experienced major financial difficulties? This question includes the indirect (co-)determination of policies of companies through the provision of trust services as defined in Article 1 of the SOSTSP. *YES/NO *If YES, please explain (legal procedure, suspension of payments, bankruptcy, or other). 8.3 Is there currently a judicial inquiry concerning, or were you ever ordered by a court of law to pay, (unpaid) debts because of liability for the bankruptcy of a legal entity pursuant to the applicable provisions of the Bankruptcy State Ordinance (Faillissementsverordening), the Civil Code of Aruba (Burgerlijk Wetboek van Aruba) or any similar provisions elsewhere? *YES/NO *If YES, please provide details.

26 8.4 If you answered question 8.2 or 8.3 affirmatively, please provide any particulars if you were directly involved with the financial difficulties, or with the legal proceedings, suspension of payments, bankruptcy or other, and if you were found liable on what grounds. 8.5 Of which other institutions are you currently a (co-)policymaker? 8.6 Do you hold any direct or indirect financial and/or controlling interest of ten percent or more in an other institution? Financial interest entails: the equity share or other similar capital providing interest which you have in an institution other than the one you work for or intend to join. Controlling interest entails: voting rights or another similar type of controlling power at the highest level in an institution other than the one you work for or intend to join. *YES/NO *If YES, please provide details. 8.7 Do these other institution(s), referred to under sections 8.5 and 8.6, maintain a commercial interest with the Regulated Entity as referred to under section 1.1? *YES/NO *If YES, please provide details.

27 SECTION 9 – Other antecedents 9.1 If you are now, or have ever been, a member of a relevant professional body or organization (refer to section 3.6), have any disciplinary or similar measures ever been taken against you? *YES/NO *If YES, please explain (the measures, the organization by which, when, and the reason why). 9.2 Have you ever been involved in a conflict with an employer? *YES/NO *If YES, please provide the name of the employer(s) and explain. 9.3 Relating to any conflict specified under question 9.2, where there any sanctions imposed on you under employment law (e.g., a warning, a reprimand, or dismissal)? *YES/NO *If YES, please explain.

28 SECTION 10 – Holders of a qualifying holding Complete this section only if you intend to become (a director of) a holder of a qualifying holding in a Regulated Entity. Pursuant to the Supervisory Laws, the CBA assesses the integrity of the holders of a qualifying holding in the Applicant. In case a holder of a qualifying holding is a legal person, all natural persons determining the day-to-day policy of this legal person (in any case: the legal person’s directors), must complete this PQ. A qualifying holding is a direct or indirect holding of 10% or more of the issued capital or the right to exercise, directly or indirectly, 10% or more of the voting rights or equivalent control. 10.1 Please provide the following information concerning the prospective qualifying holding in the applicant. Name(s) qualifying holder (s) Address(es) qualifying holder(s) Shares (%) Preferred shares (Yes/No) Priority shares (Yes/No) Share certificates (Yes/No) Voting rights (%) Other form of control (%) Direct (D) or Indirect (I) 10.2 Please explain your reasons for acquiring or increasing the qualifying holding in the Regulated Entity and your intentions regarding the qualifying holding.

29 10.3 Please specify any existing relationships between the prospective holder(s) of a qualifying holding mentioned in 10.1 and the existing shareholders of the Regulated Entity. 10.4 Please provide the name(s) and address(es) of all other subsidiaries and affiliates of the prospective holder(s) of a qualifying holding mentioned in 10.1 10.5 Are you or will you be involved in the (co-)determining of the Regulated Entity’s policy? *YES/NO *If YES, please explain.

30 SECTION 11 – Miscellaneous questions 11.1 Is there between you and the Regulated Entity any financial relationship which does not ensue directly from your (intended) function or position (e.g. a loan)? *YES/NO *If YES, please explain. 11.2 At any time in the past, have you been assessed with respect to integrity and suitability by a regulator (in Aruba or elsewhere) in charge of financial supervision? *YES/NO *If YES, please explain (name of regulator, period and result of the assessment). 11.3 Are you aware of any other facts or circumstances that could reasonably be expected to be of relevance to the CBA when assessing your personal and/or professional qualities? *YES/NO *If YES, please provide full particulars. PLEASE DISCLOSE ANY OTHER FACTS THAT YOU CONSIDER MATERIAL TO THIS APPLICATION.

31 SECTION 12 – Checklist additional information and documents Please check the corresponding box to indicate whether the documents and information listed have been included with your application (reference is made to pages 4 and 5 of the Guidance Notes). Documents and information to be provided by the Applicant: A formal request for the appointment of the proposed Candidate, including the reason(s) for the proposed appointment. The Regulated Entity’s recruitment and selection policy and procedures.11 The profile of the function concerned.12 The decision-making process regarding the selection of a Candidate and the considerations that led to the outcome of the selection process.13 Documents and information to be provided by the Candidate: A certified true copy of the photograph and signature page(s) of the Candidate’s passport.14 An extract (uittreksel) from the Civil Registry (Bevolkingsregister) regarding the Candidate not older than two (2) months. A Declaration of Good Conduct (Verklaring omtrent het gedrag) or an equivalent declaration from the relevant judicial authority from where the Candidate is domiciled, not older than three (3) months. A declaration of good standing of the tax authority (Verklaring van fiscaal gedrag) from where the Candidate is domiciled, not older than three (3) months. Test results of any assessment with respect to the Candidate’s integrity or suitability by a regulator (in Aruba or elsewhere) in charge with financial supervision. The Candidate’s certificated qualifications (including proof of relevant courses attended). The Candidate’s curriculum vitae. If the Candidate holds any direct or indirect financial and/or controlling interest of ten percent or more in another institution, a copy of the articles of incorporation, the shareholders’ register, an extract from the Chamber of Commerce, and the most recent financial statements, of that institution. 11 This concerns in any case the actual assessment that was followed for the recruitment and selection of the Candidate. If a suitability matrix of the body at which the Candidate will become a member is available this must also be submitted 12 This profile must at least contain information on the tasks and responsibilities (focus areas) and the expected time expenditure, the required knowledge, experience and competences for the function concerned 13 The considerations must indicate the extent to which the Candidate meets the function profile, in terms of knowledge, experience, competences and professional conduct, taking into account the composition and functioning of the body of which the Candidate will become a member. 14 This copy must be certified by a Key Person approved by the CBA or a civil notary. The Key Person certifying the copy of the passport should state, “I certify that this is a true copy of the original page(s) of the passport of [individual’s name] presented to me on [date].” The Key Person certifying should also sign and date the copy and print their name and capacity in which they have signed.

32 SECTION 13 – Declaration(s) The Candidate I am aware that withholding information may be considered as providing misleading information and as such may have consequences for this application and future applications. I am also aware that it is a criminal offence to knowingly or recklessly provide any information which is false or misleading in connection to this PQ. I confirm that the information in this form and any attachment is accurate and complete to the best of my knowledge and belief. I agree to provide details of any changes to information in this form and any attachment immediately to the CBA. I authorize the CBA to make such enquiries and to seek further information as it deems appropriate to verify the information given in this form. In particular, I consent to the CBA carrying out a judicial record check on any unspent convictions and convictions for relevant offences that I may have, conducting checks with other regulators, companies and institutions stated in this Personal Questionnaire and using external data sources. I confirm that I fully understand my role(s), responsibilities and accountabilities under the Supervisory Law(s) to which this PQ relates. Signed: Date: Name (BLOCK CAPITALS): The Applicant (Only in case the Applicant is not the same person as the Candidate.) I confirm to have completed Section 1 of the PQ fully and truthfully. I declare to be authorised to represent the Applicant named under 1.1. Signed: Date: Name (BLOCK CAPITALS): Position:

Annex 2 CENTRALE BANK VAN ARUBA QUESTIONNAIRE EXTERNAL AUDITOR & ASSOCIATED GUIDANCE NOTES July 1, 2023

2 PURPOSE AND SCOPE The Centrale Bank van Aruba’s (‘CBA’) written approval is required for any appointment of, or change in external auditor in relation to an entity under its supervision pursuant to:

the State Ordinance on the Supervision of the Credit System (Landsverordening toezicht kredietwezen or ‘SOSCS’)1 ;
the State Ordinance on the Supervision of the Insurance Business (Landsverordening toezicht verzekeringsbedrijf or ‘SOSIB’)2 ;
the State Ordinance on Company Pension Funds (Landsverordening ondernemingspensioenfondsen or ‘SOCPF’)3 ;
the State Ordinance on the Supervision of the Securities Business (Landsverordening toezicht effectenverkeer or ‘SOSSB’)4 ; and
the State Decree on the Supervision of Insurance Brokers (Landsbesluit toezicht assurantiebemiddelaars or ‘SDSIB’)5 . (henceforth referred to as the ‘Supervisory Laws’) Beside abovementioned supervisory laws, reference is made to the supervisory directives issued by the CBA for the different sectors on the appointment of an external auditor. These guidance notes seek to assist applicants and external auditors by clarifying areas of uncertainty that may arise when completing or answering questions contained within this Questionnaire External Auditor (‘Questionnaire’). For the purpose of this Questionnaire and associated guidance notes: Applicant includes the regulated entity which has filed an application for approval to appoint an external auditor. External auditor as defined under section 1 of the Supervisory Laws: ‘a person who is not employed by the company or institution, being a “registeraccountant” or an “accountant-administratieconsulent” registered pursuant to article 36, paragraph 2, item i, of the Dutch Law on the accounting profession (Stb. 2012, 680)’. Engagement quality review is defined as an objective evaluation of the significant judgements made by the engagement team and the conclusions reached thereon, performed by the engagement quality reviewer and completed on or before the date of the engagement report. Engagement quality reviewer is a partner, other individual in the firm, or an external individual, appointed by the firm to perform the engagement quality review. Relevant ethical requirements are defined as the principles of professional ethics and ethical requirements that are applicable to a professional accountant when undertaking the engagement quality review (e.g., International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) related to audits or reviews of financial statements. 1 Article 15, paragraph 1, in conjunction with article 21a, of the SOSCS. 2 Article 10 in conjunction with article 15a of the SOSIB. 3 Article 11a in conjunction with article 12a of the SOCPF. 4 Article 98 of the SOSSB. 5 Article 4, paragraph 5 of the SDSIB.

3 CBA means Centrale Bank van Aruba. Regulated entity includes an entity that is regulated under the SOSCS, SOSIB, SOCPF, SOSSB, or SDSIB. PRIOR WRITTEN APPROVAL Pursuant to the respective Supervisory Laws, the CBA’s prior written approval is required for any appointment of or change in external auditor. In this respect, relevant information must be submitted to enable the CBA to assess the proposed candidate. PROCESS FOR APPROVAL The process for approval usually involves at least four parties:

the regulated entity (“applicant”) that intends to appoint an external auditor;
the external auditor;
the engagement quality reviewer;
the CBA. After the applicant and the external auditor have completed the Questionnaire, the applicant must submit the Questionnaire and all other requested documents to the CBA for its review and approval. Upon completion of the assessment and after the CBA has reached a conclusion, the CBA sends its decision to the applicant. The CBA’s decision is subject to objection and appeal by both the applicant and the external auditor in accordance with the provisions of the State Ordinance on Administrative Proceedings (Landsverordening administratieve rechtspraak AB 1993 no. 45). REQUIRED INFORMATION In addition to the Questionnaire, the following documents must be submitted to the CBA as part of the application:  A formal request for the appointment of the proposed external auditor, including the reason(s) for the intended change.  Draft engagement letter, including the stipulations as mentioned in the supervisory directive “Appointment of an External Auditor”.  Detailed resume/curriculum vitae of the external auditor, including an overview of the financial institutions which he/she audited during his/her career. The overview must also include the number of years worked on the engagement, and the role he/she had in relation to the engagement.  Proof of registration of the external auditor at the “Nederlandse Beroepsorganisatie van Accountants” (including registration number).  Detailed resume/curriculum vitae of the engagement quality reviewer, including the number of years of audit experience in the financial sector, and the role he/she had in relation to the engagement.  Policies and procedures of the external audit firm on the appointment and eligibility of the engagement quality reviewer, the performance of the engagement quality review(er) and the documentation of the quality review. Said policies and procedures must comply with paragraphs 14 up to and including 30 of the International Standard on Quality Management 2, issued by the International Auditing and Assurance Board.

4 If the CBA deems this necessary, it may ask the applicant and the external auditor for additional information. CONTINUING OBLIGATION TO ADVISE THE CBA OF CHANGES On an on-going basis, the CBA is to be informed of any changes to information previously submitted in the Questionnaire, and of any other circumstances, that can reasonably be considered relevant to the CBA’s assessment of the external auditor involved. This obligation lies with the applicant. On the basis of the new information, or other new facts or circumstances, the CBA may decide to conduct a re-assessment of the external auditor. CHANGE OF EXTERNAL AUDITOR In case of a change of the external auditor, the CBA should be informed on the reason(s) for the intended change. COMMUNICATION The CBA will in principle communicate with the applicant. However, the CBA may invite the external auditor for an interview at its premises. GENERAL POINTS This Questionnaire comprises of 9 sections and each section contains a number of questions. All questions contained in the Questionnaire must be answered. All responses should be typed or written in blue ink. Incomplete Questionnaires will be returned to the applicant for completion and re-submission. All (other) facts and circumstances that can reasonably be considered relevant to the CBA’s assessment must be disclosed in the application. Withholding such information may be considered as providing misleading information and as such may have consequences for this application and future applications. SUBMISSION OF THE QUESTIONNAIRE After completion, the Questionnaire should be signed by both the External Auditor and the Applicant. The Applicant must submit its request for the appointment of the External Auditor, including the filledout Questionnaire and required documents, to the CBA in hard copy and provide the CBA with an electronic readable version (pdf format) via e-mail address informationcenter@cbaruba.org.

5 CENTRALE BANK VAN ARUBA QUESTIONNAIRE EXTERNAL AUDITOR All questions must be answered. Please refer to the Guidance Notes to aid completion of this Questionnaire. July 1, 2023 All responses should be typed or written in blue ink. Any attachments should be clearly referenced to the relevant question(s) and signed by the individual completing the Questionnaire, as confirmation that they are complete and accurate. The CBA reserves the right to seek references from organizations and individuals named in this Questionnaire, including foreign regulatory authorities. It is important, therefore, to ensure that full and accurate names, addresses, and contact information are provided.

6 CENTRALE BANK VAN ARUBA Information to be provided by the applicant SECTION 1 1.1 Name and address of the regulated entity who requests the proposed appointment of the external auditor: 1.2 Name and address of the audit firm of the external auditor: 1.3 Mark the relevant boxes to indicate the legislation under which you are seeking approval: State Ordinance on the Supervision of the Credit System State Ordinance on the Supervision of the Insurance Business State Ordinance on Company Pension Funds State Ordinance on the Supervision of the Securities Business State Decree on the Supervision of Insurance Brokers

7 Information to be provided by the external auditor SECTION 2 – Personal Details 2.1 Surname: Title(s): 2.2 Given name(s): SECTION 3 – Experience 3.1 Employment history Please provide details of your current employment position and your employment history. Your reasons for leaving should be categorised as follows:

Resignation;
Redundancy;
Retirement;
Termination/dismissal;
End of contract; and
Other (please provide details). Please provide as much contact information as possible on any relevant regulator in order to accelerate the inter-regulatory checks process undertaken by the CBA. Should you, or the regulated entity, maintain or have previously maintained a business relationship with any of your previous employers listed, please give details using a clearly referenced attachment. Name / address of employer and nature of business Name of regulator Position(s) held Relevant dates (mm/yy) Reason(s) for leaving

8 3.2 Please provide details of any employment or otherwise important positions, whether paid or unpaid, including memberships of a board or a committee. Name / address of organization and nature of business or activities Name of regulator Position(s) held Relevant dates (mm/yy) Task and responsibilities 3.3 Please provide details of relevant professional qualifications, degrees, etc. Please state the awarding body (to include full name and address), and the date the qualification was obtained. Qualification(s) Date awarded (dd/mm/yy) Name & address of awarding body 3.4 Please provide details of past and current membership of any relevant professional body or organization and the year of admission. If applicable, please provide details of why your membership ceased. Membership details Date of admission (dd/mm/yy) Name and address of professional body or organization A relevant professional body or organization would in any case include an organization of fellow professionals.

9 3.5 Please provide details of your specific experience (knowledge, capabilities, competences, fields of expertise, etc.). SECTION 4 – Quality review process 4.1 Detailed resume/curriculum vitae of the engagement quality reviewer, including the number of years of audit experience in the financial sector, and the role he/she had in relation to the engagement. 4.2 Provide a summary of the policies and procedures of the external audit firm on the appointment and eligibility of the engagement quality reviewer, the performance of the engagement quality review(er) and the documentation of the quality review. Said policies and procedures must comply with paragraphs 14 up to and including 30 of the International Standard on Quality Management 2, issued by the International Auditing and Assurance Board.

10 SECTION 5 – Business related financial antecedents 5.1 Do you have a direct or indirect interest or relationship with the regulated entity as referred to under section 1.1, other than your proposed appointment? A direct or indirect interest may in this case be related by consanguinity or affinity in a direct or indirect line up to and including relations in the third degree, your (former) spouse or cohabitant. *YES/NO *If YES, please provide details. 5.2 Has any institution whose policy is or was (co-)determined by you experienced major financial difficulties? *YES/NO *If YES, please explain (legal procedure, suspension of payments, bankruptcy, or other). 5.3 Is there currently a judicial inquiry concerning, or were you ever ordered by a court of law to pay, (unpaid) debts because of liability for the bankruptcy of a legal entity pursuant to the applicable provisions of the Bankruptcy State Ordinance (Faillissementsverordening), the Civil Code of Aruba (Burgerlijk Wetboek van Aruba) or any similar provisions elsewhere? *YES/NO *If YES, please provide details.

11 5.4 If you answered question 5.2 or 5.3 affirmatively, please provide any particulars if you were directly involved with the financial difficulties, or with the legal proceedings, suspension of payments, bankruptcy or other, and if you were found liable on what grounds. 5.5 Do you hold directly or indirectly, shares in an other institution? *YES/NO *If YES, please provide details. 5.6 Do these other institution(s), referred to under section 5.5, maintain a commercial interest with the regulated entity as referred to under section 1.1? *YES/NO *If YES, please provide details.

12 SECTION 6 – Other antecedents 6.1 Have any disciplinary or similar measures ever been taken against you or a disciplinary complaint has been filed against you which is pending a decision by a relevant professional body or organization (refer to section 3.4)? *YES/NO *If YES, please explain (the measures, the organization by which, when, and the reason why). 6.2 Have you ever been involved in a conflict with an employer? *YES/NO *If YES, please provide the name of the employer(s) and explain. 6.3 Relating to any conflict specified under question 6.2, where there any sanctions imposed on you under employment law (e.g., a warning, a reprimand, or dismissal)? *YES/NO *If YES, please explain.

13 SECTION 7 – Miscellaneous questions 7.1 Is there between you and the regulated entity any financial relationship? *YES/NO *If YES, please explain. 7.2 At any time in the past, have you been assessed by a regulator (in Aruba or elsewhere) in charge of financial supervision? *YES/NO *If YES, please explain (name of regulator, period and result of the assessment). 7.3 Are you aware of any other facts or circumstances that could reasonably be expected to be of relevance to the CBA when assessing your personal and/or professional qualities? *YES/NO *If YES, please provide full particulars. PLEASE DISCLOSE ANY OTHER FACTS THAT YOU CONSIDER MATERIAL TO THIS APPLICATION.

14 SECTION 8 – Checklist additional information and documents Please check the corresponding box to indicate whether the documents and information listed have been included with your application (reference is made to page 3 of the Guidance Notes). Documents and information to be provided by the applicant:  A formal request for the appointment or change of the proposed external auditor, including the reason(s) for the intended change. Documents and information to be provided by the external auditor:  Draft engagement letter, including the stipulations as mentioned in the supervisory directive “Appointment of an External Auditor”.  Detailed resume/curriculum vitae of the external auditor, including an overview of the financial institutions which he/she audited during his/her career. The overview must also include the number of years worked on the engagement, and the role he/she had in relation to the engagement.  Proof of registration of the external auditor at the “Nederlandse Beroepsorganisatie van Accountants” (including registration number).  Detailed resume/curriculum vitae of the engagement quality reviewer, including the number of years of audit experience in the financial sector, and the role he/she had in relation to the engagement.  Policies and procedures of the external audit firm on the appointment and eligibility of the engagement quality reviewer, the performance of the engagement quality review(er) and the documentation of the quality review. Said policies and procedures must comply with paragraphs 14 up to and including 30 of the International Standard on Quality Management 2, issued by the International Auditing and Assurance Board.

15 SECTION 9 – Declaration(s) The external auditor I am aware that withholding information may be considered as providing misleading information and as such may have consequences for this application and future applications. I am also aware that it is a criminal offence to knowingly or recklessly provide any information which is false or misleading in connection to this Questionnaire. I confirm that the information in this form and any attachment is accurate and complete to the best of my knowledge and belief. I agree to provide details of any changes to information in this form and any attachment immediately to the CBA. I authorize the CBA to make such enquiries and to seek further information as it deems appropriate to verify the information given in this form. In particular, I consent to the CBA carrying out a judicial record check on any unspent convictions and convictions for relevant offences that I may have, conducting checks with other regulators, companies and institutions stated in this Questionnaire External Auditor and using external data sources. I confirm that I fully understand my role(s), responsibilities and accountabilities under the Supervisory Law(s) to which this Questionnaire relates. Signed: Date: Name (BLOCK CAPITALS): The applicant I confirm to have completed Section 1 of the Questionnaire fully and truthfully. I declare to be authorised to represent the applicant named under 1.1. Signed: Date: Name (BLOCK CAPITALS): Position:

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES Part III Policy papers III.1 Corporate Governance practices for Insurance Companies III.2 Outsourcing Arrangements

POLICY PAPERS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.1/1 III.1 Corporate Governance practices for Insurance companies This policy paper is applicable to all licensed insurance companies operating in or from Aruba and is issued pursuant to section 10 of the State Ordinance on the Supervision of the Insurance Business (AB 2000 no. 82) (SOSIB).

Introduction Insurance companies face special challenges, since they differ from other companies in that most of the funds they put at risk belong to third parties. Using third-party funds to generate income for the benefit of shareholders of a supervised institution demands that some limitation be placed by the supervisory authority on how prudently these funds can be put at risk. It is essential that the management of the insurance company and its board of supervisory directors fully understand the nature of the business being undertaken by the company and the related risks, and are suitably qualified and competent to perform the necessary functions and oversight of the operation. In order to meet this goal, insurance supervisory authorities have developed a keen interest in determining that these institutions adopt sound corporate governance practices. These practices are presented below and the Centrale Bank van Aruba (the Bank) aims at promoting the adoption of sound corporate governance practices by insurance companies subject to its supervision.
Basic elements of sound corporate governance practices Basic elements of sound corporate governance practices are:  Establish clear strategic objectives and corporate values that are communicated throughout the organization.  Set and enforce clear lines of responsibility and accountability throughout the organization.  Ensure that board members and senior-management are qualified for their positions.  Install adequate risk management policies.  Implement comprehensive internal controls.  Provide for full, accurate and timely financial disclosure. In the following paragraphs these elements will be discussed more in length, especially in relation to the responsibilities of the Board.

POLICY PAPERS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.1/2 3. Responsibilities of the board and its members The Board has dual responsibilities. The Board has its responsibilities as a whole, while each Supervisory Director has responsibilities as an individual member of the Board. The responsibilities of the Board as a whole can be summarized as follows:  Ensure competent management on an ongoing basis.  Ensure appropriate plans and policies for the institution.  Monitor operations to ensure compliance and adequate control.  Oversee business performance. 3.1 Board responsibilities A. To ensure competent management on an ongoing basis Capable management is a critical element in the difference between success and failure of on institution. Integrity and suitability should be key considerations in the selection process of senior-management. Reference is made to paragraph 2 of the Directive on Sound Business Operations for further information on the integrity and suitability assessment conducted by the Bank. The appointment or dismissal of a member of seniormanagement should have the approval or at least the consent of the Board. B. To ensure appropriate plans and policies for the institution Planning Rapid changes in the insurance industry call for clear strategies and business planning. Long-term strategic planning is done in strong cooperation with the Board and forms the broad policy framework, containing the institution’s philosophy and vision to the future. Policies All major activities must be covered by adequate policies and no such activity should be initiated before appropriate written policies and procedures are in place. Furthermore, policies should be communicated clearly through all levels, in order to promote consistency of interpretation throughout the organization as a whole. Reference is also made to paragraph 3 of the Directive on Sound Business Operations. C. To monitor operations to ensure compliance and adequate control The Board needs to ensure that senior-management has put adequate internal controls in place to ensure that the institution’s operations are properly controlled and that they comply with adopted policies, applicable laws and regulations. D. To oversee business performance The Board must receive timely all necessary information to evaluate management's performance (refer also to paragraph IV.3). The information provided should include at least:  quarterly balance sheet and profit and loss account;  analysis of actual versus budgeted income and costs (also per insurance branche);  analysis of key ratio's and trends (including prudential ratio's);

POLICY PAPERS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.1/3  information on accounting, policy and compliance matters;  information on important external developments;  internal audit reports (including management's comments);  reports from and correspondence with the external auditor (including the so-called management-letter);  on-site examination letter and other relevant correspondence with the supervisor; and,  changes in relevant laws and regulations; 3.2 Supervisory director’s individual responsibilities A Supervisory Director should: A. be aware of the institution’s operating environment Each Supervisory Director should be generally informed of both the business environment and the legal and regulatory framework affecting the institution’s activities. B. be diligent in performing its duties Supervisory Directors must devote adequate time and attention necessary to fulfill their duties in a proper manner and should be knowledgeable enough to contribute in a meaningful sense to the activities of the Board. C. exercise independent judgment If a Supervisory Director disagrees with a Board decision, he or she should say so and formally register and explain his or her disagreement. Objective judgment, with due observance of the articles 9 and 10 of the Directive on Sound Business Operations, is critical to the Board’s effectiveness. D. be loyal to the institution’s interests Supervisors Directors are responsible for protecting the institution's interests. They must also ensure that neither they nor others abuse their position to benefit personally from the institution and avoid even the appearance of a conflict of interest. Reference is also made to articles 9 and 10 of the Directive on Sound Business Operations. 3.3 Required qualifications Candidates for board positions in supervised insurance companies need at least some basic knowledge of either insurance or financial accounting. However, the Board as a whole must possess sufficient knowledge and experience in the insurance field. 3.4 Separate Board Committees The Board can form, for example, the following separate committees, in order to perform certain tasks that require detailed review or in-depth consideration.

POLICY PAPERS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.1/4 Audit Committee: This committee serves to monitor for compliance with Board’s policies, applicable laws and regulations, and to review financial and auditing matters. Risk Management Committee: This committee ensures that acceptable risk limits and that appropriate risk-control techniques are in place to monitor and minimize losses to the institution. Investment Committee: This committee ensures that the institution’s investment policies and assets/liabilities mix are adequate and that the institution’s investments comply with Board policies, general principles of asset and liability management, principles of risk management, and applicable laws and regulations. Personnel development Committee: Matters usually dealt with by this committee include CEO compensation arrangements, remuneration, recruitment and termination policies, incentive schemes, and remuneration arrangements for Board members. It should be stressed, however, that the Board as a whole remains fully responsible for a proper supervision of the institution. Therefore, these committees should report to the complete Board on all major issues discussed. 4. Risk Management When evaluating the quality of risk management at insurance companies, the Bank considers primarily if the following conditions are met:  active Board and senior-management oversight;  adequate policies, procedures, and limits;  adequate risk measurement, monitoring, and management information systems; and  adequate and comprehensive internal controls. 4.1 Active Board and senior-management oversight The Board should be consulted on the overall business strategy and on significant policy matters, including those related to the managing and taking of risks. Senior-management is, however, primarily responsible for implementing strategies in a manner that limits risks associated with each strategy and that ensures compliance with laws and regulations on both a long-term and a day-to-day basis.

POLICY PAPERS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.1/5 4.2 Adequate policies, procedures, and limits The following guidelines are considered by the Bank in evaluating the adequacy of a supervised institution’s policies, procedures, and limits:  The institution’s policies, procedures, and limits provide for adequate identification, measurement, monitoring, and control of the risks posed by its activities.  The policies, procedures, and limits are consistent with the institution’s stated goals and objectives and the overall financial strength of the institution.  Policies clearly delineate accountability and lines of authority across the institution’s activities.  Policies provide for the review of new activities of the financial institution to ensure that the infrastructure necessary to identify, monitor, and control risks associated with an activity is in place before the activity is initiated. 4.3 Adequate risk measurement, monitoring, and management information systems Effective risk monitoring requires institutions to identify and measure all material risk exposures. Consequently, risk monitoring activities must be supported by informationsystems that provide senior-managers and Board with timely reports on the financial condition, operating performance, and risk exposure of the financial institution, as well as with regular and sufficiently detailed reports for line managers in the day-to-day management of the institution’s activities. In assessing the adequacy of a supervised institution’s measurement and monitoring of risk and its management reports and information systems, the Bank will consider whether the following conditions exist:  The institution’s risk monitoring practices and reports address all of its material risks.  Key assumptions, data sources, and procedures used in measuring and monitoring risk are appropriate and adequately documented and tested for reliability on an ongoing basis.  Reports and other forms of communication are consistent with the institution’s activities, structured to monitor exposures and compliance with established limits, goals, or objectives, and as appropriate, compare actual versus expected performance.  Reports to the Board and management are accurate and timely and contain sufficient information to identify any adverse trend and to evaluate adequately the level of risk faced by the institution.

POLICY PAPERS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.1/6 4.4 Comprehensive internal controls An institution’s internal control environment is critical to the safe and sound functioning of the institution and, in particular, to its risk management system. Establishing and maintaining an effective system of controls, including appropriate segregation of duties, is one of senior-management’s primary responsibilities. When properly structured, a system of internal controls promotes effective operations and reliable financial and regulatory reporting. Moreover, the system safeguards assets and helps to ensure compliance with relevant laws, regulations, and institutional policies. An internal auditor should test internal controls regularly. The results of audits or reviews should be adequately documented, as should management’s responses to them. In addition, communication channels should exist that allow negative or sensitive findings to be reported directly to the Board or to the relevant Committee of the Board.

POLICY PAPERS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/1 III.2 Outsourcing Arrangements Policy Paper issued on the basis of sections 15 and 15a of the State Ordinance on the Supervision of the Credit System (SOSCS), sections 10 and 10a of the State Ordinance on the Supervision of the Insurance Business (SOSIB), section 11a of the State Ordinance on Company Pension Funds (SOCPF), and section 21 of the State Ordinance on the Supervision of the Securities Business (SOSSB).1

Introduction Outsourcing arrangements may increase the risk profile of an institution due to, for example, reputation, compliance and operational risks arising from failure of a service provider in providing the service, breaches in security, or the institution’s inability to comply with legal and regulatory requirements. An institution can also be exposed to country risk, when a service provider is located overseas, and concentration risk, when more than one service is outsourced to the same service provider. Outsourcing does not diminish the obligations of an institution, and those of its Supervisory Board and Managing Board, to comply with the relevant laws and regulations in Aruba. In this regard, it is important that an institution adopts a sound and responsive risk management framework for all of its material outsourcing arrangements.
Scope and applicability of the Policy Paper 2.1 This Policy Paper is applicable to all companies and institutions that fall under the scope of the SOSCS, SOSIB, SOCPF and SOSSB. Any deviation from this Policy Paper must be explained in a separate document, to be made directly available to the Centrale Bank van Aruba (CBA) upon request. In case parts of this Policy Paper are not applicable, this must also be recorded in the aforementioned document. Institutions with a limited size (e.g. credit unions) or activities may request for a dispensation of the requirements set out in this Policy Paper, provided that these institutions have policies and procedures in place with regard to outsourced services insofar material that are considered sufficiently effective by the CBA. 2.2 This Policy Paper provides a set of standards on sound practices on risk management of outsourcing arrangements that institutions must follow. The extent and degree to which an institution implements these standards should be commensurate with the nature of risks in, and materiality of, the outsourcing arrangement. An institution must ensure that outsourced services continue to be managed as if the services were still managed by the institution. 2.3 Annex 1 provides a non-exhaustive list of examples of outsourcing arrangements to which this Policy Paper is applicable, and arrangements that are not intended to be

1 This Policy Paper is largely based on a policy paper on outsourcing issued by the Monetary Authority of Singapore.

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/2 subject to this Policy Paper. It should also not be misconstrued that arrangements not defined as outsourcing need not be subject to adequate risk management and sound internal controls. Annex 2 provides guidance to an institution in assessing whether an outsourcing arrangement would be considered a material outsourcing arrangement. Annex 3 provides a template for an institution to maintain a register of its material outsourcing arrangements. This register must be made directly available to the CBA upon request. 3. Definitions 3.1 In this Policy Paper, unless the context otherwise requires: 3.1.1 Institution means: Credit institutions, insurance companies, pension funds, securities brokers, asset managers, investment institutions, custodians and stock exchanges, supervised by virtue of the SOSCS, SOSIB, SOCPF and SOSSB; 3.1.2 Material outsourcing arrangement means an outsourcing arrangement: (a) Which, in the event of a service failure or security breach, has the potential to either significantly impact an institution’s: (i) business operations, reputation or profitability, or (ii) ability to manage risk and comply with applicable laws and regulations, or (b) Which involves customer information and, in the event of any unauthorized access or disclosure, loss or theft of customer information, may have a significant impact on an institution’s customers; 3.1.3 Outsourcing agreement means: A written agreement setting out the contractual terms and conditions governing relation-ships, obligations, responsibilities, rights and expectations of the contracting parties in an outsourcing arrangement; 3.1.4 Outsourcing arrangement means: An arrangement in which a service provider provides the institution with a service that may currently or potentially be performed by the institution itself and which includes the following characteristics: (a) The institution is dependent on the service on an ongoing basis; and (b) The service is integral to the provision of a financial service by the institution or the service is provided to the market by the service provider in the name of the institution; 3.1.5 Service provider means: Any party which provides a service to the institution, including any entity within the institution’s group 2 , whether it is located in Aruba or elsewhere;

2 This refers to the institution’s Head Office or parent institution, subsidiaries, affiliates, and any entity (including their subsidiaries, affiliates and special purpose entities) that the institution exerts control over or that exerts control over the institution.

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/3 3.1.6 Sub-contracting means: An arrangement where a service provider which has an outsourcing agreement with an institution, further outsources the services or a material part of the services covered under the outsourcing arrangement to another service provider. 4. Risk management practices 4.1 Responsibility of the Supervisory Board and Managing Board 4.1.1 The Supervisory Board and Managing Board of an institution play pivotal roles in ensuring a sound risk management culture and environment. While an institution may delegate day-to-day operational duties to the service provider, the responsibilities for maintaining effective oversight and governance of outsourcing arrangements, managing outsourcing risks, and implementing an adequate outsourcing risk management framework, in accordance with this Policy Paper, continue to rest with the institution, its Supervisory Board and Managing Board. The Supervisory Board and Managing Board of an institution must ensure that there are adequate processes to provide a comprehensive institution-wide view of the institution’s risk exposures from outsourcing, and incorporate the assessment and mitigation of such risks into the institution’s outsourcing risk management framework. 4.1.2 The Managing Board is responsible for: (a) Establishing a framework to evaluate the risks and materiality of all existing and prospective outsourcing arrangements and the policies that apply to such arrangements; (b) Developing sound and prudent outsourcing policies and procedures that are commensurate with the nature, scope and complexity of the outsourcing arrangements as well as ensuring that these policies and procedures are implemented effectively (c) Setting a suitable risk appetite to define the nature and extent of risks that the institution is willing and able to assume from its outsourcing arrangements; (d) Laying down appropriate approval authorities for outsourcing arrangements consistent with its established strategy and risk appetite; (e) Assessing management competencies for developing sound and responsive outsourcing risk management policies and procedures that are commensurate with the nature, scope, and complexity of the outsourcing arrangements; (f) Undertaking regular reviews of outsourcing strategies and arrangements for their continued relevance, safety and soundness; and (g) Communicating information pertaining to risks arising from its material outsourcing arrangements to the Supervisory Board in a timely manner. 4.1.3 The Supervisory Board is responsible for: (a) Evaluating the materiality and risks from all existing and prospective outsourcing arrangements, based on the framework established by the Managing Board;

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/4 (b) Reviewing regularly the effectiveness of, and appropriately adjusting of, policies, standards, and procedures to reflect changes in the institution’s overall risk profile and risk environment; (c) Monitoring and maintaining effective control of all risks from its material outsourcing arrangements on an institution-wide basis; (d) Ensuring that contingency plans, based on realistic and probable disruptive scenarios, are in place and regularly tested; (e) Ensuring that there is independent review and audit for compliance with outsourcing policies and procedures; and (f) Ensuring that appropriate and timely remedial actions are taken to address audit findings. 4.2 Evaluation of risks 4.2.1 In order to be satisfied that an outsourcing arrangement does not result in the risk management, internal control, business conduct or reputation of an institution being compromised or weakened, the Supervisory board and Managing Board need to be fully aware of and understand the risks arising from outsourcing. The institution must establish a framework for risk evaluation which should include the following steps: (a) Identifying the role of outsourcing in the overall business strategy and objectives of the institution; (b) Performing comprehensive due diligence on the nature, scope, and complexity of the outsourcing arrangements to identify and mitigate key risks; (c) Assessing the service provider’s ability to employ a high standard of care in performing the outsourced service and meet regulatory standards as if the outsourcing arrangement is performed by the institution; (d) Analyzing the impact of the outsourcing arrangement on the overall risk profile of the institution, and whether adequate internal expertise and resources are available to mitigate the risks identified; (e) Analyzing the institution’s as well as the institution’s group aggregate exposure to the outsourcing arrangement, to manage concentration risk; and (f) Analyzing the benefits of outsourcing against the risks that may arise, ranging from the impact of temporary disruption to service, to that of a material breach in security and confidentiality, and unexpected termination of the outsourcing arrangement, and whether for strategic and internal control reasons, the institution should not enter into the outsourcing arrangement.

4.2.2 Such risk evaluations should be performed when an institution is planning to enter into a material outsourcing arrangement with an existing or a new service provider, and also re-performed periodically on existing material outsourcing arrangements, as part of the approval, strategic planning, risk management or internal control reviews of the outsourcing arrangements of the institution.

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/5 4.3 Assessment of Service Providers 4.3.1 In considering renegotiating or renewing an outsourcing arrangement, an institution should subject the service provider to appropriate due diligence processes to assess the risks associated with the outsourcing arrangement. 4.3.2 An institution must assess all relevant aspects of the service provider, including its capability to employ a high standard of care in the performance of the outsourcing arrangement as if the service is performed by the institution to meet its obligations as a regulated entity. The due diligence must also take into account the physical and IT security controls the service provider has in place, the business reputation and financial strength of the service provider, including the ethical and professional standards held by the service provider, and its ability to meet obligations under the outsourcing arrangement. Onsite visits at the service provider, and where possible, independent reviews and market feedback on the service provider, must also be obtained to supplement the institution’s assessment. On-site visits must be conducted by persons who possess the requisite knowledge and skills to conduct the assessment.

4.3.3 The due diligence must involve an evaluation of all relevant information about the service provider. Information to be evaluated includes the service provider’s: (a) Experience and capability to implement and support the outsourcing arrangement over the contracted period; (b) Financial strength and resources (the due diligence should be similar to a credit assessment of the viability of the service provider based on reviews of business strategy and goals, audited financial statements, the strength of commitments of major equity sponsors and the ability to service commitments even under adverse conditions); (c) Corporate governance, business reputation and culture, compliance, and pending or potential litigation; (d) Security and internal controls, audit coverage, reporting and monitoring environment; (e) Risk management framework and capabilities in respect of the outsourcing arrangement; (f) Disaster recovery arrangements and disaster recovery track record; (g) Reliance on sub-contractors; (h) Insurance coverage; (i) External environment (such as the political, economic, social and legal environment of the jurisdiction in which the service provider operates); and (j) Ability to comply with applicable laws and regulations, and track record in relation to its compliance with applicable laws and regulations. 4.3.4 The service provider must ensure that the employees of the service provider undertaking any part of the outsourcing agreement have been assessed to meet the institution’s hiring policies for the role they are performing, consistent with the criteria that are applicable to the institution’s own hiring criteria. Any adverse

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/6 findings from this assessment should be considered in light of their relevance and impact to the outsourcing arrangement. 4.3.5 Due diligence undertaken during the assessment process should be documented and re-performed periodically as part of the monitoring and control processes of material outsourcing arrangements. The due diligence process may vary depending on the nature, extent of risks of the arrangement, and impact on the institution in the event of a disruption to service or breach of security and confidentiality (e.g., reduced due diligence may be sufficient where the outsourcing arrangements are made within the institution’s group) 3 . An institution must ensure that the information used for due diligence evaluation is sufficiently current. An institution must also consider the findings from the due diligence evaluation to determine the frequency and scope of audit on the service provider. 4.4 Outsourcing Agreement 4.4.1 Contractual terms and conditions governing relationships, obligations, responsibilities, rights, and expectations of the contracting parties in the outsourcing arrangement must be carefully and properly defined in written agreements. 4.4.2 An institution must ensure that every outsourcing agreement addresses the risks identified during the risk evaluation and due diligence stages. Each outsourcing agreement should allow for timely renegotiation and renewal to enable the institution to retain an appropriate level of control over the outsourcing arrangement and the right to intervene with appropriate measures to meet its legal and regulatory obligations. It should, at the very least, have provisions to address the following aspects of outsourcing: (a) Scope of the outsourcing arrangement; (b) Performance, operational, internal control and risk management standards; (c) Confidentiality and security 4 ; (d) Business continuity management 5 ; (e) Monitoring and control 6 ; (f) Audit and inspection 7 ; (g) Notification of adverse developments: an institution must specify in its outsourcing agreement the type of events and the circumstances under which the service provider should report to the institution; (h) Dispute resolution: an institution must specify in its outsourcing agreement the resolution process, events of default, the indemnities, remedies and recourse of the respective parties in the agreement. The institution should ensure that its contractual rights can be exercised in the event of a breach of the outsourcing agreement by the service provider;

3 In case of outsourcing within the same group, the institution must have a Service Level Agreement in place for the outsourced services. Refer to paragraph 4.10. 4 Refer to paragraph 4.5. 5 Refer to paragraph 4.6. 6 Refer to paragraph 4.7. 7 Refer to paragraph 4.8.

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/7 (i) Default termination and early exit: an institution must have the right to terminate the outsourcing agreement in the event of default, or under circumstances where: (i) the service provider undergoes a change in ownership; (ii) the service provider becomes insolvent or goes into liquidation; (iii) the service provider goes into receivership or judicial management; (iv) there has been a breach of security or confidentiality; or (v) there is a demonstrable deterioration in the ability of the service provider to perform the contracted service. The minimum period to execute a termination provision must be specified in the outsourcing agreement. Other provisions must also be put in place to ensure a smooth transition when the agreement is terminated or being amended. Such provisions may facilitate transferability of the outsourced services to a third party. Where the outsourcing agreement involves an intra-group entity, the agreement should be legally enforceable against the intra-group entity providing the outsourced service; (j) Sub-contracting: an institution must retain the ability to monitor and control its outsourcing arrangements when a service provider uses a sub-contractor. An outsourcing agreement must contain clauses setting out the rules and limitations on sub-contracting. An institution must include clauses making the service provider contractually liable for the performance and risk management practices of its sub-contractor and for the sub-contractor’s compliance with the provisions in its agreement with the service provider. The institution must ensure that the sub-contracting of any part of material outsourcing arrangements is subject to the institution’s prior approval; (k) Applicable laws: agreements must include choice-of-law provisions, agreement covenants and jurisdictional covenants that provide for adjudication of disputes between the parties under the laws of a specific jurisdiction. 4.4.3 Each outsourcing agreement must be tailored to address issues arising from country risks and potential obstacles in exercising oversight and management of the outsourcing arrangements made with a service provider outside of Aruba. 4.5 Confidentiality and Security 4.5.1 As public confidence in institutions is a cornerstone in the stability and reputation of the financial industry, it is vital that an institution satisfies itself that the service provider’s security policies, procedures, and controls will enable the institution to protect the confidentiality and security of customer information. 4.5.2 An institution must be proactive in identifying and specifying requirements for confidentiality and security in the outsourcing arrangement. An institution must take the following steps to protect the confidentiality and security of customer information: (a) State the responsibilities of contracting parties in the outsourcing agreement to ensure the adequacy and effectiveness of security policies and practices, including the circumstances under which each party has the right to change security requirements. The outsourcing agreement should also address:

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/8 (i) the issue of the party liable for losses in the event of a material breach of security or confidentiality and the service provider’s obligation to inform the institution; and (ii) the issue of access to and disclosure of customer information by the service provider. Customer information should be used by the service provider and its staff strictly for the purpose of the contracted service; (b) Disclose customer information to the service provider only on a need-to-know basis; (c) Ensure the service provider is able to protect the confidentiality of customer information, documents, records, and assets, particularly where multi-tenancy8

arrangements are present at the service provider; and (d) Review and monitor the security practices and control processes of the service provider on a regular basis, including commissioning audits or obtaining periodic expert reports on confidentiality, security adequacy and compliance in respect of the operations of the service provider, and requiring the service provider to disclose to the institution breaches of confidentiality in relation to customer information. 4.6 Business Continuity Management 4.6.1 An institution must ensure that its business continuity is not compromised by outsourcing arrangements, in particular, of the operation of its critical systems. 4.6.2 An institution must take steps to evaluate and satisfy itself that the interdependency risk arising from the outsourcing arrangement can be adequately mitigated in such a way that the institution remains able to conduct its business with integrity and competence in the event of a service disruption or failure, or unexpected termination of the outsourcing arrangement or liquidation of the service provider. These should include taking the following steps: (a) Determine that the service provider has in place satisfactory business continuity plans (BCP) that are commensurate with the nature, scope, and complexity of the outsourcing arrangement. Outsourcing agreements should contain requirements on the service provider in the area of business continuity, in particular, recovery time objectives (RTO), recovery point objectives (RPO), and resumption operating capacities; (b) Proactively seek assurance on the state of business continuity preparedness of the service provider. It should ensure that the service provider regularly tests its BCP and that the tests validate the feasibility of the RTO, RPO, and resumption of the operating capacities. The institution should require the service provider to notify it of any test findings that may affect the service provider’s performance. The institution should also require the service provider to notify it of any substantial changes in the service provider’s BCP and of any adverse development that could substantially impact the service provided to the institution; and

8 Multi-tenancy generally refers to a mode of operation adopted by service providers where a single computing infrastructure (e.g., servers, databases etc.) is used to serve multiple customers (tenants).

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/9 (c) Ensure that there are plans and procedures in place to address adverse conditions or termination of the outsourcing arrangement such that the institution will be able to continue business operations and that all documents, records of transactions and information previously given to the service provider are promptly removed from the possession of the service provider or deleted, destroyed or rendered unusable, with due regard to the applicable legislation in the country where the service provider is located. 4.6.3 For assurance on the functionality and effectiveness of its BCP, an institution should design and carry out regular, complete and meaningful BCP testing that is commensurate with the nature, scope and complexity of the outsourcing arrangement. 4.6.4 The institution must consider worst case scenarios in its BCP. Some examples of these scenarios are unavailability of the service provider due to unexpected termination of the outsourcing agreement, liquidation of the service provider and wide-area disruptions that result in collateral impact on both the institution and the service provider. 4.7 Monitoring and Control 4.7.1 An institution must establish a structure for the management and control of its outsourcing arrangements. Such a structure will vary depending on the nature and extent of risks in the outsourcing arrangements. As relationships and interdependencies in respect of outsourcing arrangements increase in materiality and complexity, a more rigorous risk management approach should be adopted. An institution also has to be more proactive in its relationship with the service provider (e.g., having frequent meetings) to ensure that performance, operational, internal control, and risk management standards are upheld. 4.7.2 An institution must put in place all of the following measures for effective monitoring and control of any material outsourcing arrangement: (a) Maintain a register of all material outsourcing arrangements and ensure that the register is readily accessible for review by the Supervisory Board and Managing Board of the institution and the CBA. The information maintained in the register must at a minimum consist of the information set out in Annex 3. (b) Assign clear responsibilities within the institution for the monitoring and controlling of the outsourcing agreement; (c) Periodic reviews on all material outsourcing arrangements. This is to ensure that the institution’s outsourcing risk management policies and procedures, and the requirements in this Policy Paper, are effectively implemented. Such reviews must ascertain the adequacy of internal risk management and management information systems established by the institution (e.g., assessing the effectiveness of processes and metrics used to evaluate the performance and security of the service provider) and highlight any deficiency in the institution’s systems of control;

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/10 (d) Reporting policies and procedures: reports on the monitoring and control activities of the institution must be reviewed by its Managing Board, while the outcome must be shared with the Supervisory Board. The institution must also ensure that any adverse development arising in any outsourcing arrangement is brought to the immediate attention of the Managing Board of the institution and service provider, and where warranted, to the institution’s Supervisory Board. When adverse development occurs, prompt actions should be taken by an institution to review the outsourcing relationship for modification or termination of the agreement. 4.8 Audit and Inspection 4.8.1 An institution’s outsourcing arrangements must not interfere with the ability of the institution to effectively manage its business activities or impede the CBA in carrying out its supervisory functions and meeting its objectives. 4.8.2 An institution must include, in all of its outsourcing agreements for material outsourcing arrangements, clauses that: (a) Allow the institution to conduct audits on the service provider, whether by its internal or external auditors, or by agents appointed by the institution; and to obtain copies of any report and finding made on the service provider, whether produced by the service provider’s internal or external auditors, or by agents appointed by the service provider, in relation to the outsourcing arrangement; (b) Allow the CBA, where necessary or expedient, to exercise the contractual rights of the institution to: (i) access and inspect the service provider, and obtain records and documents, of transactions, and information of the institution given to, stored at or processed by the service provider; and (ii) access any report and finding made on the service provider, whether produced by the service provider’s internal or external auditors, or by agents appointed by the service provider, in relation to the outsourcing arrangement. 4.8.3 Outsourcing agreements for material outsourcing arrangements must also include clauses that require the service provider to comply, as soon as possible, with any request from the CBA or the institution, to the service provider or its subcontractors, to submit to the CBA any report on the security and control environment of the service provider and its sub-contractors, in relation to the outsourcing arrangement. 4.8.4 An institution must ensure that independent audits and/or expert assessments of all its material outsourcing arrangements are conducted. In determining the frequency of audit and expert assessments, the institution should consider the nature and extent of the involved risks, and the impact on the institution from the outsourcing arrangements. The scope of the audit and expert assessments should include an assessment of the service provider’s security 9 and control environment, incident

9 The security environment refers to both the physical and IT security environments.

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/11 management process (for material breaches, service disruptions or other material issues) and the institution’s observance of this Policy Paper in relation to the outsourcing arrangement. 4.8.5 The independent audit and/or expert assessment on the service provider may be performed by the institution’s internal or external auditors, the service provider’s external auditors 10 or by agents appointed by the institution. The appointed persons should possess the requisite knowledge and skills to perform the engagement, and be independent of the unit or function performing the outsourcing arrangement. The Supervisory Board must ensure that appropriate and timely remedial actions are taken to address the audit findings 11. Institutions must have adequate processes in place to ensure that remedial actions are satisfactorily completed. 4.8.6 Significant issues and concerns must be brought to the attention of the Managing Board of the institution and service provider, and where warranted, to the Supervisory Board. Actions must be taken by the institution to review the outsourcing arrangement if the risk posed is no longer within the institution’s risk tolerance.

4.8.7 Copies of audit reports must be directly submitted by the institution to the CBA upon request. An institution must also, upon request, provide the CBA with other reports or information on the institution and service provider that is related to the outsourcing arrangement. 4.9 Outsourcing outside Aruba 4.9.1 The engagement of a service provider in a foreign country, or an outsourcing arrangement whereby the outsourced function is performed in a foreign country, may expose an institution to country risk (economic, social and political conditions and events in a foreign country) that may adversely affect the institution. Such conditions and events could prevent the service provider from carrying out the terms of its agreement with the institution. In its risk management of such outsourcing arrangements, an institution must take into account, as part of its due diligence: (a) Government policies; (b) Political, social, and economic conditions; (c) Legal and regulatory developments in the foreign country; and (d) The institution’s ability to effectively monitor the service provider, and execute its business continuity plans and exit strategy. The institution must also be aware of the disaster recovery arrangements and locations established by the service provider in relation to the outsourcing arrangement. As information and data could be moved to primary or backup sites located in foreign countries, the risks associated with the medium of transport, be it physical or electronic, should also be considered.

10 An institution should conduct its own audits to supplement the audits performed by the service provider’s auditors, where necessary. 11 Refer to paragraph 4.1.

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/12 4.9.2 Material outsourcing arrangements with service providers located outside of Aruba must be conducted in a manner so as not to hinder the CBA’s efforts to supervise the Aruban business activities of the institution (i.e., from its books, accounts and documents) in a timely manner, in particular: (a) An institution may not enter into outsourcing arrangements with service providers operating in jurisdictions that do not uphold confidentiality clauses and agreements; and (b) An institution may not enter into outsourcing arrangements with service providers in jurisdictions where prompt access to information by the CBA at the service provider may be impeded by legal or administrative restrictions. 4.10 Outsourcing within a group 4.10.1 This Policy Paper is also applicable to outsourcing arrangements with parties within an institution’s group. The expectations may be addressed within group-wide risk management policies and procedures. The institution would be expected to provide, when requested, information demonstrating the structure and processes by which its Supervisory Board and Managing Board discharge their role in the oversight and management of outsourcing risks on a group-wide basis. 4.10.2 Due diligence on an intra-group service provider may take the form of evaluating qualitative aspects of the service provider’s ability to address risks specific to the institution, particularly those relating to business continuity management, monitoring and control, audit and inspection, including confirmation on the right of access to be provided to the CBA, to retain effective supervision over the institution, and compliance with local regulatory standards. The respective roles and responsibilities of each office in the outsourcing arrangement should be documented in writing in a Service Level Agreement. 4.11 Outsourcing of Internal Audit to External Auditors 4.11.1 Where the outsourced service is the internal audit function of an institution, there are additional factors that an institution should take into account. One of these is the lack of independence, or the appearance of impaired independence, when a service provider is handling multiple engagements for an institution, such as internal and external audits, and consultancy services. There is doubt that the service provider, in its internal audit role, would criticize itself for the quality of the external audit or consultancy services provided to the institution. In addition, as operations of an institution could be complex and involve large transaction volumes and amounts, it should ensure service providers have the expertise to adequately complete the engagement. An institution should address these and other relevant issues before outsourcing the internal audit function. In addition, as a sound practice, institutions shall not outsource their internal audit function to the institution’s external audit firm.

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/13 4.11.2 Before outsourcing the internal audit function to external auditors, an institution must satisfy itself that the external auditor is in compliance with the relevant standards, including the independency standards, regulating the accounting profession. This Policy Paper enters into force on July 1, 2018.

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/14 Annex 1 EXAMPLES OF OUTSOURCING ARRANGEMENTS 1 The following are examples of some services that, when performed by a third party, would be regarded as outsourcing arrangements for the purposes of this Policy Paper although they are not exhaustive: (a) Application processing (e.g., loan origination, insurance underwriting, credit cards); (b) Middle and back office operations (e.g., electronic funds transfer, payroll processing, custody operations, quality control, purchasing, maintaining the register of participants of a collective investment scheme (CIS) and sending of accounts and reports to CIS participants, order processing, trade settlement and risk management); (c) Business continuity and disaster recovery functions and activities; (d) Claims administration (e.g., loan negotiations, loan processing, insurance claim processing, collateral management, collection of bad loans); (e) Document processing (e.g., cheques, credit card and bill payments, bank statements, other corporate payments, customer statement printing); (f) Information systems hosting (e.g., software-as-a-service, platform-as-a-service, infrastructure-as-a-service); (g) Information systems management and maintenance (e.g., data entry and processing, data centers, data center facilities management, end-user support, local area networks management, help desks, information technology security operations); (h) Investment management (e.g., discretionary portfolio management, cash management); (i) Management of policy issuance and claims operations (by managing agents); (j) Manpower management (e.g., benefits and compensation administration, staff appointment, training and development); (k) Marketing and research (e.g., product development, data warehousing and mining, media relations, call centers, telemarketing); (l) Professional services related to the business activities of the institution (e.g., accounting, internal audit, actuarial, compliance); (m) Support services related to archival, storage and destruction of data and records; and (n) Cloud computing.

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CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/15 2 The following arrangements would generally not be considered outsourcing arrangements, falling under the scope of this Policy Paper: (a) Arrangements in which certain industry characteristics require the use of third party providers; (i) maintenance of custody accounts; (ii) telecommunication services and public utilities (e.g., electricity, SMS gateway services); (iii) postal services; (iv) market information services (e.g., Bloomberg, Moody’s, Standard & Poor’s); (v) common network infrastructure (e.g., Visa, MasterCard); (vi) clearing and settlement arrangements between clearing houses and settlement institutions and their members, and similar arrangements between members and non-members; (vii) global financial messaging infrastructure which are subject to oversight by relevant regulators (e.g., SWIFT); and (viii) correspondent banking services. (b) Introducer arrangements and arrangements that pertain to principal-agent relationships: (i) sale of insurance policies by agents, and ancillary services relating to those sales; (ii) acceptance of business by underwriting agents; and (iii) introducer arrangements (where the institution does not have any contractual relationship with customers). (c) Arrangements that the institution is not legally or administratively able to provide: (i) statutory audit and independent audit assessments; (ii) discreet advisory services (e.g., legal opinions, independent appraisals, trustees in bankruptcy, loss adjuster); and (iii) Independent consulting (e.g., consultancy services for areas which the institution does not have the internal expertise to conduct).

POLICY PAPERS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/16 Annex 2 MATERIAL OUTSOURCING ARRANGEMENTS 1 An institution should assess the materiality in an outsourcing arrangement. In assessing materiality, the CBA recognizes that qualitative judgment is involved and the circumstances faced by individual institutions may vary. Factors that an institution should consider include: (a) Importance of the business activity to be outsourced (e.g., in terms of contribution to income and profit); (b) Potential impact of the outsourcing on earnings, solvency, liquidity, funding, capital, and risk profile; (c) Impact on the institution’s reputation and brand value, and ability to achieve its business objectives, strategy, and plans, should the service provider fail to perform the service or encounter a breach of confidentiality or security (e.g., compromise of customer information); (d) Impact on the institution’s customers, should the service provider fail to perform the service or encounter a breach of confidentiality or security; (e) Impact on the institution’s counterparties and the Aruban financial market, should the service provider fail to perform the service; (f) Cost of the outsourcing as a proportion of total operating costs of the institution; (g) Cost of outsourcing failure, which will require the institution to bring the outsourced activity in-house or seek similar service from another service provider, as a proportion of total operating costs of the institution; (h) Aggregate exposure to a particular service provider in cases where the institution outsources various functions to the same service provider; and (i) Ability to maintain appropriate internal controls and meet regulatory requirements, if the service provider faces operational problems. 2 Outsourcing of all or substantially all of its risk management or internal control functions, including compliance, internal audit, financial accounting and actuarial (other than performing certification activities) is to be considered a material outsourcing arrangement. 3 An institution should undertake periodic reviews of its outsourcing arrangements to identify new outsourcing risks as they arise. An outsourcing arrangement that was previously not material may subsequently become material from incremental services outsourced to the same service provider or an increase in volume or change in nature of the service outsourced to the service provider. Outsourcing risks may also increase when the service provider subcontracts the service or makes significant changes to its sub-contracting arrangements. 4 An institution should consider materiality at both the institution’s level and as a group, i.e. together with the institution’s branches and corporations under its control.

POLICY PAPERS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES III.2/17 Annex 3 REGISTER OF MATERIAL OUTSOURCING ARRANGEMENTS 12 An institution should maintain an updated register of all existing material outsourcing arrangements. The register must - at a minimum - contain the following information: (a) Name of service provider / sub-contractor as set out in the outsourcing agreement; (b) Description of outsourced service(s); (c) Contract renewal date (where applicable); (d) Service expiry (date); (e) Date that the institution undertook due diligence on the outsourcing / sub-contracting arrangement; and (f) Date that an independent audit was last conducted on the service provider / subcontractor.

12 Refer to paragraph 4.7.

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES Part IV Application forms

IV.1 Application form for a license for a Life Insurance Company IV.2 Application form for a license for a Non-Life Insurance Company IV.3 Application form for a license for a Captive Insurance Company

APPLICATION FORMS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES IV.1/1 IV.1 Application form for a license for Life Insurance Company By virtue of section 6 of the State Ordinance Supervision Insurance business (AB 2000 no. 82)

General
Statutory name of the applicant1 :

Country of incorporation of the applicant:

Legal status of the applicant:

The organization form in Aruba: c Limited Liability Company (Naamloze Vennootschap) c Mutual Company c Aruba Exempt Corporation (A.V.V.) c Branch Office c Agency Question 5 is exclusively for applicants that are already operating in Aruba.
Is the life insurance business in Aruba being carried out together with a non-life insurance business? c YES c NO (If answer is ‘YES’) Is the administration of the two businesses carried out separately? c YES c NO

1 The applicant is the legal entity requesting a license to operate in Aruba.

APPLICATION FORMS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES IV.1/2 2. Enclosures Please enclose the following documents together with the application form: a. Certified copy of the Articles of Incorporation of the applicant and a recent certificate (not older than 6 months) of its registration in the trade register at the Chamber of Commerce. b. The names and completed questionnaire for each of the persons who determine the day-to-day policy of the company.2 c. The names and completed questionnaire for each of the members of the supervisory board (or comparable body) of the company. d. The names of those who have a qualified holding (more than 5% of the shares or voting rights) in the company, as well as the size of the qualified holding. e. Certified annual financial statements over the past three years of the applicant and the local entity. If the applicant establishes a new legal entity, an opening balance sheet certified by an external auditor. f. A business plan, which includes at least the following information:

the risk(s) to be insured, direct assumed and ceded, per line of business;
the tariffs and technical bases for the calculation of premiums and technical provisions;
the reinsurance program;
if applicable, the estimated initial cost and funding thereof;
three year financial projections, including the development of the solvency margin. g. The envisaged administrative organization and organizational structure, including the financial administration and internal controls. h. The names and qualifications of the external auditor and the actuary. i. Documents proofing that the applicant is in compliance with the solvency margin in accordance with the requirements as stipulated in section 14, sub 1 of the State Ordinance Supervision Insurance Business. j. If the applicant is part of a group, indicate which other companies or institutions form part of the group (group structure).

2 If the day-to-day policy of the company is performed by a legal representative, e.g. a management company, the representative of the company must be professionally qualified, reliable and of good repute.

APPLICATION FORMS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES IV.1/3 If the management of the company is performed by an insurance management company (legal representative) please provide: k. A certified copy of the Articles of Incorporation of the representative. l. A recent certificate of its registration in the trade register. m. A copy of the contract between the insurance company and the legal representative. If applicable: n. Confirmation by the home country supervisor that the company is solvent and meets all the regulatory requirements in the home jurisdiction. o. Confirmation from the home country supervisor that it has endorsed the IAIS Core Principles. Number of enclosures included: _____ To be signed by applicant: Place and date : ______________________________ Name : ______________________________ Position held : ______________________________ Signature : ______________________________

APPLICATION FORMS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES IV.2/1 IV.2 Application form for a license for a non-life insurance Company By virtue of section 6 of the State Ordinance Supervision Insurance business (AB 2000 no. 82) I. General

Statutory name of the applicant1 :

Country of incorporation of the applicant:

Legal status of the applicant:

The organization form in Aruba: c Limited Liability Company (Naamloze Vennootschap) c Mutual Company c Aruba Exempt Corporation (A.V.V.) c Branch Office c Agency
Please indicate in which line of business the local entity will be engaged (please indicate by marking an ‘X’ in the corresponding box). Product details should be provided in a separate appendix. a. Accident and health insurance c b. Motor vehicle insurance c c. Maritime, transport and aviation insurance c d. Fire insurance and other property insurance c e. Other indemnity insurances c

1 The applicant is the legal entity requesting a license to operate in Aruba.

APPLICATION FORMS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES IV.2/2 2. Enclosures

In case the application (also) refers to motor vehicle insurance, please provide a declaration signed by the applicant stating, that the conditions of its motor vehicle insurance are in accordance with the stipulations as prescribed by the State Ordinance Motor Vehicles Liability Insurance (AB 1999 no. GT 12).
Please enclose the following documents together with the application form: a. Certified copy of the Articles of Incorporation of the applicant and a recent certificate (not older than 6 months) of its registration in the trade register at the Chamber of Commerce. b. The names and completed questionnaire for each of the persons who determine the day-to-day policy of the company.2 c. The names and completed questionnaire for each of the members of the supervisory board (or comparable body) of the company. d. The names of those who have a qualified holding (more than 5% of the shares or voting rights) in the company, as well as the size of the qualified holding. e. Certified annual financial statements over the past three years of the applicant. If the applicant is a new legal entity, an opening balance sheet certified by an external auditor. f. A business plan, which includes at least the following information:

the risk(s) to be insured, direct, assumed and ceded, per line of business;
the tariffs and technical bases for the calculation of premiums and technical provisions;
the reinsurance program;
if applicable, the estimated initial cost and funding thereof;
three year financial projections, including the development of the solvency margin. g. The envisaged administrative organization and organizational structure, including the financial administration and internal controls. h. The names and qualifications of the external auditor and actuary. i. Documents proofing that the applicant is in compliance with the solvency margin in accordance with the requirements stipulated in section 14, sub 2 of the State Ordinance Supervision Insurance Business. j. If the applicant is part of a group, indicate which other companies or institutions form part of the group (group structure).

APPLICATION FORMS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES IV.2/3 If the management of the company is performed by an insurance management company (legal representative) please provide: k. A certified copy of the Articles of Incorporation of the representative. l. A recent certificate of its registration in the trade register. m. A Copy of the contract between the insurance company and the legal representative. If applicable: n. Confirmation from the home country supervisor that the company is solvent and meets all regulatory requirements in the home jurisdiction. o. Confirmation from the home country supervisor that it has endorsed the IAIS Core Principles. Number of enclosures included: _____ To be signed by applicant: Place and date : ____________________________ Name : ____________________________ Position held : ____________________________ Signature : ____________________________

APPLICATION FORMS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES IV.3/1 IV.3 APPLICATION FORM FOR A LICENSE FOR A CAPTIVE INSURANCE COMPANY By virtue of section 3 paragraph 3 of the State Decree Special Provisions Captive Insurers I. General

Name of proposed captive insurance company:

Name of parent company or sponsor:

Name, address, and telephone number of individual to be contacted regarding this application:

Principal place of business of proposed captive:

Please indicate type of proposed captive. a. Pure captive c b. Association or industry captive c c. Rent-a-captive (sponsored) c d. Other (specify) c

APPLICATION FORMS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES IV.3/2 6. The organization form in Aruba: c Limited Liability Company (“Naamloze Vennootschap”) c Mutual Company c Aruba Exempt Corporation (“Aruba Vrijgestelde Vennootschap”) c Branch 7. Name, address and telephone number of resident representative:

Enclosures
Please enclose the following documents together with the application form: a. Certified copy of the articles of incorporation of the company and a recent certificate (not older than 6 months) of its registration in the trade register at the Chamber of Commerce of Aruba. b. The names and completed questionnaire for each of the persons who determine the day-to-day policy of the company.1 c. The names and completed questionnaire for each of the members of the Supervisory Board (or a similar body) of the company. d. The names of those who have a qualifying holding (more than 5% of the shares or voting rights) in the company, as well as the size of the qualifying holding. Explain the relationship among the beneficial owners. e. Certified financial statements or an opening balance sheet. f. A business plan including information on:

Risks to be insured – direct, assumed and ceded – by line of business, and maximum retained risk (per loss and annual aggregate);
The technical principles that the captive insurer intends to apply, in particular the rating program and actuarial assumptions;
Reinsurance program;
Insight in the presence of the solvency margin required and an estimation of the financial assets to cover the solvency margin;
A five year financial projection, including projections of the solvency margin and liquidity position. g. The envisaged administrative organization and organizational structure, including the financial administration and internal controls.

1 If the day-to-day management of the company is performed by a management company, the representative of the company must be professionally qualified, reliable and of good repute.

APPLICATION FORMS

CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES IV.3/3 h. The organization responsible for loss prevention and safety. i. The name and professional qualifications of the external auditor and the actuary of the company. j. Documents proofing that the applicant disposes of a solvency margin in accordance with the requirements stipulated in Section 7 of the State Decree. k. If the applicant is part of a group, holding or association indicate which other companies or institutions form part of the group, holding or association and what the relationship is with the applicant. The answer must be clearly formulated in an appendix and an organization chart of the group, holding or association should be included. l. If applicant is an Association Captive, give history, purpose, size and other details of parent association. m. If the applicant is incorporated outside of Aruba a written confirmation by the home country supervisor that the applicant is solvent and meets all regulatory requirements in the home jurisdiction. If the day-to-day operation of the company is conducted by a management company please provide: n. Articles of incorporation of the management company. o. A copy of the contract between the applicant and the management company. p. Documents showing the financial standing of the management company. Number of enclosures included: _____ I certify that to the best of my knowledge and belief all of the information given in this application is true and correct and that all estimates given are true estimates based upon facts that have been carefully considered and assessed. Place and date : Name : Position held : Signature :

Part V Landsbesluit bijzondere bedrijfsrisicoverzekeraars (AB 2002 no. 50) Unofficial English translation of the State Decree Captive Insurance Companies Landsbesluit vertegenwoordiging verzekeringsbedrijf (AB 2003 no. 12) Unofficial English translation of the State Decree Representative Insurance Companies Legislation Landsverordening toezicht verzekeringsbedrijf (AB 2000 no. 82) Unofficial English translation of the State Ordinance Insurance Business CBA PRUDENTIAL SUPERVISION MANUAL INSURANCE COMPANIES