Insurance (Submission of Information by Insurers) Directive, 2018

5th July, 2018 503

GOVERNMENT NOTICE NO. 48

INSURANCE ACT
(CAP. 47:01)

INSURANCE (SUBMISSION OF INFORMATION BY INSURERS) DIRECTIVE, 2018

ARRANGEMENT OF PARAGRAPHS

PARAGRAPH

PART I—PRELIMINARY

1. Citation
2. Application
3. Interpretation

PART II—OBJECTIVES
4. Objectives

PART III—SPECIFIC REQUIREMENTS
5. Format of call reports
6. Deadline for submission of call reports
7. Submission of institutional profile
8. Submission of other information
9. Restriction on tampering with call report templates

PART IV—ENFORCEMENT
10. Monetary penalties
11. Other penalties

IN EXERCISE of the powers conferred by section 79 (3) (f) of the Insurance Act, I, DR. DALITSO KABAMBE, Registrar of Financial Institutions, issue the following Directive—

PART I—PRELIMINARY

1. This Directive may be cited as the Insurance (Submission of Information by Insurers) Directive, 2018.

2. This Directive applies to insurance and reinsurance companies licensed to conduct insurance and reinsurance business in Malawi.

3. In this Directive unless the context otherwise requires—
   “call report” means a complete set of returns as outlined in this Directive that insurers and reinsurers must compile and submit to the Registrar; and
   “insurer” means a general insurer, a life insurer or a reinsurer.

Citation
Application
Interpretation

504
5th July, 2018

PART II—OBJECTIVES

Objectives
4. The objectives of this Directive are to—
(a) ensure that insurers submit to the Registrar on a timely basis accurate electronic call reports and any other information and data as prescribed by the Registrar;
(b) set out the supervisory reporting standards for the provision of information relating to the financial performance of insurers; and
(c) establish quality control standards for data before it is submitted to the Registrar.

PART III—SPECIFIC REQUIREMENTS

Format of call reports
5.—(1) A general insurer shall complete and submit to the Registrar call reports in the format prescribed in the First Schedule.
(2) A life insurer shall compile and submit to the Registrar call reports in the format prescribed in the Second Schedule.
(3) A reinsurer shall compile and submit to the Registrar call reports in the format prescribed in the Third Schedule.

Deadline for submission of call reports
6.—(1) An insurer shall submit quarterly call reports to the Registrar within 10 days after the last day of every quarter.
(2) An insurer shall submit to the Registrar an annual call report, audited by the insurer’s external auditors within 3 months after the end of each financial year.

Submission of institutional profile
7. An insurer shall complete and submit to the Registrar an institutional profile in the format prescribed in the Fourth Schedule, within 3 months after the end of each financial year.

Submission of other information
8. In addition to submission of call reports, an insurer shall provide any other information, reports or data as directed by the Registrar.

Restriction on tampering with call report templates
9. Unless otherwise approved by the Registrar, an insurer shall not modify or tamper with the format of the call report template, whether electronic or not.

PART IV—ENFORCEMENT

Monetary penalties
10. Where the Registrar determines that an insurer has not met the requirements of this Directive, the Registrar may impose monetary penalties to correct the situation, including—
(a) a fine of K2,000,000 for failure to submit call reports and any other information within the required deadline;
(b) a fine of K5,000,000 for modifying or tampering with a call report template; and

5th July, 2018
505

(c) a fine not exceeding K10,000,000 in addition to the penalties in paragraphs (a) or (b), for each time an insurer repeats a contravention.

11. In addition to the penalties specified in paragraph 10, the Registrar may impose directions as provided for under the Financial Services Act and other financial services laws.

Other penalties
Cap.44:05

FIRST SCHEDULE
(para. 5(1))
CALL REPORT FORMS FOR GENERAL INSURERS

NAME OF FORM	FORM NO.
1. Statement of financial position	Form G1
2. Statement of comprehensive income	Form G2
3. Statement of changes in equity	Form G3
4. Consolidated revenue account	Form G4
5. Revenue account by class of business	Form G4a
6. Capital adequacy and solvency report	Form G5
7. Specification of other liabilities	Form G6
8. Specification of other assets	Form G7
9. Specification of management expenses	Form G8
10. Specification of other income	Form G9
11. Specification of inward reinsurance premiums	Form G10
12. Specification of outward reinsurance premiums	Form G11
13. Aging of premium receivables	Form G12
14. Specification of investment in property	Form G13
15. Specification of investment in listed shares	Form G14
16. Specification of investment in unlisted shares	Form G15
17. Other underwriting information	Form G16
18. Specification of other investment income	Form G17
19. Specification of other comprehensive income	Form G18
20. Specification of equity items	Form G19

SECOND SCHEDULE
(para.5(2))
CALL REPORT FORMS FOR LIFE INSURERS

NAME OF FORM	FORM NO.
1. Statement of financial position	Form L1
2. Statement of comprehensive income	Form L2

506
5th July, 2018

NAME OF FORM	FORM NO.
3. Revenue statement	Form L3
4. Specification of other non-current assets	Form L4a
5. Specification of other assets	Form L4b
6. Specification of other loans	Form L4c
7. Specification of other liabilities	Form L5a
8. Specification of other non-current liabilities	Form L5b
9. Specification of other policyholder liabilities	Form L5
10. Specification of other technical provisions	Form L5d
11. Specification of other capital and reserves	Form L5e
12. Specification of Management Expenses	Form L6
13. Aging of loan portfolio	Form L7
14. Details of stocks and shares not traded on a stock exchange	Form L8a
15. Details of stocks and shares listed on a stock exchange	Form L8b
16. Valuation of investment in real property	Form L9
17. Ageing of debtors portfolio	Form L10
18. Summary and valuation of insurer liability	Form L11
19. Statistics	Form L12
20. Product disclosure	Form L12a
21. Minimum capital requirements and solvency	Form L13
22. Minimum base capital and solvency	Form L14
23. Solvency summary	Form L15
24. Certification	Form L16
25. Specification of bank securities	Form L17
26. Specification of corporate bonds	Form L18
27. Specification of asset backed securities	Form L19
28. Specification of other forms of investments	Form L20
29. Specification of loans on other securities	Form L21
30. Specification of loans to related parties	Form L22

THIRD SCHEDULE
(para. 5(3))
CALL REPORT FORMS FOR REINSURERS

NAME OF FORM	FORM NO.
1. Statement of financial position	Form R1

5th July, 2018
507

NAME OF FORM	FORM NO.
2. Statement of comprehensive income	Form R2
3. Statement of changes in equity	Form R3
4. Consolidated revenue account	Form R4
5. Revenue account by class of business	Form R4a
6. Capital adequacy and solvency report	Form R5
7. Specification of other liabilities	Form R6
8. Specification of other assets	Form R7
9. Specification of management expenses	Form R8
10. Specification of other income	Form R9
11. Specification of inward reinsurance premiums	Form R10
12. Specification of outward reinsurance premiums	Form R11
13. Aging of premium receivables	Form R12
14. Specification of investment in property	Form R13
15. Specification of investment in listed shares	Form R14
16. Specification of investment in unlisted shares	Form R15
17. Other underwriting information	Form R16
18. Specification of other investment income	Form R17
19. Specification of other comprehensive income	Form R18
20. Specification of equity items	Form R19

FOURTH SCHEDULE
(para. 7)
INSTITUTIONAL PROFILE

INSURANCE COMPANY LIMITED – DECEMBER 20……

HEAD OFFICE (contact details: physical, postal and email addresses; telephone and fax numbers; and website)
BRANCH OFFICES (include agencies and indicate where applicable)

508 5th July, 2018

PRINCIPAL OFFICER
EXTERNAL AUDITORS
APPOINTED ACTUARIES
COMPANY LAWYERS
BANKERS (list all banks where the company has bank accounts)
DATE OF FIRST LICENCE
VISION
MISSION
SHAREHOLDING	Name of Shareholder
BOARD OF DIRECTORS	Name of Director
SENIOR MANAGEMENT	Name of Officer
Chief Executive Officer
Chief Finance Officer
Claims Manager
Underwriting Manager
Business Development Manager
Marketing Manager
IT Manager
Human Resources Manager
NUMBER OF STAFF
PRODUCTS AND SERVICES (list all products and services offered by the company)

5th July, 2018 509

REINSURERS (list the panel of reinsurers on both treaty and facultative reinsurance arrangements)
SUBSIDIARY COMPANIES (list other companies owned by the company and the percentage of shares held in those companies)	Name of Subsidiary

CALL REPORT FORMS FOR GENERAL INSURERS

FORM G1 Institution Financial Year Start Date End Date

STATEMENT OF FINANCIAL POSITION GENERAL INSURANCE BUSINESS (AMOUNTS IN K'000)

Equity and Liabilities
1. Equity
1.1 Share capital - paid up
1.2 Share premium
1.3 General reserve
1.4 Revaluation reserves
1.4.1 Shares of related companies
1.4.2 Shares of other companies
1.4.3 Real property
1.4.4 Other investments
1.4.5 Total revaluation reserves
1.5 Other equity items (specify on Form G20)
1.6 Retained earnings
1.7 Equity attributable to shareholders of the company
1.8 Non-controlling interests
1.9 Total equity

510 5th July, 2018

2. Liabilities
2.1 Non-current liabilities
2.1.1 Long-term debt or borrowings
2.1.2 Deferred tax
2.1.3 Other non-current liabilities (specify)
2.1.4 Total non-current liabilities
2.2 Current Liabilities
2.2.1 Technical liabilities
2.2.1.1 Unearned premium (Form G4)
2.2.1.2 Outstanding claims (Form G4)
2.2.1.3 Unreported claims (Form G4)
2.2.1.4 Other technical liabilities (specify)
2.2.1.5 Total technical liabilities
2.2.2 Current tax liability
2.2.3 Dividends payables
2.2.4 Employee entitlements
2.2.5 Amounts due to related parties
2.2.6 Amounts due to other insurers
2.2.7 Amounts due on reinsurance contracts
2.2.8 Amount due to intermediaries
2.2.9 Amount due to banks
2.2.10 Other current liabilities (specify)
2.2.11 Total current liabilities
2.3 Other liabilities (specify on Form G6)
2.5 Total liabilities
3. Total Equity and Liabilities
Assets
4. Non-current assets
4.1 Property, plant and equipment
4.2 Intangible Assets
4.3 Deferred acquisition cost
4.3 Total non-current assets

5th July, 2018 511

5. Investments
5.1 Property (specify on Form G13)
5.2 Government securities
5.3 Semi-government securities
5.4 Corporate bonds
5.5 Mortgage loans
5.6 Listed shares
5.6.1 Related companies (Form G14)
5.6.2 Other companies (Form G14)
5.7 Unlisted shares
5.7.1 Related companies (Form G15)
5.7.2 Other companies (Form G15)
5.8 Fixed deposits
5.9 Other investments (specify)
5.10 Total investments
6. Loans
6.1 To related parties
6.1.1 To related companies
6.1.2 To directors
6.1.3 To employees
6.2 To insurance brokers and agents
6.4 Other loans (specify)
6.5 Total loans
7. Current assets
7.1 Receivables
7.1.1 Premium receivables
7.1.1.2 Due from intermediaries (Form G12)
7.1.1.2 Due from policyholders (Form G12)
7.1.2 Due from reinsurers
7.1.3 Due from other insurers
7.1.4 Due from related companies
7.1.5 Investment income receivable
7.1.5.1 Interest
7.1.5.2 Dividends
7.1.5.3 Rent

512 5th July, 2018

7.2 Cash and bank balances
7.3 Other current assets (specify)
7.4 Total current assets
7.5 Other assets (specify on Form G7)
8. Total Assets

FORM G2 STATEMENT OF COMPREHENSIVE INCOME GENERAL INSURANCE BUSINESS (AMOUNTS IN K'000)

1. Underwriting results
1.1 Fire
1.2 Motor
1.3 Accidents
1.4 Engineering
1.5 Marine
1.6 Liability
1.7 Miscellaneous
1.8 Total underwriting results
2. Investment income
2.1 Interest
2.2 Dividends
2.3 Rents
2.4 Realised gains (losses)
2.5 Other investment income (specify on Form G18)
2.5 Total investment income
3. Other income (specify on Form G9)
4. Total income
5. Investment expenses
6. Management expenses (specify on Form G8)
7. Other expenses (specify)
8. Total expenses
9. Net income

5th July, 2018 513

10. Income tax expense
11. Profit for the year
12. Comprehensive income
12.1 Gain (loss) on property revaluation
12.2 Net unrealised gain (loss) on investments
12.3 Gain (loss) on foreign currency translation
12.4 Other comprehensive income (specify on Form G19)
13. Total comprehensive income for the year

FORM G3 STATEMENT OF CHANGES IN EQUITY GENERAL INSURANCE BUSINESS (AMOUNTS IN K'000)

	Share capital	Share premium	Property revaluation reserve	Equity investment revaluation reserve	Other reserves	Retained earnings	Total equity
1. Balance as at beginning of the period
2. Profit for the period
3. Prior year adjustments
4. Comprehensive income for the year
4.1 Transfer to non-distributable reserve
4.2 Realised reserves on sale of property
4.3 Deferred tax on revaluation surplus
4.4 Other comprehensive income
4.4 Total comprehensive income
5. Transactions with owners
5.1 Dividends paid to shareholders
5.2 Other (specify)
6. Balance as at end of the period

514                                                                 5th July, 2018

FORM G4

CONSOLIDATED REVENUE ACCOUNT
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

| 1. Unearned premium reserve balance end of previous period | |
|---|---|
| 2. Premiums | |
| 2.1 Gross direct premiums - new business | |
| 2.2 Gross direct premiums - renewals | |
| 2.3 Total gross direct premiums (2.1+2.2) | |
| 2.4 Inward reinsurance premiums | |
| 2.5 Less: outward reinsurance premiums | |
| 2.6 Net premiums written (2.3+2.4-2.5) | |
| 2.7 Unearned premium reserve end of period | |
| 2.8 Earned premiums (1+2.6-2.7) | |
| 3. Reinsurance commission and allowances | |
| 4. Claims | |
| 4.1 Outstanding claims balance end of previous period | |
| 4.2 Unreported claims (IBNR) balance end of previous period | |
| 4.3 Claims liability - opening balance (4.1+4.2) | |
| 4.4 Claims paid - direct business | |
| 4.5 Claims paid - reinsurance | |
| 4.6 Less: recoveries on reinsurance | |
| 4.7 Net claims paid (4.4+4.5-4.6) | |
| 4.8 Outstanding claims - closing balance | |
| 4.9 Unreported claims (IBNR) - closing balance | |
| 4.10 Claims liability - closing balance (4.8+4.9) | |
| 4.11 Claims incurred (4.7+4.10-4.3) | |
| 5. Commission incurred | |
| 6. Other underwriting expenses (specify) | |
| 7. Underwriting surplus/deficit (2.8+3-4.11-5-6) | |

5th July, 2018                                                               515

FORM G4
REVENUE ACCOUNT - BY CLASS OF BUSINESS
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

| | FIRE | MOTOR | ACCIDENTS | ENGINEERING | MARINE | LIABILITY | MISCELLANEOUS | TOTAL |
|---|---|---|---|---|---|---|---|---|
| 1. Unearned premium reserve balance end of previous period | | | | | | | | |
| 2. Premiums | | | | | | | | |
| 2.1 Gross direct premiums - new business | | | | | | | | |
| 2.2 Gross direct premiums - renewals | | | | | | | | |
| 2.3 Total gross direct premiums (2.1+2.2) | | | | | | | | |
| 2.4 Inward reinsurance premiums | | | | | | | | |
| 2.5 Less: outward reinsurance premiums | | | | | | | | |
| 2.6 Net premiums written (2.3+2.4-2.5) | | | | | | | | |
| 2.7 Unearned premium reserve end of period | | | | | | | | |
| 2.8 Earned premiums (1+2.6-2.7) | | | | | | | | |
| 3. Reinsurance commission and allowances | | | | | | | | |
| 4. Claims | | | | | | | | |
| 4.1 Outstanding claims balance end of previous period | | | | | | | | |
| 4.2 Unreported claims (IBNR) balance end of previous period | | | | | | | | |
| 4.3 Claims liability - opening balance (4.1+4.2) | | | | | | | | |
| 4.4 Claims paid - direct business | | | | | | | | |
| 4.5 Claims paid - reinsurance | | | | | | | | |
| 4.6 Less: recoveries on reinsurance | | | | | | | | |
| 4.7 Net claims paid (4.4+4.5-4.6) | | | | | | | | |
| 4.8 Outstanding claims - closing balance | | | | | | | | |
| 4.9 Unreported claims (IBNR) - closing balance | | | | | | | | |
| 4.10 Claims liability - closing balance (4.8+4.9) | | | | | | | | |
| 4.11 Claims incurred (4.7+4.10-4.3) | | | | | | | | |
| 5. Commission incurred | | | | | | | | |
| 6. Other underwriting expenses (specify) | | | | | | | | |
| 7. Underwriting surplus/deficit (2.8+3-4.11-5-6) | | | | | | | | |

516                                                                 5th July, 2018

FORM G5
CAPITAL ADEQUACY AND SOLVENCY REPORT
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

TABLE 1: CORE CAPITAL TEST
| | AMOUNT | DISCOUNT FACTOR | ADJUSTED VALUES |
|---|---|---|---|
| 1. Minimum core capital requirement | | 750,000 | 750,000 |
| 2. Paid up share capital | | | |
| 3. Share premium | | | |
| 4. Retained earnings (audited as at previous December) | | | |
| 5. Current year profit (80%) or loss (100%) - (100% for audited year end profit) | | | |
| 6. Less: Investment in other companies | | | |
| 7. Total core capital (2+3+4+5-6) | | | |
| 8. Core capital surplus/deficit (7-1) | | | |

TABLE 2: SOLVENCY TEST
| | | | ADJUSTED VALUES |
|---|---|---|---|
| 1. Net premium written (audited as at latest December) | | | |
| 2. Minimum solvency ratio and required net assets | 20.0% | | |
| 3. Adjusted net assets | | | |
| 3.1 Net assets (i.e. Total equity) as per Form G1 | | | |
| 3.2 Less: inadmissible assets as per Table 2.1 below | | | |
| 3.3 Less: discounted assets as per Table 2.2 below | | | |
| 3.4 Less: weighted policyholders reserves as per table 2.3 below | | | |
| 3.5 Less: discounted supplementary capital items as per table 2.4 below | | | |
| 4. Net assets available to meet solvency (3.1-3.2-3.3-3.4-3.5) | | | |
| 5. Solvency ratio (4/1)x100% | | | |
| 6. Solvency margin (2-4) | | | |

5th July, 2018                                                              517

TABLE 2.1: INADMISSIBLE ASSETS
| | AMOUNT | DISCOUNT FACTOR | ADJUSTED VALUES |
|---|---|---|---|
| Intangible assets | | | |
| Deferred acquisition costs | | | |
| Investments in other companies | | | |
| Portion of any asset pledged | | | |
| Loans to related parties | | | |
| Loans to insurance brokers and insurance agents | | | |
| Loans to other third parties - overdue >180 days | | | |
| Insurance premium receivable - overdue >30 days | | | |
| Inwards reinsurance premium receivable - overdue >30 days | | | |
| Reinsurance recoveries - overdue >90 days | | | |
| Deferred and other taxes | | | |
| Prepaid expenses | | | |
| TOTAL – transfer to item 4 above | | | |

TABLE 2.2: DISCOUNTED ADMISSIBLE ASSETS
| Items | Total Amount | Discount Rate | Inadmissible Amount |
|---|---|---|---|
| Corporate bonds | | 5% | |
| Mortgages loans | | 5% | |
| Direct real estate investments, owner occupied | | 15% | |
| Direct real estate investments rented to third parties | | 20% | |
| Commercial Loans | | 15% | |
| Shares in listed companies | | 10% | |
| Shares not listed on stock exchange | | 20% | |
| Other receivables - outstanding >180 days | | 20% | |
| Property, plant and equipment | | 20% | |
| Loans to other third parties - overdue <180 days | | 20% | |
| TOTAL - transfer to item 5 above | | | |

518                                                                 5th July, 2018

TABLE 2.3: WEIGHTED POLICYHOLDERS RESERVES
| Items | Total Amount | Discount Rate | Inadmissible |
|---|---|---|---|
| AmountUnearned Premium Reserves | | 5% | |
| Outstanding Claims | | 10% | |
| Unreported claims (IBNR) | | 15% | |
| TOTAL – transfer to item 6 above | | | |

TABLE 2.4: DISCOUNTED SUPPLEMENTARY CAPITAL ITEMS
| Items | Total Amount | Discount Rate | Inadmissible Amount |
|---|---|---|---|
| Profit for the year or Zero if Loss | | 20% | |
| Supplementary Capital | | 50% | |
| TOTAL – transfer to item 7 above | | | |

FORM G6
SPECIFICATION OF OTHER LIABILITIES
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

| Description | Amount |
|---|---|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Total | |

FORM G7
SPECIFICATION OF OTHER ASSETS
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

| Description | Amount |
|---|---|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Total | |

5th July, 2018

FORM G8
SPECIFICATION OF MANAGEMENT EXPENSES
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

Description	Amount
Total

FORM G9
SPECIFICATION OF OTHER INCOME
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

Description	Amount
Total

FORM G10
SPECIFICATION OF INWARD REINSURANCE PREMIUMS
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)
Type of Reinsurance Arrangement

Name of Reinsurer	Proportional	Non-Proportional	Total

520
5th July, 2018

Name of Reinsurer	Proportional	Non-Proportional	Total
Total

FORM G11
SPECIFICATION OF OUTWARD REINSURANCE PREMIUMS
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)
Type of Reinsurance Arrangement

Name of Reinsurer	Proportional	Non-Proportional	Total
Total

FORM G12
AGING OF PREMIUM RECEIVABLES
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

Description ≤ 30 Days	≤ 90 Days	≤ 180 days	> 180 days	Total
Due from intermediaries
Due from policyholders (direct)
Less:
Amounts under DoCs
Total

FORM G13
SPECIFICATION OF INVESTMENT IN PROPERTY
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

5th July, 2018
521

Description of property	Location	Year Acquired	Original Cost	Current Value	Name of Valuer	Method of Valuation
Total

FORM G14
SPECIFICATION OF INVESTMENT IN LISTED SHARES
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

SHARES OF RELATED COMPANIES

Name of company	Number of Shares	Acquisition Cost	Current Value	Name of Valuer	Method of Valuation
Sub-total

SHARES OF OTHER COMPANIES

Name of company	Number of Shares	Acquisition Cost	Current Value	Name of Valuer	Method of Valuation
Sub-total
Grand total

522
5th July, 2018

FORM G15
SPECIFICATION OF INVESTMENT IN UNLISTED SHARES
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

SHARES OF RELATED COMPANIES

Name of company	Number of Shares	Acquisition Cost	Current Value	Name of Valuer	Method of Valuation
Sub-total

SHARES OF OTHER COMPANIES

Name of company	Number of Shares	Acquisition Cost	Current Value	Name of Valuer	Method of Valuation
Sub-total
Grand total

FORM G16
OTHER UNDERWRITING INFORMATION
GENERAL INSURANCE BUSINESS
(AMOUNTS IN K'000)

Class of insurance	Number of policies	Number of policyholders	Maximum net retention
Fire
Motor
Accidents
Marine