INSURANCE CONTROL SERVICE

Brussels, 20 December 1991

NOTIFICATION NO. D. 95

Subject: Statistics for Third-Party Motor Insurance, All Risks, and Transport (Direct Insurance Transactions in Belgium).

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I. INTRODUCTION.

The implementation of ex post facto control, and more specifically the control of profitability per product or group of products, as well as a more effective control of technical provisions, necessitates a complete restructuring of the statistical forms.

In order to allow insurance companies to adapt their internal organization and, in particular, their information systems from now on, the Control Service provides them as an attachment a model of the future statistical form. This model contains all the data they will be required to provide. The statistical form will be sent in its definitive form at a later date.

For the figures of the financial year 1992, the current form and the new statistical form will coexist: the former must in any case be completed, the latter to the extent possible (meaning that each company must report the statistics it possesses).

For the collection of figures concerning the financial year 1993, only the new form will be used; it must be completed by all companies without any possibility of deviation.

KORTENBERGLAAN 61 · 1040 BRUSSELS · TELEPHONE 02/732 00 75 · TELEFAX 02 736 88 17

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II. CHARACTERISTICS OF THE NEW STATISTICAL FORM.

1) All third-party motor insurance, all risks, and transport insurance are part of the same statistical form. The statistics requested in the basic form are identical for all insurance products (see IV. SECTIONS OF THE BASIC FORM). Regarding the additional statistics, there are differences; these are clarified further (see V. ADDITIONAL STATISTICS).

2) In order to avoid that companies would have to make new significant changes to the statistical scheme in the following years, the Control Service has anticipated the E.E.G. directive concerning annual accounts, specifically regarding operating costs, technical provisions, and financial income.

3) The sections for which some explanation is necessary — either because they appear for the first time, or because their content has changed — are analyzed in point IV below.

III. COLUMNS OF THE STATISTICS.

In the columns of the statistical form, 2 levels are distinguished:

1) For the supervision of profitability, 33 product categories are determined. These correspond to the columns printed in a darker shade. They correspond to the categories included in point "B. Profitability" of Annex 1.

2) In the aforementioned categories, 93 products or product groups are separated out that are of particular importance from a statistical perspective, both for a more in-depth analysis of profitability and for the control of technical provisions. They correspond to the products or product groups listed in point "A. Statistical Form" of Annex 1.

Further explanation regarding the columns is provided in that same annex.

IV. SECTIONS OF THE BASIC FORM.

By "basic form" is meant the extract from the breakdown of the annual accounts, Chapter II, Section II (see Annex 2).

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1. General Information.

1.1.

No explanation is given if there is no change to note compared to the analogous section of the old statistical form. When, on the other hand, an explanation is wholly or partially in contradiction with a previous position taken by the Insurance Control Service, the latter cancels it ex officio, and the new explanation must therefore be taken into account for completing the new statistics.

1.2. Operating Costs.

1.2.1.

Operating costs are broken down into 4 items in accordance with the draft of the E.E.G. directive concerning annual accounts and consolidated annual accounts: internal claims handling costs, acquisition costs, administrative costs, and costs related to the management of investments. This breakdown is, however, not mandatory prior to the transposition into Belgian law of the aforementioned directive. If this temporary possibility of breakdown is not used or only partially used, the item "administrative costs" will respectively contain the total or the balance of operating costs.

1.2.2.

Insurance companies are required to allocate their operating costs (broken down or not according to point 1.2.1 above) across the insurance branches. This allocation must be justified to the Control Service. Beyond the level of branches, the company is free to use its own breakdown provided that it is grounded and justified to the Insurance Control Service. If not, the Insurance Control Service will apply allocation keys to move from the level of branches to that of products or groups of products. This rule also applies to the commission for internal claims handling costs.

1.3. Income and Costs of Investments.

Regarding the items concerning investment income (9.1 to 9.3) and investment costs (10.1 to 10.4), the elements to be taken into account (coverage values, total assets, ...), the method for distribution between columns, as well as all useful clarifications, will be communicated later.

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1.4. Transfers.

The new statistics provide specific sections for the different types of transferred reserves. In case of transfer, regardless of the date, the transferred amounts must appear in those sections. Under no circumstances should the transferred reserves be included in the item "Reserves at the beginning of the financial year" to avoid double counting (even if the transfer takes effect on January 1).

1.5. Presentation.

1.5.1.

The references to the codes of the annual accounts (Chapter II, Section II) are not included in the tables to be filled. They are found on 2 separate sheets at the front of the bundle. Some codes are placed in parentheses: this means that the section in question corresponds only to part of the annual accounts section. In some cases, empty parentheses appear: these concern sections that do not appear in the current annual accounts.

1.5.2.

The method for calculating interim balances and the ending balance is also found on these sheets.

2. Specific Clarifications.

I. Premiums and Additional Costs.

1.1.A. Amount of premiums subject to the contribution to the R.I.Z.I.V.:

In agreement with the R.I.Z.I.V., the Insurance Control Service will communicate to this institution the amounts of items 1.1., 1.1.A. and 1.2.; companies must therefore no longer fulfill this formality.

II. Benefits, Recovery, and Claims Management.

• Items 2.1., 2.2. and 2.4. are a breakdown of the section "Benefits" of the old statistical form.
• Item 2.3. is new: it arises from the breakdown of operating costs. It corresponds to the cost of claims management.

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III. Technical Reserves and Estimated Recovery.

• 3.1.b. and 3.2.b.: the reserve for incurred but not reported losses (IBNR) must be reported separately.
• 3.4.a. and 3.5.a.: the reserve for reported claims must include both the reserve for the claim itself and that for the associated external costs.
• 3.4.c. and 3.5.c.: the reserve for internal claims handling costs must cover the costs that will be incurred in subsequent financial years for the handling of claims still open at the end of the financial year in question.
• 3.7.: companies that record on the asset side of the balance sheet amounts receivable resulting from the acquisition of the rights of the insured against third parties (subrogation) or the acquisition of legal ownership of the insured goods (salvage) must report these amounts in this section. These amounts must be estimated prudently.
• 3.8. to 3.13.: the section "special reserves" of the annual accounts is split into several components. These components are found here, except for the reserve for profit sharing and ristorno's, which will be discussed further.
• 3.11.b. and 3.12.b.: if the section "Other reserves" is filled, the elements comprising it must be mentioned in the annex.

IV. Other Technical Costs and Income.

• 4.1.: this item consists specifically of the R.D.R. balance (if negative), the tax on profit sharing, and the contribution to the National Fund for Disabled persons charged to insurers.
• 4.2.: this item contains the R.D.R. balance (if positive).
• 4.1. and 4.2.: if other than the aforementioned elements appear in these sections, they must be mentioned in the annex.

V. Profit Sharing and Ristorno's.

5.1. to 5.3.: the allocation of the financial year to the reserve for profit sharing and ristorno's must be included separately: it is therefore not in the reserve at the end of the financial year. The reserve at the beginning of the financial year, on the other hand, is equal to the reserve at the end of the previous financial year increased by the allocation of the previous financial year.

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VI. Acquisition Costs and Commissions.

The section 6.2 "Acquisition Costs" comes from the breakdown of the item "Operating Costs" of the annual accounts. It concerns the costs incurred for concluding insurance contracts. These costs include file costs or costs for taking insurance contracts into the portfolio, advertising costs, and administrative costs related to the processing of applications and the drafting of policies....

VII. Ceded Reinsurance.

7.1.: the completion of this item can be limited to the total of all branches. It may, however, be broken down wholly or partially depending on the possibilities, provided that this breakdown is reliable.

VIII. Administrative Costs.

8.1.: this section arises from the item "Operating Costs" of the annual accounts. Administrative costs include, in particular, the costs for premium collection, portfolio management, management of profit sharing and ristorno's, and of assumed and ceded reinsurance. They include in particular personnel costs and depreciation of furniture and equipment insofar as these must not be included under acquisition costs, internal claims handling costs, or costs related to investments.

IX. Investment Income.

9.2.: this item contains the reversal of impairments and the reversal of depreciation.

X. Investment Costs.

• 10.2.: this item arises from the item "Operating Costs" of the annual accounts. It includes all costs associated with the management of investments, including interest charges (except for interest reimbursed to the reinsurer, which currently still appears in the balance of ceded reinsurance).
• 10.3.: this item contains impairments and depreciation.

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V. ADDITIONAL STATISTICS.

Outside the basic form, the new bundle also contains purely statistical sections.
It concerns, on the one hand, the following tables which are breakdowns by accident year of certain sections mentioned above:

• 2.1. + 2.2. direct benefits to beneficiaries and external claims handling costs.
• 2.4. recovery of technical costs.
• 3.5. reserve for amounts to be paid at the end of the financial year.
• 3.7.b. estimate of the recovery of technical costs.
• 3.6.a. received transferred reserve for amounts to be paid.
• 3.6.b. ceded transferred reserve for amounts to be paid.

These tables must be completed over 10 years in most branches, groups of products, and products. But for the following products, a breakdown over 20 years is required: Third-Party Motor, guaranteed individual income, guaranteed collective income, liabilities in the transport branch, legal aid, and the various products of the civil liability branch.

On the other hand, statistics must be submitted regarding the number of claims per accident year. These statistics concern, on the one hand, the number of claims reported and booked during the year, and on the other hand, the number of claims still open on December 31.

Finally, a statistic regarding the number of guarantees granted must be completed for the following products: Third-Party Private-Life general and the various products of simple risk homes in the fire and other damage to goods branches. Likewise, the number of insured vehicles per year must be mentioned in Third-Party Motor, material damage, and theft for the category "Tourism and Business". These statistics must correspond to the breakdown of premiums: the same agreement must be booked in different columns as was done with the premium.

VI. ANNEX.

This annex contains the following sections:

• Extraordinary investment expenditures: companies must report the extraordinary investment expenditures they have made during the financial year and precisely indicate the relevant section(s) of the basic form.
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• Explanation to be provided in relation to this notification:
  • other technical reserves;
  • other technical costs;
  • other technical income.

J.-M. DELPORTE.
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ANNEX 1
49.946/P11/VK

STATISTICS OF THIRD-PARTY MOTOR INSURANCE
ALL RISKS AND TRANSPORT
(DIRECT INSURANCE TRANSACTIONS IN BELGIUM)
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BRANCH 1. - ACCIDENTS.

A. Statistical Form.

1. General Individual.
2. Traffic Individual - fixed amount.
3. Traffic Individual - common law.
4. Collective.
5. Multi-risk travel.
6. Other.

B. Profitability.
I. General Individual: 1.
II. Individual Traffic: 2 + 3.
III. Collective: 4.
IV. Other: 5 + 6.

C. Comments on the Statistical Form.

1. Insurances extended to family members must also be considered as "individual insurance".
2. Collective policies.
   Column 4 also includes the guarantee "accidents" from extended collective policies (e.g., the guarantee "accidents" from the "school institutions" policy).
3. Multi-risk tourism and travel policies.
   If possible, distribute the guarantees across the different columns of the statistical form depending on the risks covered by these policies (e.g.: accidents in column 5, illness in column 9, cancellation costs in column 90, material damage in column 11, ...). If this is not possible, a distinction must at least be made between the insurance of "accidents and illnesses" possibly supplemented with additional guarantees (in column 5) on the one hand, and the insurance of "material damage" with possible additional guarantees (column 11) on the other. The legal aid guarantee must in any case be included in branch 17 (column 91). ```

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BRANCH 2. - ILLNESS.

A. Statistical Form.
7. Guaranteed income - individual.
8. Guaranteed income - collective.
9. Illness - individual contracts (other than guaranteed income).
10. Illness - collective contracts (other than guaranteed income).

B. Profitability.
V.: Guaranteed income - individual: 7.
VI.: Guaranteed income - collective: 8.
VII.: Illness - individual contracts (other than guaranteed income): 9.
VIII.: Illness - collective contracts (other than guaranteed income): 10.

C. Comments on the Statistical Form.

1. Insurances extended to family members must also be considered as "individual insurance".
2. See comment 3 in branch 1 - accidents.
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BRANCH 3. - VEHICLE CASCO.

A. Statistical Form.
11. Tourism and Business: material damage.
12. Tourism and Business: theft.
13. Tourism and Business: other.
14. Two-wheelers: material damage.
15. Two-wheelers: theft.
16. Two-wheelers: other.
17. Buses-coaches: material damage.
18. Buses-coaches: theft.
19. Buses-coaches: other.
20. Taxis and rental cars: material damage.
21. Taxis and rental cars: theft.
22. Taxis and rental cars: other.
23. Transport of goods, MTM <= 3.5 tons: material damage.
24. Transport of goods, MTM <= 3.5 tons: theft.
25. Transport of goods, MTM <= 3.5 tons: other.
26. Transport of goods, MTM > 3.5 tons: material damage.
27. Transport of goods, MTM > 3.5 tons: theft.
28. Transport of goods, MTM > 3.5 tons: other.
29. Other vehicle casco: vehicles without motor.

B. Profitability.
IX. Tourism and Business: 11 to 13.
X. Two-wheelers: 14 to 16.
XI. Other: 17 to 29.

C. Comments on the Statistical Form.

1. In columns 11 to 28, all risks are included on which, regarding Third-Party Liability, the law on mandatory insurance applies (law of 21 November 1989).
2. Trailers and caravans are always included in columns 11 to 28, even if they are insured with a separate contract. Caravans, however, are included in branches 8 and 9 (Fire and other damage to goods) when they are of the "static caravan" type.
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3. Column 29 includes vehicles without motor such as bicycles, horse-drawn carriages, and sailing boats.
4. When a series (fleet) of vehicles is insured in the same policy, the vehicles must be distributed across the different columns according to their category.
5. Multi-risk tourism and travel policies are only included in branch 3 for the part concerning damage to vehicles. The additional guarantees, except those supplementary to illness and bodily accidents, may however be retained in branch 3, if a more refined classification would be impossible.
6. The fire guarantee must not be separated from the material damage guarantee if they are underwritten together. If the contract does not include "material damage", the fire guarantee, after possibly being separated from the theft guarantee, will be included in the column "other".
The same principle applies to other guarantees such as glass breakage, natural forces, contact with wild animals....
The theft guarantee must in any case be mentioned in the column "theft".
7. The legal aid guarantee may never be included in branch 3 - vehicle casco, but must be mentioned in the columns provided for the legal aid branch.
8. The assistance guarantee must be included in column 93, unless the split with other guarantees is not possible.
9. Insurance of the type "omnium mechanic" (mechanical breakdown) is included in the material damage columns.
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TRANSPORT BRANCHES.

A. Statistical Form.
30. Casco.
31. Goods.
32. Liabilities.

B. Profitability.
XII. Casco: 30.
XIII. Goods: 31.
XIV. Liabilities: 32.

C. Comments on the Statistical Form.

1. The column casco includes the following branches:
   • 04 casco rolling railway material;
   • 05 aircraft casco;
   • 06 sea and inland navigation casco.
2. The column goods corresponds to branch 07 - transported goods.
3. The column liabilities includes the following branches:
   • 10b Third-Party Liability of the carrier and Third-Party Liability of transport operation;
   • 11 Third-Party Liability aircraft;
   • 12 Third-Party Liability sea and inland navigation ships;
   • 13 Third-Party Liability of the railway and other Third-Party Liability transport.
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BRANCHES 8 AND 9. - FIRE AND OTHER DAMAGE TO GOODS.

A. Statistical Form.
A1. Risks to which the Royal Decree of 1 February 1988 applies.
A11. Homes.
33. Fire and related perils + electricity.
34. Storm.
35. Natural disasters.
36. Theft, vandalism, and malicious acts.
37. Labor conflicts, attacks.
38. Other.
A12. Agricultural risks.
39. Fire and related perils + electricity.
40. Storm.
41. Natural disasters.
42. Theft, vandalism, and malicious acts.
43. Labor conflicts, attacks.
44. Other.
A13. Enterprises (including commercial businesses, SMEs, crafts).
45. Fire and related perils + electricity.
46. Storm.
47. Natural disasters.
48. Theft, vandalism, and malicious acts.
49. Labor conflicts, attacks.
50. Other.
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A14. Other (than homes, agricultural risks, commercial businesses - SMEs, enterprises, and special objects).
51. Fire and related perils + electricity.
52. Storm.
53. Natural disasters.
54. Theft, vandalism, and malicious acts.
55. Labor conflicts, attacks.
56. Other.
A15. Special objects.
57. Special objects.
A2. Risks to which the Royal Decree of 1 February 1988 does not apply.
A21. All, except special objects ... (64), crops (65), and technical insurance (66 to 70).
58. Fire and related perils + electricity.
59. Storm.
60. Natural disasters.
61. Theft, vandalism, and malicious acts.
62. Labor conflicts, attacks.
63. Other.
A22. Special objects, "global bank insurance", animals.
64. Special objects, "global bank insurance", animals.
A23. Crops.
65. Crops.
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A24. Technical insurance.
66. Machine breakdown.
67. All construction site risks.
68. Assembly and commissioning.
69. Electrical and electronic installations or low current.
70. Other technical insurance.

B. Profitability.
B1. Risks to which the Royal Decree of 1 February 1988 applies.
XV. Homes: 33 to 38.
XVI. Agricultural risks: 39 to 44.
XVII. Enterprises: 45 to 50.
XVIII. Other: 51 to 57.
B2. Risks to which the Royal Decree of 1 February 1988 does not apply.
XIX. All, except technical insurance: 58 to 65.
XX. Technical insurance: 66 to 70.

C. Comments on the Statistical Form.

1. For the definition "related perils to fire", reference should be made to the description in article 1, § 1 of the Royal Decree of 1 February 1988.
2. The columns "storm" also include "hail, snow or ice pressure" if these guarantees are supplementary to the storm guarantee in the contracts.
3. Storage facilities fall under the scope of the Royal Decree of 1 February 1988 if the insured value does not exceed 30,000,000 fr. (ministerial index 1).
4. The category "special objects" refers to the insurance of theft, loss, damage, or all risks of a movable good or a set of movable goods specifically mentioned in the contract.
   Examples:
   • diamonds, jewelry, furs, paintings, and works of art, stamps and collections;
   • films;
   • uniforms;
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• collections of traveling salesmen;
• luggage;
• accounting documents and medical prescriptions;
• prostheses and glasses;
• exhibitions;
• glass windows, signs;
• contents of freezers.

These are included in column 57 (if they concern risks falling under the scope of the Royal Decree of 1 February 1988) and in column 64 (risks not falling under the scope of the Royal Decree of 1 February 1988).

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To determine which of the two columns a specific insurance belongs to, please refer to Article 1, § 3 of the Royal Decree of 1 February 1988.

5. Column 69 (electrical and electronic installations) must not be limited to "all risks" insurance for computers.

Examples of other electrical and electronic installations or equipment:

• medical equipment;
• electronic cash registers and weighing scales;
• measuring, control, and monitoring equipment.

6. Category A14 "Other" includes, among others, buildings (residential or non-residential) and institutions (education, welfare, sports, culture,...).

7. Business interruption coverage and B.A. building coverage are included in branch 16 and branch 13, respectively.

8. If the indirect losses coverage is the only underwritten coverage in a contract, it must be reported in branch 16.

In other cases, the indirect losses coverage may be included in the statistics of branches 8 and 9. The premiums must then be distributed across the columns to which the risks belong on which the premium is calculated in the rating (e.g., 50% of the indirect losses premium portion in the "fire" column and 50% in the "other" column).

Payouts under the indirect losses coverage are recorded in the column of the hazard that led to compensation (e.g., in the case of water damage in a home, the payout for indirect losses will be registered in column 38 ("Other")).

9. The B.A. operations coverage for "all construction site risks" contracts (column 67) must be included in branch 13.

BRANCH 10.A. - CIVIL LIABILITY REGARDING MOTOR VEHICLES.

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A. Statistical Statement.

71. Tourism and Business.
72. Two-wheelers.
73. Autobuses-autocars.
74. Taxis and rental vehicles.
75. Transport of goods (MTM <= 3.5 T).
76. Transport of goods (MTM > 3.5 T).

B. Profitability.

XXI. Tourism and Business: 71.
XXII. Two-wheelers: 72.
XXIII. Other: 73 to 76.

BRANCH 13. GENERAL CIVIL LIABILITY.

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A. Statistical Statement.

77. B.A. private life - general.
78. Other B.A. private life.
79. B.A. operations (except 81 and 82).
80. B.A. after delivery, B.A. products.
81. B.A. environmental pollution.
82. B.A. nuclear installations.
83. Ten-year B.A. of engineers and architects.
84. B.A. medical, paramedical, and veterinary professions.
85. Other B.A. professional life.
86. Objective B.A. (fire, explosion in establishments accessible to the public).
87. Other B.A.

B. Profitability.

XXIV. B.A. private life: 77 + 78.
XXV. B.A. operations/delivery/products: 79 to 82.
XXVI. B.A. professional life: 83 to 85.
XXVII. Objective B.A. (public establishments): 86.
XXVIII. Other B.A.: 87.

C. Remarks regarding the statistical statement.

1. Column 77 includes only general B.A. family policies.

2. Column 78 includes specific B.A. private life insurance (e.g., B.A. dogs, B.A. building...). If they are named separately, the B.A. private life coverages found in other insurances must also be included in this column.

3. Column 79 (B.A. operations) does not include the B.A. of persons who provide intellectual services. This is included, as appropriate, in column 83, 84, or 85.

4. Column 87 (Other B.A.) includes, among others, the B.A. of educational institutions, sports, culture, and leisure associations, administrations, and public institutions. However, it does not include the B.A. regarding railways, which is included in the "transport branches".