INSURANCE CONTROL SERVICE

Brussels, 20 December 1991

NOTICE NO. D. 95

Subject: Statistical Statement for B.A.-Auto, All Risks, and Transport Insurance (Direct Insurance Transactions in Belgium).

I. INTRODUCTION.

The implementation of post-audit controls, 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 statements.

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

For the figures of the 1992 financial year, the current form and the new statistical statement will coexist: the first must be completed in all cases, the second to the extent possible (meaning that each company must report the statistics it possesses).

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

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

II. CHARACTERISTICS OF THE NEW STATISTICAL STATEMENT.

1) All B.A.-Auto, All Risks, and Transport insurance forms part of the same statistical statement. The statistics requested in the basic form are identical for all insurance products (see IV. SECTIONS OF THE BASIC FORM). Regarding additional statistics, there are differences; these are clarified further (see V. ADDITIONAL STATISTICS).

2) To avoid that companies would have to make new significant changes to the statistical scheme in the coming years, the Control Service has anticipated the E.E.C. 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 detailed in point IV below.

III. COLUMNS OF THE STATISTICAL STATEMENT.

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

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

2) Within the aforementioned categories, 93 products or product groups are isolated that are of particular statistical importance for a more in-depth analysis of profitability as well as for the control of technical provisions. They correspond to the products or product groups listed in point "A. Statistical Statement" 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).

1. General Information.

1.1.

No explanation is given if there are no changes to note compared to the analogous section of the old statistical statement. On the other hand, if an explanation is in whole or in part contrary to a previous position taken by the Insurance Control Service, the latter cancels it ex officio, and thus the new explanation must be taken into account when completing the new statistical statement.

1.2. Operating Costs.

1.2.1.

Operating costs are broken down into 4 items in accordance with the draft E.E.C. 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 option for breakdown is not used or only partially used, the item "administrative costs" will contain respectively 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 lines. This allocation must be justified to the Control Service. Beyond the level of the lines, the company is free to use its own breakdown provided that it is grounded and justified to the Insurance Control Service. Otherwise, the Insurance Control Service will apply allocation keys to move from the level of the lines to that of the products or groups of products. This rule also applies to the provision 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 the columns, as well as all useful clarifications will be communicated later.

1.4. Transfers.

The new statistical statement provides specific sections for the different types of transferred reserves. In the event of a transfer, at any date, the transferred amounts must appear in those sections. Under no circumstances should the transferred reserves be included in the item "Reserves at beginning of 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 in. They are located 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 account 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 subtotals 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 "Benefits" section of the old statistical statement.
Item 2.3. is new: it stems from the breakdown of operating costs. It corresponds to the cost of claims management.

III. Technical Reserves and Estimated Recovery.

3.1.b. and 3.2.b.: the reserve for incurred but not reported losses (IBNR) / looming losses 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 arising from the acquisition of the rights of the insured against third parties (subrogation) or the acquisition of the legal ownership of the insured goods (salvage) must report these amounts in this item. These amounts must be estimated prudently.
3.8. to 3.13.: the item "special reserves" of the annual accounts is split into several components. These components are found here, except for the reserve for profit sharing and ristornos, which will be discussed further.
3.11.b. and 3.12.b.: if the section "Other Reserves" is filled in, the elements comprising it must be listed 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 listed in the annex.

V. Profit Sharing and Ristornos.

5.1. to 5.3.: the allocation of the financial year to the reserve for profit sharing and ristornos 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.

VI. Acquisition Costs and Commission Fees.

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

VII. Ceded Reinsurance.

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

VIII. Administrative Costs.

8.1.: this section stems from the item "Operating Costs" of the annual accounts. Administrative costs include specifically the costs for premium collection, portfolio management, management of profit sharing and ristornos, and of accepted and ceded reinsurance. They include in particular personnel costs and depreciation of furniture and equipment insofar as these are not to 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 stems from the item "Operating Costs" of the annual accounts. It includes all costs associated with the management of investments, including interest expenses (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.

V. ADDITIONAL STATISTICS.

Outside the basic form, the new bundle also contains purely statistical sections.
These concern, 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 lines, groups of products, and products. But for the following products, a breakdown over 20 years is required: B.A.-Auto, guaranteed income individual, guaranteed income collective, liabilities in the transport line, legal aid, and the various products of the civil liability line.

On the other hand, statistics must be delivered 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: B.A.-private-life general and the various products of simple home risks in the fire and other damage to goods lines. Likewise, the number of insured vehicles per year must be stated in B.A.-Auto, material damage, and theft for the "Tourism and Business" category. These statistics must correspond to the breakdown of premiums: the same correspondence must be recorded in different columns as was done with the premium.

VI. ANNEX.

This annex contains the following sections:

Exceptional investment expenditures: companies must report the exceptional investment expenditures they have made during the financial year and accurately indicate the relevant section(s) of the basic form.

Explanation to be provided in light of this notice:
- other technical reserves;
- other technical costs;
- other technical income.

J.-M. DELPORTE.

49.946/P11/VK
ANNEX 1

STATISTICS FOR B.A. AUTO INSURANCE

ALL RISKS AND TRANSPORT

(DIRECT INSURANCE TRANSACTIONS IN BELGIUM)

LINE 1. - ACCIDENTS.

A. Statistical Statement.

General Individual.
Traffic Individual - Fixed Amount.
Traffic Individual - Common Law.
Collective.
Multi-risk Travel.
Other.

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

C. Comments on the Statistical Statement.

Insurance extended to family members must also be considered as "individual insurance."
Collective Policies.
Column 4 also includes the "accidents" guarantee from extended collective policies (e.g., the "accidents" guarantee from the "school institutions" policy).
Multi-risk Tourism and Travel Policies.
If possible, distribute the guarantees across the different columns of the statistical statement 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, at least a distinction must 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 any additional guarantees (column 11) on the other hand. The legal aid guarantee must in any case be included in line 17 (column 91).

LINE 2. - ILLNESS.

A. Statistical Statement.
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 Statement.

Insurance extended to family members must also be considered as "individual insurance."
See comment 3 in Line 1 - Accidents.

LINE 3. - MOTOR CASCO.

A. Statistical Statement.
11. Tourism and Business: Material Damage.
12. Tourism and Business: Theft.
13. Tourism and Business: Other.
14. Motorcycles: Material Damage.
15. Motorcycles: Theft.
16. Motorcycles: Other.
17. Buses/Coaches: Material Damage.
18. Buses/Coaches: Theft.
19. Buses/Coaches: Other.
20. Taxis and Hire Cars: Material Damage.
21. Taxis and Hire Cars: Theft.
22. Taxis and Hire Cars: Other.
23. Goods Transport, MTM <= 3.5 tons: Material Damage.
24. Goods Transport, MTM <= 3.5 tons: Theft.
25. Goods Transport, MTM <= 3.5 tons: Other.
26. Goods Transport, MTM > 3.5 tons: Material Damage.
27. Goods Transport, MTM > 3.5 tons: Theft.
28. Goods Transport, MTM > 3.5 tons: Other.
29. Other Motor Casco: Vehicles without motor.

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

C. Comments on the Statistical Statement.

In columns 11 to 28, all risks are included on which, regarding B.A., the law on compulsory insurance applies (Law of 21 November 1989).
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 lines 8 and 9 (Fire and other damage to goods) when they are of the "static caravan" type.

Column 29 includes vehicles without motor such as bicycles, horse-drawn carriages, and sailboats.
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.
Multi-risk Tourism and Travel policies are included in Line 3 only for the part concerning damage to vehicles. The additional guarantees, except those related to illness and bodily accidents, may however be retained in Line 3 if a more refined classification would be impossible.
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 "other" column.
The same principle applies to other guarantees such as glass breakage, natural forces, contact with wildlife....
The theft guarantee must in any case be stated in the "theft" column.
The legal aid guarantee may never be included in Line 3 - Motor Casco, but must be stated in the columns provided for the Legal Aid line.
The assistance guarantee must be included in column 93, unless splitting with other guarantees is not possible.
Insurance of the "mechanical omnium" type (mechanical breakdown) is included in the material damage columns.

TRANSPORT LINES.

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

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

C. Comments on the Statistical Statement.

The casco column includes the following lines:
- 04 Casco Rolling Railway Material;
- 05 Aircraft Casco;
- 06 Sea and Inland Waterway Casco.
The goods column corresponds to Line 07 - Carried Goods.
The liabilities column includes the following lines:
- 10b B.A. of the Carrier and B.A. Operation of Transport;
- 11 B.A. Aircraft;
- 12 B.A. Sea and Inland Waterway Ships;
- 13 B.A. of the Railway and other B.A. Transport.

LINES 8 AND 9. - FIRE AND OTHER DAMAGE TO GOODS.

A. Statistical Statement.
A1. Risks to which the Royal Decree of 1 February 1988 applies.

A11. Dwellings.
33. Fire and Related Perils + Electricity.
34. Storm.
35. Natural Disasters.
36. Theft, Vandalism, and Malice.
37. Labor Conflicts, Attacks.
38. Other.

A12. Agricultural Risks.
39. Fire and Related Perils + Electricity.
40. Storm.
41. Natural Disasters.
42. Theft, Vandalism, and Malice.
43. Labor Conflicts, Attacks.
44. Other.

A13. Enterprises (including retail shops, SMEs, crafts).
45. Fire and Related Perils + Electricity.
46. Storm.
47. Natural Disasters.
48. Theft, Vandalism, and Malice.
49. Labor Conflicts, Attacks.
50. Other.

A14. Other (than dwellings, agricultural risks, retail shops - SMEs, enterprises, and special objects).
51. Fire and Related Perils + Electricity.
52. Storm.
53. Natural Disasters.
54. Theft, Vandalism, and Malice.
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 Malice.
62. Labor Conflicts, Attacks.
63. Other.

A22. Special Objects, "Global Bank Insurance", Animals.
64. Special Objects, "Global Bank Insurance", Animals.

A23. Crops.
65. Crops.

A24. Technical Insurance.
66. Machine Breakdown.
67. All Construction Site Risks.
68. Erection 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. Dwellings: 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 Statement.

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.
The "storm" columns also include "hail, snow, or ice pressure" if these guarantees are supplementary to the storm guarantee in the contracts.
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).
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 artworks, stamps and collections;
- films;
- uniforms;

salesmen's collections;
luggage;
accounting documents and medical prescriptions;
prostheses and glasses;
exhibitions;
window panes, shop signs;
contents of freezers.

These are included in column 57 (if the risks fall under the scope of the Royal Decree of 1 February 1988) and in column 64 (risks that do not fall under the scope of the Royal Decree of 1 February 1988).

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

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

Examples of other electrical and electronic installations or equipment:

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

Category A14 "Other" includes, among others, buildings (residential or non-residential) and institutions (education, welfare care, sports, culture,...).
The guarantees for business interruption and B.A. building are included in branch 16 and branch 13 respectively.
If the guarantee for indirect losses is the only underwritten guarantee in a contract, it must be reported in branch 16.

In other cases, the guarantee for indirect losses 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 guarantee for indirect losses are recorded in the column of the risk 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")).

The B.A.-operation guarantee of "all construction site risks" contracts (column 67) must be included in branch 13.

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

A. Statistical Return.

Tourism and Business.
Two-wheelers.
Autobuses-autocars.
Taxis and hire cars.
Transport of goods (MTM <= 3.5 T).
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.

A. Statistical Return.

B.A. private life - general.
Other B.A. private life.
B.A. operation (except 81 and 82).
B.A. after delivery, B.A. products.
B.A. environmental pollution.
B.A. nuclear installations.
Ten-year B.A. of engineers and architects.
B.A. medical, paramedical, and veterinary professions.
Other B.A. professional life.
Objective B.A. (fire, explosion in establishments accessible to the public).
Other B.A.

B. Profitability.

XXIV. B.A. private life: 77 + 78.
XXV. B.A. operation/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. Comments regarding the statistical return.

Column 77 includes only the general B.A. family policies.
Column 78 includes specific B.A. private life insurance (e.g., B.A. dogs, B.A. building...). If they can be separated, the B.A. private life guarantees appearing in other insurance must also be included in this column.
Column 79 (B.A. operation) does not include the B.A. of persons who provide intellectual services. This is included, as appropriate, in column 83, 84, or 85.
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".