Ronald A. Oleynik is a Partner in Holland & Knight's Washington, D.C. office.
Farid Hekmat is a Associate in Holland & Knight's Washington, D.C. office.
The U.S. Department of Commerce's Bureau of Economic Analysis (BEA) recently made several changes to the survey form for the mandatory BE-140 Benchmark Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons-2018.1 U.S. insurance companies that have engaged in insurance transactions with foreign persons during the 2018 reporting year need to complete and file the BE-140 survey no later than Sept. 30, 2019. This reporting requirement is mandatory, whether or not the company is contacted by BEA about the survey.
The BE-140 Benchmark Survey is conducted every five years to collect data with regard to U.S. insurance companies' transactions with foreign persons under the authority provided by the International Investment and Trade in Services Survey Act (IITSSA). In conjunction with the results from BE-45 survey in non-benchmark years,2 reporting data of BE-140 will be used to prepare the insurance services statistics for the U.S. economic data.
Who Is Required to Report and What Must Be Reported?
Each U.S. insurance company that had insurance transactions with foreign persons in the eight categories of transactions during its 2018 calendar year must file a BE-140 report.3
- Any U.S. insurance company that had transactions with foreign persons that exceeded $2 million (positive or negative) in at least one of the eight categories during the reporting year must provide totals of each type of transaction as well as disaggregated totals by countries and by relationship to the foreign counterparty.
- Any U.S. insurance company that had transactions with foreign persons that were below $2 million (positive or negative) in each of the eight categories during the reporting year is required to report only the totals for each type of transaction and has the option of voluntarily reporting on the remaining questions of the survey.
- Any U.S. insurance company that receives the BE-140 survey form from BEA but is not subject to the reporting requirements must file an exemption claim by completing the determination of reporting status section.
Additions and Modifications to Form BE-140
BEA has added two items to the 2018 BE-140 benchmark survey. First, any company that reports direct insurance transactions on Schedule B needs to provide an estimate of what percentages of these transactions were 1) life insurance, 2) freight insurance and 3) other direct insurance.
In addition, the 2018 survey will include a new schedule to collect information related to catastrophic losses (up to five) from hurricanes and other significant natural disasters.
BEA has modified the previous BE-140 survey by lowering the threshold for reporting large, infrequent reinsurance transactions to $250 million and requiring additional information regarding the expected average maturity of reserves that are transferred and included in the premiums on Schedule C.4
Reporting Dates and Preparation
U.S. insurance companies required to complete the survey should submit the data to BEA by Sept. 30, 2019. Failure to provide timely and accurate data may lead to significant civil and criminal penalties.
For the upcoming 2018 BE-140 Benchmark Survey Form, instructions and other information regarding the survey, please visit the BEA website.
1 84 Fed. Reg. 27197.
2 BEA's BE-45 Quarterly Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons is used in non-benchmark years to collect similar information. Only U.S. persons contacted by the BEA need to complete and file the form BE-45.
3 These transactions include: 1) premiums earned on reinsurance assumed from companies resident abroad; 2) losses incurred on reinsurance assumed from companies resident abroad; 3) premiums paid for reinsurance ceded to companies resident abroad; 4) losses recovered on reinsurance ceded to companies resident abroad; 5) premiums earned from direct insurance sold to foreign persons; 6) losses incurred on direct insurance sold to foreign persons; 7) receipts for auxiliary insurance services provided to foreign persons; and 8) payments for auxiliary insurance services provided by foreign persons.
4 The threshold for reporting such transactions on the 2013 BE-140 survey was $1 billion.
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