International Services Surveys: BE-140 Benchmark Survey of Insurance Transactions by U.S. Insurance Companies With Foreign Persons
| Published date | 26 March 2019 |
| Record Number | 2019-05432 |
| Section | Proposed rules |
| Court | Economic Analysis Bureau |
Federal Register, Volume 84 Issue 58 (Tuesday, March 26, 2019)
[Federal Register Volume 84, Number 58 (Tuesday, March 26, 2019)]
[Proposed Rules]
[Pages 11256-11259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-05432]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 84, No. 58 / Tuesday, March 26, 2019 /
Proposed Rules
[[Page 11256]]
DEPARTMENT OF COMMERCE
Bureau of Economic Analysis
15 CFR Part 801
[190225160-9160-01]
RIN 0691-AA88
International Services Surveys: BE-140 Benchmark Survey of
Insurance Transactions by U.S. Insurance Companies With Foreign Persons
AGENCY: Bureau of Economic Analysis, Commerce.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This proposed rule would amend regulations of the Department
of Commerce's Bureau of Economic Analysis (BEA) to renew reporting
requirements for the mandatory BE-140 Benchmark Survey of Insurance
Transactions by U.S. Insurance Companies with Foreign Persons. This
survey will apply to the 2018 calendar reporting year. This mandatory
benchmark survey, conducted under the authority of the International
Investment and Trade in Services Survey Act, covers the universe of
transactions in insurance services and is BEA's most comprehensive
survey of such transactions. For the 2018 benchmark survey, BEA
proposes several changes in the data items collected and the design of
the survey form.
DATES: Comments on this proposed rule will receive consideration if
submitted in writing on or before 5:00 p.m. May 28, 2019.
ADDRESSES: You can submit comments, identified by RIN 0691-AA88, and
referencing the agency name (Bureau of Economic Analysis), by any of
the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments. For Keyword or ID,
enter ``EAB-2018-0001.''
Email: [email protected].
Fax: Christopher Stein, Chief, Services Surveys Branch,
Balance of Payments Division, (301) 278-9507.
Mail: Christopher Stein, Chief, Services Surveys Branch
(BE-50), Balance of Payments Division, Bureau of Economic Analysis,
U.S. Department of Commerce, 4600 Silver Hill Rd., Washington, DC
20233.
Hand Delivery/Courier: Christopher Stein, Chief, Services
Surveys Branch (BE-50), Balance of Payments Division, Bureau of
Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Rd.,
Suitland, MD 20746.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in the
proposed rule should be sent to both BEA through any of the methods
above and to the Office of Management and Budget (OMB), OIRA, Paperwork
Reduction Project 0608-0073, Attention PRA Desk Officer for BEA, via
email at [email protected], or by fax at 202-395-7245.
Public Inspection: All comments received are a part of the public
record and will generally be posted to http://www.regulations.gov
without change. All personal identifying information (for example,
name, address, etc.) voluntarily submitted by the commenter may be
publicly accessible. Do not submit confidential business information or
otherwise sensitive or protected information. BEA will accept anonymous
comments (enter N/A in required fields if you wish to remain
anonymous). Attachments to electronic comments will be accepted in
Microsoft Word, Excel, or Adobe portable document file (pdf) formats
only.
FOR FURTHER INFORMATION CONTACT: Christopher Stein, Chief, Services
Surveys Branch (BE-50), Balance of Payments Division, Bureau of
Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Rd.,
Washington, DC 20233; email [email protected] or phone (301)
278-9189.
SUPPLEMENTARY INFORMATION: The BE-140 Benchmark Survey of Insurance
Transactions by U.S. Insurance Companies with Foreign Persons is a
mandatory survey and is conducted once every five years by BEA under
the authority provided by the International Investment and Trade in
Services Survey Act (Pub. L. 94-472, 90 Stat. 2059, 22 U.S.C. 3101-
3108, as amended), hereinafter, ``the Act.'' The Act provides that data
reported to BEA on this survey are confidential and may be used only
for analytical and statistical purposes. Without prior written
permission from the survey respondent, the data collected cannot be
presented in a manner that allows individual responses to be
identified. An individual respondent's report cannot be used for
purposes of taxation, investigation, or regulation. Copies retained by
BEA are exempt from legal process. Per the Cybersecurity Enhancement
Act of 2015, a respondent's data are protected from Cybersecurity risks
through security monitoring of the BEA information systems.
A response is required from persons subject to the reporting
requirements of the BE-140, whether or not they are contacted by BEA,
to ensure complete coverage of transactions in insurance services
between U.S. persons (any individual or organization subject to the
jurisdiction of the United States) and foreign persons.
In 2012, BEA established regulatory guidelines for collecting data
on international trade in services and direct investment (77 FR 24373;
April 24, 2012). This proposed rule, conducted pursuant to the Act,
would amend regulations to require a response from persons subject to
the reporting requirements of the BE-140, whether or not they are
contacted by BEA.
The benchmark survey is intended to cover the universe of insurance
transactions of U.S. insurance companies with foreign persons and is
BEA's most comprehensive survey of such transactions. In nonbenchmark
years, the universe estimates covering these transactions are derived
from the sample data reported on BEA's BE-45 Quarterly Survey of
Insurance Transactions by U.S. Insurance Companies with Foreign
Persons. The BE-45 and the BE-140 collect similar information. BEA uses
cutoff sampling for the BE-45, meaning that respondents must only
report on the BE-45 if they have transactions that exceeded $8 million
in any one of the eight covered insurance transaction categories. The
sample of reporters that file on a quarterly basis throughout calendar
year 2018 will also be required to report on the 2018 BE-140 survey.
BEA reconciles
[[Page 11257]]
the annual data from the BE-140 survey with the quarterly data reported
on the BE-45 survey, by comparing quarterly to annual submissions that
are typically completed using audited information.
The benchmark data, which includes data from respondents not
subject to filing on an ongoing quarterly basis, will be used, in
conjunction with quarterly data collected on the companion BE-45
survey, to produce estimates of insurance transactions for BEA's
international transactions accounts (ITAs), national income and product
accounts, and industry accounts. If this information was not collected
on the BE-140 survey, BEA would need to expand the scope of the BE-45
quarterly survey by collecting additional data items and reducing
reporting thresholds, resulting in an increased number of respondents
and a measurable impact on the reporting burden each quarter. The data
collected through the BE-140 are needed to monitor U.S. trade in
insurance services, to analyze the impact on the U.S. economy and on
foreign economies, to compile and improve the U.S. economic accounts,
to support U.S. commercial policy on trade in services, to conduct
trade promotion, and to improve the ability of U.S. businesses to
identify and evaluate market opportunities.
A full list of the insurance transactions covered by the BE-140
survey can be found in the regulatory text for new Sec. 801.12 at the
end of this document.
This proposed rule would amend 15 CFR part 801 by adding new Sec.
801.12 to set forth the reporting requirements for the BE-140 Benchmark
Survey of Insurance Transactions by U.S. Insurance Companies with
Foreign Persons.
Description of Changes
The proposed changes would amend the regulations and the survey
form for the BE-140 benchmark survey. These amendments include several
changes in data items collected and the design of the survey form
relative to the 2013 benchmark survey.
BEA proposes adding two items and modify two items on the benchmark
survey form. The modifications are proposed in response to suggestions
from data users and would allow BEA to more closely align with
international guidelines and publish more information on U.S. trade in
insurance services.
The following items would be added to the benchmark survey:
(1) Mandatory questions to request additional information from
respondents that have direct insurance sales and/or losses. Additional
questions, applicable to reporters of direct insurance transactions on
Schedule B of the survey, would be added to request an estimate of what
percentage of these transactions were: (1) Life insurance, (2) freight
insurance, and (3) other direct insurance. To avoid imposing undue
reporter burden, the estimates would be requested based on the
reporter's knowledge of the U.S. operations, and would not be required
to be sourced from company records at an individual transaction level.
(2) A new schedule to collect information related to catastrophic
losses from hurricanes and other significant natural disasters. The
2018 BE-140 survey would collect information from reporters for a
sample of up to 5 catastrophic events that took place during 2018.
Catastrophic events would include events such as hurricanes,
earthquakes, and wildfires, etc. The new schedule would be structured
to collect data on the loss amount, type of loss (assumed or ceded),
the country of the foreign counterparty, the relationship to the
foreign counterparty (foreign affiliate, foreign parent group, or
unaffiliated), and the date for each event/transaction.
In addition, BEA proposes to make the following two modifications
to items collected on the previous BE-140 survey form:
(1) Lowering the threshold for reporting large, infrequent
reinsurance transactions. On the 2013 BE-140 benchmark survey, the
threshold for reporting these transactions was $1 billion. For the 2018
BE-140 benchmark survey, in order to collect more comprehensive
information, a lower threshold of $250 million will be used. In
addition, reporters will be required to indicate if the transactions
either included a transfer of reserves or were related to a
catastrophic event, for up to 10 transactions.
(2) Modifying mandatory Schedule C to collect additional
information regarding the expected average maturity of reserves that
are transferred and included in the premiums reported on the survey.
Information about reserve transfers would be collected for the large,
infrequent reinsurance transactions collected at the proposed threshold
of $250 million (proposed modification (1) above). Reporters of such
transactions would be required to provide additional information about
those transactions that included a transfer of reserves at the
inception of new reinsurance contracts, or for the recapture or
termination of reinsurance contracts. The proposed schedule would
request information about the type of premium/loss (either assumed or
ceded), the country of the foreign counterparty, the relationship to
the foreign counterparty (foreign affiliate, foreign parent group, or
unaffiliated), the expected average maturity of the reserves, the
reserve amount, and the date of the transaction. A text field will also
be provided to allow the respondent to include additional details about
each transaction.
BEA proposes to redesign the format and wording of the survey. The
new survey design would incorporate improvements that have been made to
other BEA surveys. Some enhancements are the result of a recent
cognitive review conducted with selected survey respondents during the
planning for the 2017 BE-120 Benchmark Survey of Transactions in
Selected Services and Intellectual Property with Foreign Persons.
Survey instructions and data item descriptions would be changed to
improve clarity and ensure the benchmark survey form is consistent with
other BEA surveys.
Executive Order 12866
This proposed rule has been determined to be not significant for
purposes of E.O. 12866.
Executive Order 13132
This proposed rule does not contain policies with Federalism
implications sufficient to warrant preparation of a Federalism
assessment under E.O. 13132.
Paperwork Reduction Act
This proposed rule contains a collection-of-information requirement
subject to review and approval by the Office of Management and Budget
(OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520
(PRA). The requirement will be submitted to OMB for approval as a
reinstatement, with change, of a previously approved collection under
OMB control number 0608-0073 for which approval has expired. Surveys
were collected for the 2013 BE-140 in calendar years 2014 and 2015. No
survey submissions were solicited by BEA after the expiration and
discontinuance of the collection in February of 2017.
Notwithstanding any other provisions of law, no person is required
to respond to, nor shall any person be subject to a penalty for failure
to comply with, a collection of information subject to the requirements
of the PRA unless that collection displays a currently valid OMB
control number.
The BE-140 survey, as proposed, is expected to result in the filing
of reports
[[Page 11258]]
from approximately 1,300 respondents. Approximately 1,000 respondents
would report mandatory data on the survey, and approximately 300 would
file exemption claims. The respondent burden for this collection of
information would vary from one respondent to another, but is estimated
to average (1) 9 hours for the 600 respondents that file mandatory or
voluntary data by country and affiliation for relevant transaction
types on the mandatory schedules; (2) 2 hours for the 400 respondents
that file mandatory data by transaction type but not by country or
affiliation; and (3) 1 hour for other responses. These burden-hour
estimates consider time for reviewing instructions, searching existing
data sources, gathering and maintaining the data needed, and completing
and reviewing the collection of information. Thus the total respondent
burden for this survey is estimated at 6,500 hours, or 5 hours per
response (6,500 hours/1,300 respondents), compared to 4,689 hours, or
about 4.5 hours per response (4,689 hours/1,042 respondents) for the
previous BE-140 benchmark survey in 2013. The increase in burden hours
is due to an estimated increase in the size of the respondent universe
from 2013 to 2018, as well as changes to the content of the survey.
As part of its continuing effort to reduce paperwork and respondent
burden, the Department of Commerce invites the general public and other
Federal agencies to comment on proposed and/or continuing information
collections, as required by the PRA. Comments are requested concerning:
(a) Whether the proposed collection of information is necessary for the
proper performance of the functions of the agency, including whether
the information will have practical utility; (b) the accuracy of the
burden estimate; (c) ways to enhance the quality, utility, and clarity
of the information collected; and (d) ways to minimize the burden of
the collection of information on the respondents, including the use of
automated collection techniques or other forms of information
technology.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in the
proposed rule should be sent to both BEA and OMB following the
instructions given in the ADDRESSES section above.
Regulatory Flexibility Act
The Chief Counsel for Regulation, Department of Commerce, has
certified to the Chief Counsel for Advocacy, Small Business
Administration, under the provisions of the Regulatory Flexibility Act,
5 U.S.C. 605(b), that this proposed rulemaking, if adopted, will not
have a significant economic impact on a substantial number of small
entities. The changes proposed in this rule are discussed in the
preamble and are not repeated here.
A BE-140 report would be required of any U.S. insurance company
that had insurance transactions with foreign persons in any of the
types of transactions listed in the regulatory text for new Sec.
801.12 at the end of this document. While the survey would not collect
data on total sales or other measures of the overall size of the
respondents to the survey, historically the respondents to the existing
quarterly survey of insurance transactions and to the previous
benchmark surveys were major U.S. insurance corporations. A completed
benchmark survey, as proposed, would be required from U.S. insurance
companies who had insurance transactions in any of the covered
categories with foreign persons. For U.S. insurance companies who have
transactions that exceeded $2 million in at least one of the insurance
services covered by the survey for calendar year 2018, a completed
benchmark survey would include data on each of the covered types of
insurance transactions with totals disaggregated by country and by
relationship to the foreign counterparty (foreign affiliate, foreign
parent group, or unaffiliated). For U.S. insurance companies that had
transactions below $2 million in each of the insurance services covered
by the survey for calendar year 2018, a completed benchmark would
include totals for each type of transaction in which they engaged. This
below $2 million exemption level would exclude most small businesses
from mandatory reporting of detail by country and by affiliation. Any
small businesses that are required to report would likely have engaged
in a small number of covered transactions and are therefore expected to
be below the expected average burden of 5 hours per response. Even if
the responses for small businesses took the expected average burden of
5 hours per response, that would not constitute a significant impact on
any small business or other entity. Because this rule would not have a
significant impact on any small entities, an Initial Regulatory
Flexibility Analysis is not required, and none has been prepared.
List of Subjects in 15 CFR Part 801
Economic statistics, Foreign trade, International transactions,
Penalties, Reporting and recordkeeping requirements.
Dated: March 15, 2019.
Paul W. Farello,
Associate Director of International Economics, Bureau of Economic
Analysis.
For reasons set forth in the preamble, BEA proposes to amend 15 CFR
part 801 as follows:
PART 801--SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S.
AND FOREIGN PERSONS AND SURVEYS OF DIRECT INVESTMENT
0
1. The authority citation for 15 CFR part 801 continues to read as
follows:
Authority: 5 U.S.C. 301; 15 U.S.C. 4908; 22 U.S.C. 3101-3108;
E.O. 11961 (3 CFR, 1977 Comp., p. 86), as amended by E.O. 12318 (3
CFR, 1981 Comp. p. 173); and E.O. 12518 (3 CFR, 1985 Comp. p. 348).
0
2. Revise Sec. 801.3 to read as follows:
Sec. 801.3 Reporting requirements.
Except for surveys subject to rulemaking in Sec. Sec. 801.7,
801.8, 801.9, 801.10, 801.11, and 801.12 reporting requirements for all
other surveys conducted by the Bureau of Economic Analysis shall be as
follows:
(a) Notice of specific reporting requirements, including who is
required to report, the information to be reported, the manner of
reporting, and the time and place of filing reports, will be published
by the Director of the Bureau of Economic Analysis in the Federal
Register prior to the implementation of a survey;
(b) In accordance with section 3104(b)(2) of title 22 of the United
States Code, persons notified of these surveys and subject to the
jurisdiction of the United States shall furnish, under oath, any report
containing information which is determined to be necessary to carry out
the surveys and studies provided for by the Act; and
(c) Persons not notified in writing of their filing obligation by
the Bureau of Economic Analysis are not required to complete the
survey.
0
3. Add Sec. 801.12 to read as follows:
Sec. 801.12 Rules and regulations for the BE-140 Benchmark Survey of
Insurance Transactions by U.S. Insurance Companies with Foreign
Persons--2018.
The BE-140 Benchmark Survey of Insurance Transactions by Insurance
Companies with Foreign Persons will be conducted covering calendar year
2018. All legal authorities, provisions, definitions, and requirements
contained in Sec. Sec. 801.1 through 801.2 and Sec. Sec. 801.4
through 801.6 are applicable to this survey. Specific additional rules
and regulations for the BE-140 survey are given in paragraphs (a)
through (e) of
[[Page 11259]]
this section. More detailed instructions are given on the report form
and in instructions accompanying the report form.
(a) Response required. A response is required from U.S. insurance
companies subject to the reporting requirements of the BE-140 Benchmark
Survey of Insurance Transactions by U.S. Insurance Companies with
Foreign Persons--2018, contained herein, whether or not they are
contacted by BEA. Also, a U.S. insurance company, or its agent, that is
contacted by BEA about reporting on this survey, either by sending a
report form or by written inquiry, must respond in writing pursuant to
this section. This may be accomplished by:
(1) Completing and returning the BE-140 by the due date of the
survey; or
(2) If exempt, by completing the determination of reporting status
section of the BE-140 survey and returning it to BEA by the due date of
the survey.
(b) Who must report. A BE-140 report is required of each U.S.
insurance company that had insurance transactions with foreign persons
in the categories covered by the survey during its 2018 calendar year.
(c) What must be reported. (1) A U.S. insurance company that had
transactions with foreign persons that exceeded $2 million in at least
one of the insurance categories covered by the survey during its 2018
calendar year, on an accrual basis, is required to provide data on the
total transactions of each of the covered types of insurance
transactions and must disaggregate the totals by country and by
relationship to the foreign counterparty (foreign affiliate, foreign
parent group, or unaffiliated). The determination of whether a U.S.
insurance company is subject to this reporting requirement may be based
on the judgment of knowledgeable persons in a company who can identify
reportable transactions on a recall basis, with a reasonable degree of
certainty, without conducting a detailed manual records search.
(2) A U.S. insurance company that had transactions with foreign
persons that were $2 million or less in each of the insurance
categories covered by the survey during its 2018 calendar year, on an
accrual basis, is required to provide the total for each type of
transaction in which they engaged.
(i) Voluntary reporting of insurance transactions. If, during
calendar year 2018, total transactions were $2 million or less in each
of the insurance categories covered by the survey, on an accrual basis,
the U.S. insurance company may, in addition to providing the required
total for each type of transaction, voluntarily report transactions at
a country and affiliation level of detail on the applicable mandatory
schedule(s).
(ii) [Reserved].
(3) Exemption claims. Any U.S. person 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 of the BE-140 survey and returning it to BEA
by the due date of the survey. This requirement is necessary to ensure
compliance with reporting requirements and efficient administration of
the Act by eliminating unnecessary follow-up contact.
(d) Covered types of insurance services. Insurance services covered
by the BE-140 survey consist of transactions between U.S. insurance
companies and foreign persons for:
(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.
(e) Types of transactions excluded from the scope of this survey--
Premiums paid to, or losses received from, foreign insurance companies
on direct insurance.
(f) Due date. A fully completed and certified BE-140 report, or
qualifying exemption claim with the determination of reporting status
section completed, is due to be filed with BEA not later than July 31,
2019 (or by August 31, 2019 for respondents that use BEA's eFile
system).
[FR Doc. 2019-05432 Filed 3-25-19; 8:45 am]
BILLING CODE 3510-06-P
