E9-19517. 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:

Final rule.

SUMMARY:

This final rule amends the Bureau of Economic Analysis' (BEA) regulations to set forth the reporting requirements for a new mandatory Benchmark Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons. The survey will collect data on cross-border reinsurance and other insurance transactions from U.S. insurance companies. The BE-140 survey will be conducted every five years with the first survey covering calendar year 2008. The BE-140 survey data will be used by BEA to estimate the insurance services component of the U.S. International Transactions Accounts (ITAs) and other economic accounts compiled by BEA.

DATES:

This final rule will be effective. September 14, 2009.

FOR FURTHER INFORMATION CONTACT:

Chris Emond, Chief, Special Surveys Branch, Balance of Payments Division, (BE-50) Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230; e-mail; or phone [phone].

SUPPLEMENTARY INFORMATION:

In the April 10, 2009 Federal Register (74 FR 16337), BEA published a notice of proposed rulemaking to amend 15 CFR 801.9(a) to set forth the reporting requirements for a new mandatory survey entitled BE-140, Benchmark Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons. No comments were received on the proposed rule. Thus, the proposed rule is adopted without change.

Description of Changes

The BE-140 survey is a mandatory survey and will be conducted by BEA every five years, with the first survey covering calendar year 2008, pursuant to the authority provided in the International Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108), hereinafter, “the Act.” For the initial survey, BEA will send the survey to potential respondents in September of 2009; responses will be due by December 1, 2009.

The BE-140 survey will collect information from U.S. insurance companies on the following covered transactions: Reinsurance assumed from or ceded to insurance companies resident abroad, primary insurance sold to foreign persons, and receipts and payments of auxiliary insurance services. The specific data that will be collected on the survey are: (1) Premiums earned, and (2) losses, on reinsurance assumed; (3) premiums incurred, and (4) losses, on reinsurance ceded; (5) premiums earned, and (6) losses, on primary insurance sold; (7) sales of, and (8) purchases of, auxiliary insurance services. The exemption level for the survey is $2 million based on one of the eight categories listed above. Insurance companies that exceed this threshold must supply data on the amount of their insurance transactions for each category, disaggregated by country.

U.S. insurance companies that are exempt from the reporting requirements because they do not meet the criteria for reporting on the BE-140 survey form are requested to provide, on a voluntary basis, the estimates of their covered insurance transactions. Any U.S. insurance company that receives the BE-140 survey form from BEA, but that is not required to report data because it is exempt under the regulations, must provide information on the reason why it is exempt. This requirement is necessary to ensure compliance with reporting requirements and efficient administration of the Act by eliminating unnecessary follow-up contact. If a U.S. insurance company does not receive the BE-140 survey form and is not otherwise required to report under these regulations, then the company is not required to take any action.

Survey Background

BEA conducts the survey pursuant to authority provided in section 4(a) of the Act (22 U.S.C. 3103(a)), which provides that the President shall, to the extent he deems necessary and feasible, conduct a regular data collection program to secure current information related to international investment and trade in services and publish for the use of the general public and United States Government agencies periodic, regular, and comprehensive statistical information collected pursuant to this subsection.

In section 3 of Executive Order 11961, as amended by Executive Orders 12318 and 12518, the President delegated the responsibilities under the Act for performing functions concerning international trade in services to the Secretary of Commerce, who has redelegated them to BEA.

Data from the BE-140 survey are needed to monitor U.S. exports and imports of insurance services and other international insurance transactions; analyze their impact on the U.S. and foreign economies; compile and improve the U.S. international transactions, national income and product, and input-output accounts; support U.S. international trade policy on insurance services; assess and promote U.S. competitiveness in international trade in services; and improve the ability of U.S. businesses to identify and evaluate market opportunities.

Executive Order 12866

This final rule has been determined to be not significant for purposes of E.O. 12866.

Executive Order 13132

This final rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism Assessment under E.O. 13132.

Paperwork Reduction Act

The collection-of-information in this final rule has been approved by the Office of Management and Budget (OMB) under control number 0608-0073 pursuant to the requirements of the Paperwork Reduction Act.

Notwithstanding any other provisions of the 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 Paperwork Reduction Act unless that collection displays a currently valid Office of Management and Budget Control Number. The collection will display this number.

The BE-140 benchmark survey is expected to result in the filing of reports from approximately 1000 respondents. Of this number, approximately 500 respondents would report mandatory or voluntary data on the survey and approximately 500 respondents would not report data but would respond with the required statement of exemption. The respondent burden for this collection of information would vary from one respondent to another, but is estimated to average 8 hours annually, including time for reviewing the instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information for the respondents that file mandatory or voluntary data and one hour for respondents that do not report data. Thus, the total respondent burden for the survey is estimated at 4,500 hours.

Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this final rule should be sent to (1) The Bureau of Economic Analysis via mail to U.S. Department of Commerce, Bureau of Economic Analysis, Chris Emond, Chief, Special Surveys Branch (BE-50), Washington, DC 20230, via e-mail at [e-mail], or by FAX at 202-606-5318; and (2) the Office of Management and Budget, O.I.R.A., Paperwork Reduction Project 0608-0073, PRA Desk Officer for BEA, via e-mail at [e-mail], or by FAX at 202-395-7245.

Regulatory Flexibility Act

The Chief Counsel for Regulation, Department of Commerce, has certified to the Chief Counsel for Advocacy, Small Business Administration, under provisions of the Regulatory Flexibility Act (5 U.S.C. 605(b)), that this rule will not have a significant economic impact on a substantial number of small entities. The factual basis for this certification was published with the proposed rule. No comments were received regarding the economic impact of this rule. As a result, no final regulatory flexibility analysis was prepared.

List of Subjects in 15 CFR Part 801

• International transactions
• Economic statistics
• Foreign trade
• Penalties
• Reporting and recordkeeping requirements

Dated: July 2, 2009.

J. Steven Landefeld,

Director, Bureau of Economic Analysis.

For the reasons set forth in the preamble, BEA amends 15 CFR part 801, as follows:

PART 801—SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. AND FOREIGN PERSONS

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; and 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.

2. Revise § 801.9(a) to read as follows:

§ 801.9

Reports required.

(a) Benchmark surveys. Section 4(a)(4) of the Act (22 U.S.C. 3103) provides that benchmark surveys of trade in services between U.S. and unaffiliated persons be conducted, but not more frequently than every 5 years. General reporting requirements, exemption levels, and the years of coverage for the BE-120 survey may be found in § 801.10; general reporting requirements, exemption levels, and the years of coverage for the BE-80 survey may be found in § 801.11; and general reporting requirements, exemption levels, and the years for coverage for the BE-140 survey may be found in § 801.12: More detailed instructions are given on the forms themselves.

* * * * *

3. Add § 801.12 to read as follows:

§ 801.12

Rules and regulations for the BE-140, Benchmark Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons.

(a) The BE-140, Benchmark Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons, will be conducted covering calendar year 2008 and every fifth year thereafter. All legal authorities, provisions, definitions, and requirements contained in § 801.1 through § 801.9(a) are applicable to this survey. More detailed instructions and descriptions of the individual types of transactions covered are given on the report form itself. The BE-140 consists of three parts and two schedules. Part 1 requests information on whom to consult concerning questions about the report and the certification section. Part 2 requests information about the reporting insurance company. Part 3 requests information needed to determine whether a report is required, the types of transactions that would be reported, and which schedules apply. Each of the two schedules covers the types of insurance services to be reported and the ownership relationship between the U.S. insurance company and foreign transactor and is to be completed only if the U.S. insurance company has transactions of the types covered by the particular schedule.

(b) Who must report.

(1) Mandatory reporting. A BE-140 report is required from each U.S. insurance company with respect to the transactions listed below, if any of the eight items was greater than $2 million or less than negative $2 million for the calendar year covered by the survey on an accrual basis:

(i) Premiums earned, and

(ii) Losses, on reinsurance assumed;

(iii) Premiums incurred, and

(iv) Losses, on reinsurance ceded;

(v) Premiums earned, and

(vi) Losses, on primary insurance sold;

(vii) Sales of, and

(viii) Purchases of, auxiliary insurance services.

U.S. insurance companies that file pursuant to this mandatory reporting requirement must complete parts 1 through 3 of Form BE-140 and all applicable schedules. The total amounts of transactions applicable to a particular schedule are to be entered in the appropriate column(s) and these amounts must be distributed among the countries involved in the transactions.

(2) Voluntary reporting. If, during the calendar year covered, the U.S. insurance company's transactions do not exceed the exemption level for any of the types of transactions covered by the survey, the U.S. person is requested to provide an estimate of the total for each type of transaction. Submission of this information is voluntary. The estimates may be judgmental, that is, based on recall, without conducting a detailed records search.

(3) Any U.S. insurance company that receives the BE-140 survey form from BEA, but is not reporting data in either the mandatory or voluntary section of the form, must complete Parts 1 through 3 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.

(c) Covered types of insurance transactions. The BE-140 survey is intended to collect information on U.S. international insurance transactions. The types of insurance transactions covered are: Reinsurance assumed from or ceded to insurance companies resident abroad, primary insurance sold to foreign persons, and receipts and payments of auxiliary insurance services.