## BPM7 Annex 8. Insurance and Pensions: Annotated Outline

## Source details

**Canonical URL:** [BPM7 Annex 8. Insurance and Pensions: Annotated Outline](https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-8.pdf)

## Other formats

- [Markdown version](/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-8.pdf.md)
- [Structured JSON version](/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-8.pdf.json)

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### I. Introduction
- Maintains structure from BPM6 Appendix 6c and covers general issues as in BPM6 paragraphs A6c.1–6c.6 (references to other chapters updated accordingly).
- Distinguishes between direct insurance (life and nonlife) and reinsurance following 2008 SNA paragraphs 17.6–11 and BPM6 paragraphs A6c.8, A6c.9, and A6c.11.
- Notes that details on Takaful and Re-takaful arrangements are provided in Chapter 17 Islamic Finance and Insurance.
- Briefly introduces hybrid insurance products following GN F.12; further details are discussed in Section IV.
- Box A8.1: Numerical example of calculation for life insurance—no significant changes expected.

### II. Nonlife Insurance
- Retains BPM6 presentation of types of nonlife insurance and the concept of freight insurance; other related topics are moved to Section I.
- Coverage includes:
  - Role of insurance technical reserves.
  - Nonlife insurance service output.
  - Reinsurance service output.
  - Exports and imports of insurance services.
  - Investment income attributable to insurance policy holders.
  - Net insurance premiums.
  - Claims receivable or payable.
- Specific updates and issues:
  - Value of nonlife insurance service output:
    - Address inconsistency in terminology: BPM6 uses "gross premiums earned" vs 2008 SNA "actual premiums earned"; both updated manuals will include the same terminology.
    - Both updated manuals will present the same terms in the formula (BPM6: gross premiums earned + premium supplements – claims payable – adjustment for claims volatility, if necessary, vs 2008 SNA: actual premiums earned + premium supplements – adjusted claims incurred).
  - Value of reinsurance service output:
    - Some additional details to be referenced from Section E, Chapter 17, Part 1, 2008 SNA (and its update).
  - Investment income attributable to insurance policy holders (primary income account):
    - Ongoing discussion on treatment of holding gains and losses for insurance transactions; potential impact on output, net premiums, and investment income attributed to insurance policy holders.
    - Will be updated to be consistent with Chapter 12, Primary Income Account (and updated SNA) and Chapter 24 (Insurance and Pensions), 2025 SNA when additional details are available.
  - Claims receivable or payable (secondary income account or capital account):
    - As in BPM6 (A6c.28) and consistent with Chapter 14 (Capital Account), claims may be classified as capital transfers in exceptional cases (such as those related to a major catastrophe).
    - Additional details from 2008 SNA (paragraphs 17.39–40) will be added.
    - Following AEG 7/2012 recommendations on definition of catastrophes in non-life insurance measurement, national authorities are to determine whether a catastrophe is an exceptional event (including classification of claims arising from a catastrophe); this may lead to inconsistencies in recording international transfers and should be resolved case-by-case where possible.
    - Further clarification pending on whether capital transfers should only be recognized for claims related to the loss of capital assets in the event of a catastrophe (decision pending from the ISWGNA). Discussion on nonlife insurance claims in Chapter 14 will be referenced.
  - Stability fees:
    - Discussion of stability fees and their treatment (AEG 7/2012 and 8/2013)—in some cases, stability fee may qualify as a type of nonlife insurance.
    - Possible implications for balance of payments remain to be investigated.
    - Reference to Chapter 13 (Secondary Income Account) will be provided and consistency with Chapter 24 (Insurance and Pensions), 2025 SNA will be ensured.

### III. Life Insurance and Annuities
- Section mainly maintained as in BPM6.
- Addresses the inconsistent use of the term "gross premiums earned" (BPM6) vs "actual premiums earned" (2008 SNA) in the life insurance output formula—both updated manuals to include the same terminology.
- Related implications noted in Section II regarding treatment of holding gains and losses and consistency with updated SNA chapters.

### IV. Hybrid Insurance Products
- Explains concept, types, and treatment of hybrid insurance products based on GN F.12.
- Definition and classification rules:
  - Hybrid insurance products mix life insurance (financial claims arise regardless of event occurrence—i.e., insurance with a saving component) and nonlife insurance (financial claims arise only if an event occurs).
  - Such products are classified into life (financial account) or nonlife (current transfers) depending on which features are predominant (saving component vs event-triggered claims).
  - Clarifies that term life insurance will continue to be included in nonlife insurance (as in BPM6).
- References discussion on hybrid insurance products in Chapter 11 (Services Account) and ensures consistency with Chapter 24 (Insurance and Pensions), 2025 SNA.

### V. Pension Schemes
- Section mainly maintained as in BPM6 with minor changes.
- Following GN F.12, recommends treating employer-independent autonomous pension funds as part of social insurance provided they meet the conditions laid down in the GN.
- Clarifications regarding autonomous pension funds and delineation of social insurance to be elaborated as part of a request for additional guidance on editing of the 2025 SNA.
- Reviews SNA developments since 2008:
  - Some clarifications on treatment of pension schemes from SNA News & Notes 39/40 and AEG 9/2014 (recording of flows between defined benefit pension schemes and their sponsors; AEG 9/2014 meeting decisions on treatment of holding gains and losses for pensions).
  - These will be reviewed against Chapter 24 (Insurance and Pensions), 2025 SNA at the drafting stage to determine if BPM changes/clarifications are needed for SNA alignment.

### Schematic Overview (Structure)
- I Introduction
- II Nonlife Insurance
  - Types of Nonlife Insurance
  - Role of Insurance Technical Reserves
  - Value of Nonlife Insurance Service Output
  - Value of Reinsurance Service Output
  - Export and Import of Insurance Services
  - Investment Income Attributable to Insurance Policyholders
  - Net Insurance Premiums
  - Claims Receivable or Payable
- III Life Insurance and Annuities
- IV Hybrid Insurance Products
- V Pension Schemes

### References and Key Consultations
- References cited for drafting and alignment:
  - GN F.12.
  - SNA News & Notes 39/40 on recording of flows between defined benefit pension schemes and their sponsors and AEG 9/2014 meeting decisions on treatment of holding gains and losses for pensions.
  - AEG 7/2012 meeting decisions on life insurance and major catastrophic events.
  - AEG 7/2012 and 8/2013 discussion on stability fees.
- Key stakeholders consulted:
  - System of National Account and Balance of Payments Manual editors.
  - IMF Statistics Department Financial Institutions Division and Government Finance Division.

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-8.pdf_