## 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/final-annotated-outlines/bpm7-annex-8-insurance-and-pensions-annotated-outline.pdf) ## Other formats - [Markdown version](/-/media/files/data/statistics/bmp7/final-annotated-outlines/bpm7-annex-8-insurance-and-pensions-annotated-outline.pdf.md) - [Structured JSON version](/-/media/files/data/statistics/bmp7/final-annotated-outlines/bpm7-annex-8-insurance-and-pensions-annotated-outline.pdf.json) --- ### I. Introduction - Maintains the conceptual framework for insurance and pensions relevant for external sector statistics, structured as in BPM6 Appendix 6c (BPM6 paragraphs A6c.1–6c.6; cross-references to other chapters to be updated). - 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, with further details in Section IV. - Box A8.1: Numerical example of calculation for life insurance — no significant changes expected. - Editing and language consistency: further changes may be made to align language with other macroeconomic statistics manuals (e.g., System of National Accounts 2025). ### II. Nonlife Insurance - Scope: types of nonlife insurance; concept of freight insurance; 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. - Terminology alignment: - Resolve inconsistency between "gross premiums earned" (BPM6) and "actual premiums earned" (2008 SNA) in the nonlife insurance output formula so both updated manuals use 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). - Reinsurance service output: include additional details referenced from Section E, Chapter 17, Part 1, 2008 SNA (and its update). - Investment income attributable to insurance policy holders (primary income account): - Possible changes in treatment of holding gains and losses for insurance transactions may impact output (and therefore net premiums) and investment income attributed to insurance policy holders. - Update 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 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 measurement of non-life insurance, national authorities are to determine whether a catastrophe is an exceptional event (including classification of claims arising from a catastrophe); coordination with national accountants is recommended to avoid inconsistencies in recording international transfers. - Whether capital transfers should only be recognized for claims related to loss of capital assets in a catastrophe is pending an AEG/ISWGNA decision. - 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 a stability fee may qualify as a type of nonlife insurance. - Potential implications for balance of payments require further investigation. - 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 - Section largely retained as in BPM6. - Terminology alignment: - Address inconsistency between "gross premiums earned" (BPM6) and "actual premiums earned" (2008 SNA) in the life insurance output formula so both SNA and BPM use the same terminology. ### IV. Hybrid Insurance Products - Based on GN F.12 recommendations: explain concept, types, and treatment of hybrid insurance products. - Definition and classification rule: - Hybrid insurance products combine features of life insurance (insurance whose financial claims arise regardless of an event occurrence—i.e., insurance with a saving component) and nonlife insurance (insurance whose financial claims arise only if an event occurs). - Classification into life (financial account) or nonlife insurance (current transfers) depends on which features are predominant: saving component (life) or event-contingent claims (nonlife). - Clarification: the term life insurance will continue to be included in nonlife insurance (as in BPM6). - Cross-references: - Discussion on hybrid insurance products in Chapter 11 (“Services Account”) will be referenced. - Consistency with Chapter 24 (“Insurance and Pensions”) of 2025 SNA will be ensured. ### V. Pension Schemes - Section largely maintained as in BPM6 with some updates. - Treatment of employer-independent autonomous pension funds: - Following GN F.12, recommend treating employer-independent autonomous pension funds as part of social insurance, provided they meet the conditions laid down in GN F.12. - Clarifications regarding autonomous pension funds and delineation of social insurance to be elaborated during editing of the 2025 SNA. - SNA developments since 2008: - Some clarifications on pension scheme treatment (SNA News & Notes 39/40 and AEG 9/2014) will be reviewed from Chapter 24 (Insurance and Pensions), 2025 SNA to determine if BPM changes/clarifications are needed to align with SNA. ### 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 Consultations (as identified) - 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 discussions on stability fees. - Key stakeholders consulted: - System of National Accounts and Balance of Payments Manual editors. - IMF Statistics Department Financial Institutions Division and Government Finance Division. --- _Source: https://www.imf.org/-/media/files/data/statistics/bmp7/final-annotated-outlines/bpm7-annex-8-insurance-and-pensions-annotated-outline.pdf_