[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]


 ========================================================================
 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.
 
 ========================================================================
 

  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.

-----------------------------------------------------------------------

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