[Federal Register Volume 84, Number 113 (Wednesday, June 12, 2019)]
[Rules and Regulations]
[Pages 27197-27200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12373]


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DEPARTMENT OF COMMERCE

Bureau of Economic Analysis

15 CFR Part 801

[190225160-9484-01]
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: Final rule.

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SUMMARY: This final rule amends regulations of the Department of 
Commerce's Bureau of Economic Analysis (BEA) to renew the reporting 
requirements for the mandatory BE-140 Benchmark Survey of Insurance 
Transactions by U.S. Insurance Companies with Foreign Persons. This 
survey applies 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 is 
making several changes to the data items collected and the design of 
the survey form.

DATES: This final rule is effective July 12, 2019.

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; phone (301) 278-9189; or via email at 
[email protected].

SUPPLEMENTARY INFORMATION: On March 26, 2019, BEA published a notice of 
proposed rulemaking that set forth the revised reporting criteria for 
the BE-140 Benchmark Survey of Insurance Transactions by U.S. Insurance 
Companies with Foreign Persons (84 FR 11256). No comments on the 
proposed rule were received.
    This final rule amends 15 CFR part 801 to set forth the reporting 
requirements for the BE-140 Benchmark Survey of Insurance Transactions 
by U.S. Insurance Companies with Foreign Persons for 2018.
    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 (P.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 final rule, conducted pursuant to the Act, amends 
those 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 covers the universe of insurance transactions 
by U.S. insurance companies with foreign persons and is BEA's most

[[Page 27198]]

comprehensive survey of such transactions. In nonbenchmark years, the 
universe of 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 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. These data are also used 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.

Description of Changes

    This final rule amends the regulations at 15 CFR part 801 by adding 
new Sec.  801.12 to set forth the reporting requirements for the BE-140 
benchmark survey, and amends the survey form for the BE-140 benchmark 
survey to satisfy changing data needs and to improve data quality and 
the effectiveness and efficiency of data collections. These amendments 
include changes in data items collected and changes to the design of 
the survey form relative to the 2013 benchmark survey.
    BEA adds and modifies some items on the benchmark survey form. The 
following items are 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, will 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 will be requested based on the 
reporter's knowledge of the U.S. operations, and are not 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 will collect information from reporters for a sample 
of up to 5 catastrophic events that took place during 2018. 
Catastrophic events include events such as hurricanes, earthquakes, and 
wildfires, etc. The new schedule is 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, this final rule makes the following 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 is used. In addition, 
reporters are 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 will be collected for the large, 
infrequent reinsurance transactions collected at a threshold of $250 
million (modification (1) above). Reporters of such transactions are 
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 schedule requests 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.
    In addition, BEA has redesigned the format and wording of the 
survey. The new design incorporates improvements 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 have been changed to improve clarity and ensure 
the benchmark survey form is consistent with other BEA surveys.

Change to the Regulatory Text of the Proposed Rule

    BEA received no comments on the proposed rule. We note that we have 
made a change to paragraph (f), entitled ``Due date'', in new Sec.  
801.12, as found in the regulatory text of the proposed rule. The 
phrase ``July 31, 2019 (or by August 31, 2019 for respondents that use 
BEA's eFile system)'' has been replaced with ``September 30, 2019''. 
BEA made this change in this final rule to provide respondents 
additional time to comply with the requirements of the new section.

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 was submitted to 
the Office of Management and Budget (OMB) pursuant to the requirements 
of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520 (PRA). OMB 
approved the reinstatement of the information collection under OMB 
control number 0608-0073.
    Notwithstanding any other provisions of law, no person is required 
to respond to, nor shall any person be subject to a

[[Page 27199]]

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 is expected to result in the filing of reports 
from approximately 1,300 respondents. Approximately 1,000 respondents 
will report mandatory data on the survey, and approximately 300 will 
file exemption claims. The respondent burden for this collection of 
information will 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.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in the 
final rule should be sent to both BEA via email at 
[email protected] and to OMB, O.I.R.A., Paperwork Reduction 
Project 0608-0073, Attention PRA Desk Officer for BEA, Kerrie Leslie, 
via email at [email protected].

Regulatory Flexibility Act

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

List of Subjects in 15 CFR Part 801

    Economic statistics, Foreign trade, International transactions, 
Penalties, Reporting and recordkeeping requirements.

    Dated June 5, 2019.
Paul W. Farello,
Associate Director of International Economics, Bureau of Economic 
Analysis.

    For 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 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 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 in this section, 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) Transactions exceeding $2 million. 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) Transactions $2 million or below. 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

[[Page 27200]]

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. The requirement in this paragrpah (b)(3) 
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 September 
30, 2019.

[FR Doc. 2019-12373 Filed 6-11-19; 8:45 am]
 BILLING CODE 3510-06-P