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Capital Requirements for Board-Regulated Institutions Significantly Engaged in Insurance Activities

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Board of Governors of the Federal Reserve System

Instructions for the Preparation of

Reporting Form for the Capital Requirements for BoardRegulated Institutions Significantly Engaged in Insurance
Activities
Reporting Form FR Q-1
Effective January 2024

Page 1 of 55

Page 2 of 55

Contents

General Instructions

.............................................................................................................................. GEN-1
What Must Be Reported ..................................................................................................................... GEN-1
Where to Submit the Report ............................................................................................................... GEN-2
When to Submit the Report ................................................................................................................ GEN-2
How to Prepare the Report ................................................................................................................. GEN-2
Confidentiality .................................................................................................................................. GEN-4
Who Must Report

Instructions for Input, Calculation, and Supplemental Schedules

....................................................................................................... ORG-1
Schedule I—Company Inventory ................................................................................................. Schedule I-1
Schedule II—Building Block Parents .......................................................................................... Schedule II-1
Schedule III—Parent Ownership .............................................................................................. Schedule III-1
Schedule IV—Available Capital ................................................................................................. Schedule IV-1
Schedule V—Capital Requirement .............................................................................................. Schedule V-1
Schedule VI—Overall Results ................................................................................................... Schedule VI-1
Schedule VII—Section 171 Calculation .................................................................................... Schedule VII-1
Schedule VIII—Framework Information ................................................................................ Schedule VIII-1
Schedule IX—Intercompany Transactions ................................................................................. Schedule IX-1
Schedule X—Internal Reinsurance ............................................................................................. Schedule X-1
Schedule XI—Approved Variations .......................................................................................... Schedule XI-1
Schedule XII—Capital Instruments ......................................................................................... Schedule XII-1
Schedule XIII—Reinsurance Pools ......................................................................................... Schedule XIII-1
Schedule XIV—Liquidity Pools .............................................................................................. Schedule XIV-1
Glossary—Glossary ...................................................................................................................... Glossary-1
Contents for FR Q-1 Instructions

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Contents for FR Q-1 Instructions

Organization of the Instructions
These instructions are divided into three sections:

(1) The General Instructions describing overall
reporting requirements.
(2) Reporting Instructions for each schedule.
(3) The Glossary presenting definitions and discussions of terms used in the associated capital rule
and throughout the instructions.
In determining the required treatment of a particular
template column or in determining the definitions and
scope of the various items, the General Instructions,
the Reporting Instructions, and the Glossary (all of
which are extensively cross-referenced) must be used

jointly. A single section does not necessarily provide
complete instructions for completing all the items
required to be reported. The instructions and definitions in section (2) are not necessarily self-contained;
reference to more detailed treatments in the Glossary
may be needed. In all cases where a term is used in
these instructions and in the rule codified at
12 CFR 217, Subpart J, and the definitions in the rule
are legally binding and controlling over any that
appear in these instructions.
Additional copies of these instructions may be
obtained from the Federal Reserve Bank to which the
reporting entity submits its report pursuant to these
instructions, or may be found on the Federal Reserve
Board’s public website (www.federalreserve.gov).

ORG-1

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INSTRUCTIONS FOR THE PREPARATION OF

Reporting Form for the Capital
Requirements for Board-Regulated
Institutions Significantly Engaged in
Insurance Activities
General Instructions

B. Changes in Reporting Status

Who Must Report
A. Reporting Criteria
Top-tier depository institution holding companies significantly engaged in insurance activities (insurance
depository institution holding companies) that own
insured depository institutions (IDIs) (“Reporters”)
must file the reporting schedules with the Federal
Reserve.
Top-tier depository institution holding companies are
considered to be significantly engaged in insurance
activities if:

(1) The top tier depository institution holding company is an insurance underwriting company;
(2) The top tier depository institution holding company, held, as of June 30 of the previous calendar year, 25 percent or more of its total consolidated assets in insurance underwriting legal entities (other than assets associated with insurance
underwriting for credit risk). For the purposes
of this determination top-tier depository institution holding company must calculate its total
consolidated assets in accordance with U.S.
GAAP, if GAAP financial statements are prepared for any regulatory purpose, including
compliance with applicable securities laws. If
GAAP financial statements are not prepared for
any regulatory purpose, the top-tier depository
institution holding company may estimate its
total consolidated assets under U.S. GAAP; or
(3) The institution is made subject to the BBA by
order of the Board.

Top-tier depository institution holding companies
become subject to the reporting requirements when the
Reporting Criteria in Section A are met. Firms that
become subject to the requirements between January 1
and June 30 of a given calendar year are required to
begin filing as of December 31 of the same calendar
year. Firms that become subject to the requirements
between July 1 and December 31 in a given calendar
year are required to begin filing as of December 31 of
the following calendar year.
Reporters that become subject to the reporting requirements during a year are not required to file the Senior
Officer attestation section of the cover page (both electronic and paper versions), with the first submission.
This information must be submitted in subsequent
years.

What Must Be Reported
Reporters must file the completed Reporting Form for
the Capital Requirements for Board-Regulated Institutions Significantly Engaged in Insurance Activities
(Collectively referred to as Form FR Q-1). These
instructions and Form FR Q-1 are for the application
of the building block approach, as codified at
12 CFR 217, Subpart J (“BBA”).

A. Cover Page
The cover page of Form FR Q-1 must be signed by the
Chief Financial Officer of the Reporter (or by the individual performing an equivalent function). The
Reporter is required to complete the cover page as part
of the electronic version, and also is required to keep a
record of the signed cover page. By signing the cover
page, the authorized officer acknowledges that any
knowing and willful misrepresentation or omission of
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General Instructions

any material fact in this report constitutes fraud in the
inducement and may subject the officer to legal sanctions provided by 18 USC 1001 and 1007. The
Reporter must maintain the cover page in its files for a
period of 3 years.

https://www.frbservices.org/central-bank/reportingcentral/index.html for procedures for electronic submission. If filing using an Excel format, Form FR Q1 should be filed in One Agile Supervision Solution
(OASiS). Any additional required documents should
be filed separately along with the FR Q-1.

B. Schedules

Form FR Q-1 report generally is filed electronically. If
a Reporter is unable to file electronically, it should contact its appropriate Federal Reserve Bank for filing
instructions.

There are three input schedules for collecting company
information on assets, liabilities, indicated capital
framework, company available capital, company capital requirement, and other information including, for
example, whether a company is a material financial
entity within the group.
The objective of Schedules I – VII is to group all of the
companies under a supervised insurance organization
into building blocks in order to appropriately aggregate their capital positions and determine the consolidated minimum capital requirement for the insurance
depository institution holding company. The instructions guide Reporters through the required inputs and
describe the calculations.
Schedules VIII – XIV are supplemental information
schedules that solicit information about intercompany
transactions, internal reinsurance transactions,
approved variations, capital instruments, and reinsurance and liquidity pools.

When to Submit the Report
The as-of date of the FR Q-1 is December 31, with a
submission date of March 31 of the following year,
unless that date would fall on a weekend or a holiday,
in which case the submission date is the following business day.
The term “submission date” is defined as the latest
date by which the Federal Reserve must receive the
report. Earlier submission aids the Reserve Bank in
reviewing and processing the report and is encouraged.
The report is due by the end of the submission date
(5:00 pm at the appropriate Federal Reserve Bank).

How to Prepare the Report

C. Financial Statements for Material Financial
Entities and Certain Other Entities

A. Basis of Accounting and Regulatory
Framework

Reporters must also submit financial statements in
PDF format for all material financial entity that are
designated as building block parents.

Reporters are required to prepare and file Form
FR Q-1 in accordance with the indicated capital framework specified in the BBA, subject to adjustments and
other provisions discussed in the applicable sections.

Although not required in the final rule, it is expected
that most building block parents will have audited
financial statements by an independent public accountant due to the state insurance requirements or the
Federal banking requirements.

Where to Submit the Report
Electronic submission of report form
Reporters should file Form FR Q-1 electronically using
an XML format or an Excel format. The XML version
should be filed in Reporting Central. Reporters should
contact their district Reserve Bank or go to

All reports shall be prepared in a consistent manner.
The Reporter’s financial records shall be maintained in
such a manner and scope that ensures that Form
FR Q-1 can be prepared and submitted in accordance
with these instructions, and that the results reflect a
fair presentation of the Reporter’s available and capital
requirements. Reporters shall retain work papers and
other records used in the preparation of these reports.
Financial Statement Date
Most values should be reported as of the most recent
calendar year-end unless directed otherwise by the

GEN-2

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General Instructions

Board. The only exception to this is for capitalregulated companies that are not subject to capital
requirements as of the calendar year end. In this case,
values should be reported with an as of date that aligns
with the company’s most recent regulatory filing preceding calendar year-end for which a capital requirement is calculated.

cult to implement programmatically without a significant increase in the complexity of the worksheets and
formulas. If a supervised insurance organization has
such an ownership structure, the Reporter may not use
the Excel template and must calculate the necessary
output in another manner that is consistent with
the BBA.

Currency

D. Completing the Input Sections

Report all values in U.S. dollars. Balances should be
converted after calculating the appropriate amount in
the functional currency using the foreign exchange rate
used in the top-tier depository institution holding company’s most recent financial information.

Reporters should complete Schedule I prior to Schedules II and III. If changes are made to Schedule I
resulting in the addition or removal of building block
parents after data is entered into Schedules II or III,
Reporters should ensure that all data in Schedules II
and III remain consistent with Schedule I.

Subsequent Events
Subsequent events are events that occur after the as of
date, but before Form FR Q-1 is submitted. Reporters
shall follow the accounting rules supporting the regulatory requirements for each company in considering
whether adjustments should be made to the company’s
financial statements and to Form FR Q-1 to address
material subsequent events. Entities subject to the
Board’s BHC capital rules shall follow the guidance in
the Financial Accounting Standards Board’s ASC
Topic 855, Subsequent Events (formerly FASB Statement No. 165 Subsequent Events). In addition, Reporters shall consider subsequent events in relation to the
insurance depository institution holding company as a
group.

B. Report Form Captions, Non-applicable Items
and Instructional Detail
Questions and requests for interpretations of matters
appearing in any part of these instructions should be
addressed to the appropriate Reserve Bank.

C. Optional Use of Microsoft Excel
These schedules are available in Excel format. The
Excel format template was designed to calculate key
output from the rule with minimal burden and the
instructions are written assuming that this will be used.
The Excel template does not address circular ownership structures where a subsidiary owns part of a parent company. While the BBA contains provisions to
address such structures, which are rare, these are diffi-

E. Rounding
All dollar amounts shall be reported in thousands.
Rounding could result in details not adding to their
stated totals. However, to ensure consistent reporting,
the rounded detail items shall be adjusted so that the
totals and the sums of their components are identical.

F. Negative Entries
Negative entries are generally not appropriate on the
Form FR Q-1 and should not be reported, except in
the Adjustments to Available Capital and Capital
Requirements in Schedule II.

G. Verification
Each Reporter is responsible for ensuring that the data
reported each reporting period fully and accurately
reflects the reporting requirements for the reporting
date, including any changes that have taken place during the reporting period. This responsibility cannot be
transferred or delegated to software vendors, servicers,
or others outside the reporting entity.
All calculations should be double-checked before
reports are submitted. Totals and subtotals in supporting materials should be cross-checked to corresponding items elsewhere in the report. Before a report is submitted, all amounts should be compared with the
corresponding amounts in the previous report. If there
are any unusual changes from the previous report, a
brief explanation of the changes should be provided to
the appropriate Reserve Bank.
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General Instructions

H. Amended Reports
When the Board’s interpretation of how the BBA,
these instructions, or GAAP should be applied, the
Board may require the Reporter to reflect the Board’s
interpretation and to amend previously submitted
reports. The Board will consider the materiality of
such event(s), in making a determination about requiring the Reporter to apply the Board’s interpretation
and to amend previously submitted reports. The Board
may require the filing of an amended Form FR Q-1 if
reports as previously submitted contain significant
errors.

Confidentiality
All items on the FR Q-1 are confidential with the
exception of the cover page and the Section “Publicly
Reported Items” (Column K, Building Block Available
Capital; Column L, Building Block Capital Requirement; and Column M, BBA Ratio) in Schedule VI,
Overall Results. This information will be available to
the public via the National Information Center public
website (https://www.ffiec.gov/nicpubweb/nicweb/
nichome.aspx. A Reporter may request confidential
treatment of the items in the Items Publicly Reported
section if the Reporter is of the opinion that disclosure
of specific commercial or financial information in the
report would likely result in substantial harm to its
competitive position. In certain limited circumstances,
the Board may grant confidential treatment if the

Reporter clearly has provided a compelling justification for the request.
A request for confidential treatment must be submitted
in writing prior to, or included with, the submission of
the report. The request must provide justification for
the confidential treatment and must demonstrate the
specific nature of the harm that would result from public release of the information. Merely stating that competitive harm would result is not sufficient. Information for which confidential treatment is granted may
subsequently be released by the Board, if the Board
determines that the disclosure of such information is in
the public interest. If the Board deems it necessary to
release confidential data, the Reporter will be notified
prior to the release.
Reporters must indicate (1=Yes, 0=No) in the confidentiality request section of the Cover Page whether
confidential treatment is requested for the three publicly available items in the report. If the answer to the
first question is “Yes,” the Reporter must indicate
whether a letter justifying the request for confidential
treatment is included with the submission or has been
provided separately. If the Reporter does not fulfill
both requirements, or does not complete the appropriate boxes, confidential treatment will not be considered. Note: Responses to the questions regarding confidential treatment on the cover page will be considered
public information.

GEN-4

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DETAIL INSTRUCTIONS FOR

Company Inventory
Schedule I

General Instructions

Column Instructions

Schedule I is an inventory of all companies of the
supervised insurance organization. The primary purpose of the inventory is to identify the building block
parents, which are the companies at the top of building
blocks. These entities’ capital positions are adjusted
and aggregated in order to calculate the BBA ratio.
The inventory also provides certain basic information
about entities in the group.

Column A Company ID
This is a calculated field. The purpose of this column is
to attach a unique identifying number to each company to support the calculations.

The inventory of companies listed on Schedule I shall
include all companies within the supervised insurance
organization that are:
(1) Required to be included on the Board’s Reporting Form FR Y-6;
(2) Required to be included on the Board’s Reporting Form FR Y-10;
(3) Classified as affiliates in accordance with NAIC
Statement of Statutory Accounting Principles
(SSAP) 25 and the preparation of NAIC Schedule Y;
(4) Any company, special purpose entity, variable
interest entity, or similar entity that:
(a) Enters into one or more reinsurance or
derivative transactions with an inventory
company;

Column B Company Name
Report the name of each inventory company within
the supervised insurance organization using the criteria
described under the General Instructions for Schedule I above. The first company reported shall be the
top-tier holding company.
An inventory company that has multiple parents
within the supervised insurance organization should be
reported multiple times, one entry for each parent.
Column C Legal Entity Identifier
The purpose of this column is to provide the legal
entity identifier to each company for information
purposes.
Column D Type of Business
Use the drop-down menu to report the type of business
in which each inventory company is engaged. Choose
between the types of business below.
• Bank Holding Company
• Savings and Loan Holding Company

(b) Is material; and

• Other Holding Company

(c) Is engaged in activities such that one or
more of the inventory companies identified
above are expected to absorb more than 50%
of its expected losses; or

• Life Insurance

(5) Any other company that the Board determines
must be identified as an inventory company.

• Property and Casualty Insurance
• Health Insurance
• Title Insurance
• Reinsurance
SCHEDULE I-1

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Schedule I

• Affiliated Reinsurer – Life

Select “U.S. federal banking capital rules” if the inventory company is not engaged in insurance or reinsurance underwriting. Companies are considered to be
engaged in insurance or reinsurance underwriting
when they are regulated as an insurance or reinsurance
underwriting company, other than insurance underwriting companies that primarily underwrite title
insurance or insurance for credit risk. Title insurers
should select “U.S. federal banking capital rules.”

• Affiliated Reinsurer – P&C
• Affiliated Reinsurer – Other
• Insurance Agency
• Federal Savings Bank
• State Member Bank
• State Non-Member Bank

If the inventory company is otherwise engaged in
insurance or reinsurance underwriting and subject to a
regulatory capital framework that is scalar compatible,
then select that regulatory capital framework from the
menu. In order to select frameworks for which scalars
have not been specified by the Board, first mark the
framework as material and scalar compatible in Schedule VIII.

• Trust Bank
• Foreign Bank
• Thrift
• Industrial Loan Company
• Registered Investment Advisor
• Broker/Dealer

If the inventory company is engaged in insurance or
reinsurance underwriting and not subject to a regulatory capital framework that is scalar compatible, then
select from the menu U.S. NAIC for life and fraternal
insurers, health insurers, or property & casualty insurers based on the company’s primary source of premium revenue.

• Asset Manager
• Residential Mortgage Loan Servicer
• Investment Company
• Tax Credit Company
• Shared Services Company
• Other
Column E Description
Describe the purpose and function of the entity if not
otherwise clear from Column D. For investment companies, describe the type of assets invested in (e.g. timberland, venture capital, mezzanine financing, etc.).
Column F Regulatory Capital Framework
Use the drop-down menu to report the regulatory capital framework of each inventory company, if applicable. Use “Other” for regulatory capital frameworks
that are not listed. If the company is unregulated from
a capital perspective (i.e. it is not subject to a regulatory
capital framework), leave blank. Select “U.S. federal
banking capital rules” for all U.S. depository
institutions.
Column G Indicated Capital Framework
Use the drop-down menu to report the indicated capital framework of each inventory company.

Column H Accounting Basis
Use the drop-down menu to report the accounting
basis used by the inventory company to calculate company available capital if subject to a regulatory capital
framework. If the company is not subject to a regulatory capital framework, select the accounting basis
used for financial reporting.
Column I Company Assets
Report the inventory company’s total assets under the
accounting basis in column F. Where U.S. GAAP is the
accounting basis, include the consolidated assets of
subsidiaries.
This column can be left blank if (1) a company is not a
building block parent and (2) the company’s next
upstream parent company that reports a value in this
column collectively reports less than 1% of group
assets.
Column J Company Liabilities
Report the inventory company’s total liabilities under
the accounting basis in column F. Where U.S. GAAP is

SCHEDULE I-2
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Schedule I

subject to the same indicated capital framework are material; or

the accounting basis, include the consolidated liabilities of subsidiaries.
This column can be left blank if column I is left blank.
Column K Parent Company
Report the name of the company’s immediate parent.
The parent name reported must match exactly one of
the names reported in column B. Leave blank for toptier depository institution holding companies (e.g., the
top line should be blank). A company with multiple
parents within the supervised insurance group should
be listed on multiple rows such that each parent relationship has its own row; all fields other than parent
and equity ownership percentage should match.

(b) Has a parent that is an inventory company
subject to the same regulatory capital framework and, in calculating its regulatory capital requirements, applies a charge on the
inventory company’s equity value or deducts
all or a portion of its investment in the
inventory company from its available
capital.
(4) Any company, special purpose entity, variable
interest entity, or similar entity that:
(a) Enters into one or more reinsurance or
derivative transactions with an inventory
company identified above;

Column L Equity Ownership Percentage
Report the percentage of the company’s equity owned
by the parent reported in column K. As discussed
above, companies with multiple parents will list ownership percentages of all of their parents within the
supervised insurance group on separate rows.
Columns M through Q are Yes/No (Yes = 1,
No = 0) questions designed to help determine which
companies should be classified as building block parents. The columns are designed to be assessed in order.
“Yes” entries in any of the cells will result in the company becoming a building block parent. The remaining
columns should be completed as “no” because further
analysis is not needed.

(b) Is material; and
(c) Is engaged in activities such that one or
more of the inventory companies identified
above are expected to absorb more than 50%
of its expected losses;
(5) Any company for which more than one building
block parent, as identified by the criteria above,
owns a company capital element either directly or
indirectly other than through another such building block parent; and
(a) Is consolidated under any such building
block parent’s indicated capital framework; or

Each of the following inventory companies is a building block parent:

(b) Owns downstreamed capital; and

(1) Any top-tier depository institution holding
company;

(6) Any company that has been specifically designated by the Board as a building block parent.

(2) Any other depository institution holding
company;

For companies reported in multiple rows because of
split ownership, the answers in each of the columns
should match.

(3) Any capital-regulated company or material financial entity that:
(a) Is assigned an indicated capital framework
that is different from the indicated capital
framework of any of its parents that are also
inventory companies, and its indicated capital framework has a scalar determined by the
Board or, a provisional scalar if the company in aggregate with all other companies

Notwithstanding the criteria above, the Board may
decide, in the exercise of its supervisory judgment and
discretion, that a company be treated as though it is
not a building block parent. For companies for which
this determination has been made, report “0” for no in
columns M through Q.
Use the decision tree below to help determine whether
a company should be a building block parent.
SCHEDULE I-3

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Schedule I

Building Block Parent Decision Tree*

Is the entity a
top-tier parent
OR
depository institution
holding company?*

The entity is a
building block
parent.

YES

Is a scalar
specified for the
indicated capital framework
OR
Is the entity material individually
or with other capital regulated
company subject to the same
regulatory capital
framework?

The entity is a
building block
parent.

YES

Is the entity a
capital-regulated company
OR
material financial entity?

Does the
entity’s indicated
capital framework differ
from the current building block
parent’s indicated capital
framework, OR is the same
framework, but the entity receives
an equity charge or is
deducted in the parent’s
framework?

YES

The entity
is not a
building block
parent.

Does the indicated
capital framework fully reflect
the risk of the subsidiary?

YES

The entity is a
building block
parent.

* In addition to the identifications noted in the decision tree:
• Inventory companies identiﬁed pursuant to the provisions concerning the Board’s reservation of authority, structures intended
to evade application of the rule, and certain inventory companies owned by members of more than one building block are
building block parents;
• A company that otherwise would be a building block parent, but, pursuant to the proposed provision concerning the Board’s
reservation of authority, is deemed to not be a building block parent.

Column M Top-Tier Depository Institution Holding
Company
Select “1” for yes if the company is a top-tier depository institution holding companies that is not con-

trolled by another top-tier depository institution holding companies (“Top-Tier Depository Institution
Holding Company”). For all other companies, select
“0” for no.

SCHEDULE I-4
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Schedule I

Column N Subsidiary Depository Institution Holding
Company
Select “1” for yes from the drop-down menu if the
company answered “No” in Column M and the company is a bank holding company as defined in section 2
of the Bank Holding Company Act of 1956 or a savings and loan holding company as defined in section 10
of the Home Owners’ Loan Act that is organized in the
United States, including any bank or savings and loan
holding company that is owned or controlled by a foreign organization, but does not include the foreign
organization (“depository institution holding company”). For all other companies select “0” for no.
Column O Capital-Regulated Company Building
Block Parents
Select “1” for yes from the drop-down menu for all
capital-regulated companies that are building block
parents but not a depository institution holding company. For all other companies, including all companies
answering “yes” in either column M or N, select “0” for
no. A capital-regulated company is a building block
parent if:
(1) The capital-regulated company’s indicated capital
framework differs from the indicated capital
framework of the next upstream building block
parent and

in the calculation of the parent’s company
available capital; or
(3) The capital regulated company does not have a
next upstream building block parent.
Column P Material Financial Entity Building Block
Parent
Select “1” for yes from the drop-down menu for material financial entities that are building block parentsand the company answered “no” in columns M-O.
Select “2” for Opt-Out if the supervised insurance
group is electing to not treat as a material financial
entity a company that otherwise meets the criteria and
is eligible for this treatment as described below. For all
other companies, select “0” for no.
A material financial entity is a building block parent if:
(1) The material financial entity’s indicated capital
framework differs from the indicated capital
framework of the next upstream building block
parent(s) and a scalar has been specified by the
Board for the material financial entity’s indicated
capital framework; or
(2) The material financial entity’s indicated capital
framework is the same as the next upstream
building block parent(s), and that indicated capital framework, as applied to the parent

(a) A scalar has been specified by the Board for
the capital-regulated company’s indicated
capital framework; or

(a) Reflects the risk of the capital-regulated
company in its company capital requirement
by applying a charge on the company’s
equity value; or

(b) The total of the capital-regulated company
and all other capital-regulated companies
subject to the same indicated capital framework is material; or
(2) The capital-regulated company’s indicated capital
framework is the same as the next upstream
building block parent(s), and that indicated capital framework, as applied to the parent
(a) Reflects the risk of the capital-regulated
company in its company capital requirement
by applying a charge on the company’s
equity value; or

(b) Deducts all or a portion of the parent’s
investment in the capital-regulated company
in the calculation of the parent’s company
available capital; or
(3) The material financial entity does not have a next
upstream building block parent.
A supervised insurance organization may elect to not
treat a material financial entity as a building block
company (“Opt-Out”) if:
(1) The company engages in transactions consisting
solely of either:

(b) Deducts all or a portion of the parent’s
investment in the capital-regulated company

(a) Transactions for the purpose of transferring
risk from one or more affiliates within the
SCHEDULE I-5

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Schedule I

supervised insurance organization to one or
more third parties; or
(b) Transactions to invest assets contributed to
the company by one or more affiliates within
the supervised insurance organization,
where the company is established for purposes of limiting tax obligation or legal
liability; and
(2) The supervised insurance organization is able to
allocate the risks from these back-to-back transactions to the operating companies engaged in
such transactions in a way that avoids double
counting and captures all material risks.
Reporters must submit yearly financial statements in
PDF format for each company where “Yes” is selected
in this column. These financial statements must include
at least a balance sheet and income statement.
Column Q Other Building Block Parent
Select “1” for yes from the drop-down menu for all
inventory companies identified as a building block
parent under the criteria below. For all other companies, select “0” for no.
The following companies are also building block
parents:
(1) Any company that is a special purpose entity,
variable interest entity, or similar entity that:
(a) Enters into one or more reinsurance or
derivative transactions with another inventory company;

(c) Is engaged in activities such that one or
more other inventory companies are
expected to absorb more than 50% of its
expected losses;
(2) Any company for which more than one building
block parent, as identified by the criteria above,
owns a company capital element either directly or
indirectly other than through another such building block parent; and
(a) Is consolidated under any such building
block parent’s indicated capital framework; or
(b) Owns downstreamed capital; and
(3) Any company that has been specifically designated by the Board as a building block parent.
Column R Building Block Parent
This is a calculated field that displays whether a company is a building block parent based on the responses
in columns M – Q. If an affirmative response was
entered in any of these columns, the company is classified as a building block parent.
Column S Assigned Building Block
This is a calculated field displaying the building block
parent into which each company rolls up. Each company classified as a building block parent has its own
building block consisting of the company and all direct
and indirect subsidiaries that are not building block
parents extending until the next building block
parents.

(b) Is material; and

SCHEDULE I-6
January 2024

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DETAIL INSTRUCTIONS FOR

Building Block Parents
Schedule II

General Instructions
Schedule II lists all entities classified as building block
parents as a result of the entries on Schedule I. In this
schedule, report the company available capital and
company capital requirement for each building block
parent. Also report any necessary adjustments to available capital and capital requirement. These adjustments eliminate double counting, remove inconsistencies, and better reflect the risk within the building
block parent and the companies within the block.

Column E Company Available Capital
For each building block parent, report the company
available capital as determined in accordance with the
company’s indicated capital framework.
NAIC RBC - Report Total Adjusted Capital (TAC)
where NAIC is the indicated framework.
U.S. federal banking capital rules - If the company is a
depository institution, report total qualifying capital as
calculated under the regulatory capital rules promulgated by the FDIC or the OCC.
If the company is not a depository institution, report
total qualifying capital under the Board’s BHC capital
rules, calculated by:

Column Instructions
Column A Row Number
This is a calculated field that assigns a unique reference
number to each row in the schedule.
Column B Company ID
This is a calculated field that pulls the company ID
from column A of Schedule I for each inventory company identified as a building block parent in column R
of Schedule I.
Column C Building Block Parent
This is a calculated field that pulls the company name
from column B of Schedule I for each inventory company identified as a building block parent in column R
of Schedule I.
Column D Indicated Capital Framework
This is a calculated field that pulls the indicated capital
framework from column G of Schedule I for each
inventory company identified as a building block parent in column R of Schedule I.

(1) Applying the same elections and treatment of
exposures as are applied to the subsidiary
depository institution;
(2) Applying 12 CFR 217 subparts A through F to
the members of the building block of which the
building block parent is a member, to the same
extent as if the building block parent were a
Board-regulated institution; and building block
parent;
(3) Not deducting investments in capital of unconsolidated financial institutions, nor excluding
these investments from the calculation of riskweighted assets.
When applying the Board’s BHC capital rules to a
building block parent, downstream building block parents can be included on a deconsolidated basis. The
investment in downstream building block parents
should be represented by their estimated GAAP equity.
Other - For companies subject to a different indicated
capital framework, report the jurisdictional intervention point, as defined on Schedule VIII.
SCHEDULE II-1

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Schedule II

Column F Additional Tier 1 Capital Securities
Report the total amount of all instruments that meet
the definition of additional tier 1 capital securities
included in the company available capital reported in
column E. The amount reported should include securities issued by the building block parent. Securities
issued by other companies in the building block should
be included only if they are accretive to the company
available capital of the building block parent, (e.g., as a
third-party minority interest).

additions to available capital. The required adjustments are as follows:
Column I Non-Qualifying Capital Instruments
Report an adjustment to deduct any accretion to company available capital reported in Column E - arising
from any instrument issued by a building blockmember, where the instrument fails to meet the criteria for
qualifying capital instruments.

In addition to reporting the total amount of additional
tier 1 capital securities here, report the details of these
instruments on Schedule XII. Capital Instruments. The
totals on each schedule should match.

Column J Insurance Underwriting RBC
For companies where the indicated framework is U.S.
federal banking capital rules, report an adjustment to
company available capital in column E to add back any
amount deducted for insurance underwriting risks.

Column G Total Tier 2 Capital Securities
Report the total amount of all instruments that meet
the definition of tier 2 capital securities (e.g., surplus
notes) included in the company available capital
reported in column E. The amount reported should
include securities issued by the building block parent.
Securities issued by other companies in the building
block should be included only if they are accretive to
the company available capital of the building block
parent, (e.g., as a minority interest).

Column K Permitted and Prescribed Accounting
Practices
Report the impact of approved variations, including
permitted and prescribed accounting practices in this
column. The impact is the difference between the company available capital in column E and company available capital recalculated after assuming that no building blockmember had any approved variations,
including permitted practice or prescribed accounting
practices.

In addition to reporting the total amount of tier 2 capital securities here, report the details of these instruments on Schedule XII. Capital Instruments. The
totals on each schedule should match.

Column L Adjustments to Certain Life Insurance
Reserves
Report the impact of adjusting certain life insurance
reserves. This value is calculated as the difference
between:

Schedule H Legacy Surplus Notes
Report the total amount of all surplus notes included
in column G that were issued by any company in the
building block prior to the later of November 1, 2019
and the earliest date on which any depository institution holding company in the group became a depository institution holding company; and are not owned
by an affiliate of the issuer, and currently outstanding.
These instruments qualify for legacy treatment, and
therefore, are considered qualifying capital.

• The building block parent’s company available capital; and

Columns I through P: Adjustments to Available Capital
Reporters shall enter adjustments to company available capital, as necessary, to ensure there is no double
counting of capital. Enter negative numbers for deductions from available capital and positive numbers for

• The building block parent’s company available capital recalculated based on using a 40 percent factor
applied to all term life insurance accounted for using
the Valuation of Life Insurance Policies Regulation
and a 90 percent factor is applied to all secondaryguaranteed universal life insurance products
accounted for using Actuarial Guideline
XXXVIII—The Application of the Valuation of
Life Insurance Policies Model Regulation.
Column M Deduction of Investments in Own Capital
Instruments
Report as a deduction any investment by the building
block parent in its own capital instrument(s), or any

SCHEDULE II-2
January 2024

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Schedule II

investment by any member of the building block in
capital instruments of the building block parent,
including any net long position, to the extent that such
investment(s) would otherwise be accretive to the
building block parent’s building block available capital. For this calculation, the net long position should be
determined in accordance with 12 CFR 217.22(h), provided that a separate account asset or associated guarantee is not regarded as an indirect exposure unless the
net long position of the fund underlying the separate
account asset equals or exceeds 5 percent of the fund’s
value.
Column N Reciprocal Cross Holdings in the Capital of
Financial Institutions
Report as a deduction any investment(s) by the building block parent in the capital of other unaffiliated
financial institutions that it holds reciprocally, where
such reciprocal cross holdings result from a formal or
informal arrangement to swap, exchange, or otherwise
intend to hold each other’s capital instruments, to the
extent that such investment(s) would otherwise be
accretive to the building block parent’s building block
available capital.
Column O Limits on Investments in Other Financial
Institutions
For all companies other than top-tier depository institution holding companies, enter zero.
For top-tier depository institution holding companies,
enter as a negative number, any accreted capital from
an investment in the capital of an unconsolidated
financial institution that is not an inventory company,
that exceeds twenty-five percent of the amount of its
building block available capital excluding tier 2 capital
instruments and prior to the application of this
adjustment.
For purposes of calculating this amount, follow the
rules for banks in §217.22(h), except do not treat a
separate account asset or associated guarantee as an
indirect exposure. The deductions described are net of
associated deferred tax liabilities in accordance with
§ 217.22(e).
Column P Other Adjustments to Available Capital
Enter in this column any other adjustments to company available capital required by the BBA, including
adjustments made by order of the Board.

Column Q Adjusted Company Available Capital
This is a calculated field that sums the company available capital with the entered adjustments.
Column R Company Capital Requirement
For each building block parent, report the capital
requirement as determined in accordance with the
company’s indicated capital framework.
U.S. NAIC - Report Authorized Control Level (ACL)
RBC where U.S. NAIC is the indicated framework.
U.S. federal banking capital rules - If the company is a
depository institution, report risk weighted assets as
calculated under the regulatory capital rules promulgated by the FDIC or the OCC.
If the company is not a depository institution, report
risk weighted assets under the Board’s BHC capital
rules, calculated by:

(1) Applying the same elections and treatment of
exposures as are applied to the subsidiary
depository institution;
(2) Applying 12 CFR 217 subparts A through F to
the members of the building block of which the
building block parent is a member, to the same
extent as if the building block parent were a
Board-regulated institution; and
(3) Not deducting investments in capital of unconsolidated financial institutions, nor excluding
these investments from the calculation of riskweighted assets.
When applying the Board’s BHC capital rules to a
building block parent, downstream building block parents can be included on a deconsolidated basis as an
equity investment of the parent company. If that treatment is used, the assets of the subsidiary building
block parent do not need to be included in the calculation of risk weighted assets beyond a 400% risk weight
on the subsidiary building block parent’s net GAAP
equity. If this is done, Schedule III must be filed out
consistently.
Other - For companies subject to a different indicated
capital framework, report the risk-sensitive measure of
required capital used to determine the jurisdictional
intervention point applicable to the company.
SCHEDULE II-3

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Schedule II

Columns S through Y: Adjustments to Capital
Requirement
Adjustments to the capital requirement ensure consistent and comparable reporting across firms and a consolidated view of risk. For the following columns,
negative numbers shall be reported for deductions from
capital requirement and positive numbers for additions
to capital requirement. The adjustments are as follows:
Column S Internal Credit Risk Charges
Report as a deduction the difference between the building block parent’s capital requirement and the building
block parent’s capital requirement excluding all
charges for the possibility of default of any company
in the supervised insurance institution. Examples of
internal credit risk charges include capital requirements assessed for credit risk on internal loans or on
internal reinsurance arrangements.
This is an optional reduction in capital requirement.
The adjustment, however, must be made consistent
from reporting period to reporting period, unless prior
approval is obtained from the Board.
Column T Permitted & Prescribed Accounting
Practices
Report the impact of any approved variations, including permitted and prescribed accounting practices in
this column. The impact is the difference between the
building block parent’s company capital requirement
and the building block parent’s company capital
requirement recalculated after assuming that neither
the building block parent, nor any company that is a
member of the block, had prepared its most recent
financial information with the application of any
approved variations, including permitted or prescribed
accounting practices.
Column U Risks of Certain Intermediary Entities
This adjustment is applicable to supervised insurance
organizations that have made the election described in
the instructions for column P of Schedule I to not treat
a company as a material financial entity that otherwise
would meet the definition of a material financial entity.
If the building block parent or any company that is a

member of the building block has engaged in transactions with external parties indirectly using back-toback transactions with the company for which this
election has been made, an adjustment may be
necessary.
Report as an adjustment the difference between the
building block parent’s company capital requirement
and the building block parent’s company capital
requirement assuming that the building block parent
or other member of the building block had engaged in
the external transaction directly instead of indirectly.
Column V Risk Charges Relating to Investments in
Own Capital Securities
Report as a deduction any difference between the
building block parent’s company capital requirement
and its company capital requirement assuming that
neither the building block parent nor any member of
the building block held any investment in the building
block parent’s own capital instrument(s), including any
net long position. For this calculation, the net long
position should be determined in accordance with
12 CFR 217.22(h), provided that a separate account
asset or associated guarantee is not regarded as an
indirect exposure unless the net long position of the
fund underlying the separate account asset equals or
exceeds 5 percent of the fund’s value.
Column W Risks Relating to Title Insurance
Report as an addition to the building block parent’s
company capital requirement the amount of the building block parent’s reserves for claims pertaining to title
insurance, multiplied by 300 percent.
Column X Other Adjustments to Capital Requirement
Enter in this column any other adjustments to the
building block parent’s capital requirement ordered by
the Board.
Column Y Adjusted Company Capital Requirement
This is a calculated field that sums the company’s company capital requirement and all adjustments to the
capital requirement entered by the Reporter.

SCHEDULE II-4
January 2024

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DETAIL INSTRUCTIONS FOR

Parent Ownership
Schedule III

General Instructions
Schedule III lists all subsidiary/parent building block
relationships for inventory companies classified as
building block parents as a result of the entries on
Schedule I. Inputs on this schedule facilitate the aggregation of building blocks on subsequent schedules.

Column F Next Upstream Building Block Parent
This is a calculated field that displays the building
block parent’s next upstream building block parent.
This is the building block into which the building block
parent in column C rolls up into. For top-tier depository institution holding companies, “None” is
displayed.
Column G Next Upstream Building Block Parent’s
Capital Framework
This is a calculated field that displays the indicated
capital framework for the next upstream building block
parent in column F.
Column H Equity Ownership Percentage
Report the percentage of common equity ownership percentage of all members of the building block
parent’s building block in the downstream building
block parent. In the case of direct ownership of one
building block parent of the equity of another building
block parent, this should match Column L of Schedule I.
Leave blank for building block parents that do not
have a parent organization.

Column D Indicated Capital Framework
This is a calculated field that pulls the indicated capital
framework from column G of Schedule I for each
inventory company identified as a building block parent in column R of Schedule I.

Rare situations: Report 100% for the top-tier depository institution holding company’s common equity
ownership percentage for a company with no outstanding common equity that is assigned to be a building
block parent. Report 100% for special purpose entity,
variable interest entity, or similar entity identified as
building block parents in Column Q of Schedule 1.

Column E Parent Company Name
This is a calculated field that pulls the names of each of
the building block parent’s direct parents from column
K of Schedule I. For top-tier depository institution
holding companies, “None” is displayed.

Column I Capital Downstreamed from Upstream
Building Block Parent
Report the amount of downstreamed capital owned by
any member of the upstream building block parent’s
building block in the downstream building block parSCHEDULE III-1

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Schedule III

ent. The amount of the downstreamed capital is calculated as the impact, excluding any impact on taxes, on
the company available capital of the building block
parent of the building block of which the owner is a
member, if the owner were to deduct the downstreamed capital. This is typically the ownership interest reported by the upstream building block parent.
Column J Upstream Building Block Parent’s Capital
Requirement on Investment
Report the impact on the capital requirement reported
in column R of Schedule II for the upstream building
block parent shown in column F as a result of its

investment in the company. The impact is the difference between the building block parent’s company
capital requirement and the building block parent’s
company capital requirement recalculated under the
assumption that members of the building block parent’s building block had no investment in the downstream building block parent. The reported value shall
be net of applicable concentration charges, covariance
adjustments, or any other factors that impact capital
requirement as a result of the building block parent’s
investment in the company.

SCHEDULE III-2
January 2024

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DETAIL INSTRUCTIONS FOR

Available Capital
Schedule IV

General Instructions
Schedule IV has no required inputs. Building block
available capital for each building block parent is calculated on Schedule IV using the information reported
on Schedules I through III.
For each building block parent, the amount of building block available capital is the adjusted company
available capital (column I),

(1) Reduced by the downstreamed capital owned by
any member of the building block parent’s
building block;
(2) Increased by the building block available capital
of any downstream building block parents,
scaled to the indicated capital framework of the
building block parent and then multiplied by the
building block parent’s allocation share of the
downstream building block parent; and
(3) Adjusted for any adjustments to available capital
reported on Schedule III.

Column Instructions
Column A Row Number
This is a calculated field that assigns a reference number to each row in the schedule.
Column B Column H
Columns B through H are calculated fields and consist
of attributes of the building block parents. This information is pulled from Schedule III.

Column I Adjusted Company Available Capital
This is a calculated field that pulls the company’s
adjusted available capital reported in column Q on
Schedule II.
Column J Value of Downstream Building Blocks
This is a calculated field that sums the parent’s value of
investment reported in column I on Schedule III for
each row on Schedule III where the parent block in
column F of Schedule III is the same as the company
in column C of Schedule IV. The figure represents the
value of the building block parent’s downstream building block parents. The value is negative because it is
subtracted from the building block parent’s available
capital before adding the scaled downstream building
block parent available capital in column K.
Column K Scaled Downstream Building Block Parent
Available Capital
This is a calculated field that scales the downstream
building block parent’s building block available capital
from column R to the building block parent’s indicated
capital framework.
Column L Building Block Available Capital (Indicated
Capital Framework)
This is a calculated field that sums the values in columns I through K. The value represents a building
block parent’s available capital after its downstream
building block parents have all been adjusted and
scaled to its indicated capital framework. This ensures
that the capital positions of all building blocks that roll
up into this block are expressed in the building block
parent’s indicated capital framework before being
scaled, if necessary, to the common capital framework.

SCHEDULE IV-1

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Schedule IV

For top-tier depository institution holding companies,
this includes a deduction of any amounts of additional
tier 1 capital instruments and tier 2 capital instruments
in excess of the applicable limits.
Column M Building Block Available Capital (Common
Framework)
This is a calculated field that scales the building block
parent’s available capital in column L to the common
capital framework, if needed.
Column N Deduction for Additional Tier 1 Capital
Limitation
This field calculates the amount of additional tier 1
capital instruments in excess of the 100% limitation.
Instruments in excess of this limit are treated as Tier 2
instruments.
Column O Total Tier 2 Capital Securities
This is a calculated field that pulls in the amount of
tier 2 capital reported in column G of Schedule II and
any Additional Tier 1 instruments in excess of the AT1
instruments, which are treated as Tier 2 instruments.

Column P Legacy Surplus Notes
This is a calculated field that pulls in the amount of
legacy surplus notes reported in column H of Schedule II.
Column Q Deduction for Tier 2 Capital Limitation
This field calculates the amount of tier 2 capital in
excess of the 150% limitation. The amount of tier 2
capital securities permitted to be included in building
block available capital for a top-tier depository institution holding company’s BBA ratio is limited to the
greater of 150% of the building block parent’s building
block capital requirement and the amount of grandfathered tier 2 capital securities and the amount in Column N - Deduction for Additional Tier 1 Capital
Limitation.
Column R Proportionally Adjusted BBA Available
Capital (Common Framework)
This is a calculated field that multiplies the building
block available capital (common framework) in column M by the allocation share in column H. This
ensures that as building blocks roll up into upstream
building block parents, they do so at the correct
proportion.

SCHEDULE IV-2
January 2024

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DETAIL INSTRUCTIONS FOR

Capital Requirement
Schedule V

General Instructions
Schedule V has no required inputs. The capital requirement for each building block parent is calculated on
Schedule V using the information reported on Schedules I through III.
For each building block parent, the building block
capital requirement is the adjusted company capital
requirement (column I),

(1) reduced by the difference between the building
block parent’s company capital requirement and
the building block parent’s company capital
requirement recalculated after treating the building block parent as though it had no investment
in any downstream building block parent;
(2) increased by the building block capital requirement for any downstream building block parent,
which is scaled to the indicated capital framework of the building block parent and then multiplied by the building block parent’s allocation
share of the downstream building block parent, and

Column I Adjusted Company Capital Requirement
This is a calculated field that pulls the building block
parent’s adjusted company capital requirement
reported in column Y on Schedule II.
Column J Capital Requirement for Downstream
Building Block Parents
This is a calculated field that sums the parent’s capital
requirement reported in column J on Schedule III for
each row on Schedule III where the parent block in
column F of Schedule III is the same as the company
in column C of Schedule V. The figure represents the
capital requirement held by the building block parents
attributable to the building block parent’s downstream
building block parents. The value is negative because it
will be subtracted from the company’s capital requirement before adding the scaled downstream building
block parent capital requirement in column K.
Column K Scaled Downstream Building Block Parent
Capital Requirement
This is a calculated field that scales the proportionally
adjusted downstream building block parent’s capital
requirement from column N to the building block parents’s indicated capital framework.

Column A Row Number
This is a calculated field that assigns a reference number to each row in the schedule.

Column L Building Block Capital Requirement
(Indicated Capital Framework)
This field calculates the building block capital requirement in its indicated capital framework by summing
columns I through K. The value represents that building block parent’s capital requirement after its downstream building block parents have all been adjusted
and scaled to its capital framework where necessary.

Column B Column H
Columns B through H are calculated fields that consist
of the attributes of the building block parents. This
information is pulled directly from Schedule III.

Column M Building Block Capital Requirement
(Common Framework)
This is a calculated field that scales the building block
capital requirement in column L to the common capital
framework, if needed.

Column Instructions

SCHEDULE V-1

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Schedule V

Column N Proportionally Adjusted Building Block
Capital Requirement (Common Framework)
This is a calculated field that multiplies the scaled common framework capital requirement in column M by

the allocation share of the building block parent attributable to the upstream building block parent in column H. This is used for the rollup calculations.

SCHEDULE V-2
January 2024

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DETAIL INSTRUCTIONS FOR

Overall Results
Schedule VI

General Instructions
Schedule VI has no required inputs. Building block
available capital and the building block capital requirement as calculated in Schedule IV and V are pulled in
for each building block parent. The BBA ratio is calculated as a ratio of building block available capital and
building block capital requirement. The available capital, capital requirement and calculated ratio under each
company’s indicated capital framework is shown for
comparison purposes. Additionally, each building
block parent’s unadjusted available capital and
required capital under their indicated capital framework are displayed for comparison.

Column Instructions
Column A Row Number
This is a calculated field that assigns a reference number to each row in the schedule.
Column B Company ID
This is a calculated field that pulls the unique company
ID assigned to each company in column A of Schedule I.
Column C Building Block Parent
This is a calculated field that pulls the company name
from column B of Schedule I for the building block
parent.
Column D Indicated Capital Framework
This is a calculated field that pulls the company’s indicated capital framework from column G of Schedule I.

Column E Company Available Capital (Regulatory
Capital Framework)
This is a calculated field that pulls the company’s company available capital from column E of Schedule II.
Column F Company Capital Requirement (Regulatory
Capital Framework)
This is a calculated field that pulls the company’s
company capital requirement from column T of
Schedule II.
Column G Capital Ratio (Regulatory Capital
Framework)
This field calculates the ratio of company available
capital (column E) to company capital requirement
(column F). This is the company’s capital ratio under
its existing regulatory capital framework.
Column H Building Block Available Capital
This is a calculated field that pulls the building block
parent’s building block available capital from column
M of Schedule IV. This is building block available capital scaled to the common capital framework for the
building block.
Column I Building Block Capital Requirement
This is a calculated field that pulls the building block
parent’s company capital requirement from column M
of Schedule V. This is the building block capital
requirement scaled to the common capital framework,
which includes the building block parent and all of its
downstream building block parents.
Column J BBA Ratio
This field calculates the ratio of the building block
available capital in column H to the building block
capital requirement in column I for each building block
parent.
SCHEDULE VI-1

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Schedule VI

Publicly Reported Items (top-tier holding
company only)
Column K Building Block Available Capital
This is a calculated field that pulls the top-tier building
block parent’s building block available capital from
column M of Schedule IV.
Column L Building Block Capital Requirement
This is a calculated field that pulls the top tier building
block parent’s company capital requirement from

column M of Schedule V. This is the building block
capital requirement scaled to the common capital
framework, which includes the building block parent
and all of its downstream building block parents.
Column M BBA Ratio
This field calculates the ratio of the building block
available capital in column K to the building block
capital requirement in column L for the top-tier building block parent.

SCHEDULE VI-2
January 2024

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DETAIL INSTRUCTIONS FOR

Section 171 Calculation
Schedule VII

General Instructions
Schedule VII is used to report the Section 171 Ratio.
The Section 171 calculation applies the Board’s existing risk-based capital requirements to supervised insurance organizations with the option to exclude insurance operations.
For purposes of compliance with the capital adequacy
requirements and calculations in Schedule VII,
Reporters that do not file the FR Y-9C should follow
the instructions to the FR Y-9C.
This calculation gives different options for the treatment of subsidiary insurance organizations. The
options for the treatment of subsidiary insurance companies are consolidation (columns D to F), deconsolidation and deduction (columns G to I), and deconsolidation and risk-weighting (columns J to L). Only one
of these options should be populated.

Column C Indicated Capital Framework
This is a calculated field that pulls the company’s
indicated capital framework from column D of Schedule II.

Full Consolidation.
Column D Total Capital
Report consolidated total capital as defined by the U.S.
federal banking capital rules.
Column E Risk-Weighted Assets
Report consolidated risk-weighted assets as defined by
the U.S. federal banking capital rules.
Column F Capital Ratio
This field calculates the ratio of the capital reported in
column D to the risk-weighted assets reported in
column E.

Deconsolidate and Deduct.

Column Instructions
Column A Company ID
This is a calculated field that pulls the unique company
ID from column C of Schedule II for the company
entered in column B.
Column B Company Name
Report the company that is the highest depository
institution holding company within the organization
that is not an insurance underwriting company. This is
the company that is subject to the section 171 calculation. This company should be the basis for the values
reported in the remaining Columns in this worksheet.

Column G Total Capital (Excluding State-Regulated
Insurers)
Report total capital as defined by the U.S. federal
banking capital rules excluding insurance operations.
In this option, exclude insurance operations by deducting the GAAP equity of the insurance legal entities
from capital.
Column H Risk-Weighted Assets (Excluding
State-Regulated Insurers)
Report risk-weighted assets as defined by the U.S. federal banking capital rules. Do not include any assets or
exposures of excluded insurance operations when calculating this amount. Do not include any insurance
assets or exposures when determining the applicability
SCHEDULE VII-1

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Schedule VII

of the Board’s market risk capital rule or the Board’s
advanced approaches capital rule.
Column I Capital Ratio
This field calculates the ratio of the capital reported in
column G to the risk-weighted assets reported in
column H.
Deconsolidate and Risk Weight.
Column J Total Capital
Report consolidated total capital as defined by the U.S.
federal banking capital rules. Do not deduct the value
of any state-regulated insurer that is risk-weighted in
column K due to the limits on unconsolidated positions in financial institutions.

Column K Risk-Weighted Assets (State-Regulated
Insurers at 400%)
Report risk-weighted assets as defined by the U.S. federal banking capital rules, with the exception that
investments in insurance operations should be
included with a risk-weight of 400%. Do not include
any insurance assets or exposures when determining
the applicability of the Board’s market risk capital rule
or the Board’s advanced approaches capital rule.
Column L Capital Ratio
This field calculates the ratio of the capital reported in
column J to the risk-weighted assets reported in
column K.

SCHEDULE VII-2
January 2024

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DETAIL INSTRUCTIONS FOR

Framework Information
Schedule VIII

Schedule VIII shows the scalars specified by the Board
and allows Reporters to enter scalars calculated for
non-U.S. scalar compatible frameworks where
required.
For each regulatory capital framework listed, specify
whether the framework is material for the supervised
insurance organization by considering whether the
companies in the supervised insurance organization
subject to the framework are material.
For frameworks that are material other than NAIC
RBC and U.S. federal banking capital rules, specify
whether the framework is scalar compatible. A framework is scalar compatible if it exhibits the following
three attributes:

(1) The framework is clearly defined and broadly
applicable;
(2) The framework has a clearly defined intervention point that can be used to calibrate a provisional scalar; and
(3) The framework provides a risk-sensitive measure of required capital reflecting material risks
to a company’s financial strength.
For material frameworks that are scalar compatible,
enter the capital requirement scalar in the RC Multiplier column. The capital requirement scalar is calculated using the formula below:
1 adjustmentScaling from * requirementScaling from
requirementScaling to

adjustmentscaling from is equal to the jurisdictional
adjustment in the table below based on the country’s
OECD risk classification:
OECD Country Risk Classification

Jurisdictional
Adjustment

0-1, including jurisdictions with no OECD country
risk classification
2
3
46
7

0%
20%
50%
100%
150%

requirementscaling from is equal to the jurisdictional intervention point of the downstream building block parent; and
requirementscaling to is equal to the jurisdictional intervention point of the upstream building block parent
The jurisdictional intervention point is the capital level,
under the laws of the jurisdiction, at which the supervisory authority in the jurisdiction may intervene as to a
company subject to the indicated capital framework by
imposing restrictions on distributions and discretionary bonus payments by the company or, if no such
intervention may occur in a jurisdiction, then the capital level at which the supervisory authority would first
have the authority to take action against a company
based on its capital level.
For scalar compatible frameworks for which no scalar
has been specified by the Board, the building block
parent’s building block available capital shall be the
same as the available capital reported for the indicated
framework, therefore zero is automatically populated
in the “AC Factor to Common” column.

where:

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DETAIL INSTRUCTIONS FOR

Intercompany Transactions
Schedule IX

General Instructions

amount of the series. One row shall be used per intercompany transaction/balance or series.

Schedule IX provides a list of certain intercompany
transactions and all outstanding balances between
companies of the supervised insurance institution that
impact the balance sheet and capital, and related
adjustments, if applicable.

Column Instructions

In this schedule, report all significant intercompany
transactions within the supervised insurance institution. Examples of intercompany transactions include
investments in affiliates (excluding surplus notes,
which should be reported on Schedule XII), asset sales,
guarantees, and dividends between companies
reported on Schedule I. In addition, report all significant outstanding intercompany balances (e.g. loans,
letters of credit, investments in affiliates) between companies reported on Schedule I. Transactions/balances
between companies that are routine in nature and do
not have a significant impact to the balance sheet
should be excluded. This may include, for example,
general business services contracts and immaterial
financial related transactions (e.g. management of
liquidity through a centralized treasury function)
should be omitted from the schedule. Intercompany
reinsurance transactions as well as reinsurance and
liquidity pools should be reported on other supplemental schedules and excluded from this schedule.
All significant transactions entered into during the
course of the year and balances outstanding as of the
Financial Statement Date should be included in the
schedule.
Significant transactions and balances are those larger
than one-half of one percent of the total consolidated
assets of the supervised insurance organization (e.g., as
reported by the relevant top-tier institution under
12 CFR Part 246 (Regulation TT)). If a transaction is
part of a related series of transactions, report the total

Column A Row Number
This is a calculated field that assigns a reference number to each row in the schedule.
Column B Intercompany Transaction/Balance Type
Use the drop-down menu to select the option that best
describes the intercompany transaction or balance
type. The categories of intercompany transactions/
balances are:
• Dividend
• Loan - Differing valuation
• Loan - Risk charge
• Guarantee
• Letter(s) of Credit
• Other holding(s) or transaction(s) adjustment
• Investment in subsidiary or affiliate
• Derivative transaction
• Securities financing transaction
• Purchase of asset(s)
• Sale of asset(s)
• Other sale of asset(s)
• Purchase of investment(s)
• Sale of investment(s)
• Purchase of debt
• Sale of debt
SCHEDULE IX-1

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Schedule IX

• Keepwell agreement/Intercompany capital maintenance agreement
• Secured credit transaction
• Split-dollar life insurance
• Transaction with third-party if proceeds used to benefit affiliate
• Other (please describe)
Column C Transaction or Balance
Report if the entry in column B is either a transaction
or a balance.
Column D Description
Provide a brief description of the transaction or balance outstanding.
Column E Type of Effect of Transaction/Balance
Use the drop-down menu to report the type of effect of
the transaction or balance on capital, if applicable.
Column F Date
Report the effective date of the transaction. Use N/A
for outstanding balances or if the entry is a total.
Column G Amount
Report the notional amount of the transaction or
balance.
Column H Company A
Report the payor (Company A) of the transaction or
balance.
Column I Company B
Report the recipient (Company B) of the transaction
or balance.
Column J Company A’s Indicated Capital Framework
This is a calculated field that pulls Company A’s indicated capital framework. The information is pulled
directly from the column G on Schedule I.
Column K Company B’s Indicated Capital Framework
This is a calculated field that pulls Company B’s indicated capital framework. The information is pulled
directly from the column G on Schedule I.

Column L Company A’s Accounting Basis
This is a calculated field that pulls Company A’s
accounting framework. The information is pulled
directly from the column H on Schedule I.
Column M Company B’s Accounting Basis
This is a calculated field that pulls Company B’s
accounting framework. The information is pulled
directly from the column H on Schedule I.
Column N Company A’s Building Block Parent
This is a calculated field that displays the company’s
building block parent. For companies with no reported
parent, i.e., top-tier depository institution holding
company, “None” is displayed.
Column O Company B’s Building Block Parent
This is a calculated field that displays the company’s
building block parent. For companies with no reported
parent, i.e., top-tier depository institution holding
company, “None” is displayed.
Column P Type of Adjustment
Indicate if transaction resulted an adjustment to available or required capital, or both, if applicable
Column Q Adjustment to Available Capital
(Company A)
Report the adjustment to available capital for Company A, if applicable.
Column R Adjustment to Capital Requirement
(Company A)
Report the adjustment to the capital requirement for
Company A, if applicable.
Column S Adjustment to Available Capital
(Company B)
Report the adjustment to available capital for Company B, if applicable.
Column T Adjustment to Capital Requirement
(Company B)
Report the adjustment to the capital requirement for
Company B, if applicable.

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DETAIL INSTRUCTIONS FOR

Internal Reinsurance
Schedule X

General Instructions
Schedule X provides information on intra-group reinsurance. The schedule’s purpose is to have a complete
list of outstanding internal reinsurance balances
between companies of the supervised insurance institution.

Column G Amount In Force at End of Year
Report the amount of insurance in force at the end of
the most recent year. For property & casualty insurance use N/A.

In this schedule, report intercompany reinsurance balances for all companies reported on Schedule I as of
Financial Statement Date. Exclude intercompany reinsurance pools.

Column H Reserve Credit Taken/Reinsurance
Recoverable on Reserves
Report the reserve credit taken by the ceding life company at the end of the most recent year. Report the
total reinsurance recoverable on reserves for the ceding
P&C company.

Column Instructions

Column I Premiums
Report total premiums ceded for the most recent year.

Column A Row Number
This is a calculated field that assigns a reference number to each row in the schedule.
Column B Ceding Company
Report the company ceding reinsurance.

Column J Cedant’s Indicated Capital Framework
This is a calculated field that pulls the ceding company’s indicated capital framework. The information is
pulled directly from the column G on Schedule I.
Column K Reinsurer’s Indicated Capital Framework
This is a calculated field that pulls the reinsurance company’s indicated capital framework. The information is
pulled directly from the column G on Schedule I

Column C Reinsurer
Report the company assuming reinsurance.

Column L Cedant’s Accounting Basis
This is a calculated field that pulls the ceding company’s accounting framework. The information is pulled
directly from the column H on Schedule I.

Column D Business Ceded
Report the type of business ceded.
Column E Authorized, Unauthorized or Certified
Use the drop-down menu to report whether the reinsurer is authorized, unauthorized or certified.
Column F Reinsurance Type
Report the type of reinsurance ceded (e.g. Coinsurance, Modified Coinsurance, Stop Loss, Catastrophe,
Yearly Renewable Term, Facultative, Surplus Share).

Column M Reinsurer’s Accounting Basis
This is a calculated field that pulls the reinsurance company’s accounting framework. The information is
pulled directly from the column H on Schedule I.
Column N Effective Date
Report the date the contract originally went into effect.
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Schedule X

Column O Cedant’s Building Block Parent
This is a calculated field that displays the cedant’s
building block parent. For companies with no reported
parent, i.e., top-tier depository institution holding
company, “None” is displayed.

Column P Reinsurer’s Building Block Parent
This is a calculated field that displays the reinsurer’s
parent’s building block parent. For companies with no
reported parent, i.e., top-tier depository institution
holding company, “None” is displayed.

SCHEDULE X-2
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DETAIL INSTRUCTIONS FOR

Approved Variations
Schedule XI

General Instructions
Schedule XI provides information on approved variations, including permitted and prescribed practices,
and transitional measurers. This worksheet’s purpose
is to obtain a full inventory of approved variations and
transitional measures and to capture their effect on
available capital and capital requirement.
In this schedule, report approved variations, including
permitted and prescribed practices, and transitional
measures in indicated capital framework of all companies reported on Schedule I. One row shall be used per
type of approved variation or transitional measure.

Column Instructions
Column A Row Number
This is a calculated field that assigns a reference number to each row in the schedule.
Column B Company Name
Report the company from the list on Schedule I using
the approved variations or transitional measures.
Column C Country and State/Province of Domicile
Report the country and state/province in which the
company is domiciled.
Column D Indicated Capital Framework
This is a calculated field that pulls in the indicated capital framework from Schedule I for the company
selected in column B.
Column E Building Block Parent
This is a calculated field that displays the company’s
building block parent as assigned in Schedule I.

Column F Approved Variation or Transitional Measure
Report whether the practice is an approved variations
or transitional measure.
Column G Description of Approved Variation or
Transitional Measure
Provide a brief description of the approved variations
or transitional measure. Include a reference to the
approving regulatory authority, law, or regulation.
Column H Adjustment to Available Capital
Report the impact of the approved variations or transitional measure on company available capital. The
impact is the difference between the company’s company available capital and its company available capital
assuming that the company did not use the approved
variation or transitional measure. The total impact on
this schedule should match the total adjustments to
available capital reported on Schedule II for approved
variations, including permitted and prescribed practices, and transitional measures.
Column I Adjustment to Capital Requirement
Report the impact of the approved variations or transitional measure to capital requirement. The impact is
the difference between the company’s company capital
requirement and its company capital requirement
assuming that the company did not use the approved
variation or transitional measure. The total impact on
this schedule should match the total adjustments to
capital requirement reported on Schedule II for
approved variations, including permitted and prescribed practices, and transitional measures.

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DETAIL INSTRUCTIONS FOR

Capital Instruments
Schedule XII

General Instructions
Section XII is a list of outstanding capital instruments
issued by any company of the supervised insurance
organization. This worksheet is intended to obtain an
list of the capital instruments that qualify for available
capital and that meet the criteria set out in 12 CFR
217.20(d)(1), with modifications, and those instruments that are not qualifying capital instruments.
In this schedule, report capital instruments of all companies reported on Schedule I. The total of tier 2 capital securities per building block parent should equal the
amount entered in column G in Schedule II. The total
of non-qualifying capital instruments per building
block parent should equal the amount entered in column I in Schedule II. Companies should not include
intragroup financial instruments issued between companies included within the scope of the group. One row
per capital instrument shall be used for companies that
have issued multiple instruments.

Column Instructions
Column A Row Number
This is a calculated field that assigns a reference number to each row in the schedule.
Column B Issuing Company
Report the company that issued the capital instrument.
Column C Building Block Parent
This is a calculated field that displays the issuing company’s building block parent. For companies with no
reported parent, i.e., top-tier depository institution
holding company, “None” is displayed.

Column D Security Type
Use the drop-down menu to select the option that best
describes the reported capital instrument outstanding.
The types of capital instruments are:
• Senior Debt
• Senior Subordinated Debt
• Junior Subordinated Debt
• Surplus Note
• Capital Note
• Preferred Stock
• Hybrid Instrument
• Common Stock
• Other
Column E ID Number (CUSIP/ISIN)
Report the unique security identifier, if applicable.
Column F Rank
Describe the instrument’s level of subordination. Indicate the priority of the instrument compared to the
other components of capital.
Column G Legacy Treated Instrument (Y/N)
Report whether the capital instrument receives legacy
treatment. From the drop-down menu, select “1” for
yes, “0” for no.
Column H Amount Issued
Report the issued notional amount of the capital
instrument.
Column I Amount Outstanding
Report the amount outstanding of the capital instrument as of the Financial Statement date.
SCHEDULE XII-1

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Schedule XII

Column S Guaranteed by Affiliate (Y/N)
Report whether there are any affiliates guarantees
associated with the capital instrument. From the dropdown menu, select “1” for yes, “0” for no.

Column J Issue Date
Report the date the capital instrument was issued.
Column K Maturity Date
Report the date when the financial instrument will
mature. For a perpetual instrument, use N/A.
Column L Coupon Type
Use the drop-down menu, to report whether the coupon is fixed or variable, if the instrument makes coupon payments.
Column M Coupon Rate
Report the predetermined interest rate used to calculate the fixed coupon payments on the capital instrument, if the instrument makes coupon payments.
Report the reference rate and the quoted spread used
to calculate the variable coupon payments on the capital instrument.
Column N Coupon Frequency
Use the drop-down menu to report the frequency with
which the capital instrument pays interest (e.g.
monthly, quarterly, semi-annually, or annually)
Column O Length of Deferral
Report the length of time of deferred coupon interest,
if applicable. For instruments without deferrable coupons, input “N/A”.
Column P Callable (Y/N)
Report whether the capital instrument can be
redeemed prior to its maturity. From the drop-down
menu, select “1” for yes, “0 for No”.
Column Q First Ordinary Call
Report the first date on which the callable instrument
may be called.
Column R Does the Instrument Permit
Extra-Ordinary Calls Prior to the First Ordinary
Call Date?
Report whether the instrument can be called prior to
the first ordinary call date and describe the circumstance. From the drop-down menu, select “1” for yes,
“0” for no. Leave blank if the capital instrument is not
callable.

Column T Incentives to Redeem (Y/N)
Report whether there are any incentives to redeem the
capital instrument. From the drop-down menu, select
“1” for yes, “0” for no.
Column U Date of Earliest Incentive
Enter the date of the earliest incentive to redeem.
Column V Incentive Description
Provide a description as to what would constitute an
incentive to redeem.
Column W Are Distributions Cumulative if
Deferred (Y/N)
Report whether any deferred coupons are cumulative,
to be paid in the future. From the drop-down menu,
select “1” for yes, “0” for no.
Column X Conversion Feature (Y/N)
Report whether the capital instrument can be converted into another security (e.g. common stock).
From the drop-down menu, select “1” for yes, “0”
for no.
Column Y Specify If Feature Results in a Conversion
to Common /Ordinary Shares or Other
Use the drop-down menu to report whether the capital
instrument can be converted to common/ordinary
shares or other. Select N/A if the capital instrument is
not convertible.
Column Z Insurance Regulatory Approval
Needed (Y/N)
Report whether state insurance regulatory approval is
required before redemption of capital instrument.
From the drop-down menu, select “1” for yes, “0”
for no.
Column AA Is Federal Reserve Regulatory Approval
Needed (Y/N)
Report whether Federal Reserve approval is required
prior to the redemption (fully or in part) of the instru-

SCHEDULE XII-2
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Schedule XII

ment. From the drop-down menu, select “1” for yes,
“0” for no.
Column BB Special Conditions Near Maturity
Report whether there are any special conditions associated with the capital instrument near maturity.

Column DD Capital Treatment (N/A if none)
Use the drop-down menu to report the capital treatment of the instrument, if applicable.

Column CC Treated as a Liability or Equity on the
Balance Sheet
Use the drop-down menu to report whether the capital
instrument is treated as a liability or equity on the company’s balance sheet.

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DETAIL INSTRUCTIONS FOR

Reinsurance Pools
Schedule XIII

General Instructions
Schedule XIII provides information on intercompany
reinsurance pooling arrangements among companies
in the supervised insurance institution.
In the schedule, report information for all companies
on Schedule I that participate in pooling arrangements
under which the pool participants cede all or a portion
of their direct and assumed business to the pool.

Row Instructions
Row 6 and 37 Description of Pool
Provide a description of the basic terms of the intercompany reinsurance pooling arrangement and the
related accounting.

Column Instructions
Column A Row Number
This is a calculated field that assigns a reference number to each row in the schedule.

Column B Participants
Identify the lead company in row 1 and all of the affiliated companies participating in the intercompany reinsurance pool in the rows below.
Column C Premiums
Report total premiums ceded to the pool for the most
recent year.
Column D % of Pool Results
Report each company’s percentage share of the pooled
business.
Column E Lines of Business
Provide a description of the lines and type of business
subject to the pooling arrangement.
Column F Non-Affiliated Reinsurers
Provide a description of cession to non-affiliated reinsurers of business subject to the pooling arrangement,
if applicable.
Column G Other
Provide any other relevant information pertaining to
the pooling arrangement.

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DETAIL INSTRUCTIONS FOR

Liquidity Pools
Schedule XIV

General Instructions
Schedule XIV is intended to provide information on
liquidity pooling arrangements among companies in
the Supervised Insurance Organization.
In the schedule, report information on all inventory
companies, if applicable, that participate in internal
liquidity pooling arrangements.

Column B Participants
Identify the lead company and all of the affiliated companies participating in the intercompany pool. Include
the NAIC Company Code, if available.
Column C Highest Amount Payable in Calendar Year
Report the highest amount payable to the entity during
the calendar year.

Row Instructions
Row 6 and 35 Description of Facilities
Provide a description of the basic terms of the liquidity
pooling arrangement and the related accounting.

Column Instructions
Column A Row Number
This is a calculated field that assigns a reference number to each row in the schedule.

Column D Highest Amount Receivable in
Calendar Year
Report the highest amount receivable from the entity
during the calendar year.
Column E Other
Provide any other relevant information pertaining to
the pooling arrangement.

SCHEDULE XIV-1

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Page 46 of 55

Glossary

the Board to exercise a call option on the
instrument.

Additional Tier 1 Capital Instruments
Instruments issued by any inventory company that are
qualifying capital instruments:1

(b) The building block parent does not create at
issuance, through action or communication,
an expectation that the call option will be
exercised.

(1) The instrument is subordinated to depositors,
general creditors, and subordinated debt holders
of the building block parent in a receivership,
insolvency, liquidation, or similar proceeding;

(c) Prior to exercising the call option, or immediately thereafter, the top-tier depository
institution holding company must either:
replace any amount called with an equivalent amount of an instrument that meets the
criteria for additional tier 1 capital instruments or common equity tier 1 instruments
under this section; or demonstrate to the satisfaction of the Board that following
redemption, the top-tier depository institution holding company would continue to
hold an amount of capital that is commensurate with its risk.

(2) The instrument is not secured, not covered by a
guarantee of the building block parent or of an
affiliate of the building block parent, and not
subject to any other arrangement that legally or
economically enhances the seniority of the
instrument;
(3) The instrument has no maturity date and does
not contain a dividend step-up or any other term
or feature that creates an incentive to redeem; and
(4) If callable by its terms, the instrument may be
called only after a minimum of five years following issuance, except that the terms of the instrument may allow it to be called earlier than five
years upon the occurrence of a regulatory event
that precludes the instrument from being included
in the building block parent’s company available
capital or building block available capital, a tax
event, or if the issuing entity is required to register as an investment company pursuant to the
Investment Company Act of 1940 (15 U.S.C.
80a-1 et seq.) In addition:
(a) The top-tier depository institution holding
company must receive the prior approval of
1. For the purposes of assessing whether a capital instrument is
qualifying for the purpose of this definition, the supervised insurance
organization should evaluate the criteria in the qualifying capital instrument definition with regard to the building block in which the issuing
inventory company is a member.

(5) Redemption or repurchase of the instrument
requires prior approval of the Board.
(6) The paid-in amount would be classified as equity
under GAAP.
(7) The instrument meets the criteria in
§ 217.20(c)(1)(vii) through (ix) and
§ 217.20(c)(1)(xi) through (xiv), except that each
instance of “Board-regulated institution” is
replaced with “building block parent”.

Affiliate
With respect to a company, any company that controls,
is controlled by, or is under common control with, the
company.
GLOSSARY-1

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Glossary

Allocation share

Board’s market risk capital rule

The portion of a downstream building block’s building
block available capital or building block capital
requirement that a building block parent must aggregate in calculating its own building block available
capital or building block capital requirement, calculated as specified in the instructions for Schedule IV –
Available Capital in column H.

12 CFR Part 217, subpart F.

Approved variation

Building block available capital

A permitted practice, prescribed practice, or other
practice, including legal, regulatory, or accounting,
that departs from a solvency framework as promulgated for application in a jurisdiction.

Has the meaning set out in §608(b) of the BBA. A
building block parent’s building block available capital
consists of its own company available capital, net of
adjustments, plus the scaled building block available
capital of any downstream building block parents (net
of the value of any upstream investment in the building
block parent by any downstream building block parent), less the downstreamed capital to any downstream
building block parents. This is the numerator of the
BBA Ratio.

BBA
The building block approach, as codified at
12 CFR 217, Subpart J.

Building block
A building block parent and all downstream companies and subsidiaries assigned to the building block
parent.

BBA ratio

Building block parent

Defined in §217.604 of BBA. This is the calculated in
column J of Schedule VI: Overall Results as building
block available capital divided by the building block
capital requirement.

The lead company of a building block whose indicated
capital framework must be applied to all members of a
building block for purposes of determining building
block available capital and the building block capital
requirement.

BHC

Building block capital requirement

Bank Holding Company

Has the meaning set out in §607 of the BBA. This is
calculated in the common capital framework on column M on Schedule V. This is the denominator of the
BBA Ratio.

Board
The Board of Governors of the Federal Reserve
System.

Capital-regulated company
Board’s advanced approaches capital rule

A company in a supervised insurance organization that
is a depository institution, foreign bank, or company
engaged in the business of insurance, and directly subject to a regulatory capital framework.

12 CFR Part 217, subpart E.

Board’s BHC capital rules
Board’s BHC capital rules: 12 CFR Part 217, subparts
A through I and Appendix A.

Common capital framework
NAIC RBC.

GLOSSARY-2
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Glossary

Company
A corporation, partnership, limited liability company,
depository institution, business trust, special purpose
entity, association, or similar organization.

eign organization, but does not include the foreign
organization.

Downstream building block parent
A building block parent that is a downstream company
of another building block parent.

Company available capital
The amount of a company’s company capital elements,
net of any adjustments and deductions, as determined
in accordance with the company’s indicated capital
framework. This amount is reported on column E of
Schedule II, and further detail is provided in instructions for that column.

Downstream company
A company whose company capital element is directly
or indirectly owned, in whole or in part by, another
company in the supervised insurance organization.

Downstreamed capital

Company capital element
For a company, any part, item, component, balance
sheet account, instrument, or other element qualifying
as regulatory capital under the company’s indicated
capital framework prior to any adjustments and deductions under that framework.

Direct ownership of a downstream company’s company capital element that is accretive to a downstream
building block parent’s building block available capital.

Engaged in insurance or reinsurance
underwriting

Company capital requirement
For a company whose indicated capital frameworkis a
U.S. federal banking capital rule, this is total riskweighted assets. For a company whose applicable
framework is NAIC RBC, this is the Authorized Control Level risk-based capital requirement. For any
other company, a risk sensitive measure of required
capital used to determine the jurisdictional intervention point applicable to that company. This amount is
reported on column R of Schedule II, and further
detail is provided in instructions for that column.

Regulated as an insurance or reinsurance underwriting
company, other than insurance underwriting companies that primarily underwrite title insurance or insurance for credit risk.

Depository institution

A company that is:

A depository institution as defined in section 3 of the
Federal Deposit Insurance Act.

Depository institution holding company
A bank holding company as defined in section 2 of the
Bank Holding Company Act of 1956 or a savings and
loan holding company as defined in section 10 of the
Home Owners’ Loan Act that is organized in the
United States, including any bank or savings and loan
holding company that is owned or controlled by a for-

FDIC’s regulatory capital rules
12 CFR Part 324.

Financial entity
(1) A bank holding company; a savings and loan
holding company as defined in section 10(n) of
the Home Owners’ Loan Act (12 U.S.C.
1467a(n)); a U.S. intermediate holding company
established or designated for purposes of compliance with this part;
(2) A depository institution as defined in section 3(c) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(c)); an organization that is organized under the laws of a foreign country and that
engages directly in the business of banking outGLOSSARY-3

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Glossary

side the United States; a federal credit union or
state credit union as defined in section 2 of the
Federal Credit Union Act (12 U.S.C. 1752(1) and
(6)); a national association, state member bank,
or state nonmember bank that is not a depository
institution; an institution that functions solely in
a trust or fiduciary capacity as described in section 2(c)(2)(D) of the Bank Holding Company
Act (12 U.S.C. 1841(c)(2)(D)); an industrial loan
company, an industrial bank, or other similar
institution described in section 2(c)(2)(H) of the
Bank Holding Company Act (12 U.S.C.
1841(c)(2)(H));
(3) An entity that is state-licensed or registered as:
(i) A credit or lending entity, including a finance
company; money lender; installment lender; consumer lender or lending company; mortgage
lender, broker, or bank; motor vehicle title pledge
lender; payday or deferred deposit lender; premium finance company; commercial finance or
lending company; or commercial mortgage company; except entities registered or licensed solely
on account of financing the entity's direct sales of
goods or services to customers; (ii) A money services business, including a check casher; money
transmitter; currency dealer or exchange; or
money order or traveler’s check issuer;

tion 54(a) of the Investment Company Act of
1940 (15 U.S.C. 80a-53(a));
(6) A private fund as defined in section 202(a) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b2(a)); an entity that would be an investment company under section 3 of the Investment Company
Act of 1940 (15 U.S.C. 80a-3) but for section 3(c)(5)(C); or an entity that is deemed not to
be an investment company under section 3 of the
Investment Company Act of 1940 pursuant to
Investment Company Act Rule 3a-7 (17 CFR
270.3a-7) of the U.S. Securities and Exchange
Commission;
(7) A commodity pool, a commodity pool operator,
or a commodity trading advisor as defined,
respectively, in sections 1a(10), 1a(11), and
1a(12) of the Commodity Exchange Act of 1936
(7 U.S.C. 1a(10), 1a(11), and 1a(12)); a floor broker, a floor trader, or introducing broker as
defined, respectively, in sections 1a(22),
1a(23) and 1a(31) of the Commodity Exchange
Act of 1936 (7 U.S.C. 1a(22), 1a(23), and 1a(31));
or a futures commission merchant as defined in
section 1a(28) of the Commodity Exchange Act
of 1936 (7 U.S.C. 1a(28));

(4) Any person registered with the Commodity
Futures Trading Commission as a swap dealer or
major swap participant pursuant to the Commodity Exchange Act of 1936 (7 U.S.C. 1 et seq.),
or an entity that is registered with the U.S. Securities and Exchange Commission as a securitybased swap dealer or a major security-based swap
participant pursuant to the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.);

(8) An entity that is organized as an insurance company, primarily engaged in underwriting insurance or reinsuring risks underwritten by insurance companies;

(5) A securities holding company as defined in section 618 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (12 U.S.C. 1850a);
a broker or dealer as defined in sections
3(a)(4) and 3(a)(5) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)(4)-(5)); an investment
company registered with the U.S. Securities and
Exchange Commission under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.);
or a company that has elected to be regulated as a
business development company pursuant to sec-

(10) An entity that would be a financial entity
described in paragraphs (1) through (9) of this
definition, if it were organized under the laws of
the United States or any State thereof.

(9) Any designated financial market utility, as
defined in section 803 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act
(12 U.S.C. 5462); and

Financial institution
The meaning of the same term as set out in 12 CFR
217.2.

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Indicated capital framework

Material financial entity

The capital framework specified in column G of
Schedule I for a company based on its regulatory capital framework and type of business.

A financial entity that, together with its subsidiaries,
but excluding any subsidiary capital-regulated company (or subsidiary thereof), is material, provided that
an inventory company is not eligible to be a material
financial entity if:

Inventory

(1) The supervised insurance organization has
elected pursuant to section 605(c) to not treat the
company as a material financial entity.

The collection of entities contained in Schedule I.

Material

(2) The inventory company is a financial subsidiary,
as defined in section 121 of the Gramm-LeachBliley Act;

For a company in the supervised insurance
organization:
(1) Where the top-tier depository institution holding
company’s total exposure exceeds 5 percent of the
maximum of (1) the top-tier depository institution holding company’s company available capital; and (2) the largest company available capital
of all capital regulated companies reported in the
supervised insurance organization’s inventory.
For purposes of this definition, total exposure
includes:
(a) the absolute value of the top-tier depository
institution holding company’s direct or indirect interest in the company capital element
of the company;
(b) the top-tier depository institution holding
company or any other company in the
supervised insurance organization providing
an explicit or implicit guarantee for the benefit of the company; and
(c) potential counterparty credit risk to the toptier depository institution holding company
or any other company in the supervised
insurance organization arising from any
derivative or similar instrument, reinsurance
or similar arrangement, or other contractual
agreement; or
(2) the company is otherwise significant in assessing
the building block available capital or building
block capital requirement of the top-tier depository institution holding company based on factors including risk exposure, activities, organizational structure, complexity, affiliate guarantees
or recourse rights, and size.

Member
With respect to a building block, the building block
parent or any of its downstream companies that have
been assigned to a building block.

NAIC
The National Association of Insurance
Commissioners.

NAIC RBC
The most recent version of the Risk-Based Capital
(RBC) For Insurers Model Act, together with the RBC
instructions, as adopted in a substantially similar manner by an NAIC member and published in the NAIC’s
Model Regulation Service.

Next Upstream Building Block Parent
An upstream building block parent that owns, in whole
or part, the downstream company, either directly or
through one or more inventory companies that are not
building block parents.

OCC Regulatory Capital Rules
12 CFR Part 3.

Permitted Practice
An accounting practice specifically requested by a state
regulated insurer that departs from NAIC Statutory
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Accounting Principles and state prescribed accounting
practices, and that has received approval from the state
regulated insurer’s domiciliary state regulatory
authority.

Prescribed Practice
An accounting practice that is incorporated directly or
by reference to state laws, regulations and general
administrative rules applicable to all insurance enterprises domiciled in a particular state.

Qualifying capital instruments
Capital instruments that qualify for inclusion as regulatory capital are those instruments (plus related surplus) that meet the criteria below:
(1) The instrument is issued and paid-in;
(2) The instrument is subordinated to depositors and
general creditors of the building block parent;
(3) The instrument is not secured, not covered by a
guarantee of the building block parent or of an
affiliate of the building block parent, and not
subject to any other arrangement that legally or
economically enhances the seniority of the instrument in relation to more senior claims;
(4) The instrument has a minimum original maturity
of at least five years. At the beginning of each of
the last five years of the life of the instrument, the
amount that is eligible to be included in a building
block parent’s company available capital or building block available capital is reduced by 20 percent of the original amount of the instrument
(net of redemptions) and is excluded from regulatory capital when the remaining maturity is less
than one year. In addition, the instrument must
not have any term or features that require, or create significant incentives for , the building block
parent to redeem the instrument prior to maturity; and
(5) The instrument, by its terms, may be called by the
building block parent only after a minimum of
five years following issuance, except that the
terms of the instrument may allow it to be called
sooner upon the occurrence of an event that
would preclude the instrument from being

included in a building block parent’s company
available capital or building block available capital, a tax event, or if the issuing entity is required
to register as an investment company pursuant to
the Investment Company Act of 1940. In
addition:
(a) The top-tier depository institution holding
company must receive the prior approval of
the Board to exercise a call option on the
instrument.
(b) The building block parent does not create at
issuance, through action or communication,
an expectation that call option will be
exercised.
(c) Prior to exercising the call option, or immediately thereafter, the building block parent
must either: Replace any amount called with
an equivalent amount of an instrument that
meets the criteria for regulatory capital; or
demonstrate to the satisfaction of the Board
that following redemption, the building
block parent would continue to hold an
amount of capital that is commensurate
with its risk.
(6) The holder of the instrument must have no contractual right to accelerate payment of principal
or interest on the instrument, except in the event
of receivership, insolvency, liquidation, or similar
proceeding of the building block parent or of a
major subsidiary of the building block parent.
(7) The instrument has no credit-sensitive feature,
such as a dividend or interest rate that is reset
periodically based in whole or in part on the
building block parent’s credit standing, but may
have a dividend rate that is adjusted periodically
independent of the building block parent’s credit
standing, in relation to general market interest
rates or similar adjustments.
(8) The building block parent, or any entity that the
building block parent controls, has not purchased
and has not directly or indirectly funded the purchase of the instrument.
(9) If the instrument is not issued by the building
block parent or by a subsidiary of the building
block parent that is an operating entity, the only

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asset of the issuing entity is its investment in the
capital of the building block parent, and proceeds
must be immediately available without limitation
to the building block parent or the building block
parent’s top-tier holding company in a form that
meet or exceeds all of the other criteria in this
definition.
(10) Redemption of the instrument prior to maturity
or repurchase requires the prior approval of the
Board.
(11) For an advanced approaches Board-regulated
institution, the governing agreement, offering circular, or prospectus of an instrument issued after
the date on which the advanced approaches
Board-regulated institution become subject to the
BBA must disclose that the holders of the instrument may be fully subordinated to interests held
by the U.S. government in the event that the
Board-regulated institution enters into receivership, insolvency, liquidation, or similar
proceeding.

Regulatory capital framework
With respect to a company, the applicable legal requirements specifying the minimum amount of total regulatory capital the company must hold to avoid restrictions on distributions and discretionary bonus
payments, and regulatory intervention on the basis of
capital adequacy levels for the company, or equivalent
standards, provided that for purposes of determining
building block parents the NAIC RBC frameworks for
life insurance, property and casualty insurance, and
health insurance companies are different regulatory
capital frameworks.

Scalar compatible
A capital framework
(1) for which the Board has determined scalars; or
(2) an insurance capital regulatory framework that
exhibits the following three attributes: (i) The
framework is clearly defined and broadly applicable; (ii) The framework has a clearly defined
intervention point that can be used to calibrate a
scalar; and (iii) The framework provides a risk-

sensitive measure of required capital reflecting
material risks to a company’s financial strength.

Scaling
Translation of building block available capital and
building block capital requirement from one indicated
capital framework to another by application of § 606
for the BBA. The parameters for this are contained in
Schedule VIII: Framework Info.

Submission date
The date as of which form FR Q-1 is filed with the
Board.

Supervised insurance institution
In the case of a depository institution holding company, the set of companies consisting of:
(1) a top-tier depository institution holding company
that is an insurance underwriting company,
together with its inventory companies; or
(2) a top-tier depository institution holding company, together with its inventory companies, that,
as of June 30 of the previous calendar year, held
25 percent or more of its total combined assets in
insurance underwriting legal entities (other than
assets associated with insurance underwriting for
credit risk related to bank lending). For purposes
of this definition, the supervised firm must calculate its total consolidated assets under U.S.
GAAP, or if the firm does not calculate its total
consolidated assets under U.S. GAAP for any
regulatory purposes (including compliance with
applicable securities laws), the company may estimate its total consolidated assets, subject to
review and adjustment by the Board; or
(3) An institution that is determined by the Board to
be a Supervised Insurance Institution.

Tier 2 capital instruments
Tier 2 capital instruments of a building block parent
are instruments that meet the definition of qualifying
capital instruments but do not meet all of the criteria
below:
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(1) The instrument is paid-in, issued directly by the
building block parent, and represents the most
subordinated claim in a receivership, insolvency,
liquidation, or similar proceeding of the building
block parent;
(2) The holder of the instrument is entitled to a claim
on the residual assets of the building block parent
that is proportional with the holder’s share of the
building block parent’s issued capital after all
senior claims have been satisfied in a receivership,
insolvency, liquidation, or similar proceeding;
(3) The instrument has no maturity date, can only be
redeemed via discretionary repurchases with the
prior approval of the Board, and does not contain
any term or feature that creates an incentive to
redeem;
(4) The building block parent did not create at issuance of the instrument through any action or
communication an expectation that it will buy
back, cancel, or redeem the instrument, and the
instrument does not include any term or feature
that might give rise to such an expectation;
(5) Any cash dividend payments on the instrument
are paid out of the building block parent’s net
income, retained earnings, or surplus related to
common stock, and are not subject to a limit
imposed by the contractual terms governing the
instrument.
(6) The building block parent has full discretion at all
times to refrain from paying any dividends and
making any other distributions on the instrument
without triggering an event of default, a requirement to make a payment-in-kind, or an imposition of any other restrictions on the building
block parent;
(7) Dividend payments and any other distributions
on the instrument may be paid only after all legal
and contractual obligations of the building block
parent have been satisfied, including payments
due on more senior claims;
(8) The holders of the instrument bear losses as they
occur equally, proportionally, and simultaneously
with the holders of all other instruments meeting
the criteria enumerated here before any losses are
borne by holders of claims on the building block

parent with greater priority in a receivership,
insolvency, liquidation, or similar proceeding;
(9) The paid-in amount would be classified as equity
under GAAP.
(10) The building block parent, or an entity that the
building block parent controls, did not purchase
or directly or indirectly fund the purchase of the
instrument;
(11) The instrument is not secured, not covered by a
guarantee of the building block parent or of an
affiliate of the building block parent, and is not
subject to any other arrangement that legally or
economically enhances the seniority of the
instrument;
(12) The instrument has been issued in accordance
with applicable laws and regulations; and
(13) The instrument is reported on the building block
parent’s regulatory financial statement separately
from other capital instruments.

Top-tier depository institution holding company
A depository institution holding company that is not
controlled by another depository institution holding
company.

Upstream building block parent
An upstream company that is a building block parent.

Upstream company
A company within a supervised insurance organization
that directly or indirectly controls a downstream company, or directly or indirectly owns part or all of a
downstream company’s company capital elements.

Upstream investment
Any direct or indirect investment by a downstream
building block parent in an upstream building block
parent, valued based on the estimated impact, excluding any impact on taxes, on the downstream building
block parent’s company available capital if the owner
were to eliminate the investment.

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U.S. federal banking capital rules
12 CFR Part 217 and the regulatory capital rules promulgated by the Federal Deposit Insurance Corpora-

tion, and the Office of the Comptroller of the
Currency.

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