QuestionsQuestions (IC CIRCULAR LETTER NO. 5-2005)
It requires all companies licensed to write Fire and Allied perils insurance to secure minimum catastrophe excess of loss reinsurance protection against Earthquake, Typhoon, and Flood exposures in Zone A or Zone B.
All companies licensed to write Fire and Allied perils insurance in the Philippines.
A minimum amount of catastrophe excess of loss reinsurance protection.
Earthquake, Typhoon, and Flood.
An amount equivalent to five percent (5%) of the company’s aggregate net retained insured values.
It applies against Earthquake, Typhoon, and Flood under Zone A or Zone B, whichever is higher.
Companies must submit a duly accomplished attached form for the rolling 12-month aggregate as at March 31, June 30, September 30, and December 31 of each year.
The first report shall be as at December 31, 2004 and must be submitted within 45 days after the end of December.
The deadline for submitting compliance was extended to April 30, 2005 due to time constraints.
Copies of their reinsurance contracts together with the security rating of the reinsurers.
Not later than 31 March of each year.
Compliance is a prerequisite for the renewal of the company’s certificate of authority.
Yes. The Commission may examine the company’s records whenever deemed necessary to verify the accuracy of the reports.
Yes. It states that the requirement takes effect immediately.
It establishes both (1) periodic reporting of aggregate net retained insured values via a form on specific dates and (2) submission of contract and reinsurer security documentation by a fixed annual deadline.
It may not be eligible for renewal of its certificate of authority, since compliance is a prerequisite for renewal.
It is the prescribed form that companies must complete and submit to the Insurance Commission to show compliance for each rolling 12-month aggregate period.
The required reinsurance protection equals 5% of those aggregate net retained insured values, so accurate computation of retained values directly affects compliance.