Catastrophe Peril Reinsurance Requirement

All companies licensed to write Fire and Allied perils insurance in the Philippines must comply with the catastrophe reinsurance requirement.
Compliance obligations apply to each covered company’s reinsurance arrangements for the covered catastrophe perils.

Covered companies must secure a minimum amount of catastrophe excess of loss reinsurance protection.
The required minimum reinsurance protection is equivalent to five percent (5%) of the company’s aggregate net retained insured values.
The reinsurance must cover Earthquake, Typhoon and Flood.
The coverage standard is determined against Zone A or Zone B, whichever is higher.

Covered companies must submit to the Insurance Commission a duly accomplished attached form for compliance monitoring.
Submissions must be made for the rolling 12-month aggregate as at March 31, June 30, September 30, and December 31 of each year.
The first report must cover the status as at December 31, 2004 and must be submitted within 45 days after the end of December.
Subsequent reports must be filed quarterly thereafter.
The Insurance Commission may examine the records of the company whenever deemed necessary to verify the accuracy of the submitted reports.

Covered companies must submit to the Insurance Commission copies of their reinsurance contracts.
Covered companies must submit their reinsurance contracts together with the security rating of the reinsurers as proof of compliance.
The submission deadline for the reinsurance contracts and security ratings is not later than 31 March of each year.

The deadline for submitting compliance is extended to April 30, 2005.
Compliance with the circular is a prerequisite for the renewal of the company’s certificate of authority.