Scope: Types of Premiums Considered
- Two categories of premiums qualify for admission as assets:
- Premiums due from October 1 to December 31 of the calendar/valuation year for policies with regular payment modes (annual, semi-annual, quarterly, monthly).
- Premiums due from July 1 to December 31 for policies under a monthly salary deduction payment scheme.
Conditions for Net Premiums on Regular Payment Policies
- Policies must be classified as premium-paying in the company's valuation records.
- Initial premium payments must have been received.
- Corresponding reserves must be properly set up by the insurer.
Additional Requirements for Salary Deduction Premiums
- Policies must also be classified premium-paying in valuation records.
- Initial payments received.
- Corresponding reserves established.
- No notice of cancellation or withdrawal received from policyholder.
Validity of Insurance Policies
- In line with Section 77 of the Insurance Code, an insurance policy is valid and binding only upon payment of the said premium or the application of any applicable grace period.
Effectivity and Supersession
- This Circular Letter supersedes Circular Letter No. 1 dated November 20, 1981.
- Effective for calendar/valuation years beginning 1991.