RULES AND REGULATIONS ON REINSURANCE TRANSACTIONS
Commission under the provision of Section 414 of the Insurance Code, the
following revised rules and regulations governing life reinsurance
transactions in the Philippines are hereby promulgated:
1. The retention of a life insurance company on any one standard
life insured shall not be less than the amount equal to one-half (1/2)
of one percent of the latest verified stockholders equity.2. The minimum retention on substandard lives shall be graded
downwards from standard in accordance with sound underwriting practice.
The schedules of retention limits shall be submitted to the Insurance
Commission prior to its adoption in any reinsurance agreement.3. No reinsurance shall be placed abroad where the amount of risk
is Three Million Pesos (P3.0M or Less), per life standard risk, graded
down for substandard lives.4. No reinsurance shall likewise be placed abroad on accident
riders where the accident risk does not exceed One Million Five Hundred
Thousand Pesos (P1.5M) per standard risk.5. Reinsurance treaties abroad shall be on the yearly renewable
term plan (amount of risk) only. Renewal of existing treaties shall be
on a year to year basis and shall contain a provision for recapture of
previously ceded business. To protect the company against unusual number
of claims as a result of jumbo policies issued, the company may avail
itself of the catastrophe or stop loss cover abroad.6. Reinsurance abroad on other life insurance riders, group
insurance and all other life insurance business may be made only after
it has been shown by ceding company that such risk cannot be absorbed by
the Philippine market.
Likewise, facultative reinsurance placements are subject to prior approval by the Insurance Commission.
All circulars and orders inconsistent herewith are hereby revoked.
Adopted: 10 March 2009
(SGD.) EDUARDO T. MALINIS
Insurance Commissioner