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The Philippines’ Insurance Commission (IC) has issued new rules for reinsuring policies issued by firms currently under liquidation or rehabilitation.
According to a circular issued by the commission, conservators, or receivers of insurers under rehabilitation, may choose to reinsure outstanding policies. Meanwhile, those overseeing a company’s liquidation are required to reinsure these policies, reported the Philippine Star.
Furthermore, the conservator, receiver, or liquidator can enter an assumption reinsurance agreement (ARA) or an equivalent with reinsurers as a substitute for reinsurance, provided the IC gives its approval.
IC data shows that a total of 44 insurance companies have been subject to conservatorship, receivership, and liquidation as of November 2016. In recent years, several insurance companies have not been able to comply with the gradually increasing capital requirements set by the Insurance Code, which aims to improve the financial health of insurers. Five general insurers were ordered to close, while four have undergone mergers.
