The Insurance Commission (IC) has tightened the rules on the repatriation of net profits or dividends of foreign insurance and reinsurance companies doing business in the Philippines.
Insurance Commissioner Emmanuel F. Dooc issued Circular Letter 2015-09, prescribing additional requirements for applications of insurance and reinsurance companies for remittances abroad of net profits or dividends.
Under the new circular letter, applications for the sending overseas of the net profits or dividends must be supported by the following documents:
A sworn statement of the authorized officer of the applicant company attesting to the fact that the remittances shall be from net profits remaining on hand after satisfying the requirements of the Insurance Code regarding statutory deposits, risk-based capitalization, and full policy reserve funds inclusive of loss reserves and liabilities for expenses and taxes; and a copy of the latest audited financial statements of the applicant company.
The additional requirements for sending overseas the net profits or dividends were adopted to ensure that foreign insurance and reinsurance companies continue to comply with capitalization and liquidity requirements.
The new circular letter also requires a monthly consolidated report on foreign exchange receipts and remittances from insurance and reinsurance companies doing business in the Philippines.
The monthly consolidated report on foreign-exchange receipts and remittances is required to facilitate the contracting by insurers in the Philippines of reinsurance policies abroad, the premiums for which are paid for in foreign currency.
Before the effectivity in 2010 of Circular Letter 20-2010, insurers in the Philippines which need to purchase foreign currency to pay premiums on reinsurance contracts were required to secure a certification from the IC that the purchase of such foreign currency is, indeed, necessary.
But Circular Letter 20-2010 and the new circular issued recently now only require a monthly consolidated report on foreign-exchange receipts and remittances to be submitted within 15 days from the end of the month being reported.
David Cagahastian