Introduction
On 6 August 2024, the Insurance Regulator of Cambodia (“IRC“) issued Guideline No. 041 on Reinsurance Diversification (“Guideline“), aiming to ensure the safety and effectiveness of risk management and risk prevention for insurers.
The key features, among others, are outlined below.
Key Features
Reinsurance Diversification
Pursuant to the Guideline, insurers shall transfer any risk that exceeds its risk tolerance to a foreign reinsurer. The Guideline sets out the maximum level of risk transfer per agreement according to the credit rating or equivalent credit rating of the foreign reinsurer.
Implementation of the Guidelines
In the event that a foreign reinsurer has different credit ratings under different credit rating agencies, the insurer shall apply the lowest credit rating when implementing the table above.
Insurer shall seek approval from IRC on any change or retention of a foreign reinsurer in the event that the credit rating of the foreign reinsurer falls below the minimum level as set out in this Guideline within 10 days after receiving the information on the downgrading.
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Disclaimer
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