Guideline on Reinsurance Diversification

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.

If you have any queries on the above, please feel free to contact our team members below who will be happy to assist.

For more information, click here to read the full Legal Update. 


 

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Please note also that whilst the information in this publication is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as legal advice or a substitute for specific professional advice for any particular course of action as such information may not suit your specific business and operational requirements. You should seek legal advice for your specific situation. In addition, the information in this publication does not create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on the information in this publication.

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