IC Circular Letter No. 23-94 (1994)

(NAR) VOL. 5 NO. 4 / OCTOBER - DECEMBER 1994

[ IC CIRCULAR LETTER NO. 23-94, December 01, 1994 ]

INVESTMENTS UNDER THE INSURANCE CODE

Pursuant to the provisions of Chapter III — Title IV on Investments under the Insurance Code, the following general guidelines are hereby promulgated: I Investments Which Do Not Require Prior Approval of this Commission The following investments which qualify under the following Sections of the Insurance Code, provided they are in accordance with the conditions and limitations set forth therein, do not require prior approval, to wit: - first mortgage loans Sections 198 & 199 - Policy loans (for life companies) - collateral loans - purchase money mortgages - real/personal property acquired by 200 (1) reason of loan - lot and buildings for office use 200 (2) (a) to (1) - bonds of RP government and government owned or controlled corporations and entities - bonds, preferred stocks and common stocks of "solvent" corporations as the term "solvent" is defined in the Code - trustees' and receivers' obligations: equipment trust obligations and securities issued by enterprises registered under R.A. 5186 as amended - For life companies only: Section 202 i) housing projects; and ii) other income-producing real estate - Securities issued by enterprises 204 & 205 registered under R.A. 5186 (Investments Incentive Act) - Life companies may invest their legal 206 policy reserves in any of the classes ofinvestments mentioned in Sections 198, 200, 201 and 202.

II

Investments which Require Prior Approval of the Insurance Commission: - such other securities as may be approved 200 (2) (j) by the Commissioner - equities of other financial institutions 201 - short term debt instruments - securities issued by any registered 206 enterprises in such amounts as may be approved by the Commissioner (reserve and surplus investments of life insurance companies) - only investments in excess of the 191, 192, 193 204 & 20%-20% limitations set forth therein 205 - transactions between a controlled insurer 291 and any persons in its holding company system like loans or extension of credit or investments involving 5% or more of the insurer's admitted assets as of the 31st day of December next preceding. For life insurance companies all investments not requiring prior approval as enumerated in Item I above are considered/qualified as reserve investments while investments enumerated under Item II may, upon prior approval by the Insurance Commission, be considered/qualified as either reserve or surplus investment. For non-life insurance companies: only investments made under Sections 200 and 204 which do not require prior approval are considered/qualified as reserve investments. Investments made under the following Sections are classified as surplus investments: Sections 198, 201, 200(2)(a) (in excess of 20%-20% limitation), 205 (in excess of 20%-20% limitation). All other investments enumerated under Item II may, upon prior approval by Insurance Commission be considered/qualified as either reserve or surplus investment. This supersedes Circular Letters dated May 20, 1985 and December 24, 1986. Adopted: 1 Dec. 1994

(SGD.) ADELITA A. VERGEL DE DIOS Insurance CommissionerSource: Supreme Court E-Library