Philippines' Insurance Commission imposes new risk charges around infra project investment

Written by Adam Cadle

18/11/2024

Philippines’ Insurance Commission has imposed new risk charges relating to investments in infrastructure projects by re/insurers under the Philippine Development Plan (PDP).

The risk charge of equity instruments is 9%, while the charge for debt instruments is 6%. However, the Commission said it may impose a lower risk charge for debt instruments if the same have high credit ratings given by an external credit rating agency.

Said investments shall require the prior approval of the Commission. A request shall be made in writing, accompanied by the requesting company’s board resolution approving the proposed investment, its latest audited financial statement, and a copy of the Government’s approval of the project. The request shall also be accompanied by financial projections, accompanied by stress testing and/or scenario analysis reports, to assess the investing insurer or reinsurer’s resilience against severe but plausible macroeconomic stresses affecting the infrastructure project or activity.

For life insurance companies, the total allowable investments in infrastructure projects under the PDP shall not exceed 40% of their admitted assets, respectively, per their latest approved annual statements.

For non-life insurance companies and professional reinsurers, the total allowable investments in infrastructure projects under the PDP shall not exceed 40% of their respective net worths, per their latest approved annual statements.

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