Newsletter
MINISTRY OF FINANCE REQUIRES PROPERTY INSURERS TO ESTABLISH FRONTING RESERVES
The Ministry of Finance (MOF) requested property insurers to establish fronting retained reserve ratios before the end of July and seek the approval by the MOF. The reserve ratios are intended to prevent property insurers from ceding most of their insurance business to foreign insurers. The current fronting practice has caused the domestic property insurance market to shrink, premiums to flow overseas, and an decreased insurance capacity. The MOF's decision will possibly affect the premium rates and costs to companies for purchasing insurance policies as well as changes in the profits and losses of property insurers.