The Insurance Regulator of Cambodia (“IRC”) issued Prakas No. 044 on Rules and Guidelines for Reinsurance ("Prakas 044") dated July 12, 2024. Prakas 044 applies to general insurance companies, life insurance companies, reinsurance companies, and microinsurance companies operating in Cambodia.

Prakas 044 specifies that insurance companies must obtain prior approval from the IRC after receiving a resolution from their board of directors for both offshore and onshore reinsurance agreements and reinsurance policies. After the approval, any changes to these reinsurance agreements or reinsurance policies also require IRC approval: within 15 days for reinsurance agreements and within 30 days for reinsurance policies, following the board resolution.

Prakas 044 stipulates that insurance companies must manage risk by adhering to limits based on a basic model for each risk and event related to their insurance products. They are prohibited from issuing policies with amounts exceeding their insurance retention thresholds unless covered by reinsurance.

• Reinsurance Agreement: Insurance companies must obtain prior approval from the IRC for preparing reinsurance agreements after receiving a resolution from their board of directors. For any upcoming agreements, insurance companies should apply for this approval before November 1 each year or concurrently with their insurance product applications. Insurance companies may transfer excess risk beyond their insurance retention thresholds to reinsurance companies, whether offshore or onshore, as long as it complies with the terms outlined in Prakas 044.

  Reinsurance Policy: Insurance companies are required to prepare their reinsurance policies and submit them to the IRC within 30 days of the board resolution. Additionally, they must review and evaluate their reinsurance policies at least once every three years.

Both reinsurance agreements and reinsurance policies must be prepared in accordance with the terms and conditions set forth in Prakas 044. The IRC also requires insurance companies to submit a report summarizing their reinsurance activities by January 15 of the following year.  

Under Prakas 044, if there is non-compliance, the IRC allows insurance companies to explain their situation before any disciplinary sanctions are imposed. Please note that sanctions for violations of Prakas 044 will be in accordance with the Law on Insurance and other relevant regulations.

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.