Guidelines for Investing in Real Estate Investment Trust
The Insurance Circular Letter No. 2019-27 outlines guidelines for insurance companies, mutual benefit associations, and pre-need companies in the Philippines regarding investments in Real Estate Investment Trusts (REITs). It specifies that investments in publicly-listed REITs are permitted as admitted assets, provided they have prior approval from the Securities and Exchange Commission. The circular sets limits on the investment amounts, such as a maximum of 10% of Total Admitted Assets for life insurers and 20% of Net Worth for non-life insurers, with pre-need companies limited to 15% of their total trust fund. Additionally, these investments are subject to a risk-based capital charge of 25%.
Law Information
- Reference Number
- Insurance Circular Letter No. 2019-27
- Date Enacted
- Category
- Other Rules and Procedures
- Subcategory
- Insurance
- Jurisdiction
- Philippines
- Enacting Body
- Congress of the Philippines
Full Law Text
June 21, 2019
INSURANCE CIRCULAR LETTER NO. 2019-27
| TO | : | All Insurance/Reinsurance Companies, Pre-Need Companies and Mutual Benefit Associations Authorized to Transact Business in the Philippines |
| SUBJECT | : | Guidelines for Investing in Real Estate Investment Trust |
Pursuant to the provisions of Section 202 (j) of the Insurance Code, as amended by R.A. No. 10607 and IC Circular Letter No. 08-2012, investment in real estate investment trust (REIT) shall qualify as admitted asset for insurance companies and mutual benefit associations (MBAs) and allowable investment for pre-need companies provided that:
1. The REIT had the prior approval of the Securities and Exchange Commission and shall be limited to publicly-listed REITs only;
2. The aggregate placement based on the company's latest synopsis of annual statement, do not exceed 10% of Total Admitted Assets for life insurance company or mutual benefit association and 20% of Net Worth for non-life insurance or professional reinsurance company;
3. For the pre-need companies, the investment shall not exceed fifteen percent (15%) of the total trust fund. This shall form part of the Other Investments with the corresponding limits provided under Section IV of IC Circular Letter No. 08-2012, dated 15 March 2012; and
4. This shall be subject to a risk-based capital charge of 25% for both life and non-life insurance companies pursuant to IC Circular Letter No. 2016-68 on Amended Risk-Based Capital Framework. (See Annexes of Circular Letter No. 2016-68, on Real-Estate or Property Investment Trust).
Please be guided accordingly. cAaDHT
(SGD.) DENNIS B. FUNAInsurance Commissioner
Cite This Law
Guidelines for Investing in Real Estate Investment Trust, Insurance Circular Letter No. 2019-27, Jun 21, 2019 (Philippines)
Guidelines for Investing in Real Estate Investment Trust, Insurance Circular Letter No. 2019-27 (Phil. 2019)
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