Philippine pension fund ups rating requirement for reinsurers

July 10 2018 by InsuranceAsia News Staff

Companies wanting to join the Philippines’ Government Service Insurance System (GSIS)’s bidding for reinsurance contracts will now be required to have a credit rating of at least B+.

The state pension fund announced in a statement that potential bidders are now required to submit proof of a credit rating of at least B+ from A.M. Best.

Securities or panels of reinsurers — foreign or local — should also be rated at least “A”.

It is important to set a minimum credit rating as a requirement for potential bidders of reinsurance contracts so that the fund will be assured that reinsurers can meet their financial obligations should they fall due, said GSIS president and general manager Jesus Clint O Aranas in the statement.

Under AM Best’s Financial Strength Rating guide, a ‘B+’ or ‘B++’ rating is assigned to firms that have a ‘good’ ability to meet their ongoing insurance obligations.

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