oRepublic of the Philippines

Department of FinanceINSURANCE COMMISSION

107 I United Nations AvenueManila

Iiead OIIice:

P. O. Box 3589 Manila

FAXNo.522-14-34

Tel. Nos. 523-84.61 to 70

E-mail : oic@i-manila.com.ph

! 24 August 2001

CIRCULAR LETTER fio. I1@1

To .: All Insurance Comparies,{R'einsurancp Brokers LicensedTo Do Business in the Philippines

SUBJECT : Documents Required of Insurance Companies/Reinsuranee Brokers toAccompany Requests for the Certifications to be issued by theInsurance Commission relative to Foreign Exchange Applications forRemifiance ofNet Profits, R*insurance Premia and Payment of LossClairirso:

In connectioil with the Circular Letter- Series of 2001 to all Authorized AgentBanks (AABs) and Their Subsidiary/Affiliate Forex Corporations, dated August 9,

2001, of the Bangko Senffal ng Pilipinas, superseding MAAB, dated June 27, 1980, allinsurance.companies/reinsurance brokers are hereby advised that the followingdocuments should accompany requests for the certifications stated in the said AABs :

I - Net Prolits of branches offoreign duthorized insurancecompanies -

L Swom statement of the authotized officer ofthe applicuttcompa$y attesting that the rei'niffance shall be from netprofits to be remaining bn hand after retaining uriimpaired the

following requirements ofthe Insurance Code :

r) The statutory depositb) The mmgin of solvency andc] The legal resenre firnd

and a sum suflicient to pay atl net losses reported or in the courseof settlement and all liabilities for expenses and taxes.

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Copy ofthe latest ardited finanbial statement ofthe applicant.

Reinsurance Premia - ,

Copy. of the statembnt ofheinsurance Account prepared bythe applicant.

Parti culars of the be atylfac ultative placement covering the

remittance.

Nbtice of demand and/oi-statement ofreinsurance premium

due given or prepared by the beneficiary.

Sworn statement of aresponsible official ofthe applicant

cErti$ihg that it has withheld th6 required taxes inurroidanm dvith the Internal Revenue rules and regulaiions.

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5. A written authorization to remit premia issued by the ceding

insurance compary in favor of a resident reinsurance broker,

in case the latter is applying for or in hehalf of said coinpany

6. Copy ofthe insurance policy inba5e of facultative placements.

m - Payment of Clairns for Losses -

1. Copy of the Irotice 9f demand or statement of account'

2. Particulbrs' of the ieatyffacrltative placement.

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3. Copy of the marine hull/caigo policy and survey report

, in case of marine losn claims-.

ru - For all other cases of insdrance and/or reinsurance payments '

All pertinent documents to establish the legitimacy/accuracy oftheamount sgught to be remitted.

In any of the above caser, the follor*'ing should likewiee be submifred :

l. Copy of the appropriate CBP application form for the purihase of

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foreign exclange, duly accomplished and notarized.

?. copy ofihe certificatio, or* independant certified publi, accountant.. in accordance with circular LettLr dated ribruary 10, 1975 of this

Commission.

A copy of the Bangko Senhal ng Pilipinas Circular Letter- Series of 2001 toAll Authorized Agent 'Banks" (AABs) and itreir Subsidiary/Afliliate Forexcbrporations dated August 9, 2001, is attached for ready reference.

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Encl. : #s

Insurance Commissioner

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Bangko Sentral ng Piiipinas

MAYNILA, PITIPINAS

oFTrcE oF TErEnmur,v corrynnibnslrpguttirs tonq anm ExANm{ATIC}H sECToR

CIRCUI-{R- mrrm.SffiIES of 2001

TO : AtL AtlTi{ORIZmAGH\iT BAIi{-IG (AABE} AI{DTIfiIRSIJBS IDIART]/AFTILIATE FDREX CORPORATIOI\ffi

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l^^.,-^-+^-,r1ll+l.LllFll1 rur !uljr SUrLkl,tlLt?.tA [IlF iin.ii. Lij. Iiiiiiiiiiuiit iiUUiiiittrIiti:Urcre quireme ntr that AABE" *#o, the ir. sub si di ary/affi I i af e forex c orporati onsshall require from'residEnts purchasing foreign exchange for non-hadepurToEec. r

This Circular-Letter seryes to clanfy Sestion 2 of CifeularNo. 1389s, 1995, a-q amended.

ALBERTOV. RE'TESDeputy Governor

'August 9. 2001

DOCUMENTATION REQUIREMEIiTS FOR_ THE SAIE OF FX FORN{-i}.I-TRAD E P [iRP T} SEiJ

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Travel Frurds (Only for permanentresidents of the Philippinesi

Educational Expensee/StudentMaintenanee

Corresponclence StudiesAABs ma_y sell foreign+xchange to cover iuitirnfees for correspondencestudies rvhich shall hedirecily remiited to thecorrespondence school.

Ivledical Expens*-E

-uocrrnmlrys ng+ruREu

1. Applieant's paxErort2, Passenger ticket

1. ,gtaternsnt of emsllm*nt oraeceptance by the sciroolalroad shorving that thestudent is rt'orking sr atlautto work for a degree or taking atechnology course;

1 Rl-lrnnl lrillo/gtat+nn+*f< nf n**+rrnt

covering tuition and other schoolfees; and

3. Sworn statement of the studeriithat he does net enjoy ncholarship/g'aniife I I ewshipristipr end atdior i s

not gainfully e mployed.

1. Proof of admission or enrollmentin correspondence. school;

t. Descripiian rf curriculum cours*s3. Statement of iles, duee or totalr co*t ofthe couree; and

4. Schedule of paymenilbillingsfrom the school ahroad.

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l. C*rtificatior fi'om a locsl doctoreertiS'ing the need for thepatient to *nrl+rgo m+di+altreatrnent atrroasl and the non-availabilif af sueh h'eatmeni

" locally; and2. Estima.te of cost of medical/

hospital treatment abroad/state-ment of account wittr thehos.pital,tbills of e4penses.

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5) Support ofDependentsAbroadAABs may sell foreign exchangecovering the monthll, livin_tallor+'atee abroad of a ehild uoimore than 2l yems of age, ,EFouEe

or parent of aPhilippine resident,

6) Emigrants'assets

1. Consular certifieafe or its*-quivalent documsnts taFrDvE that the dependentis residing abroad and isnot gaint'ully employedin the counky ofresidense abroarl;

2. {-lertiijed true cepy of hirthcertificate" marriage confu'acladaption papet's, r+,hichev+r isapplicatrle, to prove thatdependent is the wife"husbandchild ar parent of the remitter

' applicant; and3. Proof that remitt+r is a resirlent

ofthe Philippines.

!.. Preaf efpernnanent residenceof emisrurtibeneticiarl,abraadl

2. Proof of ownership oftheassetis by emi granttbenefi c-iary abroad;

Fayment of applicahle taxes;In case of income ltom realpropertien" a stetement afrentals/income earned, certi-fied by an independent CIA;In ease oftranstEr ofproceedsof capital assets. the AABsnhall aelditionalll'- require.a. copy ofdeed ofsaleb. If the subject ofthe sale is

real *state, pl'oaf ihat thekansaction rvas registeredwith the Regirter ofDeeds;

In case of capital transfer oftestale and intestate inherit-ance anrl legacies;a- copy ofcourt order

approving the partitionanr,{ dish-ibuiian of entate;

3.

4.

_5.

6,

b. copy of the exhqjudicialsettleni*ut atd putitiondulv registered rvithRegister of Deeds,

7. For hansfsr ofproceeds oflife insurance benetits, proofofpayment of the proceedsofthe policy;

8. For rernittance ofproceedsof sales ofp*rsonal pro-perty, copy ofdeed ofsale;

9. In case ofhansfer ofpro-ceeds ofsale ofshares ofgt*ck. A.r-Bs shall n!s*require:a. i-1oF-v afthe csnfirm-

ation af rale af auth-orized necurities dealer/broker ot the issuinqcorporation:

b. Certification of stocktransfbr agent s horr"ingthe name of the issuingcorporatiori,date ofissuing pm value, coutof acquisition, and thatthe shares of ntockovrned by the bene{i-eiary have been soldat the price indieaied_

10. In case ofretirementbenefrts, AABs shall, inaddition to Items I to 4,also require:a. Evidence ofpayment

of retirement h,enefitn;fr. It-ihe remittance will

be done in five (5)years or over alterreceipt ofthe retire-ment pay. evidenceregarding custodl, ofthe firnds.

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7) Salary'offoreign*4pah'iates

L Producers'Share/TVFilm RentalsThe producers' orf,oreign licensore'contractual shffre whichshall not exceed 609/o ofthe net proceeds less localdi stritruti on erpenses. fromthe distibutioru'exhibitionof zuch films importedwithout foreign exchangepayrnenLr, may be remiiiedin full, net of ta.x+s. T1.rtilm rentale rlay als* beremitted in full based anraten stipulated in theindividual conhactsor agreements.

9. Commissions on Exports dueFareign Age*ts

1. Certification of employeron the amount of compe-nstriicfl paid to th* f*reignnaiionais ntating whetherthe sarne had been paidin foreign exchange or inpes*c, and if in foreignexchange, pr.oof that theforeign exchange wasnslil for FBE+F ta AAEs;

1. Copy ofthe witholdingta-:r receiPts unless*xeurpt by lauq

3, Photoeopy of the ACRand M0LE AlienEmployment Permit ofthe foreign national.

1. Statement ofremittableshme rental certified

hy an independent tlPA;2. Proofofpavurent of

witholding tax.

Agency agreementExp+rt Declaratian arExport PermitExport Bills of ladingand ftrvoicesStatement ofAccount/InvoieesComputation showinghow the amountsought to be remittedwas an'ived aI; and

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10) Freight Chariges ou ExportsPhil. elporters may buy foreignexchange from AABs ta payfor freight charges due shippingcompanies, whether foreign orFilipino-orvned, on export shipments.

11) Advertisitg Casts

l2) Subscriptions

13) Charters and Leaseu. of Vessels Domestic operators

sr lessees of foreign-ownedvessels may remit foreignexchange for charter fees orl*ase rcttals.

6. Certification fromrecei'"'ing bartk coucer-ned indicating th*amount of export pro-ceeds *'hich have beensold for FEECIB.

1. Freight conkact. If noformal confuact ofaffreightment has beenexecuted, a duly notedfreight bilUstatementof account may bepresented;

2. Export declaration;3. Sdes invoice;4. Bill oflading5. Bills/Statements of

account on fr+ightcharges.

1. Copy af advertisingaEreementl and

?. Original statementof accounts or trillsor invoices,

3. Clippings ofappro.riate page ofpubli-cations or the adver-tisement.

1. Subscription a.gree-

ment2. Statement of accoilnt

or bills

1. Cliarter or Leaseconkact ruithout optionto purchase

2. BillingsiStatement ofaccount from the owneror lessor duly certi{iedby an itdependent CPA

3. Proofofpayment ofwithohling ta:i

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14) Mernlrership dues alrdregish'ation f+esRemittanee to be made directlyio the asrosif,tir,:nr atroad

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15) Port DisbursemeiltsPort disbursements abroadsf aircrafts and vesnels ofPhil. Regisky or charieredileased by domestic operatorsfor fuel, sliips's stores sndsimilar suppli es, harbor/airfiekl feer.tonflage, repair anrlmaintenance

16) Mail fees/ International settlementof accounts for telegraph, telegram,radio, saiellite and other communi-cation facilitiee

l;'i Sulvage fhe*

18i Income taxes due ia Fareign Gor.ern-6^-4-rutlttiJIncome taxes due to tbreign Gcvem-mert fi'om foreippr riationals wifhspecial ternporary visa and h{0LEemployment permit, ifrequired byIax', *'ho are employed in thp phil-ippines and whose entire compen-sati on (salar1,, allowances, bouusesand other fringe benefitr) is paidfor in foreign exchange Inward-remitted into the philippines.

I 9) Sen ices.llieenseJConsultancvFeex,&Ianagement FepeForeign exchange pa.-l'mente forma*agem *n#senri *el*+nsultancyconiracts ruith tbreign tjrms orindividuals or residents not involvingtechnology tranrfer may be sen icedbyAABs.

1. Pro+fafm*mbershipiir the f*r+ign or inter-national association.

l Eillings fcr m+n-rtier-rhip dues/regiskation fees

1. Copy of conh.act oragreement;

2. Duly certilied tru+ copyof statement of accounts/bill#invoices (va.ifiedagainst original copy)

1. Copy ofconkact or sgree-ment whenever applicable

2. Duly certilied statementsof accounts/bi I I n,invoicen

i. ilt:p5,'$f cilti'ri=aet f$rsalvage semicEs

2. Ihrly eertified siatementof accounts./bi I lsiinvo i ces

3. Proofofpayment ofapplicable ta':es

1. Certified kue capy of[.{#LE-appraved con-bact of emprloyrnent;

2. Certifi+d true eopry ofIncorne tax return cover-ing the Income tax pay-rnent "eought to beremitted.

1. Copy ofpertinentagreement-

2. Statementr(lomputationof tles due; and

3. Proof ofpayment ofsJrplieabl e ruitholdingta:res on feer to beremitted.

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20) Retainers' feesForei.gn exchange payments byresi defl ts ta foreign protlssional sacting as liason, counsel. agent onrepresentative-abrnad may treSen'iced by AAB

2 1.i Reiffitu atce prerniunu'ciainrs iorlosser and other payments ofinsurance campani en/trrokers

22) Freight Charges on Imports

23'!Net Passenger Revenues ofForeign AirlinesForeign airlines authorized todo husiness in the Philippinesrnay remit abroad their pesorevenues, net of commissionspaid,pesa commissions earnad,commissions earned and ticket

sales in foreign exchange.Agency commissions shall bepaid in the currencv irrwhieh ihe tickeis are sold.

1. Copy ofthe agreement;and

2. BillingsrTnvoices fi'oilrthe henefieiarv

i. Original copli of certitiea-tion fom the Insurance(-lsmm isni onsr statingamong othern, that theamount is due urel pay-able to the beneficiary.

2. trn case ofremittance ofpayment of claims forlosses, AABs shall alsorequire copy ofReportofDamage on SurveyReport rendered by anadjustor on MarineSurreyor and a copyof tlre Notice of Dernandfor Paynrent ofLoss.both verifipd by OIC.

L Certified copy ofBillof Lading and FreightInvoiee

2. Certified copy of LClSales Confirmation ifshipment is without LC

l. Copy ofthe Gene.ralSales Ag+ncy Agreementor certified copy oftheBilateral Air,{gree-ments;

2. Statement ofReceiptsand Disbursements forthe period correred by

.the remittance, dulycertified by an iudepe-dent CPA;

3, Proof ofpayment trfthecorresponding taxes;

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?4 ) Freiglrt Callectioru or.ShippingCompaniesShipping agents may rernit totheir principals abroad freightcollections in pesos. net ofagencyf+es, eourfirissions enrt ilist,urse-

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ments made in behalf of theprincipals;

35) Transfer ofsavings of expahiatesTransfer of savings of e4pahiateemployee may be allowed in ftll,net ofiaxes, lvhen ihe +onhact ofemployment has been concludedar flre employee has treer tsanstb-tredto ather oflices abroad r

4. Statement of grossPhilippine billingcon*upandi*g to theperiod covered by theremittance; and

5. List of non-rcxidentpassengers who paidtheir tickets in pesos, ifany, and lirt of pass-engpr tickets refunded.

l_ Copy of AgeneSr.{greenrents;

?. Statement ofRevenuesand E4penses dulycertified by an indepen-dent t-lPA;

3. Proofofpavments ofcorresponding tmes

4. Detailed statement offreight receipts indica-ting natr* ofpnvorr.bills of, lading. officialreceipts, data andamount ofpayment.

l. Contract of employment;2. Certification of the

employer that the con-baci has been terminaiedor concluded;

3. Staternent of salaries paiddru"ing the validig afilreconkact of employment;

4. Transcript ofbankdeposit account perti{iedby the bank afticial. Ifihe amount to be remii-ted comes fom newdeposits {less than oneyear p lacement), inform-ation regarding thesourceg oft-unds,supported by appropriatedocuments;

, 5. Proofofpayment ofIncome taxes.

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1. Statement/computationofthe Ravalty/fee dulycertifi ed by independentCPA

?. Proofofpayment ofwitholding taxes

3. Regirtrati onr(-lertifi cateof f-lompliance issued byDo eum * ntati on lrrforma-tion TechnologyTransfer.

26i Royalties/Fees

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