Hong Kong Regulations

INSURANCE COMPANIES (GENERAL BUSINESS) (VALUATION) REGULATION - SECT 9

Premiums receivable

(1) The value of any gross premiums receivable in respect of contracts of
insurance (not being reinsurance contracts) entered into by an insurer after
deducting the commissions of agents or brokers payable thereon and the
necessary provision for bad and doubtful debts in respect thereof must be not
greater than 25% of the gross premium income (where the relevant financial
year is a period of 12 months) or the adjusted  gross premium income (where
the relevant financial year is not a period of 12 months) of the relevant
financial year after deducting the commissions of agents or brokers payable on
the gross premium income or the adjusted  gross premium income, as the case
may be.

(2) The value of any gross premiums receivable in respect of reinsurance
contracts accepted by an insurer after deducting the commissions of agents or
brokers payable thereon and the necessary provision for bad and doubtful debts
in respect thereof must be not greater than 75% of the gross premium income
(where the relevant financial year is a period of 12 months) or the
adjusted gross premium income (where the relevant financial year is not a
period of 12 months) of the relevant financial year after deducting the
commissions of agents or brokers payable on the gross premium income or the
adjusted gross premium income, as the case may be. (Enacted 1995)