Part Two: Organization

Part Three: Operations

Part Four: Interpretation and arbitration

Part Five: Final Provisions

Annex A. The establishment of agreed reinsurance cessions in favour of the Asian Reinsurance Corporation

Annex B. Immunities and privileges accorded to the Asian Reinsurance Corporation by the Governments of Member States

Appendix

• Concerning immunities, privileges and facilities accorded to the Asian Reinsurance Corporation by the Host Country
• Rules for election of Chairman and Vice-Chairman and appointment of General Manager
• Rules for payment of subscription for shares by the founding members
• Rules of Procedures
• Financial Regulations

RECOGNIZING the important role of insurance in the development of their national economies, both as provider of economic security and as generator of investible funds;

AWARE of the fact that their national insurance markets, in order to meet the rapidly growing need for insurance cover generated in their countries, make extensive use of foreign reinsurance services;

CONSCIOUS that the heavy outflow of insurance business, in the form of outward reinsurance covers, results in a serious expenditure of foreign exchange for each Asian and Pacific country concerned and for Asia and the Pacific as a whole;

DESIRING to utilize the regional acceptance capacity to the maximum and to foster the retention in Asia and the Pacific of a large part of reinsurance business which at present flows outside the region to the international reinsurance centre;

TAKING NOTE of the resolutions 42/III(1972) and 7/IV(1973) of the United Nations Conference on Trade and Development (UNCTAD), inviting, inter alia, the developing countries to increase regional co-operation in the field of reinsurance;

HAVING CONSIDERED the various forms of reinsurance cooperation, such as intercompany arrangements, concerns and pools, as well as intergovernmental institutions;

DECIDE HEREBY to establish an intergovernmental regional Asian Reinsurance Corporation which shall be governed by the provisions of the present Agreement and its Protocols and shall perform the following functions:

1. The Corporation shall operate as a professional reinsurer accepting business from the insurance markets in member States as well as other markets of the region and elsewhere, and shall retrocede its surpluses after net retention with priority given to the national insurance and reinsurance markets of the member States.
2. The Corporation shall invest a sizeable proportion of its funds within the region, provided that such investments meet with the requirements of sound insurance techniques.
3. The Corporation shall also serve as regional centre for the collection of insurance information and the development of expertise in insurance and reinsurance, to be put at the disposal of the national insurance markets of the member States.
4. The Corporation shall provide technical assistance to the national insurance markets of the member States.

2. The Corporation shall possess legal personality and, in particular full capacity to contract, to acquire, hold and dispose of property, and to institute legal proceedings.

3. In its relations with the Governments of member States the Corporation shall benefit from a special status as defined by the present Agreement and by annexes A and B which form an integral part of the present Agreement.

4. In its relations with ceding insurance companies and, in general, those arising out of the transaction of its normal reinsurance functions, the Corporation shall be subject to appropriate national legislation and to the jurisdiction of national judicial and administrative authorities.

2. Membership in the Corporation may be acquired pursuant to the provisions of Articles XXVI to XXX of the present Agreement.

2. Subscription of the shares of the capital stock shall be made only by Governments of member States. However, each Government may authorize one of its national institutions to participate in the purchase of the portion of the capital stock allotted to it.

3. Each member of the Corporation shall subscribe and pay up five hundred shares of a total par value of five hundred thousand United States dollars, of which half may be paid in local currency. The local currency capital of the member Government shall be convertible and remittable in the required foreign currency whenever the Corporation calls for it. Members in the category of Least Developed Countries may, if they so wish, acquire membership by subscribing and paying up the entire amount of five hundred thousand US Dollars in their local currencies.

4. The Council of Members may decide to increase, in the light of increases in membership of the Corporation, or for other reasons, the initial authorized capital stock. Such decisions shall require a two-thirds majority of the members present and voting. The Council of Members shall determine the issue price of the subsequent shares to be subscribed, and the date, place and mode of payment.

5. Shares shall not be pledged, or encumbered in any manner and, in case of withdrawal of a member, its shares shall be transferred to the Corporation, and the repurchase of these shares shall be covered exclusively by the provisions of Article XXII of the present Agreement.

6. The liability of each member shall be limited to the amount of shares held by that member.

2. The status, privileges, immunities, and facilities, to be enjoyed by the Corporation in the territory of the Host Country shall be the subject of a host country agreement between the Corporation and the Government of the Host Country, to be approved by the Council of Members. It shall correspond to the provisions contained in the appendix to the Agreement; pending the conclusion of the host country agreement, the Government of the Host Country shall apply to the Corporation the provisions contained in the said appendix.

2. In the Council, each member State shall designate one representative (hereinafter referred to as the Representative), who shall hold office until revoked by his Government and replaced by another representative. When nominating its Representative, each member shall give due regard to the high competence in reinsurance and in financial and economic matters required for this office. In the Council each member shall have one vote. By informing the Chairman in writting any member may authorize any other member to represent its interests and to cast its vote at any meeting or meetings of the Council, provided that no one member may be authorized to cast the vote of more than one other member.

3. The Council shall elect from among the Representatives a Chairman and a Vice-Chairman, who shall hold office for a period of two years. The Chairman and the Vice-Chairman shall be eligible for re-election.

4. The Council shall hold an annual regular session. The session shall be held at the headquarters of the Corporation, within nine months after the closing of each financial year to approve the Annual Balance Sheet, the Revenue and the Profit and Loss Account, the Report of the Management Board and the Report of the Auditor.

5. A notice convening the annual regular session of the Council shall be sent by registered air mail, not less than six weeks prior to the date of the meeting. Accompanying the notice shall be a copy of the Balance Sheet, the Revenue and the Profit and Loss Account, the Report of the Management Board and the Auditor's Report.

6. In addition to the annual regular session of the Council, special sessions may be convened by the Chairman of the Council, or the Vice-Chairman at the request of the Chairman, or by the General Manager.

7. Special sessions of the Council shall also be convened by the General Manager upon request of one third or more of the members of the Council.

8. Notice of a special session of the Council, together with the provisional agenda, shall be communicated to the members not less than two weeks before the date of the session.

9. The meetings of the Council shall be presided over by the Chairman or, in his absence, by the Vice-Chairman or, in the absence of both, by a Representative elected by the Council to preside.

10. The quorum for any meeting of the Council shall be the presence of more than half of the Representatives.

11. Decisions of the Council shall be taken by a simple majority of members present and voting, except for cases in which a two-thirds majority is required in accordance with the provisions of Article VII of the present Agreement. The Presiding Officer shall be eligible to vote, and in case of a tie vote may additionally cast the deciding vote.

12. Within six weeks after the entry into force of the present Agreement, the inaugural meeting of the Council shall be convened by the Executive Secretary of the United Nations Economic and Social Commission for Asia and the Pacific.

1. Appoint the General Manager, the Assistant General Manager, the Corporate Secretary and the External Auditor, in accordance with the provisions of Articles X to XIII and determine the terms and conditions of their services;
2. Define guidelines for the investment policy of the funds of the Corporation;
3. Define guidelines for the acceptance, retention and retrocession of reinsurance business by the Corporation;
4. In consultation with the General Manager, adopt rules and regulations for the staff of the Corporation;
5. Take such other action as may be appropriate, to implement the present Agreement.

1. To appoint the General Manager, the Assistant General Manager, the Corporate Secretary and the External Auditor;
2. To approve the annual Balance Sheet, the Revenue and the Profit and Loss Account, the Report of the Management Board, and the Report of the Auditor;
3. To decide on the allocation of the net profit, the establishment of statutory reserves and transfers to and from these reserves;
4. To increase or decrease the authorized stock capital;
5. To terminate the operations of the Corporation;
6. To recommend to the member States amendments to the present Agreement or propose its termination.

1. Recommendations to member States regarding amendments to this Agreement or its termination;
2. Termination of the operations of the Corporation;
3. Increase of the authorized stock capital;
4. Appointment of the General Manager and termination of his contract.

2. The Management Board shall instruct the General Manager and the Assistant General Manager on how to direct the affairs of the Corporation in conformity with the general directives of the Council. The Chairman and the Vice Chairman of the Council shall represent the Council in the Management Board. The Management Board and each of its members shall be responsible to the Council.

2. In the performance of their duties, neither the General Manager, nor the Assistant General Manger, nor the Corporate Secretary, nor the other members of the staff of the Corporation shall seek or receive instructions from any Government or person or authority other than the Council or a person acting on behalf of the Council under the terms of the present Agreement. They shall refrain from any action which might reflect on their position as international officials responsible only to the Council. Each member State undertakes to respect the exclusively international character of the responsibilities of the staff of the Corporation and not to seek to influence them in the discharge of their responsibilities.

2. The General Manager shall be the Chief Executive of the Corporation and shall conduct its business in conformity with the decisions of the Council and of the Management Board. He shall be responsible for the performance of any duties devolving upon him in the administration of the Corporation, including the appointment and administration of staff.

3. The General Manager shall be the legal representative of the Corporation.

4. The General Manager shall attend the meetings of the Council without the right to vote.

2. The Assistant General Manager shall carry out such functions under the present Agreement as assigned to him by the General Manager.

2. The Corporate Secretary shall serve as secretary to the Council of Members and to the Management Board and shall keep a record of the proceedings of these bodies and of their decisions.

3. The Corporate Secretary shall be responsible to the General Manager or, in his absence, to the Assistant General Manager.

2. The Auditor shall be eligible for reappointment for up to four successive years.

3. The External Auditor shall have the right to recommend to the Chairman that he convenes a special session of the Council. In such cases, the Auditor shall prepare the provisional agenda.

2. The Corporation may accept in addition, subject to the limits and types of risks that the Council may determine, reinsurance treaties and facultative reinsurance offers from any insurance or reinsurance institution.

2. Priority on retrocessions shall be given by the Corporation to compensating those agreed cessions received from insurance and reinsurance institutions under shares of treaties providing for reciprocal business inflow from the foreign leading reinsurers.

3. Remaining retrocessions shall be offered primarily to insurance and reinsurance institutions ceding business to the Corporation and located in the region of the Economic and Social Commission for Asia and the Pacific, and only thereafter to reinsurers located elsewhere.

4. The Management Board shall establish the plan of retrocessions taking into account the priorities referred to in paragraph 2 of this Article, and the volume of business ceded to the Corporation and after assessing the companies of the region of the Economic and Social Commission for Asia and the Pacific which are able and willing to accept retrocessions. The Council may revise the priorities on retrocessions for important technical and financial reasons.

2. The accounts and records of the Corporation shall be maintained in United States dollars in conformity with the procedures adopted by the Council in consultation with the External Auditor.

3. At the end of each financial year the Management Board shall evaluate the assets of the Corporation at cost ma ket or realizable value - whichever shall be least - and shall make provisions, inter alia, for unexpired premium and outstanding loss reserves, for all other liabilities of the Corporation, for bad debts and other contingencies and for depreciation on fixed assets.

2. For subsequent financial years, one tenth of the annual net profit shall be transferred to the Statutory Reserves until such a fund shall amount to 100 per cent of the Stock Capital of the Corporation. The Council may decide to continue such transfers to the Statutory Reserves beyond that limit.

3. In addition to the Statutory Reserves, the Council, before proposing any dividend, shall set aside out of the annual profits such sums as it deems necessary for meeting contingencies.

4. In no cases shall the quantum of dividend distributed to members exceed 60 per cent of the net profit before deduction of Statutory and Contingency Reserves, and any residual amounts shall be transferred to the Statutory Reserves.

5. The annual dividend shall be paid to the members in accordance with modalities to be established by the Council.

2. On cessation of membership a former member shall remain liable to the Corporation for its direct obligations and for its contingent liabilities until such time as all the business contracted prior to the date membership ceased, has been settled. In order to achieve and expeditious settlement, the Council may enter into an alternative arrangement with such former member. Should a disagreement arise between the Corporation and a withdrawing member, the matter shall be submitted to arbitration in accordance with the provisions of Article XXV of the present Agreement.

1. The repurchase price shall be the equity stock value of the shares as certified by the Auditor at the date of termination of membership;
2. The proceeds of these shares shall be placed by the Corporation on short term fixed deposit. The interest earnings thereon shall accrue to the benefit of the former member and shall be paid at the time of final settlement of the repurchase of the shares;
3. The amount due under sub-paragraph (a) shall be withheld by the Corporation so long as the former member or any of its agencies remain liable in any capacity to the Corporation and such amount may at the option of the Corporation be applied on such liability as it arises;
4. Payment for the shares may be made from time to time to the extent by which the amount due under sub-paragraph (a) exceeds the aggregate liabilities of the former member, until such time as the full repurchase price has been settled.

2. Should the Corporation exhaust half of its subscribed share capital, the Council shall meet in special session and shall recommend to the member States termination of the Agreement and thereby termination of the operations of the Corporation. Notwithstanding the provisions of the present paragraph, the Council may by qualified majority vote recommend any other alternative appropriate solution.

2. The Depositary shall send certified copies of the present Agreement to all Signatory Governments.

2. Any member which has not deposited any acceptance of the amendment by the date on which that amendment becomes effective, shall as of that date cease to be a member of the present Agreement and therefore of the Corporation, unless such member satisfies the Council at its first session following the effective date of the amendment that its acceptance could not be secured in time owing to difficulties in completing its constitutional procedures, and the Council decides to extend for such member the period fixed for acceptance until these difficulties have been overcome. Such member shall not be bound by the amendment before it has notified its acceptance thereof.

2. During the winding-up period, the Council and the Corporation shall remain in existence for the following purposes:

1. To realize, conserve and preserve its assets, and to settle its obligations vis-a-vis creditors holding claims out of reinsurance contracts, as a matter of priority, and then to other creditors;
2. To proceed subsequently with the distribution of the remaining assets to the member States, in proportion to the capital stock held by each member State, provided that such member State has settled all its obligations vis-a-vis the Corporation.

The Governments of the member States of the Asian Reinsurance Corporation, desirous of securing a regular basic flow of reinsurance business to the Corporation, agree as follows:

1. All insurance and reinsurance institutions operating in their countries shall be directed to cede to the Corporation uniform percentages of all their outward reinsurance treaties placed abroad, not less than the equivalent of 5 per cent of each of these treaties, or 500,000 United States dollars of acceptable reinsurance premiums, whichever is the lesser.

2. The shares of the outward reinsurance treaties so ceded to the Corporation shall be made on the best terms and conditions as accorded in these treaties, with the exception of reciprocity conditions where special arrangements may have to be made between each ceding company and the Corporation.

3. In the case of foreign insurers not having separate reinsurance arrangements in respect of local risks, the member Governments shall take such measures as are necessary to bring about in another form a commensurate contribution of business to the Corporation.

4. The Corporation shall be bound to accept all the agreed shares of all treaties offered to it pursuant to this annex, except when such cessions are not in conformity with the underwriting guidelines laid down by the Council and implemented by the Management Board.

5. Each Government, upon becoming a member of the present Agreement, shall notify the Corporation in writing of the percentages and/or amounts of premiums as well as the precise manner in which the agreed cessions will be made to the Corporation from the insurance market of its country.

6. A Government which, upon becoming a member of the present Agreement, enters a qualification that it is unable to comply with the provisions of this annex shall be exempted therefrom.

7. The provisions of this annex shall be reviewed by the Council of Members four years after the entry into force of the present Agreement.

The Governments of member States of the Asian Reinsurance Corporation agree as follows:

1. The Corporation shall enjoy immunity from every form of legal process. The property and assets of the Corporation located in member countries shall be immune from all forms of seizure, attachment, expropriation, execution and any other form of interference, whether by executive, administrative, judicial or legis lative action.

2. Notwithstanding the provisions of the preceding paragraph, in disputes arising out of, or in connexion with the exercise by the Corporation of its activities in transacting reinsurance business, or out of, or in connexion with the sale or purchase of real property, legal action may be brought against the Corporation in the Court or Administrative Agency of competent jurisdiction. However, in such cases the property and assets of the Corporation located in member countries shall be immune from any forms of seizure, attachment, expropriation, execution and any other form of interference, prior to the delivery of the final judgement against the Corporation.

3. To the extent necessary to carry out its functions the Corporation shall be accorded maximum freedom as regards restrictions, regulations, controls and moratoria of any nature on its assets.

4. In order to secure widest distribution of assets of the Corporation in the area, member Governments may consider granting exemption from taxation for the income from such assets.

5. The archives of the Corporation and in general all documents belonging to it or held by it shall be inviolable wherever located.

6. The representatives of member States in the Council of Members, the staff of the Corporation and its consultants:

1. Shall be immune from legal process with respect to words spoken or written and all acts performed by them in their official capacity;
2. Shall be accorded travelling and foreign exchange facilities, and shall be exempted from immigration restrictions and from alien registration requirements.

8. The Government of each member State, in accordance with its own consti- tutional or other legal requirements, shall promptly take such action as is necessary to make effective in its own territory, the provisions set forth in this annex and shall inform the Corporation of the action which it has taken on the matter.

9. The orderly functioning of the Corporation and the fulfilment by its members of their obligations to it shall not be impeded or affected as a result of any political or other differences which may arise between Governments of member States.

The Government of Thailand, Host Country of the Asian Reinsurance Corporation, agrees to grant to the Corporation in addition to the immunities and privileges accorded to it by the Governments of all member countries as enumerated in annex B to the present Agreement, the following facilities:

Exemption from taxation

1. The Corporation, its assets, property, premium income, profit, balances and dividend, shall be exempt from all taxation and from all duties.

2. No tax shall be levied on or in respect of salaries, emoluments paid by the Corporation to the Chairman, Vice-Chairman, officers, employees and consultants of the Corporation.

Other facilities

1. Adequate office premises free of charge to serve as the head office of the Corporation, until the latter acquires its own premises.

2. A site in Bangkok, adequately located and free of charge, where the Corporation could build its head office.

3. Telecommunication facilities, including post, telephones and telex systems.

4. Exemption from customs duties for the furniture, machinery, office equipment and vehicles imported by the Corporation for its of ficial use.

5. Exemption from customs duties for furniture, personal belongings and vehicles imported by professional staff members of the Corporation at the time they are recruited to work at its head office.

6. Facilitating adequate housing of the aforementioned staff members of the Corporation at moderate rents.

7. Facilitating access to adequate schooling of children of the staff members of the Corporation, free of charge or at moderate cost.

1. Definitions

In these rules, unless the context shall otherwise require.
1. "Agreement" means the Agreement Establishing the Asian Reinsurance Corporation (hereafter called the Corporation).
2. "Council" means the Council of Members of the Corporation.
3. "Presiding officer" means the Executive Secretary of ESCAP or an officer designated by the Executive Secretary who is placed in charge of the conduct of the proceedings at the inaugural meeting of the Council and the person presiding at the meeting in terms of rule 12 of the Rules of Procedure at subsequent meetings of the Council.
4. "Member" means the representative of the government on the Council and includes the representative of another government holding a proxy for the government concerned.
5. "Secretary" means an officer of the ESCAP performing the duties of the Secretary at the inaugural meeting and the Corporate Secretary at subsequent meetings of the Council.
6. "Election" means the election of Chairman and Vice-Chairman and appointment of General Manager.
7. "Rules of Procedure" means the rules of procedure for conduct of business of the Corporation as adopted by the Council.

2. Provisions of the Agreement The provisions of Articles V and X of the Agreement shall apply to the conduct of the election and shall prevail in the event of any inconsistency arising between those provisions and these rules.

3. Nominations

1. Any person nominated by one or more members entitled to vote in the election and seconded by another member shall be eligible for election.
2. Each nomination shall be made on a nomination form furnished by the Secretary, signed by the members proposing and seconding the nomination, and be deposited with the Secretary.
3. A member may nominate only one person for each office.
4. Nominations may be made within the time specified by the presiding officer at the inaugural meeting and by the Chairman or Vice-Chairman in respect of subsequent meetings.
5. A person nominated to an office may withdraw from the election or in the case of the post of General Manager the member proposing the name may withdraw the name from the election at any time up to the commencement of voting.

4. Supervision of the election The presiding officer shall appoint such tellers and other assistants and take such other action as he deems necessary for the conduct of the election.

5. Ballots

1. If there be only one valid nomination for a particular post, the person nominated shall be declared as duly elected.
2. Each ballot shall be taken as follows:
   1. The roll of members shall be called in alphabetical order of the government they represent.
   2. After a member's name is called, he shall mark the ballot form and deposit it in the ballot box.
   3. Where a member is represented at the meeting by the representative of another member, such representative shall cast the ballot on behalf of such member in addition to voting on behalf of his own government.
   4. A member may cast his vote only for one candidate for each office. Any ballot form containing marks in favour of more than one candidate shall be treated as invalid.
   5. When a ballot shall have been completed, the presiding officer shall cause the ballots to be counted and shall announce the name of the person elected. If a succeeding ballot is necessary, the presiding officer shall announce the names of the nominees to be voted on.
   6. A distinctive separate ballot paper shall be used for each ballot. Voting will be by secret ballot.

6. Elimination of nominees

Chairman and Vice Chairman:

1. For the posts of Chairman and Vice-Chairman the member securing the highest number of votes shall be declared elected.
2. If two or more nominees secure an equal number of votes at the top of the list, a further ballot shall be held with the inclusion of the names of only those nominees for election.

General Manager
1. For the post of General Manager, the person securing a two-thirds majority of votes of members present and voting shall be declared elected.
2. If no person secures such majority of votes, a ballot shall be held with the inclusion of the names of the two securing the highest number of votes in the first ballot.
3. If neither of the two nominees secures a two-thirds majority of votes, the presiding officer shall consult the Council on the further steps to be adopted.

7. Announcement of Results After the last ballot for each office, the presiding officer shall cause to be distributed a statement setting forth the result of the election.

8. Commencement of Term of Office

1. The terms of office of the persons elected as Chairman and Vice- Chairman shall commence at the conclusion of the session in which the elections are held except in the case of the inaugural meeting where the Chairman will assume charge as soon as elected.
2. The term of office of the person elected as General Manager shall commence on the date the person assumes charge of his office but in any case, not later than the date specified by the Chairman. In specifying such date the Chairman shall bear in mind the reasonable time required for the person to secure release from his current assignment.

9. General Any question arising in connection with the conduct of the election shall be resolved by the presiding officer. Whenever possible, any such question shall be put without identifying the member concerned.

Rule 1: Payment of subscription for shares: In compliance with the provisions of Article XXVII of the Agreement, each signatory government shall place or cause to be placed by an authorized national institution (in terms of clause 2 of Article III of the Agreement establishing the Asian Reinsurance Corporation), with a bank or Treasury "or other similar institution, or Government hereinafter referred to as bank as may be considered appropriate, an amount sufficient to subscribe for the share capital in terms of article III of the said Agreement on a date to be decided by the Depositary (articles XXVI and XXVII of the said Agreement).

Rule 2: Certification by bank: The amount deposited with the bank in terms of Rule 1 shall be held in the name of Asian Reinsurance Corporation (in incorporation) and to the order of the Depository. All necessary formalities to permit remittance of the amount and conversion of the whole or part of it into foreign exchange shall be completed in advance so that the bank can act on the order of the Depository without any loss of time. A certificate from the bank to the effect that the amount is held by it as required by rules 1 and 2 hereof shall be deemed sufficient compliance with the requirements of article XXVII of the said Agreement.

Rule 3: Payment to the Corporation: The Depository shall determine the earliest convenient date for payment of the subscription for the shares to the Corporation and advise the signatory governments as well as the authorized national institution as the case may be, by cable at least 10 days in advance of the specified date. On or before the specified date, the bank shall transfer to the accounts of the Corporation with a bank or banks to be specified by the Depository amounts as follows:

Account A: An amount in national currency sufficient to buy US$ 250,000 on the actual date of payment into the account. In case of least developed countries the amount in national currency shall be sufficient to buy US$ 500,000 on the actual date of payment.

Account B: US$250,000 in US Dollars. In respect of least developed countries which make the total payment in national currency, no amount will be payable in Account B.

Rule 4: Closure of account with the bank: Where the amount held in account with the bank in terms of rules I and 2 hereof is insufficient to make the payment in terms of rule 3, after taking credit for interest accrued, the signatory government shall pay directly or through authorised national institution into the bank the amount of such deficit forthwith to enable payments to be made in terms of rule 3 hereof. Where the amount together with interest accrued is more than the amount required for payment in terms of rule 3 hereof, the surplus shall be refunded to the order of the signatory government or authorized national institution. After payment of the amounts in terms of rule 3 hereof, the account with the bank in the name of Asian Reinsurance Corporation (in incorporation) shall, be closed. Any service charges or taxes etc. payable to the bank in connection with the account and transfer of monies shall be paid by the signatory government or authorized national institution.

Definitions: In these rules the following words shall have the meanings as indicated below:

1. Agreement: Agreement Establishing the Asian Reinsurance Corporation as amended from time to time.
2. Chairman, General Manager: The Chairman, General Manager respectively of the Asian Reinsurance Corporation.
3. Management Board: The Management Board as defined in Article VIII of the Agreement.
4. Corporation: Asian Reinsurance Corporation.
5. Council: The Council of Members as defined in article V or the Agreement .
6. Depository. The Executive Secretary of ESCAP as defined in article XXVI of the Agreement.
7. Rules for election: Rules for election of Chairman and Vice-Chairman and appointment of General Manager.

Rule I - Application: Any government, eligible for membership in terms of article 11 of the Agreement and seeking such membership, shall notify its intention in writing to the Chairman specifying whether it proposes to enter any qualification in terms of clause 6 of Annexure A to the Agreement and if so, providing details thereof.

Rule 2 - Information to be provided: The Management Board of the Corporation, may seek such information as it may consider necessary to assist in establishment of the conditions by the Council subject to which the membership may be acquired.

Rule 3 - Recommendation: The Management Board will process the application and supporting information as soon as possible and make its recommendations to the Council regarding the eligibility for membership and conditions to be established in terms of article XXX of the Agreement. Such recommendation will, infer alia, deal with the following:

1. Purchase value of shares of face value of US$ 500,000 and manner of payment.
2. Conditions governing admission as member.
3. Date of effect of membership and date of commencement of cessions to the Corporation.

Rule 4 - Enrollment: The Council will then determine the eligibility for membership and the conditions governing membership. If the government agrees to such conditions or any modifications thereof which may be agreed to by the government and the Council, then it may proceed to sign the agreement, ratify it and effect payment towards the price of shares before the date of effect of the membership.

Rule 5 - Withdrawal from membership: Any government, which is a member of the Corporation, desiring to withdraw from membership in terms of article XXI of the Agreement, may give written notice of its intention to the Chairman of the Corporation with a copy to the Depository. Such notice should give the reason for seeking withdrawal and may contain suggestions of the government with regard to the discharge of current liabilities on either side.

Rule 6 - Settlement of obligations: On receipt of such a notice the Management Board will consider the consequential action to be taken and make recommendations to the Council, inter alia, on the following points:

1. Effective date for withdrawal of membership.
2. Mutually agreeable arrangement for expeditious settlement of obligations and liabilities on both sides.
3. Arrangement for repurchase of shares including the value to be paid, currency for payment and the manner in which the amounts will be held and dealt with in compliance with the provisions of article XXII of the Agreement.
4. Periodicity of review of the amounts withheld in terms of clause (d) of article XXII.

Rule 7 - Non-compliance with Agreement or conditions governing membership:

1. When the Management Board finds a member not complying with the Agreement or conditions governing membership it shall first try to secure compliance by bringing the default to the notice of the member. Where the default is not promptly remedied, the Management Board shall seek the guidance of the Council.
2. When non-compliance with the provisions of the Agreement or conditions governing membership arises out of the actions of one or more insurance companies operating in the member country concerned, the General Manager shall seek the assistance of the government concerned to secure compliance. If such efforts do not succeed within a reasonable time, the Management Board shall seek the guidance of the Council.

Rule 8 - Payment of subscription to shares through authorised institution:

1. Where a government exercises the option available in terms of clause 2 of article 111 of the Agreement it shall notify its decision to the Corporation in writing and provide sufficient information about the nominated organisation such as its constitution, memorandum and articles of association, and its activities.
2. A government which exercises such power may nominate a different national institution in place of the institution nominated earlier or take over the payment towards the shares in its own account.
3. Notwithstanding the nomination of a national institution to subscribe to the purchase price of shares, or the replacement of one national institution by another, the Corporation will only recognise the government as the shareholder.
4. While the Corporation may agree to make payment of amounts due in respect of dividends or repurchase price of shares or disposal of assets in the event of dissolution, as per instructions of the member government, the national institution shall have no direct claim to such amount and the shares of the Corporation shall not be regarded as forming part of the assets of the national institution in the event of the latter's dissolution.

Rule 9 - Payment for shares in national currency: Where a part or whole of the purchase price of shares is paid in the national currency, the rate of exchange for determination of the amount payable in national currency shall be the rate ruling on the date on which the amount is first deposited into the bank account of the Corporation.

Rule 10 - Representatives on the Council: Nomination of a representative or his replacement shall be made in writing.

Rule 11 - Attendance at Council meetings:

1. A member can be represented by only one representative. However, the representative may be accompanied by such advisers, assistants or interpreter as the member considers appropriate for his effective participation in the meeting. The Chairman may invite experts or professional persons such as lawyers, auditors etc. to attend a part or whole of a Council meeting as invitees. Such advisers, assistants, interpreters and invitees will participate in the discussions at the meeting to the extent determined by the Chairman but will not have the right to vote.
2. If for any reason the representative of a member government is unable to attend a meeting of the Council, the government may nominate any other person to attend the Council meeting as an observer.

Rule 12 - Presiding over meetings: The inaugural meeting of the Council of Members will be presided over by the Executive Secretary of ESCAP or an officer designated by him: Such person shall conduct the meeting until the Chairman is duly elected when he will hand over conduct of the meeting to the Chairman. Subsequent meetings shall be conducted by the Chairman and in his absence by the Vice- Chairman. When both are not present, one of the members present may be elected to conduct the meeting.

Rule 13 - Election of Chairman: At the inaugural meeting of the Council, the presiding officer shall determine the date and time before which nominations to the post of Chairman should be received. At subsequent elections, the Chairman or in his absence the Vice-Chairman shall determine the last date and time for receipt of nominations. The persons nominated shall be members of the Council. As soon as possible after expiry of the time limit for the nominations, the Secretary shall notify all members of the Council of the valid nominations received. The Rules for election shall be applicable.

Rule 14 - Election of Vice-Chairman: At the inaugural meeting of the Council, the Chairman shall determine the date and time before which nominations to the post of Vice - Chairman should be received. At subsequent elections, the same procedure as that applicable for election of Chairman shall apply.

Rule 15 - Subsequent elections to the posts of Chairman and Vice-Chairman: Persons elected to the posts of Chairman or Vice-Chairman shall hold office for a period of two years in terms of clause 3 of article V of the Agreement. For practical convenience, the period of two years shall be deemed to expire at the conclusion of the second annual regular session of the Council immediately following the session in which the person is elected. New incumbents shall be elected to take office immediately on expire of the terms of the present incumbents.

Rule 16 - Replacement of Chairman or Vice-Chairman: (1) If the person holding the office of Chairman or Vice-Chairman ceases to be the representative of a member government or if the government concerned gives notice of withdrawal from membership, he shall cease to hold office as Chairman or Vice-Chairman as the case may be effective from the date of such notice. The procedure used for filling up casual vacancies will apply. (2) In the event of both the positions of Chairman and Vice-Chairman falling vacant due to the above or other reasons, the General Manager shall forthwith convene a meeting of the Council of Members to elect members to those positions.

Rule 17 - Casual Vacancy of Chairman: In the event of a vacancy arising in the post of Chairman, the Vice-Chairman shall act as the Chairman until a Chairman is elected at the next meeting of the Council.

Rule 18 - Powers of the acting Chairman: The acting Chairman shall have the same powers and duties as the Chairman.

Rule 19 - Casual Vacancy of Vice-Chairman: In the event of a vacancy arising in the post of Vice-Chairman, the Management Board shall decide-whether to wait for the vacancy to be filled in at the next regular session of the Council or to call for a special meeting. The absence of Vice-Chairman in the meantime shall not affect the validity of the decisions of the Management Board.

Rule 20 - Remuneration of Chairman and Vice-Chairman: Chairman and Vice- Chairman will not receive any remuneration. They will, however, be reimbursed their expenses in accordance with regulations adopted for the purpose in respect of all travels undertaken by them in the course of their work for the Corporation.

Rule 21 - Date of meeting: The Management Board shall decide the date and time of each meeting in accordance with the provisions of the Agreement and the agenda for the meeting.

Rule 22 - Agenda for meetings: Every notice convening a meeting shall be accompanied by a statement specifying the business to be transacted at such meeting and explanatory notes on the various items of the agenda. The meeting may take up for discussion any business not specified in the notice of the meeting with the permission of the presiding officer. However, no decision shall be taken on such matters unless all members are present and the decision is unanimous.

Rules 23 - Quorum:

1. Where a member who is unable to attend a meeting authorises another member to represent its interests and to cast its vote at the meeting, the presence of the proxy shall be deemed to be the presence of the member and the vote by the proxy shall be deemed to be vote by the member in addition to the presence and vote by the proxy for his own government.
2. If, within 30 minutes of the appointed time for commencement of the meeting, the number of members present including the number of proxies held is insufficient to form a quorum in terms of clause 10 of article V of the Agreement, the meeting shall stand adjourned. The Chairman or presiding officer may reconvene the meeting after a further 30 minutes or more as the circumstances may warrant. No decisions shall be taken at a meeting without the requisite quorum.

Rule 24 - Business at the meeting:

1. The Chairman or with the permission of the presiding officer, any member of the Management Board or any member of the Council, may make oral as well as written statements to the Council concerning any question under consideration.
2. The Chairman or in his absence, the presiding officer shall declare the opening and closing of each meeting, direct the discussions, ensure observance of rules, accord the right to speak, put questions to vote, announce decisions and perform other functions customarily performed by presiding officers. He shall have control of the proceedings and the maintenance of order at the meeting. He may propose to the Council the limitation of the time to be allowed to speakers, the limitation of the number of times each representative may speak on any question, the closure of the list of speakers or the closure of the debate. He may also propose the suspension or the adjournment of the meeting or of the debate on the question under discussion.
3. The Chairman or in his absence, the presiding officer shall decide the manner of voting on each question but if any member so desires, the voting shall be by secret ballot.
4. Where the question under discussion concerns a particular member, the Chairman or in his absence, the presiding officer shall decide whether the member concerned should withdraw from the meeting.
5. Subject to points of order which may be raised and regardless of the order in which they are submitted, the following motions shall have precedence in the following order over all other proposals or motions before the meeting:
6. To suspend the meeting;
7. To adjourn the meeting;
8. To adjourn the debate on the question under discussion; and
9. For closure of the debate on the question under discussion.

Rule 25 - Fresh points for discussion: Any member desiring to bring up a question for discussion at a Council meeting shall write to the Council well in time for its inclusion in the agenda. Failing this, the presiding officer may permit discussion on the question in accordance with the provisions of Rule 22.

Rule 26 - Minutes of meetings: The Secretary shall interpret speeches and discussions at meetings, receive and circulate documents of the Council and prepare and circulate the minutes of the meetings. He shall communicate the decisions taken at the Council and authenticate them as required. The minutes of the meetings shall only record-the decisions taken and conclusions reached and the views of any member specifically asked to be recorded. They shall be taken as confirmed unless any comments thereon are received within 45 days of the date of their circulation to members.

Rule 27 - Special Meetings: The Secretary shall issue notice convening a special session of the Council, within seven days of communication to him of the decision to convene such a meeting in terms of clause 6 of article V or clause 3 of article Xlll or within seven days of receipt of a request from members in terms of clause 7 of article V of the Agreement. Where the meeting is requested for by members in terms of clause 7 of article V, they shall also furnish to the Secretary the relevant agenda papers. The rules applicable to the conduct of annual meetings will also apply to the conduct of special meetings. When the General Manager calls for a meeting in terms of clause 6 of article V, he shall do so only after advising the Chairman.

Rule 28 - Report of the Management Board: The report of the Management Board in terms of clause 4 of article V shall deal with various matters in sufficient detail to enable the Council to review and where necessary issue revised guidelines on matters referred to in clause I of article Vl of the Agreement and to take decisions on matters referred to in clause 2(c) of article VI..

Rule 29 - Management Board: The Management Board shall meet at least twice a year at such place and time as the Chairman may decide. The Management Board shall lay down its own procedure of work. The Management Board shall decide on the frequency and manner in which the General Manager and Assistant General Manager shall report to it and seek its guidance on direction of the affairs of the Corporation. The Management Board shall also set up procedures to enable the General Manager and Assistant General Manager to seek its guidance on matters which cannot wait until a meeting of the Management Board. The presence of two members of whom one should be the Chairman or Vice-Chairman shall constitute a quorum.

Rule 30 - Reference to Council in circulation: Where the Management Board considers it appropriate to adopt such a procedure, it may authorise circulation of a note and draft resolution to members for a decision without waiting until the next meeting of the Council.

Rule 31 - Nominations for General Manager: Immediately upon the agreement coming into force or earlier, the Executive Secretary of ESCAP or an officer nominated by him will send a notice to Council members inviting nominations of suitable persons for appointment as General Manager.

Rule 32 - Appointment of General Manager: The appointment of General Manager and the determination of the terms and conditions of service for the post shall be taken up at the inaugural meeting of the Council. The Rules for election shall be applicable.

Rule 33 - Subsequent appointments of General Manager: Appointment of the new General Manager shall be taken up at the annual regular session of the Council immediately preceding the expiry of the term of office of the current incumbent. The Chairman shall issue a notice to members of the Council well in time calling for nominations for the post. The members shall forward nominations together with sufficient particulars about the nominees and assurance that the person will be available to take up the appointment so as to reach the Chairman at least 8 weeks before the proposed date of meeting of the Council. Particulars of all the nominations so received shall be circulated to members along with the agenda papers. The Council shall pay due attention to the need for ensuring a smooth changeover and may require the new incumbent to join the Corporation sufficiently in time for the purpose and define his functions in the interim period.

Rule 34 - Casual vacancy in the post of General Manager: In the event of a vacancy arising in the post of General Manager before expiry of his term, the Assistant General Manager shall act as the General Manager until a person is appointed to the post. The Chairman shall initiate the process to secure such election at the next annual regular session or at a special meeting as he considers appropriate. During the period when the Assistant General Manager is acting as the General Manager, he shall have all the functions and powers relating to that position.

Rule 35 Appointments of Assistant General Manager and Corporate Secretary:

1. To assist the General Manager to prepare lists of candidates for the posts of Assistant General Manager and Corporate Secretary, each member may furnish the Chairman his recommendations of not more than one candidate for each post together with sufficient particulars about such candidates. The General Manager shall consider such recommendations and make any inquiries he considers necessary to ascertain the suitability of the candidates for the posts. He shall thereafter submit the lists to the Council, as soon as practicable, together with his recommendations. The basis for making recommendations by the General Manager shall not be questioned but any member may seek clarification. However, in making his recommendations the General Manager shall bear in mind the need to ensure an equitable geographical representation consistent with suitability to work as a team.
2. The Council shall make appointments by secret ballot based on the lists and recommendations submitted by the General Manager. For each post, the candidate securing the highest number of votes shall be appointed. In determining the duration of their appointments the Council shall bear in mind the importance of maintaining continuity and the disadvantage of a simultaneous change of the entire management.
3. The terms and conditions of service of the Assistant General Manager and Corporate Secretary shall be fixed in the meeting of the Council in which the appointments are made or at an earlier meeting.

Rule 36 - Reappointment: Persons appointed to the posts of General Manager, Assistant General Manager and Corporate Secretary will be eligible for reappointment. However, the Council will give the consideration to the need to give an opportunity to other equally eligible candidates while arriving at its decisions.

Rule 37 - Casual Vacancy of Assistant General Manager or Corporate Secretary: In the event of a casual vacancy arising in the post of Assistant General Manager or Corporate Secretary, the Management Board may decide either to designate another officer of the Corporation to hold charge until a new incumbent is appointed by the Council and takes over or to request for a special meeting of the Council to appoint the successor.

Rule 38 - Appointment of External Auditor: At the inaugural meeting of the Council, and at every subsequent annual regular session of the Council, the Council will appoint the External Auditor for the Corporation for the forthcoming financial year. The selection shall be made from a panel of names recommended by members. The provisions of rules 35 and 36 shall apply to such appointment in so far as appropriate.

Rule 39 - Casual vacancy of Auditor: In the event of a casual vacancy arising in the post of the auditor, the Management Board shall immediately appoint another auditor for the year and submit its decision for ratification by the Council.

Rules 40 - Entering a qualification: A government desiring to enter a qualification of the nature referred to in clause 6 of Annexure A to the Agreement should make its intentions known and furnish a copy of the reservation to be made by it, at the time of seeking membership. It will not be open to a member to enter a qualification or modify a qualification already made, subsequent to its admission as a member. This will not, however, prevent a member desiring to secure a better flow of business in terms of clause I of Annexure A, from doing so after discussion with the Corporation.

Rule 41 - Notification of Cessions: Notification of cessions as required by clause 5 of Annexure A shall be made in such detail and in such forms as the ESCAP may prescribe prior to the establishment of the Corporation's office and as prescribed by the General Manager after establishment of the Corporation's office. The Government shall also furnish or cause to be furnished any further data or explanations that may be necessary.

Rule 42 - Declinature of cessions: Any decision not to accept the agreed shares of business in terms of clause 4 of Annexure A shall be taken by the Management Board and reported to the Council at the next meeting. Such decision shall be based on specific reasons to be reported by the Management Board. Where the decision is not of a general nature but applies to specific cessions, the Management Board may decide whether or not and to what extent the reasons should be recorded in writing before the Council.

Rules 43 - Acceptance of agreed cessions: Upon receipt of information in terms of Rule 41, the General Manager shall have it examined by the office. Where certain features of the reinsurance business offered are not considered in compliance with the underwriting guidelines to the management, the General Manager shall hold discussions with the government concerned to explore the possibility of securing suitable adjustments to make the offered business acceptable. He shall thereafter report to the Management Board on the particulars of the business offered, his observations about their acceptability and the outcome of any discussions held by him. The decision with regard to acceptability shall be that of the Management Board. Where a portfolio of reinsurance business producing a premium of US$ 500,000 is accepted as an alternative to uniform cessions, its acceptability shall be open to review at each renewal date of the reinsurance treaties.

Rule 44 - Terms and conditions for treaties: In respect of reinsurance treaties where it is customary to agree terms specifically with each reinsurer, the Corporation shall also negotiate terms with the ceding companies within the framework of the underwriting guidelines for reinsurance business. Such negotiation shall extend also to the provision of reinsurance business by way of reciprocity to the ceding company.

Rule 45 - Cessions to be direct: Cessions to the Corporation in compliance with the provisions of article XV of the Agreement shall be made direct without the intervention of any reinsurance broker and at most favoured reinsurer terms.

Rule 46 - Retrocessions within the Region: A declaration by the General Manager to the effect that all practicable efforts have been made to secure compliance with the provisions of article XVII shall be accepted as sufficient compliance with the Agreement.

Rule 47 - Relationship with insurance and reinsurance companies incorporated in countries which are not members: The Corporation shall be at liberty to deal with any insurance or reinsurance company on a purely commercial basis. The Management Board may authorise the Corporation to render technical assistance or provide expertise or information services to a company incorporated in a country which is not a member, on such terms and conditions as it deems appropriate.

Rule 48 - Cessation of membership: Although the membership of a government may cease, it shall be open to the Corporation to continue to accept reinsurance business from the insurers of that country or to retrocede business to them subject to the underwriting guidelines laid down by the Council.

Rule 49 - Interpretation: A member seeking an interpretation of the Agreement in terms of article XXIV thereof shall submit a detailed note on the subject sufficiently in time for circulation to members of the Council with the agenda papers. The Management Board may also submit its observations on the points raised for interpretation to the Council.

Rule 50 - Arbitration:

1. The party seeking arbitration shall give written notice of its intention along with the issues in dispute and the name and address of the arbitrator appointed by it.
2. In appointing arbitrators all persons shall bear in mind the desirability of selecting persons with a good legal background and familiarity with reinsurance operations.
3. Within 4 weeks of receipt of such notice by the other party, it shall respond by appointing its arbitrator and will advise the first party in writing.
4. The two arbitrators shall immediately communicate with each other and appoint the third arbitrator within a further six weeks. In the event of failure to select a mutually acceptable person, they shall seek the assistance of the Executive Secretary of ESCAP.
5. Immediately following the appointment of the third arbitrator, they shall meet and determine the procedure to be followed.
6. In considering the dispute and making their award the arbitrators shall take not of the spirit and not merely the letter of the contract. The arbitrator may make such award as they consider fit with regard to costs.

Rule 51 - Amendments to the Agreement:

1. A copy of every communication to the Depository with regard to an amendment in terms of clause 1 of article XXXI shall be sent to the General Manager of the Corporation for his information.
2. The General Manager shall advise promptly all the representatives of member governments whose communications with regard to the amendment have not been received upto 4 weeks prior to the date fixed by the Council.
3. When a government ceases to be a member in terms of clause 2 of article XXXI, the Council may agree with the government concerned, an administratively convenient date for cessation of membership. The amendment of the Agreement shall not be applicable to that government until such date.

Rule 52 - Immunuties: The immunities referred to in clause 6 (a) Annexure B shall continue to operate even after such person has ceased to hold office with the Corporation in so far as it relates to acts performed in his official capacity while with the Corporation.

Rule 53 - Language for communications: The language for communications and for maintenance of records will be English.

Rule 54 - Communications: Except in respect of communications relating to the designating of a representative on the Council, withdrawal from membership and amendments to the Agreement, communications signed by the representative on the Council shall be treated as communications from the member government. Likewise, unless specifically instructed otherwise, the Corporation will address communications only to the member designated by the government and it will be considered the responsibility of the member to consult his government in the appropriate manner before replying to the Corporation or communicating with it.

Rule 55: In the event of any inconsistency coming to light between the Agreement and these Rules, the Agreement will have overriding effect.

Definitions: In these rules the following words will have the meanings indicated below:

1. Agreement: Agreement Establishing the Asian Reinsurance Corporation as amended from time to time.
2. Corporation: Asian Reinsurance Corporation.
3. Despository: Executive Secretary of ESCAP as referred to in Article XXXVI of the Agreement. Council: The Council of Members as defined in Article V of the Agreement.
4. Management Board: The Management Board as defined in Article VIII of the Agreement.
5. General Manager: The General Manager of Asian Reinsurance Corporation.

Rule 1: Interest and exchange fluctuations: Any interest earned after the date of payment of subscription for the shares to the Corporation and any fluctuations in the rate of exchange after that date shall be for account of the Corporation.

Rule 2: Subsequent applicants for membership: Any government seeking membership subsequent to incorporation of the Corporation shall pay the share money to the Corporation on a date and in the manner to be specified by the Council.

Rule 3: Conversion of share capital held in national currency: The General Manager shall have the authority to convert the portion of the share capital held in national currency in any member state to any foreign currency as may be necessary. It shall not be a condition that all national currency balances shall be simultaneously converted.

Rule 4: Remittance of interest, dividend etc.: The interest, dividend etc. earned by the Corporation on the investments of the amount subscribed in national currency for the share capital shall be remitted in foreign exchange as and when called by the General Manager. However, the Corporation may, if it so desires, reinvest the amount in that country.

Rule 5: Issue of new shares: New shares shall only be issued on the specific authorization of the Council.

Rule 6: Selection of Banks: The Management Board may select the banks in member countries to handle the transactions of the Corporation and to hold deposits.

Rule 7: Operation of bank accounts: The bank accounts shall be operated by signatures of two persons from among the members of the Management Board or other officers specifically authorised by the Council.

Rule 8: Other bank accounts: The Management Board may also operate accounts with other banks at important centrals for reinsurance, for the reinsurance transactions and the Council may authorise any two of a specified list of officers to operate such accounts.

Rule 9: Property: All proposals for purchase or sale of immovable property shall be submitted to the Council for approval.

Rule 10: All the property of the Corporation shall be held duly registered in the name of the Corporation. The documents and title deeds relating to such properties shall be held in safe custody of Bank(s) as far as possible.

Rule 11: Borrowing: All proposals for long term borrowing of funds shall be submitted to the Council for approval. The General Manager may, in consultation with the Chairman or Vice-Chairman, make an overdraft on any bank for the purpose of meeting unexpected demands for payments under the reinsurance arrangements. He shall thereafter report such overdraft to the Management Board.

Rule 12: Delegation of powers: The Management Board may delegate authority upto specified limits to officers of the Corporation for purchase of durable and expendable items and for payments for various services.

Rule 13: Forms: The annual accounts and balance sheet shall be prepared in the forms annexed to these regulations.

Rule 14: The accounts shall be maintained in US dollars. For this purpose all other currencies shall be converted into US dollars at the rate of exchange ruling on I January of the year of account for all the transactions booked into the accounts for that year and all the assets shall be valued in US dollars at the rate of exchange ruling on the date of the Balance Sheet. Any profit or loss on exchange due to fluctuations in the exchange rates shall be reflected in the Revenue Accounts and Profit and Loss Account.

Rule 15: Scope and objectives of audit: Besides establishing the financial accuracy of the accounts, audit shall also examine the reasonableness of valuation of assets and provision for liabilities made in terms of clause 3 of article XIX of the Agreement. The audit shall also report on the observance of guidelines provided by the Council and provisions of the Agreement.

Rule 16: Statutory Reserves: Funds constituting the Statutory Reserves set up in terms of article XX of the Agreement shall not be utilised in any manner without the specific authorization of the Council. The investments constituting the fund shall be specifically marked out in the Balance Sheet.

Rule 17: Budget for income and expenses: At every regular annual session of the Council, the Management Board shall put up for approval of the Council, a report including the following:

1. Plan of activities for the forthcoming year.
2. Estimated income through various sources and estimated cash flow during the forthcoming year.
3. Actual expenses incurred together with estimates for balance of the current year with comparison with budget estimates and comments on major variations.
4. Budget for expenses for the forthcoming year with explanatory notes where required.

Rule 18: Expenses in excess of the budget provisions shall require specific authorization of the Management Board who may decide to submit a revised or supplementary budget for approval of the Council.

Rule 19: Deposit of Re-purchase price: Deposit of the re-purchase price in terms of clause 1 (b) of article XXII of the Agreement shall be held in such manner and at such place as the Council considers appropriate. The withdrawing member shall have no claim for deficiency or loss of interest.

Rule 20: Currency of Repayment: The Management Board shall determine the currencies and the apportionment among the currencies of the re-purchase price in an equitable manner and bearing in mind the manner of payment of the share price by the withdrawing member.

Rule 21: Unexpired Liability: For the purpose of clauses I (c) and I (d) of article XXII of the Agreement, the Management Board shall decide the basis of valuation of liabilities and periodicity of review. Where a certain liability was omitted or under- provided at a certain date, it will be open to correction at the next review date. The withdrawing member shall accept the valuation of liabilities as correct. The liabilities referred to here relate to the reinsurance transactions in respect of guaranteed cession and reciprocal cessions in terms of articles V and XVII of the Agreement with insurers operating in that member country.

Rule 22: Liquidator: It will be open to the Council to appoint a liquidator to carry out the winding up of the Corporation under article XXXII of the Agreement if it deems such a measure expedient.

Rule 23: In the event of any inconsistency coming to light between the Agreement and these rules, the Agreement will have over-riding effect.