Scribd
Upload
87 views1 page

Policy On Related Party Transaction v.2

This policy outlines procedures for reviewing and approving related party transactions (RPTs) at the association. RPTs refer to transactions involving related parties that have a financial interest. Related parties include subsidiaries, affiliates, trustees, officers, stakeholders and their family members. The policy ensures RPTs are conducted at arm's length. The audit committee reviews RPTs annually and recommends approval to the board of trustees based on whether the transaction benefits the association. Members must disclose any conflicts of interest. If a conflict arises, the transaction is referred to the audit committee for review and a recommendation to the board for final approval.

Uploaded by

Maricar Bautista
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
87 views1 page

Policy On Related Party Transaction v.2

This policy outlines procedures for reviewing and approving related party transactions (RPTs) at the association. RPTs refer to transactions involving related parties that have a financial interest. Related parties include subsidiaries, affiliates, trustees, officers, stakeholders and their family members. The policy ensures RPTs are conducted at arm's length. The audit committee reviews RPTs annually and recommends approval to the board of trustees based on whether the transaction benefits the association. Members must disclose any conflicts of interest. If a conflict arises, the transaction is referred to the audit committee for review and a recommendation to the board for final approval.

Uploaded by

Maricar Bautista
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

POLICY ON RELATED PARTY TRANSACTIONS

Related Party Transaction or RPT are those which refers to any business deal, agreement, or arrangement
involving the association as participant, and in which related parties have a financial interest.The
transactions involved in this subject shall be material, direct or indirect, and may potentially affect the
nature and interests of the association.

Related Parties shall refer to the associations subsidiaries, its affiliates and other entities which exert
direct/indirect control or exert significant influence; the Trustees, Officers and Stakeholders; their related
interest and their family members up to fourth degree of consanguinity or affinity; as well as the
corresponding persons in affiliated organizations and companies, including those person, whether
natural or juridical entity, which may pose potential conflict to the interest of the association.

Objective

This Policy shall ensures that the association’s RPTs are consistent with the arm’s length principle.Its
implementation shall be spearheaded by the association’s Board of Trustees with the assistance of its
Audit Committee in recommending approval and reviewing any conduct and materials concerning RPTs
which involves the following;

a. Name of related parties and description of its relationship with parties within the association;
b. Value of transaction as recorded in association’s financial statements; and
c. Nature of transaction including significant contractual obligations.

Review and Approval of Related Party Transactions

The Audit Committee shall conduct an annual review on RPTs and identify whether it is in the best
interest of the association and its stakeholders. Its review shall be guided in accordance to the Insurance
Commission Circular Letter No. 2017-29 or the “Guidelines on Related Party Transactions for Insurance
Commission’s Covered Institutions”. Similar reviews may be required by the Board of Trustees for any
impending future transactions between the association and its partner organizations.

Members of the Board of Trustees, upon being elected, and Management Team, upon appointment or
being hired, shall be required to disclose to KMBA any material personal interest and/or connection to
the organizationwhich may give rise to conflict of interest in accordance to its functions in the
association.

In the event that the association or related parties enter into, or participated in any transaction, which
may give rise to conflict of interest or other impending transactions which requires prior review and
approval of the Audit Committee, the said transaction, upon discovery, shall be immediately referred to
the committee for review.

To analyze the circumstances or conditions prevalent to the nature of its business, the Audit Committee
shall formulate a report recommending whether or not the RPT shall be approved by the Board of
Trustees with due consideration with IC regulations and applicable laws. The report shallidentify
comparable transactions within which the association’sinterest were affected. Afterwards, the same shall
be endorse to the Board of Trustees for approval. Any member of the Board or the Audit Committee
who has interest in the transaction must abstain participation in the review and approval of any RPT.

You might also like