The Ministry of Economy and Finance issued more than $13 million worth of bonds

April 1 to satisfy the capital requirements of Cambodia's two state-owned insurance

companies. The bonds, which are valued at more than $2,500 each, will mature in three

years.

Mey Vann, director of the department of industrial finance at the ministry, told

the Post the bonds could not be sold because Cambodia lacked the necessary laws to

regulate financial markets.

"We borrowed the money from the National Bank [of Cambodia] in order to fulfill

the capital requirement," said Vann. "We printed the bonds and then signed

a contract with the state enterprise."

Caminco and Kampuchea Re, the two state-owned insurance companies, will pay 3 percent

interest on the bonds.

Under a sub-decree passed last October, all insurance companies are required to have

a capital investment of at least $7 million, with 10 percent lodged at the national

treasury and 50 percent pledged as an insolvency deposit.

At the time the sub-decree was issued private insurance companies criticized the

capital requirement, arguing it was excessive given the country's small insurance

market.