15 insurance firms fail to meet P100-M capital requirement

A total 15 life and non-life insurance companies failed to meet the government’s higher capital requirement and are in danger of losing their licenses to sell insurance policies, the Insurance Commission (IC) reported. Evangeline Escobillo, head of the Insurance Commission, reported that one life insurance provider and 14 non-life insurance companies had a net worth of below P100 million as of 2006. Documents from the commission showed that the life insurance company was Generali Pilipinas Life Assurance while the non-life insurance firms include Asia United Insurance, Covenant Assurance Co., Eastern Assurance & Surety, Finman General Assurance, First Integrated Bonding & Insurance and Generali Pilipinas Insurance. Other non-life insurance companies that failed to meet the required net worth were Investors Assurance, Manila Insurance, Meridian Assurance, Monarch Insurance, Oriental Assurance, Solid Guaranty, Summit Guarantee & Insurance and Travellers Insurance & Surety. She added that the number of non-compliant insurance companies could still increase as three life insurance providers and 10 non-life insurance firms have yet to submit their 2006 Annual Statements. These include Beneficial-PNB Life Insurance, Manila Bankers Life, and United Coconut Planters Life Assurance, CAP General Insurance, eStandard Insurance, Far Eastern Surety & Insurance, Oriental Assurance, Philippine Phoenix, Philippine First Insurance, Plaridel Surety & Insurance, Premier Insurance & Surety, and UCPB General Insurance. Escobillo said the companies that failed to meet the capital requirement and those that failed to submit their required annual statements were told to explain why their licenses should not be suspended or revoked. “I told them to explain why they should not be suspended," she said. The commissioner issues the Certificate of Authority (CA) allowing insurance companies to sell insurance policies to the public. Once suspended, these companies could no longer sell new policies but should continue to service claims for existing policies. Last year, the Insurance Commission double the minimum capitalization for both life and non-life insurance companies to P100 million from P50 million in its bid to help sustain public and investor confidence in the capital-intensive insurance industry. Despite strong opposition from industry players, the commission required insurance companies to increase their net worth by at least P100 million every year until it reaches P500 million by 2010. It also issued Department Order 19-06 imposing a P1 billion minimum capital requirement for new life and non-life insurance companies and P2 billion for new reinsurance companies. The commission is undertaking several reforms to revitalize the insurance industry and renew the confidence of the investing public as part of its efforts to increase the number of Filipinos covered by life or non-life insurance. Escobillo said the reforms would help raise the number of Filipinos covered by insurance to 20 percent next year from the existing level of about 12 percent. - GMANews.TV