4 nonlife insurers closing shop
Four nonlife insurance firms, including Manila Surety and Fidelity Co. Inc., are expected to close down as they will not be able to hike their paid up capital as mandated under law, according to the Insurance Commission.
Insurance Commissioner Dennis B. Funa told reporters recently that on top of these four nonlife insurers that will fold up, eight were currently in talks to merge into four firms, although he did not identify the concerned insurers.
Under the Amended Insurance Code, the paid up capital of all domestic life and nonlife insurance firms must have had more than doubled at end-2016 from the 2013 requirement of P250 million.
The capitalization requirement must again increase to P900 million in 2019, and further jump to P1.3 billion by end-2022.
In the life sector, all companies are expected to be compliant, citing that at least one firm is expected to bring in a new investor to be able to raise its paid up capital.
The closure of four nonlife insurers and merger of eight will bring the number of nonlife insurers in the country from 63 as of the end of 2016 to 55, according to Funa.
Funa said Manila Surety and Fidelity, which was established in the 1960s, would surely closing down operations.
The three other firms were still in the process of finalizing their respective closures, Funa said.