Insurance firms get respite
Local insurance companies gained a respite from a requirement to jack up their minimum paid-up capital as the Quezon City Regional Trial Court last Tuesday issued a writ of preliminary injunction against the regulation.
In a seven-page order dated Dec. 5, presiding Judge Charito B. Gonzales of QC RTC Branch No. 80 said the court found the need to explore whether the manner of implementing the increase in capitalization was reasonable.
Earlier this year, 10 non-life insurance firms filed a motion assailing a Department of Finance order that required the further increase of the minimum capitalization for each firm to P250 million by the end of 2012.
This follows a floor level of P175 million imposed at the end of 2011. Further, the minimum will continue to be raised every two years to reach P1 billion by end-2020.
The 10 insurers are Security Pacific Assurance Corp., Visayan Surety and Insurance Corp., Finman General Assurance Corp., Milestone Guaranty and Assurance Corp., R & B Insurance Corp., Industrial Insurance Co., Philippine Phoenix Insurance and Surety Corp., Mercantile Insurance Co., Great Domestic Insurance Co. of the Philippines and Insurance of the Philippine Islands Co.
In their motion, the firms said the amount of increase was arbitrary and the manner by which it would be implemented was abrupt.
The companies added that implementation of the requirement, spelled out through DOF Department Order No. 15-2012 issued last July, would lead to the death of their business.
Gonzales of QC RTC said the court finds merit in the plaintiffs’ arguments, noting that the firms’ fear about having to fold up was “not without basis.”
In fact, the tribunal noted that at least three of the plaintiff firms—Finman General Assurance, Industrial Insurance, and Insurance of the Philippine Island—were not included in the Insurance Commission-issued list of companies with valid certificates of authority for July 1, 2012 to June 30, 2013.
Non-inclusion in the list means that a company failed to comply with the minimum P175 million by the end-2011.
A company needs the certificate of authority to be able to do business.
Get Inquirer updates while on the go, add us on these chat apps:
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94