Up to eight nonlife insurance companies may be up for sale this year as they would unlikely be able to comply with the higher capitalization requirement set by law, a ranking official of the Insurance Commission (IC) said.
Deputy Insurance Commissioner Ferdinand George A. Florendo told reporters five to eight companies have informed the IC they are eyeing to offer themselves for sale or to be merged with another firm.
“They were asking the commission the process if they [can] convert to a servicing company and stop selling,” Florendo said.
Under Republic Act No. 10607 or the Amended Insurance Code, all life and nonlife insurance companies must have had a net worth of at least P250 million as of end-2013. At the end of 2016, the minimum capitalization will more than double to P550 million. This will then increase to P900 million by end-2019 before hitting P1.3 billion in 2022.
Philippine Insurers and Reinsurers Association (Pira) data showed that as of December 2014, 35 companies already had a net worth of P500 million and above, with the top 10 companies each raking in over a billion pesos. However, 30 companies were still below the P500-million mark.