More nonlife insurance firms merge

Two nonlife insurance firms will merge before yearend as a number of small players are hard-pressed to comply with the higher capitalization requirement, Insurance Commissioner Dennis B. Funa said Tuesday.

“We are down to 54 nonlife companies, but two will be eventually merging before the end of the year—they are actually part of a conglomerate. But I don’t want to preempt their announcement. So we will be down to 53 by the end of the year,” Funa told reporters on the sidelines of the launch of the AXA Academy in Makati City.

The upcoming merger of the two nonlife firms will make the surviving entity “more efficient,” Funa said, without disclosing details.

Another company earlier placed under conservatorship, which Funa did not name, attracted the interest of a potential investor, specifically a Chinese group.

“It could be revived, hopefully before the end of the third quarter,” Funa said, as the acquisition process was ongoing.

Under Republic Act No. 10607 or the Amended Insurance Code, the minimum net worth of insurance players must be at least P550 million at end-2017.

The capital cap will further rise to P900 million next year before jumping to P1.3 billion in 2022.

In March, the Insurance Commission placed five

nonlife companies under conservatorship due to noncompliance with the capitalization rule.

The five companies were: First Integrated Bonding and Insurance Co. Inc.; Investors Assurance Corp.; Metropolitan Insurance Co. Inc.; Plaridel Surety and Insurance Co.; as well as Premier Insurance and Surety Corp.