Less than 10 insurers are facing closure for failing to meet the law-mandated net worth requirement of at least P900 million by the end of 2019, according to Insurance Commissioner Dennis B. Funa.
The Insurance Commission (IC) chief did not disclose the names of the noncompliant insurance firms, but said he already “signed some show cause letters the other day.” The number of insurance companies that have yet to comply with the minimum capitalization was based on documentary submissions to the commission last Feb. 28, Funa told the Inquirer.
In a Feb. 11 advisory to insurance players, the IC said it would serve show cause orders “to make good any such deficiency by cash, to be contributed by all stockholders of record in proportion to their respective interests, and paid to the treasurer of the company.”
The orders would also compel insurers to “not to take any new risk of any kind or character unless and until it makes good any such deficiency pursuant to section 200 of the Amended lnsurance Code,” the IC added.
“ln the event that a company still failed to comply with the P900-million minimum net worth and minimum capital investment requirements within the prescribed deadline, a cease and desist order shall be issued,” the IC warned.
The IC is also looking into further amendments to Republic Act No. 10607 or the Amended Insurance Code of 2013. It wants to keep the prevailing net worth requirement, instead of P1.3 trillion, by end-2022.
Industry groups Philippine Life Insurance Association comprised of life insurers and the Philippine Insurers and Reinsurers Association or the group of nonlife players were also pushing to retain the 2019 capitalization requirement moving forward. —BEN O. DE VERA