4 undercapitalized insurers face closure

Four insurers have yet to comply with last year’s P900-million net worth requirement and the regulator is giving them a few more days to beef up their capital or face closure.

Insurance Commissioner Dennis B. Funa told the Inquirer that of the six insurance firms granted temporary reprieve last March at the onset of the COVID-19 pandemic, two companies had already complied.

As for the four remaining undercapitalized insurers, which Funa did not identify, the Insurance Commission (IC) had ordered them to comply “in the coming days.”

Funa said noncompliant insurers would be dealt with “very soon” if they would still fail to meet the requirements more than 10 months after the mandatory deadline.

Republic Act No. 10607, or the Amended Insurance Code, mandated all life and nonlife insurers to have a net worth of at least P900 million by Dec. 31, 2019.

Funa earlier said that the six noncompliant firms were in the process of complying before the COVID-19 lockdown was imposed in mid-March. As such, the IC had suspended the show-cause orders earlier issued to them.

But if they still will not comply, the IC can slap them with cease-and-desist orders.

As of the first quarter, there were 129 insurers operating in the Philippines.

The IC has been considering seeking amendments to RA 10607 to keep the prevailing net worth requirement until end-2022 instead of further raising it to P1.3 billion as the law provides.