MANILA, Philippines—The Insurance Commission (IC) said FLT Prime Insurance Corp. has officially folded up, one of the casualties of the mandatory increase in capitalization of Philippine insurers.
In a May 11 notice to the public, Insurance Commissioner Dennis Funa said FLT Prime’s insurance business was officially withdrawn through a separate directive he issued on the same date. The company’s mandated security deposit net of aggregate outstanding liabilities amounting to P23.9 million was also withdrawn.
But Funa said FLT Prime cannot reimburse the security deposit for its servicing license unless it can show the IC that it already fully settled its liabilities to all creditors and policyholders.
Also, FLT Prime must “show proof” of its commitment to pay any liability which may arise in the future even as these weren’t reflected in its current balance sheet.
FLT Prime was among the insurers which surrendered their license to the IC in 2018, ahead of the mandatory increase in capitalization to P900 million in 2019. Funa said FLT Prime also did not comply with the earlier minimum requirement of P500 million in 2016.
Under the Amended Insurance Code, the net worth requirement will further rise to P1.3 billion in 2022.
This coming hike in capitalization was expected to result in a flurry of mergers and acquisitions (M&As) among domestic players.
Funa earlier told the Inquirer that a local non-life insurer will be acquired by a foreign conglomerate within the second quarter of 2021. He declined to disclose the parties since due diligence was ongoing.