Finance Secretary Benjamin Diokno
For President Marcos’ chief economic manager, insurers’ minimum capitalization must rise as scheduled by yearend, despite lobby from the industry to delay implementation.
“The directive made by Finance Secretary Benjamin Diokno was to go ahead with the P1.3-billion net worth requirement under the Amended Insurance Code,” Insurance Commissioner Dennis Funa told the Inquirer on Friday.
From at least P900 million at present, all insurers’ net worth had been mandated to increase to at least P1.3 billion by Dec. 31 this year.
But the Philippine Life Insurers Association and Philippine Insurers and Reinsurers Association are pushing for legislation to retain the current capitalization level.
The two industry groups said the prevailing P900-million net worth requirement was among the highest in Southeast Asia. They also claimed that this level was “sufficient” to maintain solvency.
Funa said that 19 of 31 life insurers, plus 23 of 52 nonlife insurers, already had at least P1.3 billion in net worth as of end-September 2021.
Among the 12 life players that have yet to reach such level, seven have built over P1 billion net worth, while two have reached more than P950 million.
As for the remaining nonlife firms, 17 had breached P1 billion in net worth and two had over P950 million.
“The statutory net-worth requirement ensures that by 2023, insurance companies shall be in a favorable solvency position to address the needs of the insuring public. The P1.3-billion requirement also aims to realize the IC’s vision that insurance companies shall be strong and sustainable and dependable pillars of the Philippine economy in service of the Filipino people,” Funa said.