The Insurance Commission (IC) said seven insurance companies voluntarily surrendered their license due to progressively higher capital imposed on the industry.
According to the regulator, six were nonlife insurers and one life-insurance firm who all acknowledged their inability to meet the minimum net worth requirement of P550 million.
Insurance Commissioner Dennis B. Funa said these include the Centennial Guarantee Assurance Corp., CAP Life Insurance Corp., FLT Prime Insurance Corp., Manila Surety and Fidelity Company Inc., Meridian Assurance Corp., The Solid Guaranty. Inc. and United
Insurance Co. Inc.
As a result, these companies were issued individual servicing licenses that allow for the orderly run off of their insurance business.
This means they are barred from writing new contracts or extend them and their activities are limited to accepting premium payments, paying the cash surrender value of outstanding policies, reviving lapsed policies and such other related services.
“The existing policyholders of these companies numbering more or less 170,000 will not be affected as all existing contracts remain effective and that they are bound to honor their contractual obligations and settle the insurance claims that may be filed,” Funa said.
The IC closely monitors the limited business activities of these companies to ensure their liabilities are paid and settled as they become due.
“While these companies are not compliant with the present P550-million net worth requirement, [such] are positive, which means they have sufficient assets to settle their obligations to their policyholders,” Funa said.
Under the Amended Insurance Code, the minimum net worth requirement of insurance companies increases every three years until 2022. The insurers were told to have at least P250 million by June 2013, P550 million by December 2016, P900 million by December 2019 and P1.3 billion by December 2022.