IC: 42 insurers meet net-worth rule

MORE insurance companies in the country are now “on track” to comply with the P1.3 billion minimum net worth requirement by the end of this year under the Insurance Code, the Insurance Commission (IC) said.

Based on quarterly reports of the licensed insurance firms as of endseptember last year, 23 out of 52 non-life insurance companies and 19 out of 31 life insurers in the country have already complied with the rule.

Of the remaining 29 non-life insurers, 18 have a net worth exceeding P1 billion while three companies have net worth exceeding P950 million, the regulator said in a statement on Monday. For the life insurance industry, seven of the remaining 12 life insurers have a net worth more than P1 billion and 2 companies with net worth above P950 million.

Under Republic Act 10607, or the Amended Insurance Code of the Philippines, existing insurance companies need a net worth of P550 million by December 2016, P900 million by December 2019 and P1.3 billion by December 2022. Likewise, insurance companies are also required to submit to the Insurance Commission their capital build-up plans with financial projections, which are approved by their board of directors and certified and attested by their actuaries.

“The statutory net worth requirements 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,” Insurance Commissioner Dennis Funa said.

To recall, Finance Secretary Carlos G. Dominguez III earlier thumbed down calls to cap the minimum net worth requirement at P900 million instead of jacking it up by adding another P400 million this year, arguing that the proposed higher capitalization was meant to protect the public.