IC takes over BF General Insurance conservatorship

The Insurance Commission (IC) has placed under conservatorship non-life insurer BF General Insurance Co. Inc., for its inability to meet the P350-million minimum paidup capital requirement for all insurance companies.

The commission also issued a cease-and-desist order (CDO) addressed to BF General president Rene Carlos P. Barreto, ordering the insurer to stop selling or renewing policies until all requirements, including additional capital, are complied with.

To ensure compliance, the IC appointed lawyer John A. Apatan, chief of the Conservatorship, Receivership and Liquidation Division of the commission, as temporary conservator.

If it fails to meet all requirements based on an agreed period of time, the insurer will be placed under receivership or for liquidation.

The insurer claims to have assets worth P846 million, but failed to raise the additional P265 million to meet the minimum capital required on all insurers for calendar year 2015.

In 2015, BF General reported gross written premiums ( GWP) worth P59 million, ranked 63rd out of the active 69 non-life insurance companies.

Last month, the IC also placed BF Life Insurance Corp. under receivership and suspended all business, including the sale of new policies or paying out claims. It is a sister company of BF General.

The IC also slapped stern conditions to protect the policyholders in case the insurer shuts down.

That includes freezing all payment of claims to ensure the validity of each claim or policy.

It likewise prohibited BF Life from selling, encumbering, transferring or disposing of its properties without the consent of its IC-appointed conservator or receiver.

In July 2015, the Philippine Deposit Insurance Corp. ( PDIC) filed criminal complaints against officers and directors of Banco Filipino Savings and Mortgage Bank led by its vice chairman Albert Aguirre, for unsafe and unsound banking practice resulting in P1.4-billion losses.

Banco Filipino was placed under receivership last March 2011 upon the order of the Bangko Sentral ng Pilipinas (BSP).

Other entities identified with the Banco Filipino group are BF Homes, BF Citi, BF General, BF Life, Glamor and Vastland.

Both BF General and BF Life are the first insurance firms placed under the direct control of the IC due to their failure to meet the P350-million minimum capital requirement.

By the end of the 2016 calendar year, the minimum capital for all insurance firms will rise to P550 million.