Meridian Assurance prepares to close shop
The Insurance Commission (IC) has called on the remaining clients of Meridian Assurance Corp. to file their claims, as the company is now finalizing its exit from the non-life insurance industry.
According to Insurance Commissioner Dennis Funa, Meridian has surrendered its license to operate as a non-life insurance company.
He said the company is now finalizing its exit from the insurance business and is requesting for the regulator’s approval to withdraw its security deposits.
“Notice is hereby given that Meridian Assurance Corp. has applied for voluntary cessation from the insurance business and voluntary cessation from the insurance business and the withdrawal of its non-life insurance license on April 30, 2017,” Funa said in a notice posted in the IC website. “The Commission appointed Zeus Aboy as overseer effective Aug. 14, 2019,” he added.
In a phone interview, Funa said Meridian has decided to exit the industry as it cannot raise its paid-up capital requirement to P550 million, which became effective Dec. 2016.
“They don’t want to put up additional capital anymore, they cannot do it,” Funa said. “At that time, they were already impaired, they cannot comply even with the P550 million.”
Under the Amended Insurance Code, existing insurance companies need to have a net worth of at least P550 million by the end of 2016, P900 million by the end of 2019 and P1.3 billion by 2022.
Funa said Meridian has also entered into an indemnity reinsurance agreement, transferring 100 percent of its unexpired net retained risks to Prudential Guarantee And Assurance Inc.
The Insurance Commission then called clients of Meridian to file their claims from the company, together with all the supporting documents detailing the character, basis and the amount of their claims until Jan. 18 next year.
“Claims filed after Jan. 18, 2020 shall be barred forever and shall not be allowed to participate in any manner whatsoever in any kind of disposition, partition, distribution or settlement/payment in the voluntary cessation from insurance business of the above-mentioned insurance company. Hence, all claimants are reminded to file their claims on time,” Funa said.
Earlier, Funa said some insurance players have voluntarily surrendered their licenses due to their inability to comply with the minimum paid-up requirement for insurance companies.
Just recently, the Armed Forced and Police General Insurance Corp. (AFPGen) also voluntarily ceased its non-life insurance business due to its inability to raise the required net worth requirement by the end of the year.