THE ARMED FORCES and Police General Insurance Corp. (AFPGen) has ceased its operations as a non-life insurance firm as the business is no longer financially viable, the Insurance Commission said yesterday.
Insurance Commissioner Dennis B. Funa said in a statement on Tuesday that AFPGen has voluntarily surrendered its license to sell non-life insurance products and has applied for a servicing license instead.
While the insurer’s 2018 net income was compliant with the P550-million net worth requirement, Mr. Funa said AFPGen has seen the financial health of its insurance business “continuously erode” in the past years.
“While the company’s net worth as of end-2018 is compliant with the existing P550-million net worth requirement, the company said that it is no longer viable to maintain its insurance business considering that its financial health continuously eroded in the last six years,” Mr. Funa was quoted as saying in the statement.
Under Republic Act 10607 or the Amended Insurance Code of the Philippines, new industry players are required to have P1 billion in paid-up capital, while existing insurance companies need to maintain a paid-up capital of P550 million by December 2016, P900 million by December 2019 and P1.3 billion by December 2022.
Mr. Funa said all of AFPGen’s issued policies prior to its surrender of its license remain valid, existing and binding.
An overseer has been appointed to monitor the company for its compliance with all of its outstanding liabilities to its stakeholders, the official said.
“Now as a servicing insurance company, AFPGen’s operation is limited to servicing its existing policyholders. All insurance contracts and policies issued by AFPGen shall remain to be valid and AFPGen is required to fulfill its obligation under these contracts,” Mr. Funa added.
The withdrawal and cessation of AFPGen’s operations will only be approved by the IC after it has settled al its obligations to clients and the creditors.
According to AFPGen’s 2018 annual report, it has issued 65,568 non-life insurance policies, the bulk of which were for migrant workers and motor cars.
Established in 1977, the company caters to the non-life insurance needs of the country’s military and police organizations. — BML