IC sets new capital requirement for pre-need firms that don’t sell plans
PRE-NEED FIRMS that do not sell any type of plans will now have to maintain a minimum paid-up capital of P50,000, the Insurance Commission (IC) said.
The IC in Circular Letter No. 2019-50 dated Sept. 16 set a minimum unimpaired paid-up capital requirement for pre-need companies “to avoid confusion,” it said in a statement on Tuesday.
“For the avoidance of confusion, this Commission likewise finds the need to prescribe minimum unimpaired paid-up capital requirements for pre-need companies with servicing licenses and/or those that are not offering any type of plan for sale in the market,” the statement read.
However, IC maintained that the number of plans that these firms sell to the market will still determine its minimum paid-up capital requirement.
“The threshold amount of said minimum capital shall be based on the number of pre-need plans such company actually offered for sale in the market during said calendar year,” the circular read.
The IC requires pre-need companies selling three or more types of plans to have a minimum unimpaired paid-up capital of P100 million, while those selling two types of plans have a requirement of P75 million. Meanwhile, pre-need firms offering just one kind of plan have a minimum unimpaired paid-up capital requirement of P50,000.
The circular will take effect immediately, the IC said. — B.M. Laforga
