THE INSURANCE Commission (IC) said “majority” of nonlife insurance companies are still working to meet the higher minimum capital requirement that took effect at end-2019, while only “a couple” of life insurers have not yet reached the prerequisite, its top official said.
IC Chief Dennis B. Funa told BusinessWorld that they will know this quarter the exact number of firms that are compliant with the end-2019 minimum net worth requirement when firms submit their financial statements for the year.
Republic Act No. 10607 states that insurance companies are required to maintain at least P900 million worth of capital requirement by the end of 2019, up from the P550-million requirement previously.
This will increase further to P1.3 billion by end-2022.
“For the nonlife (insurance companies), a majority are still in the process of complying. I cannot give an exact figure because it will send a wrong signal to the industry. We will know in the first quarter of [this] year the definite number,” Mr. Funa said in a phone message last week.
He said individual reports from life insurers showed several firms are already compliant with the higher solvency requirement.
“Only about a couple are still noncompliant for the life insurers,” he said.
Meanwhile, there will be insurance companies that will merge to meet the minimum capital requirement but those will be formally announced by the companies themselves, according to Mr. Funa.
Currently, there are 31 life and 55 nonlife insurance companies operating in the country.
So far, he said only the multinational, digital-only life insurance company Singapore Life Private Ltd. (Singlife) will be entering the market this year.
Singlife Philippines CEO Rien Hermans had said they will be operating and launching their products at the start of 2020.
Mr. Hermans also said they are equipped to comply with the minimum paid-up capital requirement worth P1 billion for new insurance firms entering the market.
In an earlier interview, Mr. Funa said Singlife Philippines will be the first in the local market to use a primarily digital platform for its business operations. — Beatrice M. Laforga