MANILA, Philippines – While the insurance industry remains in discussions regarding the proposed P1-billion minimum paid-up capital requirement, about 30 percent of life and non-life insurance companies still have yet to comply with the present minimum paid-up capital of P175 million.
The insurers have up to March 31 to comply or they will not be issued a certificate of authority (CA) to operate for the period 2012-2013.
Of the total number of insurers that have so far failed to comply with the minimum paid up capital, seven are life insurance companies while 28 come from the non-life insurance industry.
According to the Insurance Commission (IC), 14 non-life insurance firms are “partially complied”, meaning they already made infusions to their capital base but are still short of the P175-million level.
There are 117 insurance companies in the country, consisting of 31 life insurance firms, 81 non-life insurers, one re-insurer, and four composite (life and non-life insurance) firms.
The insurers said they are inclined to take more drastic action against plans to increase minimum paid-up capital to P1 billion.
In a public consultation at the IC, the group expressed disappointment that government was not able to present the formula for arriving at the capital requirement.
“We gave our position papers last week, and we were expecting government to present their scientific formula,” the insurers said.
They pointed out that they could defy the new department order and go to the extent of filing for a temporary restraining order or court injunction stopping the new regulation of the finance department.
IC Deputy Commissioner Vida Chiong said that compared with other Asian nations, the country had the lowest capital level of $4 million (P125 million) as of 2009.
She said the minimum capital level in other Asian nations are: $7 million in Cambodia; Indonesia, $8 million; Singapore, $8 million; Thailand, $16.5 million; Malaysia, $33 million; Vietnam, $40 million; and Brunei, $6.44 million (non-life only).