In an interview with reporters, PLIA president Hans Loozekoot said the organization and the Philippine Insurers and Reinsurers Association (PIRA) are asking the IC to cap the capitalization requirement of insurance companies at P900 million and not to increase it anymore to P1.3 billion by 2022.
Insurers urge IC to cap capital hike to P900 M
Mary Grace Padin (The Philippine Star) - August 1, 2019 - 12:00am

MANILA, Philippines — Life and non-life insurers are asking the Insurance Commission (IC) to reconsider its plan to raise their capital requirement to P1.3 billion to ensure the industry’s competitiveness and to allow them to invest in digital technologies, according to the Philippine Life Insurance Corp. (PLIA).

In an interview with reporters, PLIA president Hans Loozekoot said the organization and the Philippine Insurers and Reinsurers Association (PIRA) are asking the IC to cap the capitalization requirement of insurance companies at P900 million and not to increase it anymore to P1.3 billion by 2022.

“We feel, together with the PIRA, that a P900 million capital requirement should be kept and not further increased to P1.3 billion,” Loozekoot said on the sidelines of PLIA’s 69th Anniversary celebration on Tuesday night.

Under Republic Act (RA) 10607 or the Amended Insurance Code of the Philippines, new players in the industry are required to have P1 billion in paid-up capital when they establish business in the country.

Existing insurers must have a paid-up capital of at least P250 million by June 2013, P550 million by December 2016, P900 million by December 2019 and P1.3 billion by December 2022.

According to Loozekoot, the P900 million capital requirement, to be implemented by the end of 2019, should already be enough to ensure that the industry is well-capitalized, and that it is at par with other insurers in Association of Southeast Asian Nations (ASEAN) member-countries.

“I think P900 million is probably enough to support the businesses and to give indeed the confidence to stakeholders that we are strongly capitalized to have a buffer for our obligations to policyholders. We feel that we should not necessarily be at a stricter regime than other countries in the ASEAN sector. You want to still be able to compete,” he said. 

Furthermore, he said capping the capital requirement at P900 million would allow insurance companies to allocate their funds for other purposes, such as digitization.

“It is important that we are able to invest in different capabilities – data analytics, digital marketing – and if we need to lock in further capital, we need to find more capital even to invest in the future,” said Loozekoot, who also serves as president and chief executive officer of Troo, the life insurance joint venture between EastWest Banking Corp. and Ageas.

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