MANILA, Philippines - The Securities and Exchange Commission (SEC) has approved the increase in capital stock of two of the country’s largest insurance firms.
Fortune General Insurance Corp. and Fortune Life Insurance Co. Inc. doubled their capital to P500 million in 2012 from P250 million and P313 million, respectively in 2011.
The life and non-life insurance companies did nothave to tap the capital markets as funds were sourced from internal funds and infusion from stockholders of the companies.
This move is in anticipation of the full implementation of the mandated increase in the capitalization requirement for life and non-life insurance companies.
The government, through the Department of Finance, called for the capital enhancement of all life and non-life insurance companies to keep them at par with insurers in neighboring countries.
Finance Secretary Cesar Purisima, in a department order, required all Philippine-based insurers to have a capital of not less than P250 million.
In his directive, Purisima stated that the business of insuring the lives and property of Filipinos was a capital-intensive activity, requirement the infusion of a bigger amount of capital than that usually put up by insurers.
By 2020, the country’s insurers should have a minimum paid-up capital of P1 billion.
Fortune Life and Fortune General are members of the Fortune Insurance Group of the Antonio Cabangon-Chua. Aside from insurance firms, the group is also composed of Fortune Medicare Inc., a health maintenance organization.