IC: 32 insurers in financial trouble
MANILA, Philippines - The Insurance Commission (IC) said 32 life, non-life and insurance firms and mutual benefit association (MBA) companies are presently under various stages of conservatorship, receivership or for liquidation.
According to IC deputy commissioner Vida Chiong, the main reason for the “penalty” has to do with the companies’ inability to comply with such regulations as the proper margin of solvency, insufficient reserves, or non-compliance with the minimum paidup capital of P175 million.
However, Chiong said majority of those technically suspended have been in a stage of limbo for some time, while others are relatively new cases.
“For example, we have also been advised that Sony Life of Japan has made public their intention of withdrawing operations in the Philippines,” the IC official said.
All told, there are 101 industry players – or four composite license holders (life and non-life insurance operations), 29 life insurers, 68 non-life insurers and one re-insurer.
The companies under an IC-assigned conservator are: Fire Services Mutual Benefit Association Inc., Travelers Life Assurance of the Philippines Inc.; CICI General Insurance Corp., Algen Insurance Corp., Filipino Merchants’ Insurance Co. Inc.; Cathay Insurance Co. Inc.; Philippine Public School Teachers Association (PPSTA); The Capital Insurance & Surety Co. Inc.; Wellington Insurance Co. Inc.; Mantrust General Insurance Corp.; Times Surety and Insurance Co. Inc.; First Quezon City Insurance Co. Inc.; Luzon Insurance & Surety Co. Inc.; The Imperial Insurance Inc.; Tico Insurance Co. Inc.; AFISCO Insurance Corp.; National Life Insurance Co. of the Philippines; Value General Financial Insurance Co. Inc.; CCC Insurance Corp.; Philippines General Insurance Corp.; and, Insurance of the Philippines Co. Inc.
A company under an IC-appointed conservator is generally non-compliant with certain regulations, thus the conservator takes charge of the company to preserve the troubled insurer’s assets, take charge of the company, and attempt to restore the company to vitality, or recommend its liquidation.
The companies under receivership are: Covenant Assurance Co. Inc.; South Sea Surety & Insurance Co. Inc.; and Central Surety & Insurance Co. Inc.
For liquidation are: Fidelity Insurance Co.; Philippine Association for Vocational Education (PAVE) MAS Fund; Rico General Insurance Corp.; Nicphil Insurance Inc., Mega Pacific Insurance Corp.; Development Insurance & Surety Corp.; Zenith Insurance Corp.; and General Insurance & Surety Corp.
“There is a very thin line between a company under receivership and one placed for liquidation,” Chiong pointed out.
According to the Insurance Code of 1974, a troubled company is placed under an IC-assigned receiver after it has been order to cease operations, except to service claims.
The insurer stops transacting business, due to reasons of insolvency or “the continued exercise of business will be hazardous to the policyholders and creditor, . . . for the purpose of bringing suits and foreclosing mortgages in the name of the insurer.”