The insurance industry is urging the Insurance Commission (IC) anew to postpone the mandated increase in their minimum capital set for this yearend, saying many companies are still far from meeting the higher requirement.
Philippine Insurers and Reinsurers Association (PIRA) chairman Edgardo D. Rosario and Etiqa Philippines CEO and Philippine Life Insurers' Association President (PLIA), Mr. Rico T Bautista, urged the regulator to delay the increase, reported BusinessWorld.
Insurance companies’ minimum capital requirement was increased to PHP900m ($16.5m) at the end of 2019 from PHP550m, and is to be raised to PHP1.3bn by end-2022, according to the Insurance Code.
At the two-day Second Virtual Philippine Insurance Summit that ends today, PLIA’s Mr Bautista said, “It is the industry’s view that proceeding with the PHP1.3-bn level would make us disproportionately overcapitalized relative to our market size, as compared with our Association of Southeast Asian Nations counterparts.”
He added that 12 companies or 38% of the insurance industry are at risk of being unable to meet this requirement. Among them, four are currently PHP275m to PHP488m short of the PHP1.3bn requirement.
Mr. Bautista added that the funds to be used by insurers to meet the higher requirement could instead have been used on their digital transformation.
Source: asiainsurancereview.com