Non-life insurers want the industry regulator to stipulate that the minimum capital requirement would be maintained at the current level of PHP900m ($17.6m) under a pending Senate bill aimed at raising the minimum to PHP1.3bn by the end-2022.
In a letter, last month to Senator Grace Poe, who chairs the Senate committee on banks, financial institutions, and currencies, the industry group Philippine Insurers and Reinsurers Association (PIRA) noted that the current minimum net worth required among insurance players was “sufficient” to maintain insurers' solvency, according to a report on the news website Inquirer.net.
Also, the PHP900m minimum capital requirement in place since 2019 is already among the highest in the region, PIRA chair Edgardo Rosario said.
PIRA told Ms Poe that non-life companies in Vietnam had a net worth requirement equivalent to at least PHP667.9m; PHP517.7m in Indonesia; PHP480m in Thailand; and PHP363.4m in Singapore.
The group said the prevailing net worth level was “more than sufficient as [it acts] as buffer or early warning signal before a company shall be unable to pay its claims and liabilities to policyholders and creditors.”
The Philippine Life Insurance Association is also working on its comments on the proposed law amendment, its general manager George Mina said.