8 insurance firms invest P555M in government securities

Eight insurance firms invested at least $11 million (roughly P555 million) in various instruments during the first three months this year,the Insurance Commission (IC) reported yesterday.

The IC said these dollar-denominated investments, which were made with the National Government," included $3 million from Pioneer Allianz Life Assurance Corp. in the form of high yield reserve assets facilities.

Another investor is the Yuchengo-led Great Pacific Life Assurance Corp. (Grepalife) which acquired over $1.2-million worth of Republic of the Philippines bonds with maturities ranging from four to six years.

New York Life Insurance Philippines Inc., a new player in the life insurance industry, bought $3 million worth of dollar-denominated bonds with maturities ranging from two to six years.

Other insurers that invested in dollar-denominated bonds are the UCPB General Insurance Co. Inc., Tokio Marine Malayan Insurance Co. Inc., Cibeles Insurance Corp., Reliance Surety and Insurance Co., and the National Reinsurance Corp. of the Philippines (National Re).

Last year, insurers sank at least $62.7 million in US dollar-denominated investments as the peso weakend.

The Insurance Code requires life insurance companies to invest at least one-fourth of their paid-up capital in government securities. The amount is deposited with the IC as a contingency surplus much like the reserve requirement of banks deposited with the Bangko Sentral ng Pilipinas (BSP).

Total investments by insurance companies in government-initiated investment instruments reached P10.16 billion. These were infused in various investment instruments including government bonds, corporate bonds, eurobonds, corporate loans, bank notes, government securities, capital markets, and commercial papers. In 2000, the life insurance industry invested a minimum P14.84-billion or a 31.5-percent better than last year.