Likewise, two non-life insurers stopped operations up to the end of 2003.
The CDO issued this month ordered South Sea and Insurance Co. Inc., Luzon Insurance and Surety Co. Inc., Investors Assurance Corp., and First Quezon City Insurance Co. Inc. to stop operations until it has met the minimum paid-up capital of P30 million as of end September.
The four non-life insurers, whose certificate of authority (CA) to operate have been suspended, are involved in the insurance, among others, of surety and judicial bonds. It has been reported that First Quezon City Insurance Co. has incurred arrears with the judicial system for unpaid bonds.
Based on DOF, all life and non-life insurance companies must have a paid-up capital of at least P50 million. But those that fail to reach P50 million, though able to surpass the P30-million paid-up capital level by end September, will be allowed to continue operating until the end of the year wherein their paid-up capital should have reached P50 million.
IC officials said industry players have no reason to fail to comply as they had already been warned since last year. The original July deadline was, in fact, expected just to accommodate the 16 non-life insurance firms that were unable to meet the minimum paid-up level.
"It was clear to all the industry players and they agreed to the terms as well as the extension," they said.
Meanwhile, Far Eastern Surety and Insurance Co. Inc., and Times Surety and Insurance Co. Inc., voluntarily "opted not to renew their licenses for the year 2002-2003."
Finance Secretary Jose Isidro Camacho last June warned insurance industry players that the department would not reverse its minimum paid-up capital requirement although an extension was negotiable. The IC sought an extension in behalf of the industry earlier.
In early June, 16 non-life insurers were unable to meet the required P50-million capital. Of the total, 10 had a capital of only P10 million while remaining six had over P20 million.
Camacho allowed an extension of up to the end of the year but under certain conditions.
The new extension follows the IC proposal that by end September, insurers must have at least a paid-up capital of P30 million. By yearend, insurers should have reached the minimum P50 million.
The IC made it clear however, that those who fail to reach the minimum P30 million by end September would immediately be issued a cease-and-desist order (CDO) and its certified of authority (CA) would be revoked.