MANILA - More insurance companies face possible closure due to inadequate capital, after 7 closed voluntarily for failure to meet capital requirements, a source told ABS-CBN News. Up to 6 more companies face closure, according to a source within the commission, who requested not to be identified because the list of firms has not been finalized. Seven companies closed voluntarily this week instead of meeting the minimum P550 million capital requirement. These include Centennial Guarantee Assurance, CAP Life Insurance Corp, FLT Prime Insurance, Manila Surety and Fidelity, Meridian Assurance, The Solid Guaranty, and United Insurance. CAP Life Insurance Corp is not related to CAP General Insurance, College Assurance Plan, or CAP Pension. The 170,000 policy holders of the 7 insurers are still entitled to claims. The companies are only banned from selling new policies, the commission said. "Contract 'yan (That's a contract). If you don't honor it, the holders can sue. Sana maging maayos ang transition para walang problema (We hope the transition will be orderly and problem-free)," said Joe Ferreria, president of personal finance consultancy Money Doctors. "It is important to make sure insurers have enough capital to honor claims. But we also have room for small insurers who can service far flung areas where the large insurers aren't present," he said. The Insurance Commission is doing a good job at ensuring stability, but niche players should also be accommodated, said Nations Reinsurance Corp president Augusto Hidalgo. "Stability is important. But there are so many innovations now in insurance, online and what not, and the players trying to innovate might not be able to meet the capital requirements," he said. National Reinsurance acts as an “insurer” for insurers helping companies manage their risk.
Smaller insurance firms in the Philippines face closure for failing to meet capital requirements. Seven have already opted to shut down instead of meet the PHP550m ($10.6m) minimum capital requirement, a source from the country's Insurance Commission said. The companies' 170,000 policyholders are still entitled to make claims, but the seven firms are banned from selling new policies. Another six insurers are also facing closure, the source added.