MANILA - Insurers have won a respite from a government order for them
to hike their capital by P250 million by the end of this year.
A Quezon City Regional Trial Court has ordered Finance Secretary
Cesar V. Purisima to stop implementing a Department Order No. 15-2012,
which requires insurance companies to gradually increase their capital
to P1 billion by 2020.
Issued by Branch 80 of the QC court, the ruling also stops the
Department of Finance from requiring all insurers to hike their capital
to P250 million this year. Failure to comply with the DOF order would
have led to the revocation of an insurer's license.
The Philippine Insurers and Reinsurers Association (PIRA) earlier
held a dialogue with Purisima to stave off the capital hike, which is
meant to protect the public from unscrupulous insurance firms that
renege on their contracts. The DOF however turned down the insurers'
request, forcing them to go to court.
PIRA members had argued that the P1 billion paid-up capital
requirement was “too high” for companies that sell only P300 million
worth of risk cover.
source: interaksyon.com