The Insurance Commission (IC) said the statutory increase in capital of insurance companies by end-2016 would continue to be pursued no matter the preliminary injunction issued by the courts stopping the Department of Finance (DOF) from implementing the increase.
This was because the preliminary injunction issued by the Quezon City Regional Trial Court (RTC), which was recently affirmed by the Court of Appeals (CA), had already become moot with the passage of the amended Insurance Code in 2013.
According to Deputy Insurance Commissioner for Legal Affairs Dennis Funa, the issue in the case wherein the preliminary injunction was issued centered on the validity of Department Order (DO) 15-2012, which ordered the increase in the capital of insurance companies.
“But the said DO had already been superseded by the amendments to the Insurance Code, which mandates the increase in capitalization of insurance companies,” Funa told the BusinessMirror.
Under the amended Insurance Code, new insurance companies must have a minimum paid-up capital of P1 billion, while existing insurance companies must comply with the phased schedule of increase in capital, with such capital mandated to be at least P1.3 billion by 2022.
By the end of 2016, existing insurance companies should have already achieved a capital of at least P550 million.
Funa said of the 16 petitioners that originally filed the case questioning the validity of DO 15-2012, only three are still operational.
He added the IC would not recognize the preliminary injunction issued by the Quezon City RTC, nor the recent decision of the CA upholding the validity of such preliminary injunction.