Definition and Classification of Composite Insurance Companies
- New composite insurers: companies licensed to transact life and non-life insurance concurrently after the Amended Insurance Code’s effectivity.
- Existing composite insurers: companies licensed for both types of insurance prior to the Amended Insurance Code’s effectivity.
Minimum Capitalization Requirements for New Composite Insurers (Section 1)
- Paid-up capital of at least P2 billion: P1 billion allocated to life insurance and P1 billion to non-life insurance units.
- The Commissioner may require a contributed surplus fund of at least P200 million, equally split between life and non-life units.
- Minimum paid-up capital must remain unimpaired throughout the license validity.
Minimum Net Worth Requirements for Existing Composite Insurers (Section 2)
- Staged net worth targets for both life and non-life units:
- P550 million each by December 31, 2016
- P900 million each by December 31, 2019
- P1.3 billion each by December 31, 2022
- Total minimum net worth for existing composite insurers to comply with accordingly:
- P1.1 billion by December 31, 2016
- P1.8 billion by December 31, 2019
- P2.6 billion by December 31, 2022
Additional Unit Capital Requirements for Existing Life or Non-Life Insurers Applying for Composite License (Section 3)
- The new unit must comply with minimum net worth requirements under Section 194 of the Amended Insurance Code in addition to the existing capital for their current license.
Minimum Capitalization/Net Worth for Insurance Cooperatives (Section 4)
- Cooperatives require at least 50% of the capitalization/net worth requirements imposed on non-cooperative insurance companies.
Applicability of Risk-Based Capital Framework (Section 5)
- These capitalization and net worth requirements are without prejudice to other risk-based capital requirements under Commission Circular Letters and their amendments.
Separability Clause (Section 6)
- Invalidity of any portion of the guidelines does not affect the validity and enforceability of the remaining provisions.
Repealing Clause (Section 7)
- All inconsistent rules, regulations, or circular letters are repealed, modified, or amended accordingly.
Transitory Provisions and Compliance for Existing Composite Insurers (Section 8)
- Existing composite insurers must formally declare within 65 days whether to continue as composite or cease either life/non-life units.
- Non-compliant insurers choosing to remain composite are given one year to comply with net worth requirements.
- Certificates of Authority for 2019-2021 may be renewed if compliant with other Commission requirements.
- Those discontinuing one or both units must follow prescribed procedures for voluntary cessation or servicing licenses.
Effectivity (Section 9)
- The guidelines take effect immediately upon issuance.