Definition of Paid-Up Capital for Solvency Margin Calculation
- When determining the surplus available to comply with the margin of solvency, the paid-up capital used must be equal to the minimum paid-up capital required for the company's specific category.
Minimum Paid-Up Capital Requirements by Company Category
- Direct writing companies existing before March 1992: minimum paid-up capital of P50 million.
- Professional reinsurers existing before March 1992: minimum paid-up capital of P75 million.
- Insurance companies organized under Department Orders Nos. 27-92 & 100-94:
- Companies with 60% or more Filipino equity: minimum of P75 million.
- Companies with more than 40% but less than 60% Filipino equity: minimum of P150 million.
- Companies with 40% or less Filipino equity: minimum of P250 million.
Scope and Applicability of the Circular
- These rules apply in relation to the effects of increases in paid-up capital and adherence to Sections 194 and 247 of the Insurance Code.
- The provisions aim to ensure the financial soundness of insurance companies through capital requirements aligned to their classification.
Effective Date
- The circular became effective immediately upon issuance on March 29, 2004.
Legal Authority
- Issued under the authority of Eduardo T. Malinis, Officer-in-Charge.