The Armed Forces and Police General Insurance Corp. (AFPGen) has voluntarily surrendered its license as non-life insurance company as it can no longer raise the required net worth for insurance companies by the end of the year, the Insurance Commission (IC) said.
The IC said in a statement yesterday the company has applied for a servicing license, and that all existing policies issued by AFPGen before the surrender of its license are still valid, existing and binding.
Under the Amended Insurance Code, existing insurance companies need to have a net worth of at least P900 million by yearend and P1.3 billion by 2022.
“While the company’s net worth as of end 2018 is compliant with the existing P550 million net worth requirement, the company said that it is no longer viable to maintain its insurance business considering that its financial health continuously eroded in the last six years,” Dennis Funa, insurance commissioner, said.
“Now as a servicing insurance company, AFPGen’s operation is limited to servicing its existing policyholders. All insurance contracts and policies issued by AFPGen shall remain to be valid and AFPGen is required to fulfill its obligation under these contracts,” Funa said.
As a servicing insurance company, the IC said AFPGen is prohibited from entering into new insurance contracts and the licenses granted to its agents are considered revoked.
“In order to ensure that its outstanding liabilities to its policyholders are addressed, an overseer has been appointed to determine and monitor the company’s compliance,” Funa said.