Insurance firm given deadline to fill capital gap

The Insurance Commission (IC) has given non-life insurer CICI General Insurance Corp. until June 30 to fill a capital deficiency of P59 million.

Failure to meet the deadline may lead to a non-renewal of CICI’s certificate of authority (CA) to operate, which means it will not be allowed to sell new insurance policies although it will be required to service its existing policies.

According to unnamed IC officials, CICI General Insurance claims to have properties in Zambales and Metro Manila worth over P59 million. However, these properties may not be easily disposed of to provide liquidity for large claims.

The same sources said that while the properties in Metro Manila may be easily sold and converted into cash amounting to some P10 million, the properties in Zambales are a different matter.

"It turns out that the Zambales properties have huge unpaid levies with both the local government of Olongapo and the provincial government of Zambales claiming rights to unpaid taxes," they said. "In effect, CICI (General Insurance) can not yet use the properties as collateral for its impaired capital.

Unconfirmed reports show that there is also a P1-million capital gains tax issue tied to the Zambales properties, which the CICI has to settle.

Sta. Lucia Realty Corp. reportedly manages the contested properties although the titles are said to be in the name of several individuals. "We can not accept these properties until they are placed in the name of CICI General Insurance," officials said.

CICI officials reportedly want a three-year lead time to dispose of the properties.