IC gives All Asia Life more time to raise its capital

The Insurance Commission (IC) has extended to September the deadline for All Asia Life Assurance Corp. to fill its capital deficiency.

"It is the final extension. If they fail again, we have to enforce the law," said IC Commissioner Eduardo T. Malinis.

The original deadline was set for end June this year. But the insurer sought an extension saying it was waiting for the court to issue what they expect to be a favorable decision involving certain properties, which would be used to fill up its capital deficiency of P123.4 million.

All Asia Life submitted documents covering the remaining capital deficiency among which were proof of ownership, an appraiser’s report, proof of non-encumbrances in tax responsibilities, and the like. The properties consist of 291 lots at the Golden Haven Memorial Park said to be worth P120 million.

The commission said they were given an assurance that the court would be handing down a decision by September. "They said that it is just a formality and that it will rule in favor of the legitimacy of the properties," the commission assured.

Clearance by the IC of All Asia Life’s capital deficiency will allow it to operate unhampered. The commission said that it has been paying claims, and has raised it capital beyond the minimum P50 million capital requirement.

In February this year, ATR Kim Eng Capital Partners Inc. acquired troubled All Asia Life for an undisclosed amount. ATR got control of almost 90 percent of the life insurance firm. Former parent company, All Asia Capital and Trust Corp. (AACTC), retained 10-percent stake through its subsidiary, All Asia Insurance Holdings.

Earlier, ATR also acquired GE Life Insurance Co. Inc. and named the new insurer as ATR Professional Life Assurance Corp. ATR Professional Life will concentrate on group insurance and other wholesale insurance products. All Asia Life will focus on the individual insurance business.

All Asia Life had been performing credibly until its parent company. AACTC got into financial problems and dipped its fingers on the life insurer. AACTC withdrew P240 million from All Asia Life to meet maturing debts and operational expenses.

"It is only then that they became delinquent," Malinis said. In 2000, All Asia Life registered a premium income of P217 million allowing it to be ranked among the top 20 insurers in the country.

AACTC has an existing debts of $17 million (roughly P850 million) with the International Finance Corp. (IFC), the private investment arm of the World Bank. Aside from the loan, the IFC also controls seven percent of AACTC worth almost $4 million.