IC to further tighten reportorial requirements on insurance firms

The Insurance Commission (IC) is considering requiring insurance companies to submit quarterly financial reports on top of the present annual statements.

This as the IC has increased penalties on insurance companies failing to submit their regular annual statements every end of April. It also increased the minimum authorized capital level to ensure the financial health of the insurers.

From a mere P100 per week, the penalty for life and non-life insurance companies failing to submit by April 30 their annual statements was raised to P5,000 per day.

In addition, the commission threatened to withhold the issuance or reissuance of the certificate of authority (CA) of companies that fail to comply with the new ruling or fail to pay the corresponding penalties.

The CA is renewed every year or at the start of July each year. Without the CA, an insurance company cannot operate.

"There are too many spoiled insurance companies, and the old penalty is a joke," Benjamin S. Santos, IC commissioner said. "If they can meet the April 15 deadline of the Bureau of Internal Revenue, I see no reason for them not to meet our April 30 deadline."

A number of insurance companies reportedly wait for the early reports, especially from their main competitors, in order to revise their own. There are also companies that consistently filed their statements late.

Santos said as soon as the companies have adapted to submitting their annual statements on time, the IC will introduce quarterly reporting.

Most of the life and non-life insurance companies interviewed by The STAR welcomed the proposal. In fact, Insurers who are subsidiaries of foreign insurers actually make monthly, quarterly, semi-annual and annual reports.

There have been concerns by the public that the leniency of getting more frequent reports could lead to serious results such as in the case of pre-need firms CAP and Pacific Plans. IC officials admitted that complaints continue to swamp the government office regarding companies, especially those in the non-life sector, for non-payment of claims. "That could be avoided if the IC can closely monitor the industry, Santos said.