The commission also sought the assistance of the National Bureau of Investigation (NBI) to put a stop to the illegal practice which is depriving the country of tax revenues.
The country’s life insurance industry has called the attention of the commission since last year on the illegal practice which robbed domestic insurers of the opportunities.
Policies illegally sold by foreign entities were cheaper as it was free of taxes. Local players had to deal with the five-percent premium tax on every policy written plus the corporate and income taxes required of a legitimate corporation.
According to the Philippine Life Insurance Association (PLIA), the action taken by the IC raised important issues.
"That is, to stamp illegal businesses of unlicensed insurers, tax evasion concerns with the non-payment of premium and documentary stamp taxes, and to protect the local industry," Peter Coyuito, PLIA president said.
Coyuito welcomed the vigilant coordination with the IC with the Hong Kong authorities to warn the public against Zurich Financial Services/Zurich International Life’s business solicitation without the proper licenses.
Last April, the IC also urged the NBI to institute appropriate legal action against violators of the Insurance Code. It called for further investigation and enforce the subsequent legal action against the violators.
"The business of insurance is one which is affected with public interest and as the principal regulator of the insurance industry, the IC cannot tolerate the illegal practice of soliciting insurance business by an unauthorized insurer and its agents in the country," IC Commissioner Evangeline C. Escobillio said in her letter to the NBI.
Early this year, PLIA also called the attention of the IC regarding "parachute" or foreign wealth managers offering policies issued by foreign insurers. Their principal targets are the wealthy Filipinos in the class A and B category, who seem to have lost trust in the Filipino financial managers.
The practice does not only prejudice against the 35 registered life insurance companies in the Philippines, but it also deprives the National Government of much-needed tax revenues.
The PLIA alleges that the "foreign life insurance companies are soliciting business in the Philippines without the required license from the IC."
Among the leading foreign banks in the country are Chinatrust Commercial Bank, Citibank NA, Hongkong Shanghai Banking Corp. (HSBC), and Standard Chartered Bank of the Philippines.
Coyuito said its members have received information that foreign banks package their wealth products with life insurance policies issued by foreign insurers.
Rich Filipino clients are seduced by the wealth managers or private banking executives of foreign banks by such offers as free travel expenses to other Asian countries for health and medical examination, they added.
"This practice is inimical to the interest of the Philippine economy considering the loss of tax revenues as these entities do not pay the requisite dues for the business solicited," Coyuito lamented.