Insurer quits business, surrenders license to IC

As a servicing insurance company, AFPGen is now prohibited from entering into new insurance contracts.

The insurance arm of the country’s military and the police has quit the business and has surrendered its license to the Insurance Commission.

The Armed Forces and Police General Insurance Corp. (AFPGen) told the IC that it has ceased operations and gave back its license to IC chief Dennis Funa.

According to Funa, the AFPGen was unable to meet the minimum capital required of all insurers: “While the company’s net worth as of end 2018 is compliant with existing P550 million net worth requirement, the company said it is no longer viable to maintain its insurance business considering that its financial health continuously eroded in the last six years,” Funa 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,” he added.

Under the amended Insurance Code, existing insurance companies, both life and non-life, must have at least P900 million net worth by the end of this year and increase it to P1.3 billion by 2022.

Moreover, the IC chief said AFPGen’s existing policies issued prior to giving up its license, remains valid, existing and binding.

“As a servicing insurance company, AFPGen is now prohibited from entering into new insurance contracts and the licenses granted to its agents are considered revoked,” the IC explained.

“Under existing rules of the Insurance Commission, the withdrawal and cessation of AFPGen will only be approved once the Insurance Commission finds that the company has settled all its outstanding liabilities to its policyholders and creditors,” it added.

AFPGen caters to the non-life insurance needs of the country’s military and police organization.