By CHINO S. LEYCO
An Indian insurer has infused funds into SGI Philippines General Insurance Co., Inc. to comply with the Insurance Commission’s (IC) capital requirement.
In a statement, Insurance Commissioner Dennis B. Funa said yesterday that Shriram General Insurance Co. Ltd. has injected ₱624 million into its majority-owned non-life insurance firm SGI Philippines.
Following the capital infusion, Funa said that SGI Philippines’ capital rose from ₱710 million to ₱1.35 billion, thereby making it compliant not only with the net worth requirement for 2019 but also up to 2022.
“Last 16 December 2019, Shriram General Insurance Company Limited, an Indian insurance company and the majority shareholder of SGI Philippines, has infused fresh capital amounting to ₱624 million,” Funa said.
This move by the SGI Philippines to comply with the last tranche of capital increase under the Amended Insurance Code is commendable, Funa noted.
“Such action gives us the confidence that SGI Philippines has a solid source of capital to deliver its promises to the insuring public,” he added.
In October last year, SGI Philippines already expressed its ability to comply with the minimum net worth requirement of ₱900 million by the end of 2019.
Under Republic Act No. 10607 or the Amended Insurance Code, existing insurance companies are required to have a net worth of at least ₱550 million by December 2016, ₱900 million by December 2019 and at least ₱1.3 billion by December 2022.
Funa noted that the IC previously required insurance companies to submit their respective capital build-up plan and five-year financial projection in relation to the increase in the minimum net worth from ₱550 million to ₱900 million.
“We required the companies to submit their respective capital build-up plan for us to see an overview of their respective course of action in order to comply with the law-mandated net worth increase and for us to evaluate their capability to comply with the net worth requirement,” Funa.
“The early submission of this plan would also give them time to consider other ways to comply with the requirement, other than cash infusion, such as through entering into merger, consolidation, or acquisition,” he added.
SGI Philippines is a joint venture of Shriram Group — along with Piramal Group and Sanlam Group — which is an Indian financial services conglomerate involved in commercial vehicle financing, consumer and enterprise finance, retail stockbroking, and life insurance, among others.