The Insurance Commission (IC) has issued a new license to AIA Philippines Life and General Insurance Co., Inc. following its merger with Philam Equitable Life Assurance Co., Inc. (PELAC).

In a statement, Insurance Commissioner Dennis B. Funa said on Thursday, April 28, that the IC needed to issue a new certificate of authority to transact insurance business to AIA Philippines following the approval of its merger with PELAC.

To recall, the Securities and Exchange Commission (SEC) approved in March this year the merger of the two life insurers, with AIA Philippines as the surviving entity.

AIA Philippines’ new license, with No. 2022/04-R-A, will take effect on April 1, 2022, Funa said.

IC said the issuance is in compliance with the Circular Letter No. 2021-52 or “Omnibus Guidelines on the Consolidation and Merger of Insurance Companies” dated Sept. 10, 2021.

Under the IC circular, “the constituent companies to a merger are required to surrender their respective licenses and apply for a new license with the IC after the SEC’s approval of the merger.”

It will be recalled that PELAC, one of the constituent companies to the merger, was previously an inactive company as of 2020, although licensed with the IC and compliant with the statutory net worth requirements.

PELAC was a wholly-owned subsidiary of the Philippine American Life and General Insurance Co. (PhilamLife), a member of the AIA Group.

It will likewise be noted that PELAC was previously a bancassurance venture between Equitable Bank and PhilamLife.

However, following Equitable Bank’s merger with Banco de Oro (BDO), which bank was already under a bancassurance partnership with Generali Insurance, PELAC became redundant.

In consequence, the bancassurance agreement between PELAC and BDO as successor of Equitable Bank, was terminated in 2009, and the insurance business in BDO was subsequently agreed to be shared between Generali and PhilamLife, Funa said.