The Philippines’ Insurance Commission (IC) has lifted its order that placed Metropolitan Insurance Co. under conservatorship, after an infusion of capital from a Hong Kong-based firm.
Streetcorner E-Commerce Ltd invested in the troubled general insurer, allowing Metropolitan to meet the PHP550 million (US$10.7 million) net worth requirement imposed by the IC, the Philippine Star reported. The investment has kick-started the insurer’s rehabilitation.
Furthermore, the IC ordered Streetcorner to invest more capital into Metropolitan, in order to meet the next round of increase in capital requirements that will come into effect on December 31. After that date, insurers must have a minimum capital of US$19 million in order to continue operating.
In December 2017, the IC revoked Metropolitan’s approval to operate and placed it under conservatorship, due to failure to meet the capital threshold imposed by the regulator one year prior.
To meet the capital deficit of PHP421 million (US$8.25 million), Metropolitan met with several investors. Streetcorner agreed to invest PHP422 million on May 21 through a share purchase and subscription agreement.
According to the IC, it is gradually increasing the minimum capital requirements of insurers to make sure that they are able to meet their obligations to their clients, as well as boost their competitiveness with other insurance firms in the ASEAN region.
