By Lawrence Agcaoili

The Insurance Commission has given 35 life and non-life insurance companies until the end of the month to raise their paid-up capital in compliance with the industry?s capital build-up program.

Vida Chiong, deputy commission of the Insurance Commission, told reporters during yesterday?s 1st general membership meeting of the Philippine Life Insurance Association that 29 non-life insurance providers and six life insurance companies had yet to increase their paid-up capitalization to P75 million.

Chiong said a Finance Department order calling for a capital build-up program until 2010 was still in effect as Finance Secretary Margarito Teves had not deferred its implementation.

Under the program, wholly- owned Filipino life and non-life insurance companies are required to meet a minimum capitalization of P50 million and a minimum net worth of P100 million until they reach P250 million and P500 million by 2011.

Insurance firms with foreign equity of 40 percent or less are required to have a minimum capitalization of P100 million and a net worth of P200 million and increase them every year until they reach P300 million and P600 million by 2010.

Companies with foreign equity of more than 40 percent but less than 60 percent, meanwhile, are required to comply with a minimum capitalization of P150 million and minimum net worth of P300 million and raise them to P350 million and P700 million by 2010.

Insurance providers wanted the government to remove the provision requiring them to meet the statutory net worth and extend the deadline for meeting the required P250 million paid-up capital to 2015 instead of 2011.

Chiong said the commission was confident that only less than 10 of the 35 insurance providers would not be able to comply with the higher capitalization as most of the companies are already in the process of completing their documentations.

?We see some companies that could easily comply because they can either convert their contributed surplus to paid-up capital or they can declare stock dividends,? she said.

She said insurance providers that are hard pressed to meet the higher capital requirement could seek additional infusions either from shareholders or new partners.

Chiong said the commission would not hesitate to issue a cease-and-desist order on insurance providers that fail to comply with the higher capitalization requirement.

The government wants insurance providers to beef up their capitalization to help boost the confidence of the public despite the financial meltdown in the US brought.