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Acquisitio of Domestic Insurance Co
Min Cap Req
Insuranc Broers and Agentss





A certificate of authority must be obtained from the Philippine Insurance Commission (IC) before a person can engage in the insurance business. 

There are no foreign equity restrictions on insurance companies. 


An insurance company may be established as a domestic company, a branch of a foreign insurance company, or a mutual benefit association. (The discussion below focuses on domestic insurance companies and branches of foreign insurance companies.) A foreign insurance company may do business in the Philippines, provided (i) it is among the top 200 foreign insurance corporations globally, or among the top 10 insurance companies in its country of origin, and (ii) it has been doing business for the last 10 years as of the date of its application for IC approval. 


In addition, if the foreign insurance company will establish a domestic insurance company or a branch (as opposed to acquiring shares in an existing domestic insurance company), it must be (i) widely owned and/or publicly listed in its country of origin, or (ii) majority-owned by the government of the country of origin. The term “widely-owned” means that not a single stockholder of the applicant owns more than 20% of its voting stock; while “publicly listed” means that its shares of stock are listed in the stock exchanges. 

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A new domestic insurance or a branch must have a minimum capital paid-up capital / assigned capital of PHP1 billion.6 In addition:

  • In the case of a domestic company, the IC may require the stockholders of a new insurance company to pay in cash to the company, in proportion to their subscription interests, a contributed surplus fund of not less PhP100 million.

  • In the case of a branch, in must deposit with the IC, for the benefit of policyholders and creditors of the foreign insurer in the Philippines, securities which have a market value of not less than PhP1 billion. The securities must be acceptable to the IC, and at least 50% of the securities must consist of bonds or other instruments of debt of the Government of the Philippines. 


Existing insurance companies (domestic companies and branches) as well as those to be established before 31 December 2019 must comply with the following net worth requirement:

  • Minimum net worth: Php 900 million | Compliance Date: 31 December 2019

  • Minimum net worth: Php 1.3 billion | Compliance Date: 31 December 2022

The minimum paid-up capital and net worth requirement must remain unimpaired for the continuance of the license.  Foreign insurance companies are required to set aside an amount corresponding to the legal reserves of the policies written in the Philippines, and such amount may be invested only in certain classes of acceptable Philippine securities subject to aggregate limits. 


Further insurance companies must comply with solvency requirements. The IC adopts a risk-based capital approach.  


The President of the Philippines has the power to order a periodic review of the capital structures of insurance companies, to determine the capital adequacy of the local insurance industry, every two (2) years from and after the integration and liberalization of the financial services (including insurance,) in the ASEAN Region. 

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Prior IC approval must be obtained for an acquisition by a foreign company of control of a domestic insurance company. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities by a contract other than a commercial contract for goods or non-management services or otherwise. Control is presumed to exist if any person directly or indirectly owns, controls or holds with the power to vote 40% or more of the voting securities of an insurance company.

In reviewing a proposed acquisition of control, the IC will consider the following factors:

  1. the financial condition of the acquiring person and the insurer;

  2. the trustworthiness of the acquiring person or any of its officers or directors;

  3. the plan for the proper and effective conduct of the insurer’s operations;

  4. the source of the funds or assets for the acquisition;

  5. the fairness of any exchange of stock, assets, cash or other consideration for the stock or assets to be received;

  6. whether the effect of the acquisition may be substantially to lessen competition in any line of commerce in insurance or to tend to create a monopoly therein; and,

  7. whether the acquisition is likely to be hazardous or prejudicial to the insurer’s policyholders or stockholders.

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Insurance companies are considered ‘covered persons’ under the Anti-Money Laundering Act. A new insurance company must register as such with the Anti-Money Laundering Council. 

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A person (an individual, partnership, or corporation) intending to act as an insurance broker or an insurance agent must obtain authority from the IC. 

An insurance agent refers to a person who, for compensation, solicits or obtains insurance on behalf of any insurance company or transmits for a person other than himself an application for a policy or contract of insurance to or from such company or offers or assumes to act in the negotiating of such insurance. On the other hand, an insurance broker refers to any person who, for any compensation, commission or other thing of , acts or aids in any manner in soliciting, negotiating or procuring the making of any insurance contract or in placing risk or taking out insurance, on behalf of an insured other than himself. A reinsurance broker is one who, for compensation, not being a duly authorized agent, employee or officer of an insurer in which any reinsurance is effected, acts or aids in any manner in negotiating contracts of reinsurance, or placing risks of effecting reinsurance, for any insurance company authorized to do business in the Philippines.

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