Hello...
I'm just reposting this bit of a forum I got from another forum, that talks more on money matters, and I found this post quite informative. I already know this since I myself am in the insurance industry, but I would just like to share to you what this particular guy shared in the other forum, since he's been in the industry much longer than I am and knows more than I do.
"...just an unsolicited advise, if the reason for your thinking to terminate your policy is because of the uncertainties and questions lingering in your mind due to what happen with Philamlife's parent company, AIG. I suggest you take comfort with previous historical events that has happened in the Philippine life insurance industry before.
To tell you frankly, there has never been a life insurance company in the Philippines that has been allowed to file for bankruptcy or turn belly-up, for that matter. The life insurance industry is one of the highly capitalized and regulated industries in the Philippines. Unlike what happened with the pre-need industry, in contrast, no life insurance company ever went belly-up in our jurisdiction.
Before a life insurance company can do business, it needs to comply with the paid-up capital requirement imposed by the Insurance Code. Aside from the paid-up capital requirement, every life insurance companies are also required by the Code to maintain a separate fund for "Margin of Insovency" and "Legal Reserve" to answer at all times any liabilities to the insuring public or third parties. This undertaking is assured by the Insurance Commission since such funds are under their supervision and serves as bond of the insurance companies for the faithfull compliance of their obligations. In fact, even if all policyholders will withdraw or terminate their policies at the same time, they will all be served because there is always a reserved fund that is available for such contingency. Even if a 9/11 scenario will happen that will result to the simultaneous filing of claims, every policyholder are assured that as long as their policy is enforced every policy claim will be honored.
If you are in doubt, you may view the full text of the Insurance Code for your peace of mind. What usually happens if a company would like to withdraw its operations from the Philippines if their continued operation is no longer viable, is to sell their existing operation to another company. They will then show proof to the Insurance Commission that they have no outstanding liabilities to their policyholders or third parties since these have all been assumed by the new acquiring company.
Only after the Insurance Commission is satisfied that the public interest have been protected will they finally release to the withdrawing company their money/bond that is deposited with the IC.
I have experienced this event personally when my previous company, ING LIFE INSURANCE PHILIPPINES divested its operations here and sold it to PRULIFE of UK in 2002. Two years before that, AETNA PHILS, also divested its operations and was acquired by ING LIFE.
There were also the likes of CMG, JOHN HANCOCK, and several others who were all acquired by other life insurance companies. However, all policyholders were all protected since 100% of their original contract with the former companies were honored by the new acquiring companies up to the last letter of their original policy contract.
So you see, you need not lose a single night of sleep if you have invested in a life insurance policy with Philamlife or with any other life insurance companies for that matter. I can assure you that the policyholders protection being provided by the Insurance Code and the Insurance Commission is even better than that of the PDIC in relation with bank deposits. With bank deposits, you are protected only up to P250,000.00 while with life insurance, the Insurance Code requires that 100% of the total liability arising out of life insurance policy is honored..."
Hope this info helps...
What to do when you hear that your insurance company is closing down...
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