The International Finance Corp. (IFC), the private-sector arm of the World Bank, has placed a US$1.5-million quasi-equity investment in a small insurance firm, Paramount Life and General Insurance Co.

With the investment, the insurance company, which is engaged in both life and nonlife business, will set up a holding company that would buy other insurers, both foreign and local, that have closed shop.

"Through this investment, IFC will help Paramount expand and fortify its business operations, as well as allow it to finance strategic acquisitions. It will [also] support the government's efforts to promote healthy industry consolidation," visiting IFC executive vice president Peter Woicke said on Wednesday.

Principal shareholders of Paramount are the Chinese-Filipino families Go and Chu from Cebu and the Tahija family from Indonesia. with the investment, IFC will have a 20-percent stake in the insurance firm.

A quasi-equity stake is a debt instrument that offers its holder rights and benefits similar to those offered to the holders of shares.

Paramount chief executive officer Patrick Go said the company expects to buy more firms in the future, owing to the global downturn in the insurance industry.