‘Insurance premium increase inflationary, must be paused’

Alawmaker is urging the Insurance Commission (IC) to suspend its recent disaster premium hike policy, claiming that it would exacerbate the increase in food prices as insured Filipinos would have to shell out more money for their policies.

AGRI Party-list Rep. Wilbert T. Lee said the IC must suspend the implementation of its Circular Leter (CL) 2022-34, which increases insurance premium rates on catastrophes, due to its inflationary impact.

Lee earlier filed a house resolution that seeks to initiate a probe into the “untimely” adjustment of the minimum catastrophe insurance rates nationwide, which he alleged did not have “prior consultation” with the private sector and concerned stakeholders.

The adjusted rates, Lee claimed, would take effect next year and would result in a “huge” increase in insurance premiums ranging from 40 percent to as high as 400 percent.

However, the regulator’s CL 202234 states otherwise in terms of the revised minimum catastrophe rates.

The document, issued by Insurance Commissioner Dennis B. Funa, stipulated that the new minimum catastrophe rates already took effect last November 1.

“Kaya po natin nireregulate itong insurance industry para maging patas o hindi makapang-abuso ang mga insurance companies. Pero bakit wala man lang nakonsultang end-users sa pagtaas ng insurance premium na ito? Sino po ba ang pinoprotektahan sa polisiyang ito?” Lee said. [That’s why we regulate this insurance industry so that the insurance companies can be fair or not abusive. But why were no end-users consulted on this insurance premium increase? Who is protected by this policy?]

Ceiling rates

LEE argues that the IC should regulate the ceiling rates for the catastrophe rates instead of adjusting the minimum levels.

“Bakit minimum ang tinututukan dito? Hindi ba, it’s better or it’s good for the consumer if magkakompetisyon at pababaan ng rate. Bakit ngayon ang kinokontrol ng ating komisyon ay ang minimum? Walang maximum eh, walang ceiling,” he added. [Why concentrate on the minimum? Isn’t it better or good for the consumer if there is competition and the rate is lowered? Why is the IC now focused on the minimum levels while there is no maximum; no ceiling.]

The lawmaker said through a statement issued by his office over the weekend he wrote to Funa to formally inquire on the issue. Lee, however, said that as of writing, the latter has not responded yet.

“Domino effect po ito. Siguradong tataas ang presyo ng mga pagkain, dahil sa production pa lang, sa storage, sa mga makina, pagdating sa distribution center, hanggang sa retail, lahat ay apektado ng pagtaas ng insurance premium na ito dahil halos lahat po ay kumukuha na ng insurance,” he said. [It’s a domino effect. The price of food will definitely increase, because just in production, in storage, in machines, when it comes to the distribution center, to retail, everything is affected by this increase in insurance premium because almost everyone is taking insurance.]

Passing on costs

LEE further said: “Kanino po ito ipapasa ng mga kompanya kundi sa mga consumers. Panibagong pagtaas na naman po ito sa presyo ng mga bilihin. Kawawa na naman ang taumbayan dito. Kaya tayo po ay nananawagan sa ating Commissioner ng Insurance Commission na itigil ang implementasyon ng kanilang circular dahil wrong timing na wrong timing po ito. Kapag nasuspinde ito,

winner tayo lahat.”

[Companies will pass on this cost to consumers. This is another increase in the price of goods. Pity the people. That is why we are calling on our Commissioner of the Insurance Commission to stop the implementation of the circular because of the wrong timing. We would all win if the circular is suspended.]

Lee also claimed that the increase in insurance hike would also impact the agriculture sector, thereby affecting the government’s effort to achieve the country’s food security. He explained that the Philippine Crop Insurance Corp. is covered by the CL and would have to hike their insurance premium.

“Kung patuloy na madedehado ang ating agri workers sa mga serbisyo, nalalagay din sa alanganin ang isinusulong nating food security. Kung matutuloy ang dagdag-singil na ito sa

catastrophe insurance, disaster po yan para sa mga Pilipino,” he added. [If our agricultural workers continue to be disadvantaged in services, the food security we are promoting would also be in jeopardy. If this surcharge on catastrophe insurance continues, it will be a disaster for Filipinos.]