SHAPING A STRONG, STABLE, AND DEPENDABLE INSURANCE INDUSTRY
As a regulatory body for 69 years, the Insurance Commission (IC) has greatly exerted its influence in shaping the insurance industry to what it is today—a strong, stable, dependable field that has helped millions of Filipinos over the years.
The insurance industry’s continued growth is a testament to that positive influence and solidified IC’s reputation as an effective and reliable financial regulator.
It is because of this remarkable track record that additional industries were entrusted to the IC— the Pre-Need industry was put under IC in 2010, and more recently, the Health Maintenance Organizations (HMO) industry in 2015.
IC, like any government institution, exists for the benefit of the people, helping promote the growth and stability of the entities it regulates.
“It is important for us to reaffirm our commitment to our mandate. More than feelings of nostalgia, we learn by reflecting on what has happened in the history of the Commission. These lessons are invaluable because they allow us to move forward with conviction in the future,” said Insurance Commissioner Dennis B. Funa.
Since IC’s inception in 1949, IC’s core functions have not changed very significantly, except for the additional industries it was tasked to oversee in recent years. IC’s relevance to the Filipino people emanates from the fact that as the sole regulator of the Insurance, Pre-Need, and HMO industries in the country, it serves as the government agency they can run to if they have complaints and issues against any company under the three industries.
More than serving as a public assistance hub for the Filipinos, IC also pushes for inclusive risk protection. Through inclusive risk protection programs and initiatives, affordable insurance products are made available for every Filipino. A prime example of this is the Microinsurance product, which is designed for the low-income earners with its premium not exceeding 7.5 percent of the current minimum wage in Metro Manila. Its benefit, on the other hand, should not be more than 1,000 times of the current minimumwage in Metro Manila.
Affordable financial products provide opportunity for every Filipino especially the most vulnerable, to participate in the country’s economy. It is only with their participation in the financial system that the Philippine economy will be truly inclusive.
Notable achievements
Among IC’s several notable achievements in the past year, Commissioner Funa is exceptionally proud that IC has continually ensured the effective implementation of the Risk Based Capital (RBC) Framework for insurance companies. This framework paves the way for the growth of the insurance industry by ensuring its stability and capability amid domestic, regional, or global risks.
Also, the Commission released the guidelines on the approval of HMO products and the Standard Contract Provisions. Through this issuance, HMO consumers will have added layer of assurance that HMO products approved by the IC have passed the minimum requirements.
“The outcomes of these accomplishments have far-reaching positive impact and will serve as stepping stones for IC’s continued fulfillment of its mandate,” Commissioner Funa said.
The Commission has also participated in the Disaster Risk Finance Initiatives of the Department of Finance (DOF). This initiative shall permit the conception of the World Bank Second Catastrophe-Deferred Drawdown Option (CAT-DDO2) Loan Facility. For IC’s part, the Circular Letter on the Adoption of the Property Insurance Exposure and Loss Database has been issued to generate an information database. Information provided by this database will be used in the development of future policy and regulatory frameworks.
Moreover, capacity-building programs for IC financial examiners have been institutionalized this year. Through these programs, IC examiners are equipped with the most recent knowledge and techniques they need to perform in order to scrutinize the financial health of the regulated entities.
It is important for us to reaffirm our commitment to our mandate. More than feelings of nostalgia, we learn by reflecting on what has happened in the history of the Commission. DENNIS B. FUNA Insurance Commissioner
True to its mandates
One may treat achievements as one-off events—but for IC, the most important achievements exist in a continuum. Since 1949, IC’s actions and efforts have been concentrated in supporting the growth of the industries under its regulation.
The 2017 third quarter results of the insurance industry looks rosy. During this period, total as- sets of the industry grew by 16 percent from the same period of 2016. At the same time, profit of the insurance industry grew by 22 percent during the same time frame.
Commissioner Funa said that further innovation and implementation of global standards on insurance regulation and supervision will be observed, which will mean continued implementation of the risk-based supervision in the insurance industry.
In the next few years, IC is already contemplating on when and how to gradually roll out the implementation of the IFRS 17 on accounting for insurance contracts.
Commissioner Funa said that Filipinos should be excited in the current initiative of the Commission to support the proposal to increase the insurance benefits for passengers of public utility vehicles (PUVs) under the Personal Passenger Accident Insurance (PPAI) Program. As public transportation in the country continues to move forward, it is important for PUVs to have insurance coverage for its consumers should an accident occur. With this, increase in compensation will ease the financial strain on the part of the victims.
Commissioner Funa said: “IC employees are happy to celebrate another fruitful year of working with the Commission. They remain steadfast to their oath of performing their duties and responsibilities, many of whom have served for more than 20 years. Furthermore, they look forward to growing their careers with IC and spending more meaningful anniversaries with the Commission.”