AN earthquake in the Philippines wreaks damage on the church of St. Catherine of Alexandria in the town of Porac. Courtesy: Vatican news
AGRI Party-list Rep. Wilbert T. Lee urged the Insurance Commission (IC) to scrap the implementation of its IC Circular Letter No. 2022-34 which seeks to increase the minimum catastrophe (earthquake, typhoon and flood) insurance premium rates, especially because the country’s inflation hit a 14-year high of 8.7% this January.
The hike was supposed to be implemented this Jan. 1, 2023 but was suspended after Lee questioned it. Along with business groups and Micro, Small and Medium Enterprises (MSMEs), the solon pointed out the ill effects of the circular.
Lee who exposed the said adjustments which was decided without prior consultation with stakeholders and consumers, said he will scrutinize this further after the House Committee on Banks and Financial Intermediaries set the first hearing on his House Resolution No. 632 to conduct an inquiry on this suspended IC policy tomorrow (Feb. 21).
The lawmaker from Sorsogon expressed concern on the reported plan of IC, as shared by its Commissioner Atty. Dennis Funa in a Businessworld article dated Feb. 7, to hold talks with stakeholders on the proposed increase in catastrophe risk premiums.
“The proper forum to hold discussions on this matter is during our inquiry,” Lee said.
“The IC had that opportunity before—to consult the public before coming up with an abrupt policy that will aggravate the prices of basic commodities—bakit hindi nila ginawa? Yun ang kailangan muna nilang ipaliwanag,” he added.
According to Funa’s reported statement, there is a need for the adjustment because the “current premium rates are too low” as they were last set in 2006, and that “non-life insurers are effectively penalized for writing catastrophe risks by making them operate at a loss to write such risk.”
Responding to the IC Commissioner, Lee said: “Kung nalulugi ang mga insurance industry, kailangang suriin ang mga datos at maipakita nila ang kanilang financial statements.”
“Walang supervening event na nangyari para taasan ang singil sa insurance na ito. And until now, IC has still not answered our initial queries to them.
Aside from the lack of consultation with the end-users, why is IC regulating the minimum catastrophe premium rates? Hindi ba dapat yung maximum ang kinokontrol to promote competition, para may pagpiliang mas mababang rates ang consumers,” he added.
Lee also pointed out that Funa, whose term as IC Commissioner ended last Dec. 2022 and is now only acting in a holdover capacity, should not be on top of the matter anymore, as he no longer has authority pending his successor.
In filing HR 632, the solon seeks to determine the detrimental impact of the catastrophe insurance hike to several sectors, including agriculture, since facilities of agri-products are also being covered by the said insurance and will affect the government’s food security efforts.
“Dapat tuluyang itigil ang pagtataas na ito sa catastrophe insurance premium dahil kapag natuloy ito, siguradong sisipa na naman ang presyo ng bilihin na papasanin ng taumbayan. Sa isyung ito, sisiguruhin kong Winner Tayo Lahat,” he added.
