CONSUMERS and micro, small and medium enterprises (MSMEs) will not have to bear the additional burden of increased catastrophe insurance costs after AGRI Party-list Rep. Wilbert T. Lee blasted the Insurance Commission (IC) for issuing IC Circular Letter No. 2022-34 dated July 14, 2022 which would have imposed as much as 400% increase in minimum catastrophe insurance rates.
Lee was able to secure a commitment from the IC to revoke the implementation of the said circular after he moved to defer the budget of the Department of Finance (DOF) and its attached agencies during plenary budget deliberations.
The Bicolano lawmaker only agreed to withdraw the motion when IC Commissioner Reynaldo Regalado finally committed to him and other House Members that the IC will revoke the increase in insurance premium rates, as well as nullify a Memorandum of Understanding (MOU) between the IC and insurance companies involving the establishment of the Philippine Catastrophe lnsurance Facility (PCIF) if the MOU is found to be illegal. IC Commissioner Regalado said that they will review the legality of the said MOU within 15 days.
Lee questioned the IC Circular increasing the minimum catastrophe premium rates, which he said was unnecessary as the House was able to determine that insurance companies were profitable.
“Bakit? Nalulugi na ba ang insurance companies? During our House Inquiry, we were able to expose that all insurance companies, except for two, were recording high-profit,” said Lee.
“Malinaw na sinisira ng circular na ito ang competition. Paano kung may mga insurance companies na gustong magbenta ng mas mababang premium, paparusahan pa nila? Hindi po serbisyo ito, kundi perhuwisyo. Instead, the IC should look into setting the maximum rate that insurance companies can charge and let the market forces dictate the prices or rates,” he explained.
Lee earlier filed House Resolution No. 632 in December 2022 to probe into the untimely and unjust increase in the said insurance premiums. He then led the House Inquiry last February, where he exposed the detrimental effects of the policy, which was decided without prior consultation with the private sector and end-users.
During the deliberations, Lee inquired about the MOU signed on January 28, 2020 by representatives of the IC, the Philippine lnsurers and Reinsurers Association, Inc. (PIRA), and the National Reinsurance Corporation of the Philippines (NatRe).
