BusinessWorld
Finance
Posted on January 24, 2011 09:46:54 PM
THE DEPARTMENT of Finance (DoF) and the Insurance Commission (IC) are partnering up with the local government of Quezon City to bring microinsurance to barangays.
The nationaL government’s partnership with the Quezon City government to bring microinsurance to barangays, whose residents are most vulnerable to calamities, serves as a test case for the initiative. -- AFP
The Quezon City government, along with DoF, IC, the Philippine Information Agency and insurance associations, will form a technical working group to develop training modules for barangay leaders to teach microinsurance to their constituents.
“The educational materials will include the basics of insurance, the responsibilities of insurers and the benefits entitled to clients,” National Credit Council (NCC) Deputy Executive Director Joselito S. Almario told BusinessWorld in a phone interview last Friday.
The NCC is headed by the DoF.
Mr. Almario, also a director at the DoF, also stressed the importance of bringing down the concept of risk protection to the masses, saying, “Microinsurance contracts have to be made simple and written in Filipino.”
The partnership with Quezon City is the first stage of a bigger campaign by DoF and IC to bring microinsurance to all barangays in the country.
“We will work with all local government units (LGU). We want to have information bureaus in each locality to link Filipinos to microinsurance providers,” Mr. Almario said.
The nationwide financial literacy campaign will be launched in June of next year. The partnership with Quezon City will serve as a pilot run, for the technical working group to test the effectivity of the educational materials and training modules.
Mr. Almario explained that Quezon City was chosen as a pilot city because of its population of informal settlers. According to the Quezon City government’s website, there are more than 200,000 informal settlers in the city, the highest in Metro Manila.
“Since poor households are most vulnerable to risks... such as death, illness or injury, accidents, and natural or man-made calamities, there is a vital need to provide the low-income sector with access to affordable financial protection,” IC said in a statement.
Mr. Almario also said Quezon City’s existing poverty alleviation program, Sagip Buhay, was the perfect vehicle for the microinsurance campaign.
“Several microfinance institutions (MFI) are already tied up with the Quezon City government for Sagip Buhay. Microinsurance providers, in turn, can link up with MFIs to deliver their products to the poor,” he said.
Mr. Almario said he hoped to build their own version of private-public partnerships with insurers and LGUs working together to make insurance more accessible.
“When we were hit by calamities last year, poor families could only rely on LGUs for assistance,” he explained.
“But LGUs don’t always have enough resources to attend to all their constituents and rebuild infrastructure at the same time. If insurers can provide coverage for the people, LGUs can focus on reconstruction efforts.”
The partnership with the Quezon City government will officially kick-off on January 31.
DoF and IC will also be also announcing the approved performance standards for the microinsurance industry on the same day.
“The performance standards will evaluate the strength and stability of microinsurance providers,” Mr. Almario said.
There are currently 25 microinsurance products approved by IC. The performance standards will be applied in the evaluation of their operations this year.
“Once the microinsurance standards are approved, we will train IC staff so they can evaluate the insurers’ annual reports according to the performance standards,” Mr. Almario said. -- Diane Claire J. Jiao
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