Saturday, October 22, 2011
Friday, October 21, 2011
Thursday, October 20, 2011
Philippines: Insurance reform in public utility vehicle sector
Asia Insurance Review
Operators of public utility vehicles will soon pay cheaper insurance premiums for passenger insurance coverage while there will also be an increase in insurance benefits accorded to dependents of victims of fatal road accidents.
These measures follow a decision by the Quezon City regional trial court to uphold the Department of Transportation and Communications’ (DoTC) initiative to institute reforms in the Passengers Personal Accident Insurance Programme of the Land Transportation Franchising and Regulatory Board (LTFRB).
The court dismissed a petition for a temporary restraining order against LTFRB’s move to open up accreditation for providers of passenger insurance service from two to five insurers. Prior to the decision, the industry was dominated by only two players— PAMI for those registering odd-numbered plates and by UNITRANS, even-numbered plates.
LTFRB chairman, Mr Jaime Jacob, will now move forward to open up insurance coverage. He has been talking with eight insurance companies who are willing to compete for the right to provide cover. He says that the new insurance terms will require the five accredited insurance players to offer an “all risk, no fault” insurance policy. This policy ensures that any passenger who meets with an accident will be paid by a PUV operator regardless of who is at fault in an accident.
“We have set a maximum premium and minimum benefit for the accreditation process. Those applying for accreditation will now compete in order to bring down the premium and raise the benefit,” says Mr Jacob.
Operators of public utility vehicles will soon pay cheaper insurance premiums for passenger insurance coverage while there will also be an increase in insurance benefits accorded to dependents of victims of fatal road accidents.
These measures follow a decision by the Quezon City regional trial court to uphold the Department of Transportation and Communications’ (DoTC) initiative to institute reforms in the Passengers Personal Accident Insurance Programme of the Land Transportation Franchising and Regulatory Board (LTFRB).
The court dismissed a petition for a temporary restraining order against LTFRB’s move to open up accreditation for providers of passenger insurance service from two to five insurers. Prior to the decision, the industry was dominated by only two players— PAMI for those registering odd-numbered plates and by UNITRANS, even-numbered plates.
LTFRB chairman, Mr Jaime Jacob, will now move forward to open up insurance coverage. He has been talking with eight insurance companies who are willing to compete for the right to provide cover. He says that the new insurance terms will require the five accredited insurance players to offer an “all risk, no fault” insurance policy. This policy ensures that any passenger who meets with an accident will be paid by a PUV operator regardless of who is at fault in an accident.
“We have set a maximum premium and minimum benefit for the accreditation process. Those applying for accreditation will now compete in order to bring down the premium and raise the benefit,” says Mr Jacob.
Friday, October 14, 2011
Government abandons prototype for life microinsurance product
Finance
Posted on October 12, 2011 09:33:57 PM
BY ANN ROZAINNE R. GREGORIO, Reporter
THE GOVERNMENT no longer pushed through with its plan of coming up with a prototype microinsurance product combining life protection and savings, choosing instead to leave it up to market players to design it.
Rino C. Asuncion, senior adviser at the German Agency for International Cooperation (GIZ), said the government “called off” the plan after holding focus group discussions with representatives of the life insurers’ association, Philippine Life Insurance Association, Inc. (PLIA), and microfinance institutions (MFI) last February.
In January, the Department of Finance, the National Credit Council, along with the Asian Development Bank and GIZ, announced they were developing a prototype product combining microinsurance and savings, with insurance premiums to be deducted from savings accounts. The product, as well as a non-life microinsurance product called “Buhay, Bahay at Kabuhayan,” was envisioned to give a boost to the nascent microinsurance industry.
“The result of the FGDs made us decide to not pursue with our plan to create a prototype product that would combine life insurance and savings,” Mr. Asuncion said.
PLIA, during the FGDs, asked to “leave the product specifications to them” as some life insurers already offer a life insurance product with a savings component.
“PLIA wanted the freedom to construct the savings component of the product. It was just a matter of adjusting their existing products with a savings component to fit the microinsurance market,” Mr. Asuncion said.
PLIA also pointed out the difficulty of administering the savings component of the product.
“Aside from working as an insurance company, they would have to work as a ‘bank’ because of the savings component. So it would require insurance companies to either work with a bank or buy a new system or invest in a technical support group, which would be costly for them,” he said.
MFIs, meanwhile, opposed a microinsurance product combining life protection and savings as this would “directly compete” with their savings products.
MFIs are composed of rural banks, cooperatives and nongovernment organizations.
Mr. Asuncion said PLIA and MFIs instead asked the GIZ and the other institutions to come up with a simplified and standardized contract for a life microinsurance product, so a consumer could easily understand the product he or she was purchasing.
Contracts that covered insurers’ existing products were long and complicated.
“We came up with a contract and PLIA submitted it to the Insurance Commission (IC) for approval,” he said.
The contract was approved “months ago,” he said.
For his part, National Credit Council Deputy Executive Director Joselito S. Almario, in a phone interview, said: “We decided to leave to the insurance providers the decision to come up with a microinsurance life product with savings.”
“We didn’t want the industry players to have the impression we were dictating to them what product to sell. We didn’t want that,” he said.
Insurers at present are allowed to design their products in line with their target market’s demand and their products are considered microinsurance products as long as they comply with the IC’s definition for such products.
According to IC’s Insurance Memorandum Circular 1-2010, microinsurance products are those whose daily premiums do not exceed 5% of the current daily minimum wage rate of non-agricultural workers in Metro Manila.
Furthermore, the maximum sum of guaranteed benefits should not be 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.
Fifty microinsurance products have been approved since the circular was issued in January 2010. Of these, 33 were life products while 17 were non-life products.
Posted on October 12, 2011 09:33:57 PM
BY ANN ROZAINNE R. GREGORIO, Reporter
THE GOVERNMENT no longer pushed through with its plan of coming up with a prototype microinsurance product combining life protection and savings, choosing instead to leave it up to market players to design it.
Rino C. Asuncion, senior adviser at the German Agency for International Cooperation (GIZ), said the government “called off” the plan after holding focus group discussions with representatives of the life insurers’ association, Philippine Life Insurance Association, Inc. (PLIA), and microfinance institutions (MFI) last February.
In January, the Department of Finance, the National Credit Council, along with the Asian Development Bank and GIZ, announced they were developing a prototype product combining microinsurance and savings, with insurance premiums to be deducted from savings accounts. The product, as well as a non-life microinsurance product called “Buhay, Bahay at Kabuhayan,” was envisioned to give a boost to the nascent microinsurance industry.
“The result of the FGDs made us decide to not pursue with our plan to create a prototype product that would combine life insurance and savings,” Mr. Asuncion said.
PLIA, during the FGDs, asked to “leave the product specifications to them” as some life insurers already offer a life insurance product with a savings component.
“PLIA wanted the freedom to construct the savings component of the product. It was just a matter of adjusting their existing products with a savings component to fit the microinsurance market,” Mr. Asuncion said.
PLIA also pointed out the difficulty of administering the savings component of the product.
“Aside from working as an insurance company, they would have to work as a ‘bank’ because of the savings component. So it would require insurance companies to either work with a bank or buy a new system or invest in a technical support group, which would be costly for them,” he said.
MFIs, meanwhile, opposed a microinsurance product combining life protection and savings as this would “directly compete” with their savings products.
MFIs are composed of rural banks, cooperatives and nongovernment organizations.
Mr. Asuncion said PLIA and MFIs instead asked the GIZ and the other institutions to come up with a simplified and standardized contract for a life microinsurance product, so a consumer could easily understand the product he or she was purchasing.
Contracts that covered insurers’ existing products were long and complicated.
“We came up with a contract and PLIA submitted it to the Insurance Commission (IC) for approval,” he said.
The contract was approved “months ago,” he said.
For his part, National Credit Council Deputy Executive Director Joselito S. Almario, in a phone interview, said: “We decided to leave to the insurance providers the decision to come up with a microinsurance life product with savings.”
“We didn’t want the industry players to have the impression we were dictating to them what product to sell. We didn’t want that,” he said.
Insurers at present are allowed to design their products in line with their target market’s demand and their products are considered microinsurance products as long as they comply with the IC’s definition for such products.
According to IC’s Insurance Memorandum Circular 1-2010, microinsurance products are those whose daily premiums do not exceed 5% of the current daily minimum wage rate of non-agricultural workers in Metro Manila.
Furthermore, the maximum sum of guaranteed benefits should not be 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.
Fifty microinsurance products have been approved since the circular was issued in January 2010. Of these, 33 were life products while 17 were non-life products.
BPI microfinance bank ventures into microinsurance
Business World
Finance
Posted on September 30, 2011 07:35:24 PM
MOBILE MICROFINANCE bank BPI Globe BanKO will begin offering microinsurance after partnering with two other subsidiaries of the Bank of the Philippine Islands.
In a statement, BPI Globe BanKO said it has partnered with BPI Philam Life Assurance Corp. (BPI-Philam) and BPI-Mitsui Sumimoto Insurance Corp. (BPI/MS) to offer insurance products that are affordable and targeted at low-income earning Filipinos.
BPI-Philam, the bancassurance arm of BPI, is an alliance between BPI and the Philippine American Life and General Insurance Co., the country’s biggest life insurance company.
BPI/MS is a joint venture between BPI and Mitsui Sumimoto Insurance Co., a non-life insurance company based in Japan.
BPI Globe BanKO on Friday launched three microinsurance products, namely, PondoKO, PuhunanKO and PaniguroKO.
PondoKO entitles an individual to life insurance and to a 1% interest rate per annum on his or her deposit once this reaches P2,000.
In the event of death -- regardless of the cause -- his or her beneficiary will get five times of the amount of cash in the account.
PuhunanKO provides both life insurance and loan coverage. An individual who purchases this will entitle his or her beneficiary to P10,000 and to 100% loan coverage in case he or she dies.
PondoKO and PuhunanKO are offered in partnership with BPI-Philam.
PaniguroKO, offered in partnership with BPI/MS, gives the account holder access to a life insurance policy that costs only P365 for a one-year coverage.
With PaniguroKO, an account holder is entitled to a P50,000 coverage for accidental death, P5,000 assistance in case of fire and P2,500 assistance in case of flood, typhoon and earthquake. This insurance can be purchased through mobile phones, thus doing away the need to fill out documents.
"Through BanKO’s ’banking the unbanked’ concept, the market that other banks have failed to reach will be given options and this is a very good way of giving back. We at BPI-Philam are hoping that more from the lower income segment will be empowered and will appreciate the need to save," Stephen James Clark, BPI-Philam president and chief executive officer, was quoted as saying in the statement.
"Getting an insurance used to be expensive or at least that’s what a lot of people think, especially those who are not familiar with it. Through the BanKO-BPI/MS partnership, we hope more people will realize the value in securing one," Mr. Takaaki Ueda, BPI/MS president and chief executive officer, was also quoted as saying in the same statement.
In the same statement, BPI Globe BanKO said it had partnered with the German Agency for International Cooperation to conduct financial literacy seminars nationwide. This is in line with the bank’s objective to educate depositors on the importance of insurance. The seminars will begin in the fourth quarter of this year and will run up to next year.
BPI Globe BanKO is a savings bank that handles the mobile microfinance operations of BPI, the country’s third largest in terms of assets.
It is a shared venture between BPI, Ayala Corp. and Globe Telecom, Inc. The bank uses Globe’s GCash platform to electronically transfer funds to microfinance institutions and individual borrowers. -- Ann Rozainne R. Gregorio
Finance
Posted on September 30, 2011 07:35:24 PM
MOBILE MICROFINANCE bank BPI Globe BanKO will begin offering microinsurance after partnering with two other subsidiaries of the Bank of the Philippine Islands.
In a statement, BPI Globe BanKO said it has partnered with BPI Philam Life Assurance Corp. (BPI-Philam) and BPI-Mitsui Sumimoto Insurance Corp. (BPI/MS) to offer insurance products that are affordable and targeted at low-income earning Filipinos.
BPI-Philam, the bancassurance arm of BPI, is an alliance between BPI and the Philippine American Life and General Insurance Co., the country’s biggest life insurance company.
BPI/MS is a joint venture between BPI and Mitsui Sumimoto Insurance Co., a non-life insurance company based in Japan.
BPI Globe BanKO on Friday launched three microinsurance products, namely, PondoKO, PuhunanKO and PaniguroKO.
PondoKO entitles an individual to life insurance and to a 1% interest rate per annum on his or her deposit once this reaches P2,000.
In the event of death -- regardless of the cause -- his or her beneficiary will get five times of the amount of cash in the account.
PuhunanKO provides both life insurance and loan coverage. An individual who purchases this will entitle his or her beneficiary to P10,000 and to 100% loan coverage in case he or she dies.
PondoKO and PuhunanKO are offered in partnership with BPI-Philam.
PaniguroKO, offered in partnership with BPI/MS, gives the account holder access to a life insurance policy that costs only P365 for a one-year coverage.
With PaniguroKO, an account holder is entitled to a P50,000 coverage for accidental death, P5,000 assistance in case of fire and P2,500 assistance in case of flood, typhoon and earthquake. This insurance can be purchased through mobile phones, thus doing away the need to fill out documents.
"Through BanKO’s ’banking the unbanked’ concept, the market that other banks have failed to reach will be given options and this is a very good way of giving back. We at BPI-Philam are hoping that more from the lower income segment will be empowered and will appreciate the need to save," Stephen James Clark, BPI-Philam president and chief executive officer, was quoted as saying in the statement.
"Getting an insurance used to be expensive or at least that’s what a lot of people think, especially those who are not familiar with it. Through the BanKO-BPI/MS partnership, we hope more people will realize the value in securing one," Mr. Takaaki Ueda, BPI/MS president and chief executive officer, was also quoted as saying in the same statement.
In the same statement, BPI Globe BanKO said it had partnered with the German Agency for International Cooperation to conduct financial literacy seminars nationwide. This is in line with the bank’s objective to educate depositors on the importance of insurance. The seminars will begin in the fourth quarter of this year and will run up to next year.
BPI Globe BanKO is a savings bank that handles the mobile microfinance operations of BPI, the country’s third largest in terms of assets.
It is a shared venture between BPI, Ayala Corp. and Globe Telecom, Inc. The bank uses Globe’s GCash platform to electronically transfer funds to microfinance institutions and individual borrowers. -- Ann Rozainne R. Gregorio
Thursday, October 13, 2011
Cash transfer beneficiaries targeted for microinsurance
Economy
Posted on October 03, 2011 11:42:32 PM
TACLOBAN CITY -- Beneficiaries of the government’s conditional cash transfer program -- supposedly some of the poorest of the poor -- are being targeted for microinsurance coverage next year, a senior economic official said here recently.
Finance Undersecretary Gil S. Beltran, executive director of the National Credit Council, said in a recent interview here that the Department of Finance is in talks with the Department of Social Welfare and Development to tap cash transfer beneficiaries who are part of state livelihood programs.
“With livelihood programs in place for beneficiaries, the third stage in the process is microinsurance,” Mr. Beltran explained in the interview.
Microinsurance involves low premium payments as well as simpler application and claim processes.
“Through this scheme, they will be protected from calamities and they won’t slide back to poverty,” Mr. Beltran added.
The cash transfer program, formally called Pantawid Pamilyang Pilipino Program, has 2.3 million household beneficiaries this year. Their ranks are targeted to increase to three million next year.
Reynaldo M. Vergara, who heads the Insurance Commission’s Actuarial Division, said in a separate interview that the government aims to insure about a fifth of the population by the end of 2012 from 16.65% currently. -- S. Q. Meniano
Posted on October 03, 2011 11:42:32 PM
TACLOBAN CITY -- Beneficiaries of the government’s conditional cash transfer program -- supposedly some of the poorest of the poor -- are being targeted for microinsurance coverage next year, a senior economic official said here recently.
Finance Undersecretary Gil S. Beltran, executive director of the National Credit Council, said in a recent interview here that the Department of Finance is in talks with the Department of Social Welfare and Development to tap cash transfer beneficiaries who are part of state livelihood programs.
“With livelihood programs in place for beneficiaries, the third stage in the process is microinsurance,” Mr. Beltran explained in the interview.
Microinsurance involves low premium payments as well as simpler application and claim processes.
“Through this scheme, they will be protected from calamities and they won’t slide back to poverty,” Mr. Beltran added.
The cash transfer program, formally called Pantawid Pamilyang Pilipino Program, has 2.3 million household beneficiaries this year. Their ranks are targeted to increase to three million next year.
Reynaldo M. Vergara, who heads the Insurance Commission’s Actuarial Division, said in a separate interview that the government aims to insure about a fifth of the population by the end of 2012 from 16.65% currently. -- S. Q. Meniano
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