THE government has a draft framework for resolving disputed microinsurance claims whose incidence does not as yet threaten the popularity of an P8-billion industry catering to the insuring requirements of some seven million policyholders.
The draft was presented on Friday at a consultation workshop held by proponents at the Hyatt Hotel as an initial step towards full accreditation and adoption by the Insurance Commission (IC).
Disputes between policyholders and microinsurance providers are still rare but the government, said Joselito “Itoy” Almario, director at the Department of Finance, is making sure the framework addresses the absence of dispute resolution bodies for insurance claims involving no more than P200,000.
Right now, such bodies can be found only in the cities of Cebu in the Visayas, Davao in Mindanao and in Manila, the nation’s capital.
Requiring microinsurance policyholders to elevate their claims to the regional offices of the Insurance Commission was clearly impractical and thus the need to adopt an accredited alternative dispute resolution mechanism right where the conflict arises.
The framework seeks to respond to the physical and administrative challenges to the resolution of microinsurance-related conflicts at the local levels.
Establishing ADR mechanisms for microinsurance foresees the decentralization of dispute resolution capacities by deputizing fair and capable third party mediators outside of the three regional offices of the Insurance Commission.
Thus far, the government said, five microinsurance claims have been disputed since the IC issued the mandate for the creation of the ADR in 2010.
The ADR aims to eliminate the likelihood for the conflict to reach the level of the judicial courts which entail costs on both the policyholder and the microinsurance provider.
The long and tedious legal process, plus the lack of readily accessible resolution bodies other than those found in three regional centers, may discourage microinsurance clients to pursue disputed claims with legitimate microinsurance providers.
Microinsurance policies typically cover risk claims of up to P200,000 and require premium payments of between P1 to P20 a day.
Delivery channels for now include community-based organizations, rural banks, cooperatives and non-government organizations.
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