Thursday, April 30, 2015
Wednesday, April 1, 2015
Gov’t Agencies & Partners Eye NCR Stance on Health Microinsurance
Philippine Information Agency
March 28, 2015
MANILA, 28 March (PIA)--The Department of Finance–National Credit Council (DOF-NCC), Insurance Commission (IC) and Department of Health (DOH) are putting the microinsurance stake deep in the ground so that every low-income Filipino, including the informal sectors, would have access to relevant and cost-sensitive healthcare financing.
The National Capital Region consultation on March 27 at New World Manila Bay Hotel was the final round in the series of five regional Health Microinsurance (HMI) consultations held in major cities across the country.
So far, close to 500 participants from public and private providers and practitioners in health and insurance sounded out on the HMI document. The German Development Cooperation (GIZ) continues to provide the support for HMI Policy and Regulatory Framework consultations which will culminate at the NCR.
It is expected that the final leg of discussions right at the seat of Philippine government would be dynamic particularly on the Philippine initiatives on microinsurance, updates on the social health insurance (SHI) and the proposed draft of HMI policy and regulatory framework.
NCR accounts for 37.2% of the gross domestic product of the Philippines and remains the premier center for finance and commerce.
Moreover, Metro Manila is known as the Philippine’s global power city with 25 million Filipinos who impact various fields in commerce, finance, media, art, fashion, research, technology, education, and entertainment.
Hopefully soon, it will include inclusive insurance.
At present, health issues remain one of the key concerns in Metro Manila along with poverty and population pressures. It is the second most populated region among 17 regions in the country and seventh most populous metropolitan area in Asia.
The proposed HMI framework is intended to support the Universal Health Care (UHC) outlined in the Philippine Development Plan (PDP 2011-2016) which safeguards equitable access to health care for all Filipinos, particularly the poor. The HMI framework sets to address the health needs of more than 12 million Filipinos who considered their present state poor according to 2014 SWS survey.
The PDP envisions a National Health Insurance Program (NHIP) that encourages public-private partnerships to respond to the current gaps in healthcare risk protection in the country. Philhealth is the government’s current frontline health insurance provider along with a handful of licensed Health Maintenance Organizations (HMOs).
At present, 82% of Filipinos have some form of health coverage; the gap remains wide for healthcare financial risk protection, particularly to the most vulnerable low-income and informal sectors. Philhealth provides basic health care packages but has not covered medical transport, drugs and medical supplies outside of the hospital.
According to DOH, 54 percent of the total health expenditure comprised out-of-pocket expenses.
Addressing the gaps thru public-private partnership, the government’s founding triumvirate (DOH, DOF-NCC, and IC) and the health and insurance industry key representatives collaborated in a Technical Working Group to work on the draft of the HMI framework.
The German Development Cooperation (GIZ) through its regional program on microinsurance, the Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia program (GIZ-RFPI Asia) provided the technical and financial support.
As such, the HMI framework is envisioned to augment the UHC program through a viable and sustainable private sector microinsurance industry. HMI is expected to provide every Filipino with greater coverage and wider access to simple, affordable, appropriate and effective HMI products and services.
Microinsurance responds to the needs and paying capacities of the low-income and informal sectors. Products have affordable premiums, the benefits correspond to the risks, and claims settlement is fast.
The Luzon consultations were split in two consecutive consultations in Laguna and Pampanga. The Visayas and Mindanao consultations were held in Cebu and Davao respectively last year. More than three hundred providers and practitioners from health and insurance sectors participated in these regions.
Inputs from the consultations will be collated and reflected in the final framework which will be launched to the public in the second quarter of 2015.(DOH/DOF-NCC/GIZ/PIA-NCR)
- See more at: http://news.pia.gov.ph/article/view/231427438091/gov-t-agencies-partners-eye-ncr-stance-on-health-microinsurance#sthash.NR5pKH3l.dpuf
Saturday, February 28, 2015
Tapping microinsurance to help address health, disaster risks
Manila Times
December 3, 2014 9:47 pm
THE Philippines was recently cited as the country with the highest insurance penetration rate in Asia by a landscape study commissioned by the Munich Re Foundation in 2013.
Simply put, this means that one in every five Filipinos is protected by microinsurance. This penetration ratio also tells us that the strategy and mechanism for distribution adopted by microinsurance players in the country have been successful in providing access for the product.
Rural banks, cooperatives and microfinance institutions—as licensed distributors—have largely not efficiently reached before.
A challenge remains, however, in providing products that specifically address health and disaster risks.
Despite the protection offered by the state-run Philippine Health Insurance Corp. (PhilHealth), there is still a need to further enhance coverage in order to reduce the out-of-pocket expenditures of low-income families not efficiently reached before.
A challenge remains, however, in providing products that specifically address health and disaster risks.
Despite the protection offered by the state-run Philippine Health Insurance Corp. (PhilHealth), there is still a need to further enhance coverage in order to reduce the out-of-pocket expenditures of low-income families who typically do not have health maintenance organization (HMO) coverage to complement PhilHealth.
To address this, the Department of Finance, Insurance Commission and Department of Health partnered with the private sector to draft a framework for health microinsurance and promote a more inclusive health insurance system. The first public consultation for the framework was held in Cebu last month.
Disaster-related insurance, on the other hand, is also gaining ground as more financial institutions participate to protect the most vulnerable. When the Visayas Region was hit by a powerful earthquake and a destructive super typhoon in 2013, it revealed how defenseless communities are when faced with disasters of such magnitude.
Progressive Bank, a rural bank in Iloilo, played a critical role in helping its clients cope with the effects of the disaster through its microinsurance program, Akap. The cash benefit clients received under the program was used to finance burial expenses, house repairs and purchase of materials for their small businesses.
This proves that while micro insurance is not the silver bullet to poverty eradication, it gives individuals the chance to quickly recover from a financial loss.
Looking forward, coverage will likely continue its upward trend as awareness and the number of Filipinos who benefit from various financial inclusion programs increase. Through continuous innovations in product design and delivery mechanism, our success shall also be complemented with more stories on the positive impact of microinsurance on the lives of Filipinos.
Microinsurance responds to disaster protection
Manila Times
February 4, 2015 10:04 pm
The microinsurance industry has made its call for public and private players to effectively respond to the challenges of climate change.
In the recently concluded culminating activity of the National Micro insurance Month this January, a Microinsurance Manifesto was presented and signed by regulators and industry stakeholders as an expression of support and commitment to address the need to create measures that will allow Filipinos to cope with threats of natural disasters.
Lead agencies that signed the manifesto include the Department of Finance, Bangko Sentral ng Pilipinas, Insurance Commission, Cooperative Development Authority, Securities and Exchange Commission and the Climate Change Commission.
Among others, the Manifesto urges the government to continue providing an enabling and conducive policy environment for micro in su rance. The Insurance Commission earlier reported that there are already 28 million Filipinos covered with micro insurance by end of 2014. The country has also been cited for having the highest penetration ratio in the Asian region at roughly 28 percent.
Insurance providers, on the other hand, are encouraged to develop simple, affordable and innovative microinsurance products and services through easily accessible delivery channels.
Rural banks—because of their strategic location in the countryside—are among the ideal partners for the effective and fast delivery of mi croinsurance coverage. In support of this cause, the Rural Bankers Association of the Philippines, through its technical arm, the Rural Bankers Research and Development Foundation, Inc., has been conducting trainings to build the capacity of rural banks as effective channels of microinsurance.
To date, there are now 43 rural banks authorized by the Insurance Commission as mi croinsurance agents, providing protection to their low-income clients from financial loss including those brought by calamities.
Microinsurance has proven to be an effective tool to safeguard the poor from risks as it allows them to avail of financial security measures at low costs. By being an active provider of micro insurance, rural banks are given the chance not only to reinforce their relevance to their clients but to help the country attain a more inclusive growth, as well.
February 4, 2015 10:04 pm
The microinsurance industry has made its call for public and private players to effectively respond to the challenges of climate change.
In the recently concluded culminating activity of the National Micro insurance Month this January, a Microinsurance Manifesto was presented and signed by regulators and industry stakeholders as an expression of support and commitment to address the need to create measures that will allow Filipinos to cope with threats of natural disasters.
Lead agencies that signed the manifesto include the Department of Finance, Bangko Sentral ng Pilipinas, Insurance Commission, Cooperative Development Authority, Securities and Exchange Commission and the Climate Change Commission.
Among others, the Manifesto urges the government to continue providing an enabling and conducive policy environment for micro in su rance. The Insurance Commission earlier reported that there are already 28 million Filipinos covered with micro insurance by end of 2014. The country has also been cited for having the highest penetration ratio in the Asian region at roughly 28 percent.
Insurance providers, on the other hand, are encouraged to develop simple, affordable and innovative microinsurance products and services through easily accessible delivery channels.
Rural banks—because of their strategic location in the countryside—are among the ideal partners for the effective and fast delivery of mi croinsurance coverage. In support of this cause, the Rural Bankers Association of the Philippines, through its technical arm, the Rural Bankers Research and Development Foundation, Inc., has been conducting trainings to build the capacity of rural banks as effective channels of microinsurance.
To date, there are now 43 rural banks authorized by the Insurance Commission as mi croinsurance agents, providing protection to their low-income clients from financial loss including those brought by calamities.
Microinsurance has proven to be an effective tool to safeguard the poor from risks as it allows them to avail of financial security measures at low costs. By being an active provider of micro insurance, rural banks are given the chance not only to reinforce their relevance to their clients but to help the country attain a more inclusive growth, as well.
Government, private sector ink microinsurance manifesto
(The Philippine Star)
Updated February 24, 2015 - 12:00am
Beltran
MANILA, Philippines - A manifesto outlining the country’s masterplan for microinsurance was launched recently involving six key government agencies.
The one-page document spells out the country’s goals for insuring low-income Filipinos as protection for risks brought about by climate change.
Finance Undersecretary Gil Beltran said that microinsurance is one of the best tool for poor countrymen to help them adapt to climate change.
“With microinsurance, they have a better chance of recovering from financial shocks caused by typhoons, floods and other natural or man-made calamities,” he added.
Microinsurance is insurance sold in sachet form. It cost as low as P25 and provide payouts as low as P5,000. It sold to farmers, fisherfolk, vendors, and other low-income groups.
Beltran said the signing of the manifesto signals a more active cooperation among government agencies, and between government and the private sector for the continued development of microinsurance.
Aside from the Department of Finance, the agencies that signed the manifesto were the Insurance Commission, the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Cooperative Development Authority, and the Climate Change Commission.
Representatives from the Japanese and German governments as well as more than 200 private companies with microinsurance products witnessed the signing.
Beltran added that the number of Filipinos with microinsurance has already grown tremendously from a low of three million in 2008 to unofficially 28 million as of end of 2014.
This is the reason why the Philippines now leads Asia Oceania in the percentage of population with microinsurance.
He also cited the P700 million paid by microinsurance for those who suffered from Typhoon Yolanda, was the highest microinsurance payout for a single incident so far.
Yet despite these achievements, there was still so much work to do.
“More than 80 percent of the population is at risk of the negative impact of climate change. We must ensure that all of them are protected,” he said.
Non-traditional channels being tapped to distribute microinsurance
BusinessWorld
Posted on February 02, 2015 08:45:00 PM
By Raymund Luther B. Aquino, Reporter
MICROINSURANCE must be a cornerstone of the Philippines’ climate change adaptation strategy, officials said on Friday at the launch of a manifesto enjoining both public and private sectors to work toward wider microinsurance penetration.
The call went out at even as the Philippines leads the region in terms of microinsurance penetration -- with pawnshops in particular driving growth, according to regulators.
In an event called “Challenging the Climate, Responding to Change” at the Philippine International Convention Center Friday, Department of Finance (DoF) Undersecretary Gil S. Beltran highlighted the need to be “creative and innovative” in the face of climate change-related risks.
Mr. Beltran pointed to microinsurance’s contribution to the rebuilding of communities following super-typhoon Yolanda’s (International Name: Haiyan) devastation of parts of central Philippines in November 2013, with more than P700 million in payoffs logged by microinsurance providers as a result of the disaster.
But even with the end-2013 figure of 27.9 million Filipinos covered by a microinsurance policy -- at almost 28% penetration of the population, the highest in Asia and Oceania, Mr. Beltran noted -- the “majority [of Filipinos] still have not bought or even have not heard such a thing.”
This is a cause for concern since “76.6% of our land area is considered hazard prone, and 83.5% of our population is exposed to life-threatening risks brought by climate change,” Mr. Beltran said.
Joselito S. Almario, deputy executive director at DoF arm National Credit Council, read out the microinsurance manifesto to the audience before its signing. Among the signatories of the manifesto present at the event were Mr. Beltran, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla, Jr., and Securities and Exchange Commission (SEC) Chairperson Teresita J. Herbosa, as well as other state officials, insurance industry representatives, and delegations from the German and Japanese embassies.
“We believe in the important role of microinsurance for climate change adaptation,” Mr. Almario said, reading the manifesto. “Microinsurance will not stop typhoons, will not stop flooding, it will not even stop death or injuries... It is not a tool for mitigation. It is a tool for adaptation.”
Among the manifesto’s main points are: for the government to provide an enabling and conducive policy and regulatory environment for microinsurance; for microinsurance players to develop, design and create simple, affordable and innovative microinsurance products and services; and for donors, multilateral institutions and the international community to provide technical and other forms of assistance to those concerned.
At the press conference following the launch of the manifesto, the BSP’s Mr. Espenilla noted that the banking sector is also being primed for the growth of microinsurance.
“We have actually already adopted very liberalized rules for our banks to distribute microinsurance products,” Mr. Espenilla noted. The central bank has for more than a decade now been taking steps to liberalize rules on the banking system’s engagement with the insurance industry.
In August, the BSP issued Circular 844, which relaxed rules on the cross-selling of simple -- i.e., non-investment-linked -- insurance products. Under the relaxed rules, simple insurance products are now allowed to be “cross-sold” inside bank premises regardless of whether the insurance provider is part of the same financial conglomerate as the bank or not.
“Based on the most recent data, more than 40 banks have been allowed to distribute microinsurance. More than that, we have more than 80 banks in the pipeline waiting to be accredited to distribute microinsurance... The target here really are the smaller banks,” Mr. Espenilla said at the press conference. These banks are “mostly located in the provinces.”
But the major growth driver of microinsurance has proven to be non-bank distribution channels, like pawnshops.
“Pawnshops are under the regulation of the BSP, and the BSP has also enabled pawnshops to distribute insurance products in accordance with the rules of the Insurance Commission,” Mr. Espenilla said. “The reason we take that very liberalized view [of pawnshop distribution] is precisely because we are very aware that many municipalities that may be unbanked is actually well served by our pawnshops.”
“The penetration rate of pawnshops is much deeper than our banks,” Mr. Espenilla said. “Today, for example, there are more than 17,000 pawnshops all over the country.”
However, local insurers are now starting to look even beyond the ubiquitous pawnshop.
Philippine Insurers and Reinsurers Association Chairman Michael F. Rellosa shared: “One of our members companies is now dealing with the distributors of fertilizer. We discovered that that’s another possible channel of distribution of microinsurance.”
In an event called “Challenging the Climate, Responding to Change” at the Philippine International Convention Center Friday, Department of Finance (DoF) Undersecretary Gil S. Beltran highlighted the need to be “creative and innovative” in the face of climate change-related risks.
Mr. Beltran pointed to microinsurance’s contribution to the rebuilding of communities following super-typhoon Yolanda’s (International Name: Haiyan) devastation of parts of central Philippines in November 2013, with more than P700 million in payoffs logged by microinsurance providers as a result of the disaster.
But even with the end-2013 figure of 27.9 million Filipinos covered by a microinsurance policy -- at almost 28% penetration of the population, the highest in Asia and Oceania, Mr. Beltran noted -- the “majority [of Filipinos] still have not bought or even have not heard such a thing.”
This is a cause for concern since “76.6% of our land area is considered hazard prone, and 83.5% of our population is exposed to life-threatening risks brought by climate change,” Mr. Beltran said.
Joselito S. Almario, deputy executive director at DoF arm National Credit Council, read out the microinsurance manifesto to the audience before its signing. Among the signatories of the manifesto present at the event were Mr. Beltran, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla, Jr., and Securities and Exchange Commission (SEC) Chairperson Teresita J. Herbosa, as well as other state officials, insurance industry representatives, and delegations from the German and Japanese embassies.
“We believe in the important role of microinsurance for climate change adaptation,” Mr. Almario said, reading the manifesto. “Microinsurance will not stop typhoons, will not stop flooding, it will not even stop death or injuries... It is not a tool for mitigation. It is a tool for adaptation.”
Among the manifesto’s main points are: for the government to provide an enabling and conducive policy and regulatory environment for microinsurance; for microinsurance players to develop, design and create simple, affordable and innovative microinsurance products and services; and for donors, multilateral institutions and the international community to provide technical and other forms of assistance to those concerned.
At the press conference following the launch of the manifesto, the BSP’s Mr. Espenilla noted that the banking sector is also being primed for the growth of microinsurance.
“We have actually already adopted very liberalized rules for our banks to distribute microinsurance products,” Mr. Espenilla noted. The central bank has for more than a decade now been taking steps to liberalize rules on the banking system’s engagement with the insurance industry.
In August, the BSP issued Circular 844, which relaxed rules on the cross-selling of simple -- i.e., non-investment-linked -- insurance products. Under the relaxed rules, simple insurance products are now allowed to be “cross-sold” inside bank premises regardless of whether the insurance provider is part of the same financial conglomerate as the bank or not.
“Based on the most recent data, more than 40 banks have been allowed to distribute microinsurance. More than that, we have more than 80 banks in the pipeline waiting to be accredited to distribute microinsurance... The target here really are the smaller banks,” Mr. Espenilla said at the press conference. These banks are “mostly located in the provinces.”
But the major growth driver of microinsurance has proven to be non-bank distribution channels, like pawnshops.
“Pawnshops are under the regulation of the BSP, and the BSP has also enabled pawnshops to distribute insurance products in accordance with the rules of the Insurance Commission,” Mr. Espenilla said. “The reason we take that very liberalized view [of pawnshop distribution] is precisely because we are very aware that many municipalities that may be unbanked is actually well served by our pawnshops.”
“The penetration rate of pawnshops is much deeper than our banks,” Mr. Espenilla said. “Today, for example, there are more than 17,000 pawnshops all over the country.”
However, local insurers are now starting to look even beyond the ubiquitous pawnshop.
Philippine Insurers and Reinsurers Association Chairman Michael F. Rellosa shared: “One of our members companies is now dealing with the distributors of fertilizer. We discovered that that’s another possible channel of distribution of microinsurance.”
Saturday, February 21, 2015
Thursday, February 19, 2015
Low-income Filipinos can rely on microinsurance when disaster strikes
Manila Times
February 18, 2015 8:42 pm
THE domestic insurance industry posted a stellar growth performance in the past year, registering an estimated 28 million Filipinos protected by microinsurance.
Microinsurance has proven to be a great tool in promoting affordable security in the Philippines with its significant contribution to the increase in insurance penetration, which hit 28 percent, one of the highest rates in the Asian region.
The recent calamities that shook the country highlighted the importance of having insurance protection, especially for the poor who are the most vulnerable. When Super Typhoon Yolanda struck the country in November 2013, over half a billion pesos in microinsurance claims were settled and given as benefits to families to cover calamity assistance for damaged crops, hospitalization and death.
Now that its wide-ranging impact is known, microinsurance is currently seen as an important component of risk management, complementing the government’s disaster prevention and rehabilitation program.
To support the industry’s growth, providers are encouraged to look into designing more products that will provide comprehensive coverage to the lives and livelihood of low-income people. One example of this is crop insurance offered by public insurance agencies in partnership with private providers.
There is a need to develop such products to cushion the effects on the low-income segment whose livelihoods and income sources are threatened when calamities strike. When such losses occur, the ability of an individual to bounce back from a calamity is severely affected, thus also affecting the productivity of their segment in the broader economy.
Delivery channels like the rural banks, cooperatives and other microfinance institutions should respond to these needs by providing access to a product that will provide security over losses at an affordable rate. Support and development institutions like industry associations, donors and other development-oriented agencies, on the other hand, should do their part by providing assistance in building the capabilities of various delivery channels to provide quality microinsurance services to the low-income sector.
For its part, the Rural Bankers Association of the Philippines is continuously providing training and licensing and other forms of technical assistance to its member banks. To date, a total of 223 rural banks and over 500 staff have already undergone microinsurance training provided by the RBAP’s training arm, the Rural Bankers Research and Development Association.
Bank staff who completed the course are qualified to act as their institution’s soliciting agent, which is part of the program to empower institutions as access points for clients to avail of microinsurance.
With continuous partnership between the private and the public sector, microinsurance will soon emerge to be a vital component of disaster risk management, benefiting more Filipino lives in the coming years.
February 18, 2015 8:42 pm
THE domestic insurance industry posted a stellar growth performance in the past year, registering an estimated 28 million Filipinos protected by microinsurance.
Microinsurance has proven to be a great tool in promoting affordable security in the Philippines with its significant contribution to the increase in insurance penetration, which hit 28 percent, one of the highest rates in the Asian region.
The recent calamities that shook the country highlighted the importance of having insurance protection, especially for the poor who are the most vulnerable. When Super Typhoon Yolanda struck the country in November 2013, over half a billion pesos in microinsurance claims were settled and given as benefits to families to cover calamity assistance for damaged crops, hospitalization and death.
Now that its wide-ranging impact is known, microinsurance is currently seen as an important component of risk management, complementing the government’s disaster prevention and rehabilitation program.
To support the industry’s growth, providers are encouraged to look into designing more products that will provide comprehensive coverage to the lives and livelihood of low-income people. One example of this is crop insurance offered by public insurance agencies in partnership with private providers.
There is a need to develop such products to cushion the effects on the low-income segment whose livelihoods and income sources are threatened when calamities strike. When such losses occur, the ability of an individual to bounce back from a calamity is severely affected, thus also affecting the productivity of their segment in the broader economy.
Delivery channels like the rural banks, cooperatives and other microfinance institutions should respond to these needs by providing access to a product that will provide security over losses at an affordable rate. Support and development institutions like industry associations, donors and other development-oriented agencies, on the other hand, should do their part by providing assistance in building the capabilities of various delivery channels to provide quality microinsurance services to the low-income sector.
For its part, the Rural Bankers Association of the Philippines is continuously providing training and licensing and other forms of technical assistance to its member banks. To date, a total of 223 rural banks and over 500 staff have already undergone microinsurance training provided by the RBAP’s training arm, the Rural Bankers Research and Development Association.
Bank staff who completed the course are qualified to act as their institution’s soliciting agent, which is part of the program to empower institutions as access points for clients to avail of microinsurance.
With continuous partnership between the private and the public sector, microinsurance will soon emerge to be a vital component of disaster risk management, benefiting more Filipino lives in the coming years.
Saturday, February 14, 2015
PH Microinsurance: Challenging the Climate, Responding to Change
Watch how Microinsurance in the Philippines helped the victims of Typhoon Haiyan (Yolanda). https://www.youtube.com/watch?v=MjICODBAudE&feature=youtu.be
Monday, January 26, 2015
32M Filipinos have insurance
Manila Standard Today
By Jennifer Ambanta | Jan. 23, 2015 at 11:40pm
One in every three Filipinos is now covered by insurance, following the growth of the micro-insurance industry, the Insurance Commission said Friday.
"About 32 million Filipinos are now insured, not including those under the Social Security System and the Government Service Insurance System," Insurance Commissioner Emmanuel Dooc said at the sidelines of the 66th anniversary of the agency.
Dooc said a large part of the insured population was serviced by the micro-insurance industry with 28 million individuals.
"As of end-2014 micro insurance have reached 28 million Filipinos," Dooc said.
He said his personal target was to increase the insurance penetration rate in the country to 50 percent, involving 50 million Filipinos, by the end of his term in 2019.
"Before my term ends in 2019, I hope we reach out to that much people," he said.
Dooc said the goal of the Insurance Commission was to bring financial inclusion to more Filipinos, especially those in remote parts of the country.
The insurance industry ended the third quarter of 2014 with total assets of P1.043 trillion and total premiums of P132 billion.
Total investments reached P800 billion, half of which were placed in government securities while total benefits amounted to P52.3 billion.
Dooc said the insurance industry was fast becoming a pillar of the economy as it expanded over the past five years.
"Despite mergers and consolidation as a result of capital buildup and strict implementation of law, the industry continues to thrive," he said.
Data showed that from an all-time high of 130 insurance companies, the total number of industry players dropped to 99 this year.
The Insurance Commission said earlier it expected mergers and consolidation to continue in the coming years, because of the Association of Southeast Asian Economic Integration.
The Insurance Commission celebrated its 66th anniversary on Friday, with theme "Alleviating Poverty Through Inclusive Insurance Protection.”
By Jennifer Ambanta | Jan. 23, 2015 at 11:40pm
One in every three Filipinos is now covered by insurance, following the growth of the micro-insurance industry, the Insurance Commission said Friday.
"About 32 million Filipinos are now insured, not including those under the Social Security System and the Government Service Insurance System," Insurance Commissioner Emmanuel Dooc said at the sidelines of the 66th anniversary of the agency.
Dooc said a large part of the insured population was serviced by the micro-insurance industry with 28 million individuals.
"As of end-2014 micro insurance have reached 28 million Filipinos," Dooc said.
He said his personal target was to increase the insurance penetration rate in the country to 50 percent, involving 50 million Filipinos, by the end of his term in 2019.
"Before my term ends in 2019, I hope we reach out to that much people," he said.
Dooc said the goal of the Insurance Commission was to bring financial inclusion to more Filipinos, especially those in remote parts of the country.
The insurance industry ended the third quarter of 2014 with total assets of P1.043 trillion and total premiums of P132 billion.
Total investments reached P800 billion, half of which were placed in government securities while total benefits amounted to P52.3 billion.
Dooc said the insurance industry was fast becoming a pillar of the economy as it expanded over the past five years.
"Despite mergers and consolidation as a result of capital buildup and strict implementation of law, the industry continues to thrive," he said.
Data showed that from an all-time high of 130 insurance companies, the total number of industry players dropped to 99 this year.
The Insurance Commission said earlier it expected mergers and consolidation to continue in the coming years, because of the Association of Southeast Asian Economic Integration.
The Insurance Commission celebrated its 66th anniversary on Friday, with theme "Alleviating Poverty Through Inclusive Insurance Protection.”
Monday, December 8, 2014
EIU names Phl number 1 in microfinance in Asia
By Ted P. Torres (The Philippine Star) |
Updated December 8, 2014 - 12:00am
MANILA, Philippines - The Economist Intelligence Unit (EIU) has ranked the Philippines as microfinance leader in Asia, and third best globally in a study that covered 55 countries.
Global microfinance leader is Peru, followed by Colombia. In fourth is Chile and fifth is India (second best in Asia).
The Philippines was second best in 2010, and number one globally in 2009, the first time the report was conducted.
The EIU report also noted the Philippines was ranked among the leaders in the regulation and promotion of micro-insurance. The other nations mentioned were Colombia, India and Mexico.
The strength of the top three, according to the report, lies in the presence of a financial-inclusion strategy.
“The Philippine government’s multi-year development plan includes a financial-inclusion strategy with specific commitments, many of which have been implemented, including financial-education initiatives,” EIU said.
The report noted that one of the key strengths of the Philippines is that the Bangko Sentral ng Pilipinas (BSP) is the first monetary regulator to form a body specifically for financial inclusiveness. The National Strategy for Microfinance, formed in 1997, preceded the Inclusive Finance Advocacy Staff.
In close cooperation with other agencies, the BSP also encourages a strategy that offers micro-insurance regulations to facilitate the provision of life, health and other insurance products to low-income populations.
However, the report expressed concern that most of the providers of micro-credit and microinsurance are situated in populous and urbanized areas. Only 26.6 percent of the adult population had deposit accounts, majority of which are also in urbanized areas.
Other major challenges highlighted by the report include the weak and fragile delivery and implementation.
Another stumbling block is the country’s archipelagic situation made up of more than 7,000 islands, where huge financial, security and logistical challenges exist in reaching the poor and unbanked.
The EIU said that in the country’s largest province, Mindanao, coverage for microfinance is negligible. Non-regulated financial institutions, namely, co- operatives, are not well supervised and engage in deceptive practices and charge high interest rates. Over-indebtedness is also an issue with multiple financing,
“Financial literacy continues to be a problem, as many Filipinos do not understand or value the importance of savings,” the report added.
The EIU is an independent business within The Economist Group providing forecasting and advisory services through research and analysis, such as monthly country reports, five-year country economic forecasts, country risk service reports, and industry reports. The group also publishes the prestigious The Economist, a business journal.
Updated December 8, 2014 - 12:00am
MANILA, Philippines - The Economist Intelligence Unit (EIU) has ranked the Philippines as microfinance leader in Asia, and third best globally in a study that covered 55 countries.
Global microfinance leader is Peru, followed by Colombia. In fourth is Chile and fifth is India (second best in Asia).
The Philippines was second best in 2010, and number one globally in 2009, the first time the report was conducted.
The EIU report also noted the Philippines was ranked among the leaders in the regulation and promotion of micro-insurance. The other nations mentioned were Colombia, India and Mexico.
The strength of the top three, according to the report, lies in the presence of a financial-inclusion strategy.
“The Philippine government’s multi-year development plan includes a financial-inclusion strategy with specific commitments, many of which have been implemented, including financial-education initiatives,” EIU said.
The report noted that one of the key strengths of the Philippines is that the Bangko Sentral ng Pilipinas (BSP) is the first monetary regulator to form a body specifically for financial inclusiveness. The National Strategy for Microfinance, formed in 1997, preceded the Inclusive Finance Advocacy Staff.
In close cooperation with other agencies, the BSP also encourages a strategy that offers micro-insurance regulations to facilitate the provision of life, health and other insurance products to low-income populations.
However, the report expressed concern that most of the providers of micro-credit and microinsurance are situated in populous and urbanized areas. Only 26.6 percent of the adult population had deposit accounts, majority of which are also in urbanized areas.
Other major challenges highlighted by the report include the weak and fragile delivery and implementation.
Another stumbling block is the country’s archipelagic situation made up of more than 7,000 islands, where huge financial, security and logistical challenges exist in reaching the poor and unbanked.
The EIU said that in the country’s largest province, Mindanao, coverage for microfinance is negligible. Non-regulated financial institutions, namely, co- operatives, are not well supervised and engage in deceptive practices and charge high interest rates. Over-indebtedness is also an issue with multiple financing,
“Financial literacy continues to be a problem, as many Filipinos do not understand or value the importance of savings,” the report added.
The EIU is an independent business within The Economist Group providing forecasting and advisory services through research and analysis, such as monthly country reports, five-year country economic forecasts, country risk service reports, and industry reports. The group also publishes the prestigious The Economist, a business journal.
Tuesday, November 25, 2014
Phl leads East Asia in microinsurance
By Ted P. Torres
The Philippine Star
Updated November 25, 2014
MANILA, Philippines - Roughly 27.96 million Filipinos had microinsurance coverage in 2013, among the highest in the East Asian region, according to the Insurance Commission (IC).
Likewise, the penetration ratio (as a percentage of population) rose from 7.22 percent in 2009 to 28.62 percent last year.
The Philippines had the highest microinsurance penetration ratio and the second highest penetration, based on a 2013 study commissioned by the Munich Re Foundation.
The Philippines recorded a 20.6-percent penetration ratio or the highest among the top 10 nations covered by the study.
It was followed by the 13.9 percent in Thailand, nine percent for India, 6.1 percent for Bangladesh, and 3.7 percent for Malaysia. The rest of the countries based on ranking are Pakistan, Cambodia, East Timor, Jordan and Nepal.
In terms of penetration, India was tops with 111.1 million with microinsurance policies followed by the Philippines with 19.9 million policies.
China came in third with 11.9 million, Bangladesh with 9.4 million, and Thailand with 9.3 million. The rest of the field are: Pakistan, Indonesia, Malaysia, Nepal and Cambodia.
Before 2010, mutual benefit associations (MBAs), with a few exceptions among the larger life insurers, sold the low-cost informal insurance products.
But the government’s microinsurance program, with all its regulatory and actuarial improvements, changed all that.
At the start of 2013, there were 80 microinsurance products – 54 are classified as life products and 26 as non-life products – approved by the IC.
Offering microinsurance products are 19 insurance companies and 17 MBAs with approved microinsurance products.
In fact, 14 of the 17 MBAs are focused solely on IC-approved microinsurance products. About two million MBA members have microinsurance products.
Already, the program benefited more than 95,000 clients/beneficiaries, with payments reaching P1.87 billion in death and disability benefits.
IC commissioner Emmanuel F. Dooc said that the numbers are expected to be greater this year, with the increase in the number of participants coming the private sector.
Dooc said that the rapid entry of financial but non-insurance institutions, such Cebuana Lhuillier, in the microinsurance environment would dramatically increase the number of individual coverage.
‘They have one of the largest distribution networks today,” he added.
The Philippine Star
Updated November 25, 2014
MANILA, Philippines - Roughly 27.96 million Filipinos had microinsurance coverage in 2013, among the highest in the East Asian region, according to the Insurance Commission (IC).
Likewise, the penetration ratio (as a percentage of population) rose from 7.22 percent in 2009 to 28.62 percent last year.
The Philippines had the highest microinsurance penetration ratio and the second highest penetration, based on a 2013 study commissioned by the Munich Re Foundation.
The Philippines recorded a 20.6-percent penetration ratio or the highest among the top 10 nations covered by the study.
It was followed by the 13.9 percent in Thailand, nine percent for India, 6.1 percent for Bangladesh, and 3.7 percent for Malaysia. The rest of the countries based on ranking are Pakistan, Cambodia, East Timor, Jordan and Nepal.
In terms of penetration, India was tops with 111.1 million with microinsurance policies followed by the Philippines with 19.9 million policies.
China came in third with 11.9 million, Bangladesh with 9.4 million, and Thailand with 9.3 million. The rest of the field are: Pakistan, Indonesia, Malaysia, Nepal and Cambodia.
Before 2010, mutual benefit associations (MBAs), with a few exceptions among the larger life insurers, sold the low-cost informal insurance products.
But the government’s microinsurance program, with all its regulatory and actuarial improvements, changed all that.
At the start of 2013, there were 80 microinsurance products – 54 are classified as life products and 26 as non-life products – approved by the IC.
Offering microinsurance products are 19 insurance companies and 17 MBAs with approved microinsurance products.
In fact, 14 of the 17 MBAs are focused solely on IC-approved microinsurance products. About two million MBA members have microinsurance products.
Already, the program benefited more than 95,000 clients/beneficiaries, with payments reaching P1.87 billion in death and disability benefits.
IC commissioner Emmanuel F. Dooc said that the numbers are expected to be greater this year, with the increase in the number of participants coming the private sector.
Dooc said that the rapid entry of financial but non-insurance institutions, such Cebuana Lhuillier, in the microinsurance environment would dramatically increase the number of individual coverage.
‘They have one of the largest distribution networks today,” he added.
Saturday, November 22, 2014
Philippines ranks 3rd in global EIU financial inclusion ranking
Business, Manila Bulleting
Lee C. Chipongian
November 13, 2014
The Philippines is one of the top three countries in the world that have the most effective financial inclusion programs, based on the “Global Microscope 2014” index of the Economist Intelligence Unit (EIU) which assessed the “enabling environment” of 55 countries.
It is an improvement from the 2013’s ranking which listed the country as fourth in the world.
“Peru, Colombia and the Philippines demonstrate the most conducive environments for financial inclusion,” the report said. The Philippines improved its score to 79 (out of 100) from last year’s 67.9, trailing behind to Peru’s 87 and Colombia’s 85.
EIU highlighted the Philippines’ leadership in the micro-insurance regulation and the government’s committed and documented financial-inclusion strategy or programs. “The Philippines government’s multi-year development plan includes a financial-inclusion strategy with specific commitments, many of which have been implemented, including financial-education initiatives,” said EIU.
The report also discussed the country’s challenges to ensure long-term success such as in implementation. “While the Philippines is at the forefront of promoting and creating an enabling environment for financial inclusion, some sector experts believe that delivery and implementation are weak.”
The fragmented economic sectors are a significant financial, security and logistical challenges, in a country of 7,000 islands. The EIU said the concentration of microfinance institutions (MFIs) in urban and semi-urban areas with larger populations leads to banks charging higher interest rates on loans. “Non-regulated financial institutions, namely, co-operatives, are not well supervised and engage in deceptive practices and charge high interest rates.”
There are also areas that MFIs are too few and scarce, specifically in Mindanao where EIU said coverage for microfinance is “negligible.” The report also pointed out the multiple financing problems or over-indebtedness, however they also acknowledged efforts to improve on this with the establishment of a credit data bureau or the Credit Information Corp. which should be in place by the end of this year. The Credit Information System Act was legislated in 2008.
“Lastly, financial literacy continues to be a problem, as many Filipinos do not understand or value the importance of savings,” said EIU. The report cited a World Bank data that only 26.6 percent of the adult population has a deposit account.
The EIU said the Bangko Sentral ng Pilipinas’ (BSP) efforts to improve and promote financial literacy as part of its financial inclusion agenda have gained traction over the years.
It noted that the BSP was the first central bank in the world to have an “Inclusive Finance Advocacy Staff” for financial inclusion.
“The BSP continues to promote an enabling environment for financial inclusion through the issuance of various regulations and circulars, which seek to encourage new entrants of financial-services providers and products that serve the poor, while also ensuring the safe provision of such services,” said EIU.
In May this year, the central bank approved a stronger consumer protection framework which includes a separate system that will be implemented by 2016.
Lee C. Chipongian
November 13, 2014
The Philippines is one of the top three countries in the world that have the most effective financial inclusion programs, based on the “Global Microscope 2014” index of the Economist Intelligence Unit (EIU) which assessed the “enabling environment” of 55 countries.
It is an improvement from the 2013’s ranking which listed the country as fourth in the world.
“Peru, Colombia and the Philippines demonstrate the most conducive environments for financial inclusion,” the report said. The Philippines improved its score to 79 (out of 100) from last year’s 67.9, trailing behind to Peru’s 87 and Colombia’s 85.
EIU highlighted the Philippines’ leadership in the micro-insurance regulation and the government’s committed and documented financial-inclusion strategy or programs. “The Philippines government’s multi-year development plan includes a financial-inclusion strategy with specific commitments, many of which have been implemented, including financial-education initiatives,” said EIU.
The report also discussed the country’s challenges to ensure long-term success such as in implementation. “While the Philippines is at the forefront of promoting and creating an enabling environment for financial inclusion, some sector experts believe that delivery and implementation are weak.”
The fragmented economic sectors are a significant financial, security and logistical challenges, in a country of 7,000 islands. The EIU said the concentration of microfinance institutions (MFIs) in urban and semi-urban areas with larger populations leads to banks charging higher interest rates on loans. “Non-regulated financial institutions, namely, co-operatives, are not well supervised and engage in deceptive practices and charge high interest rates.”
There are also areas that MFIs are too few and scarce, specifically in Mindanao where EIU said coverage for microfinance is “negligible.” The report also pointed out the multiple financing problems or over-indebtedness, however they also acknowledged efforts to improve on this with the establishment of a credit data bureau or the Credit Information Corp. which should be in place by the end of this year. The Credit Information System Act was legislated in 2008.
“Lastly, financial literacy continues to be a problem, as many Filipinos do not understand or value the importance of savings,” said EIU. The report cited a World Bank data that only 26.6 percent of the adult population has a deposit account.
The EIU said the Bangko Sentral ng Pilipinas’ (BSP) efforts to improve and promote financial literacy as part of its financial inclusion agenda have gained traction over the years.
It noted that the BSP was the first central bank in the world to have an “Inclusive Finance Advocacy Staff” for financial inclusion.
“The BSP continues to promote an enabling environment for financial inclusion through the issuance of various regulations and circulars, which seek to encourage new entrants of financial-services providers and products that serve the poor, while also ensuring the safe provision of such services,” said EIU.
In May this year, the central bank approved a stronger consumer protection framework which includes a separate system that will be implemented by 2016.
Gov’t. body seeks public views on health insurance
Sunstar
November 21, 2014
THE government’s Technical Working Group (TWG) on MicroHealth yesterday conducted the first of its series of public consultations on the Health Microinsurance (HMI) Framework, which will cover all people, most especially the poorest among the poor.
Joselito S. Almario, deputy executive director of the Department of Finance-National Credit Council(DOF-NCC), said the proposed HMI framework is intended to encourage private sector support to the Universal Health Care (UHC) outlined in the Philippine Development Plan (PDP 2011-2016), which safeguards equitable access to health care for all Filipinos, particularly the poor.
Almario, the TWG chairman, said the PDP envisions a National Health Insurance Program (NHIP) that encourages public-private partnerships (PPP) to respond to the current gaps in healthcare risk protection in the country.
The joint press release distributed during the press conference that followed after the morning session stated that the private sector under the proposed Microhealth Framework is expected to complement and supplement Philhealth’s social health insurance packages especially for the low income and informal sectors.
Stats
Although 82 percent of the 100 million Filipinos have some form of health coverage, the gap remains wide for healthcare financial risk protection, particularly to the most vulnerable low-income sectors.
Philhealth Chief Social Insurance Officer Maria Cristina C. Ramos said Philhealth provides basic health care packages, but has not covered medical transport, drugs and medical supplies.
Ramos said that with microinsurance, they hope all Filipinos, rich and poor, will be covered.
Almario said microinsurance offers a maximum benefit of P500,000 for a maximum coverage of P40.
The consultations aim to draw together views, concerns and support of public and private providers and practitioners in health and insurance sectors on the draft framework.
The TWG on MicroHealth is composed of IC, DOF-NCC, Philhealth, Department of Health (DOH), the insurance industry and the Association of Health Maintenance Organization in the Philippines (AHMOPI), with the support from German Development Cooperation (GIZ).
Support
The GIZ, through its regional program on microinsurance, the Regulatory Framework Promotion on Pro-poor Insurance Markets in Asia (GIZ-RFPI), is providing technical and financial support.
Almario said microinsurance responds to the financial risk protection needs of the low-income and informal sectors. While the products have affordable premiums, the benefits that correspond to the risks and claims settlement is fast.
Ferrer said the MicroHealth framework is envisioned to augment the UHC program through a viable and sustainable private sector microinsurance industry.
Ferrer said Microhealth is expected to provide every Filipino greater coverage and wider access to simple, affordable, appropriate and effective health microinsurance products and services.
Source: Sunstar
Tuesday, September 9, 2014
Micro-insurance gaining popularity in PH – Fitch
Manila Times
February 11, 2014 8:42 pm
by MAYVELIN U. CARABALLO
REPORTER
Micro-insurance is gradually gaining its popularity in the Philippines particularly in the poorest segment of the population, Fitch Ratings said recently.
In its special report “Philippine Insurers Show Ample Growth Potential, Face Changes,” the ratings agency noted that the Philippines continues to be plagued by poverty, with poverty incidences averaging at least 20 percent per year (2009 to 2012), and worse in times of disaster.
“This has led to a gradual increase in the popularity of micro-insurance—as it raises insurance awareness while keeping it affordable for the lower classes,” it said.
Meanwhile, Fitch lauded the Philippine government in creating various measures in regulating and promoting the expansion of micro-insurance in the country.
“The Philippines government has put in a tremendous effort to promote micro-insurance,” it said.
The agency cited that these measures include the establishment of micro-insurance websites and social media tools; the issuance of micro-insurance framework and simple prototype life/nonlife contracts; and the additional permits issued for insurers, and microfinance institutions (MFI) to enter the market.
Fitch said that these efforts have led to double-digit growth in the number of Filipinos with micro-insurance coverage. Based on the data from Insurance Commission, the ratings agency said that from 6.6 million in 2010, there were now 12.9 million Filipinos covered by micro-insurance by end-2012.
“The demand for and awareness of micro-insurance is still growing, and Fitch believes that continuous government support will continue to play a vital role in penetrating the lower-income classes,” Fitch added.
On the other hand, the ratings agency noted that despite being the 12th most densely populated nation with over 97 million people, the Philippine insurance industry remains heavily underpenetrated compared with its regional peers.
Fitch attributed the problem to the fact that the public does not fully appreciate the benefits of insurance, together with issues of insurance affordability for the low-income population.
However, with the improved economic conditions that boosted Filipinos’ standard of living and led to rising urbanization trend, the agency is positive on the expansion of the insurance industry in the coming years.
“Rising levels of income and financial literacy have led to a gradual rising urbanization trend in the last five years,” it said.
Fitch noted that the average urbanization rate in the country stood at 65 percent, marginally lower than the world’s 69 percent.
“Fitch takes a positive view on the growing urbanized trend, as this will drive higher demand for wealth accumulation and health protection products—and in turn, propel higher premium growth,” it said.
February 11, 2014 8:42 pm
by MAYVELIN U. CARABALLO
REPORTER
Micro-insurance is gradually gaining its popularity in the Philippines particularly in the poorest segment of the population, Fitch Ratings said recently.
In its special report “Philippine Insurers Show Ample Growth Potential, Face Changes,” the ratings agency noted that the Philippines continues to be plagued by poverty, with poverty incidences averaging at least 20 percent per year (2009 to 2012), and worse in times of disaster.
“This has led to a gradual increase in the popularity of micro-insurance—as it raises insurance awareness while keeping it affordable for the lower classes,” it said.
Meanwhile, Fitch lauded the Philippine government in creating various measures in regulating and promoting the expansion of micro-insurance in the country.
“The Philippines government has put in a tremendous effort to promote micro-insurance,” it said.
The agency cited that these measures include the establishment of micro-insurance websites and social media tools; the issuance of micro-insurance framework and simple prototype life/nonlife contracts; and the additional permits issued for insurers, and microfinance institutions (MFI) to enter the market.
Fitch said that these efforts have led to double-digit growth in the number of Filipinos with micro-insurance coverage. Based on the data from Insurance Commission, the ratings agency said that from 6.6 million in 2010, there were now 12.9 million Filipinos covered by micro-insurance by end-2012.
“The demand for and awareness of micro-insurance is still growing, and Fitch believes that continuous government support will continue to play a vital role in penetrating the lower-income classes,” Fitch added.
On the other hand, the ratings agency noted that despite being the 12th most densely populated nation with over 97 million people, the Philippine insurance industry remains heavily underpenetrated compared with its regional peers.
Fitch attributed the problem to the fact that the public does not fully appreciate the benefits of insurance, together with issues of insurance affordability for the low-income population.
However, with the improved economic conditions that boosted Filipinos’ standard of living and led to rising urbanization trend, the agency is positive on the expansion of the insurance industry in the coming years.
“Rising levels of income and financial literacy have led to a gradual rising urbanization trend in the last five years,” it said.
Fitch noted that the average urbanization rate in the country stood at 65 percent, marginally lower than the world’s 69 percent.
“Fitch takes a positive view on the growing urbanized trend, as this will drive higher demand for wealth accumulation and health protection products—and in turn, propel higher premium growth,” it said.
Tuesday, August 19, 2014
Developing microinsurance: The path taken
Business Mirror
Opinion
12 Aug 2014
The Technical Services Group of the Insurance Commission
THE Insurance Commission (IC) has taken great strides toward the promotion of microinsurance in the country, considering the initiatives and strategies undertaken over the years.
The most important of these initiatives is the crafting and issuance of the Regulatory Framework for Microinsurance, as embodied in Insurance Memorandum Circular (IMC) 1-2010. In this document, the IC defined the parameters for a microinsurance product in terms of the amount of daily premiums and face amount. But with the enactment of the New Insurance Code, the maximum amount of daily premiums and the maximum sum of guaranteed benefits of a microinsurance product have been pegged at 7.5 percent of and 1,000 times the current daily minimum-wage rate for non-agricultural workers in Metro Manila, respectively.
Another significant stride toward the promotion of microinsurance was making it more accessible to the public. Again, this was done through IMC 1-2010, in which accredited life and nonlife insurers, cooperative insurance societies, and mutual-benefit associations were allowed to issue IC-approved microinsurance products.
Moreover, to encourage their increased participation in providing microinsurance products, the IC approved new distribution channels—categorized as microinsurance agents and microinsurance brokers—which can be availed of by interested individuals and groups, including rural banks, microfinance institutions, non-governmental organizations and cooperatives, and prescribed lower capitalization requirements or a guaranty fund for microinsurance providers.
Likewise, it expanded the set of admitted assets to include premiums collected from the sale of microinsurance products, and even relaxed licensing requirements for agents solely engaged in the solicitation of microinsurance business.
In terms of customer protection, regulations were issued to ensure these microinsurance providers’ financial solvency at all times, so that they shall have the liquidity to fulfill their obligations to their insureds or members as they fall due.
Thus, the IC, together with the Securities and Exchange Commission and the Cooperative Development Authority, issued a joint memorandum circular requiring all entities engaged in informal insurance activities to formalize their operations, either by obtaining a license from the IC or by partnering with a licensed microinsurance provider. This way, the premiums and contributions of the insureds or members are safeguarded through the regulatory policies, in particular, through the circular on performance standards.
This circular prescribes a set of benchmarks or indicators that shall be used in evaluating the microinsurance operations of licensed providers, so as to ensure their stability and capability to continue offering microinsurance products and services. The performance indicators cover such areas as solvency and stability, efficiency, governance, understanding of the product, risk-based capital and outreach. Serving as an early warning system, the IC, through these indicators, can identify entities with specific concerns on the financial condition of their microinsurance operations as early as possible.
Also of great importance is the circular issued for the protection of microinsurance policyholders, the one on the Alternative Dispute Resolution Mechanism. Through the guidelines set out in this circular, claims disputes or complaints related to microinsurance contracts may be settled expeditiously and at less cost to policyholders.
The last of these activities—and this could be the most extensive that was undertaken to promote microinsurance—was the institutionalization of financial literacy. Following the creation of a document called the Road Map to Financial Literacy on Microinsurance, which detailed the campaign strategies directed toward microinsurance stakeholders,
a series of advocacy seminars and trainings, as well as news conferences, were conducted in 17 key regional centers of the country.
Support from collaborators
THE IC recognizes the fact that, by itself, it could not have achieved the feats stated above.
The Department of Finance-the National Credit Council, other government agencies, our private partners, industry associations and academe all selflessly shared their time, expertise and resources to help develop and promote our microinsurance advocacy.
Lending even more extensive support are two multilateral agencies that literally acted as the wind beneath IC’s wings, promoting our microinsurance program as a model for financial-inclusivity efforts not only in Asia, but also in many parts of the world.
The IC is most grateful to these two organizations, the Asian Development Bank (ADB) and the German Technical Cooperation (GTZ), for their wholehearted support for our microinsurance program, making it possible for millions of Filipinos to understand the value of, and have access to, insurance cover against life’s harsh blows.
That we now have about 20 million Filipinos from the low-income sector enjoying the benefits of microinsurance is a testament to the greatness that can be achieved when worthy projects are pushed by people and entities sharing a common vision and goal.
Presently, both the ADB and GTZ have ongoing projects with the IC for the continuous development of microinsurance and related endeavors.
With these collaborations, the goodness continues.
Opinion
12 Aug 2014
The Technical Services Group of the Insurance Commission
THE Insurance Commission (IC) has taken great strides toward the promotion of microinsurance in the country, considering the initiatives and strategies undertaken over the years.
The most important of these initiatives is the crafting and issuance of the Regulatory Framework for Microinsurance, as embodied in Insurance Memorandum Circular (IMC) 1-2010. In this document, the IC defined the parameters for a microinsurance product in terms of the amount of daily premiums and face amount. But with the enactment of the New Insurance Code, the maximum amount of daily premiums and the maximum sum of guaranteed benefits of a microinsurance product have been pegged at 7.5 percent of and 1,000 times the current daily minimum-wage rate for non-agricultural workers in Metro Manila, respectively.
Another significant stride toward the promotion of microinsurance was making it more accessible to the public. Again, this was done through IMC 1-2010, in which accredited life and nonlife insurers, cooperative insurance societies, and mutual-benefit associations were allowed to issue IC-approved microinsurance products.
Moreover, to encourage their increased participation in providing microinsurance products, the IC approved new distribution channels—categorized as microinsurance agents and microinsurance brokers—which can be availed of by interested individuals and groups, including rural banks, microfinance institutions, non-governmental organizations and cooperatives, and prescribed lower capitalization requirements or a guaranty fund for microinsurance providers.
Likewise, it expanded the set of admitted assets to include premiums collected from the sale of microinsurance products, and even relaxed licensing requirements for agents solely engaged in the solicitation of microinsurance business.
In terms of customer protection, regulations were issued to ensure these microinsurance providers’ financial solvency at all times, so that they shall have the liquidity to fulfill their obligations to their insureds or members as they fall due.
Thus, the IC, together with the Securities and Exchange Commission and the Cooperative Development Authority, issued a joint memorandum circular requiring all entities engaged in informal insurance activities to formalize their operations, either by obtaining a license from the IC or by partnering with a licensed microinsurance provider. This way, the premiums and contributions of the insureds or members are safeguarded through the regulatory policies, in particular, through the circular on performance standards.
This circular prescribes a set of benchmarks or indicators that shall be used in evaluating the microinsurance operations of licensed providers, so as to ensure their stability and capability to continue offering microinsurance products and services. The performance indicators cover such areas as solvency and stability, efficiency, governance, understanding of the product, risk-based capital and outreach. Serving as an early warning system, the IC, through these indicators, can identify entities with specific concerns on the financial condition of their microinsurance operations as early as possible.
Also of great importance is the circular issued for the protection of microinsurance policyholders, the one on the Alternative Dispute Resolution Mechanism. Through the guidelines set out in this circular, claims disputes or complaints related to microinsurance contracts may be settled expeditiously and at less cost to policyholders.
The last of these activities—and this could be the most extensive that was undertaken to promote microinsurance—was the institutionalization of financial literacy. Following the creation of a document called the Road Map to Financial Literacy on Microinsurance, which detailed the campaign strategies directed toward microinsurance stakeholders,
a series of advocacy seminars and trainings, as well as news conferences, were conducted in 17 key regional centers of the country.
Support from collaborators
THE IC recognizes the fact that, by itself, it could not have achieved the feats stated above.
The Department of Finance-the National Credit Council, other government agencies, our private partners, industry associations and academe all selflessly shared their time, expertise and resources to help develop and promote our microinsurance advocacy.
Lending even more extensive support are two multilateral agencies that literally acted as the wind beneath IC’s wings, promoting our microinsurance program as a model for financial-inclusivity efforts not only in Asia, but also in many parts of the world.
The IC is most grateful to these two organizations, the Asian Development Bank (ADB) and the German Technical Cooperation (GTZ), for their wholehearted support for our microinsurance program, making it possible for millions of Filipinos to understand the value of, and have access to, insurance cover against life’s harsh blows.
That we now have about 20 million Filipinos from the low-income sector enjoying the benefits of microinsurance is a testament to the greatness that can be achieved when worthy projects are pushed by people and entities sharing a common vision and goal.
Presently, both the ADB and GTZ have ongoing projects with the IC for the continuous development of microinsurance and related endeavors.
With these collaborations, the goodness continues.
Wednesday, August 6, 2014
IC to issue new circular revising the SCA for MBAs
Opinion, Business Mirror
05 Aug 2014
Written by Bernandino B. Camba
NOT too many people know that the mutual-benefit association (MBA) industry has always been under the regulatory supervision of the Insurance Commission (IC). What the savings-and-loans company is to the Bangko Sentral ng Pilipinas, the MBA is to the IC.
As a key stakeholder in the country’s national strategy for the development of microinsurance, MBAs are key in providing every Filipino with equal access to insurance. In contrast to regular insurance companies, MBAs are nonstock and nonprofit organizations that offer social, economic and/or educational programs for their members (and their families) to ensure the protection and development of the same. Accordingly, the IC recognizes the role that MBAs have in the government’s program for inclusive growth and development and, thus, provides the necessary regulation to help them grow and stay stable.
In 2006 the IC issued IC Circular Letter 33-2006, which revised the old Standard Chart of Accounts (SCA) for life-insurance companies, and introduced a Uniform Chart of Accounts for both life-insurance companies and MBAs. This circular lists the uniform account titles to be used by an MBA in recording similar transactions. Each account’s nature described adopted the latest International Financial Reporting Standards (IFRS)/Philippine Financial Reporting Standards (PFRS) rulings and issuances.
The issuance of the circular formalized the accounting review processes for MBAs. This reduced queries and complaints from MBAs during the audit period and standardized account-reporting.
However, with the updates and changes in the IFRS and PFRS in the last eight years, it is again necessary to review and revise the SCA, align it with the latest IFRS rules, and differentiate the account titles for for-profit and not-for-profit organizations. The proposed issuance of the IC circular for the new SCA is one way to ensure that the differences between regular insurance companies and nonprofit organizations are recognized.
There are three major changes:
1) Accounting for fund balances is now unique for an insurance company and an MBA. For example, before, “retained earnings” were used to describe accumulated earnings for MBAs. Now the term “fund balance” is used.
2) “Legal policy reserves” required for insurance companies are now classified into two accounts for MBAs: “Liability on individual equity value,” which represents the total amount of obligations set up by the MBA on membership certificates pertaining to the 50-percent equity value; and “Basic contingent benefit reserves,” which represents the total actuarial reserves set up by the MBA pertaining to the basic life benefit that is in force at the end of the accounting period.
3) In the Assets Section for MBAs, several accounts were also added. These include the Unremitted Member’s Contributions, Dues and Fees account for the unremitted collections on membership fees at the end of the period, and the Unremitted Premiums account for the unremitted collections on all optional policies at the end of the period.
The IC, with the help of the Department of Finance, the MBAs and funding from the Asian Development Bank, has already finished its consultations with various industry stakeholders and, as of last week, conducted its seminar for IC examiners and other employees. The next step is to organize seminars in Luzon, the Visayas and Mindanao for the MBAs to be familiar with the proposed new SCA for MBAs in time for the IC circular’s official publication.
With the completion of the nationwide seminars for MBAs, the IC expects that it will improve financial-data collection, reporting, accuracy and comparability across the industry, and will also provide full disclosure of its financial standing and position to its members and other regulators.
*****
Bernardino B. Camba is a member of the Financial Examination Group of the Insurance Commission.
05 Aug 2014
Written by Bernandino B. Camba
NOT too many people know that the mutual-benefit association (MBA) industry has always been under the regulatory supervision of the Insurance Commission (IC). What the savings-and-loans company is to the Bangko Sentral ng Pilipinas, the MBA is to the IC.
As a key stakeholder in the country’s national strategy for the development of microinsurance, MBAs are key in providing every Filipino with equal access to insurance. In contrast to regular insurance companies, MBAs are nonstock and nonprofit organizations that offer social, economic and/or educational programs for their members (and their families) to ensure the protection and development of the same. Accordingly, the IC recognizes the role that MBAs have in the government’s program for inclusive growth and development and, thus, provides the necessary regulation to help them grow and stay stable.
In 2006 the IC issued IC Circular Letter 33-2006, which revised the old Standard Chart of Accounts (SCA) for life-insurance companies, and introduced a Uniform Chart of Accounts for both life-insurance companies and MBAs. This circular lists the uniform account titles to be used by an MBA in recording similar transactions. Each account’s nature described adopted the latest International Financial Reporting Standards (IFRS)/Philippine Financial Reporting Standards (PFRS) rulings and issuances.
The issuance of the circular formalized the accounting review processes for MBAs. This reduced queries and complaints from MBAs during the audit period and standardized account-reporting.
However, with the updates and changes in the IFRS and PFRS in the last eight years, it is again necessary to review and revise the SCA, align it with the latest IFRS rules, and differentiate the account titles for for-profit and not-for-profit organizations. The proposed issuance of the IC circular for the new SCA is one way to ensure that the differences between regular insurance companies and nonprofit organizations are recognized.
There are three major changes:
1) Accounting for fund balances is now unique for an insurance company and an MBA. For example, before, “retained earnings” were used to describe accumulated earnings for MBAs. Now the term “fund balance” is used.
2) “Legal policy reserves” required for insurance companies are now classified into two accounts for MBAs: “Liability on individual equity value,” which represents the total amount of obligations set up by the MBA on membership certificates pertaining to the 50-percent equity value; and “Basic contingent benefit reserves,” which represents the total actuarial reserves set up by the MBA pertaining to the basic life benefit that is in force at the end of the accounting period.
3) In the Assets Section for MBAs, several accounts were also added. These include the Unremitted Member’s Contributions, Dues and Fees account for the unremitted collections on membership fees at the end of the period, and the Unremitted Premiums account for the unremitted collections on all optional policies at the end of the period.
The IC, with the help of the Department of Finance, the MBAs and funding from the Asian Development Bank, has already finished its consultations with various industry stakeholders and, as of last week, conducted its seminar for IC examiners and other employees. The next step is to organize seminars in Luzon, the Visayas and Mindanao for the MBAs to be familiar with the proposed new SCA for MBAs in time for the IC circular’s official publication.
With the completion of the nationwide seminars for MBAs, the IC expects that it will improve financial-data collection, reporting, accuracy and comparability across the industry, and will also provide full disclosure of its financial standing and position to its members and other regulators.
*****
Bernardino B. Camba is a member of the Financial Examination Group of the Insurance Commission.
Monday, July 28, 2014
Rural banks to serve more Filipinos with increased microinsurance benefits
Manila Times
July 23, 2014 9:57 pm
The havoc created by Typhoon Yolanda in the Visayas late last year underlines the value of having security against unexpected hazards. Fortunately, the realization has snowballed into the implementation of measures that seek to increase the coverage of microinsurance.
Under the new Insurance Code, benefits that may be derived from a microinsurance policy have been raised to up to 1,000 times the minimum daily wage of non-agricultural workers in Metro Manila or up to P466,000. Premium, meanwhile, is now computed at 7.5 percent of the same daily wage.
The Bangko Sentral ng Pilipinas likewise issued BSP Circular 841 to reflect the change in the maximum amount of premiums and benefits in the manual of regulations for banks.
The increase in the cap of microinsurance benefits expands protection while ensuring that products remain affordable to the low-income sector. To illustrate one of its benefits, a microinsurance credit life product may now be linked to a client’s loan amounting to P300,000. In case of death of the client, the family will not be burdened with the payment of the loan balance.
The same can be said of a microinsurance product linked with a bank’s micro-deposit account. To encourage clients to save more, a microinsurance policy is tied up to the client’s savings account and the amount of insurance benefit may be computed based on the average daily balance of the deposit.
Noteworthy at this point are previous BSP issuances increasing the amount of loan to microenterprises and small businesses through Microfinance Plus and the average daily balance of microfinance savings account from P15,000 to P40,000.
To increase insurance coverage in the country and to provide the low-income sector access to insurance products, rural banks have been allowed by regulators to market and sell microinsurance products to their clients.
Strategically located nationwide, rural banks are seen as effective distribution points in providing protection to the most vulnerable sector of the society. In fact, rural banks with offices and branches in provinces hit by Yolanda contributed to the relief efforts in the aftermath of the deadly typhoon.
Industry reports show that by end of 2013, there were 40 rural and cooperative banks licensed as microinsurance agents, serving about 1.3 million Filipinos with active microinsurance policies.
Microinsurance is seen as vital in providing protection in the agriculture sector where farmers and fisherfolk are most vulnerable to natural calamities.
An average of 20 typhoons hit the Philippines annually and experts predict stronger typhoons as a result of climate change. When Yolanda struck the country last year, it incurred $13 billion in economic losses but only $1.5 billion insurance losses due to the fact that the areas hit by the typhoon had very low insurance penetration. With measures such as the increase in benefits, we can expect that microinsurance will gain ground even more.
July 23, 2014 9:57 pm
The havoc created by Typhoon Yolanda in the Visayas late last year underlines the value of having security against unexpected hazards. Fortunately, the realization has snowballed into the implementation of measures that seek to increase the coverage of microinsurance.
Under the new Insurance Code, benefits that may be derived from a microinsurance policy have been raised to up to 1,000 times the minimum daily wage of non-agricultural workers in Metro Manila or up to P466,000. Premium, meanwhile, is now computed at 7.5 percent of the same daily wage.
The Bangko Sentral ng Pilipinas likewise issued BSP Circular 841 to reflect the change in the maximum amount of premiums and benefits in the manual of regulations for banks.
The increase in the cap of microinsurance benefits expands protection while ensuring that products remain affordable to the low-income sector. To illustrate one of its benefits, a microinsurance credit life product may now be linked to a client’s loan amounting to P300,000. In case of death of the client, the family will not be burdened with the payment of the loan balance.
The same can be said of a microinsurance product linked with a bank’s micro-deposit account. To encourage clients to save more, a microinsurance policy is tied up to the client’s savings account and the amount of insurance benefit may be computed based on the average daily balance of the deposit.
Noteworthy at this point are previous BSP issuances increasing the amount of loan to microenterprises and small businesses through Microfinance Plus and the average daily balance of microfinance savings account from P15,000 to P40,000.
To increase insurance coverage in the country and to provide the low-income sector access to insurance products, rural banks have been allowed by regulators to market and sell microinsurance products to their clients.
Strategically located nationwide, rural banks are seen as effective distribution points in providing protection to the most vulnerable sector of the society. In fact, rural banks with offices and branches in provinces hit by Yolanda contributed to the relief efforts in the aftermath of the deadly typhoon.
Industry reports show that by end of 2013, there were 40 rural and cooperative banks licensed as microinsurance agents, serving about 1.3 million Filipinos with active microinsurance policies.
Microinsurance is seen as vital in providing protection in the agriculture sector where farmers and fisherfolk are most vulnerable to natural calamities.
An average of 20 typhoons hit the Philippines annually and experts predict stronger typhoons as a result of climate change. When Yolanda struck the country last year, it incurred $13 billion in economic losses but only $1.5 billion insurance losses due to the fact that the areas hit by the typhoon had very low insurance penetration. With measures such as the increase in benefits, we can expect that microinsurance will gain ground even more.
Friday, July 18, 2014
Typhoon Rammusan skipped Manila; insurance loss low
Source: AIR eDaily | 18 Jul 2014
Typhoon Rammasun which made landfall in the central Philippine province of Sorsogon on Tuesday and was seen as heading towards Manila, later shifted away from the capital towards China. Insurance losses are not expected to be significant.
US-headquartered catastrophe modelling firm AIR Worldwide noted that, “although smaller and much less intense than deadly and highly destructive Super Typhoon Haiyan - which devastated parts of the Philippines in November 2013 -Typhoon Rammasun nonetheless prompted sizeable evacuations and resulted in some disruption of transportation, as well as school and office closings. Widespread damage is not expected, but some areas could experience storm surge flooding, flash flooding, and/or mud slides, as well as wind damage.”
More than 423,000 fled to emergency shelters, according to the National Disaster Risk Reduction and Management Council. Rammasun caused at least 20 deaths compared to more than 6,300 in the case of Haiyan. Many areas lost power and telephone connections.
In an alert posted at Rammusan's landfall in the Philippines, AIR said that “typhoon and flood damage are usually covered together in the Philippines and are given under separate fire policies with named perils extensions. Insurance penetration varies by region. Typhoon Rammasun will affect some densely populated and urban areas, including Manila, where insurance penetration for residential lines would be around 5-10%, 25-30% for commercial/industrial. Still, given that insurance penetration in this area is around 10% to 20%, insured losses are not expected to be significant as a result of this typhoon.”
In a post-landfall report, AIR noted that Rammusan weakened as it crossed Luzon and passed to the south of Manila.There have been no reports of major flooding to the Metro Manila area.
Rammasun is the seventh typhoon to lash the Philippines this year. About 20 typhoons and storms hit the Philippines each year, making it one of the world’s most disaster-prone countries
Typhoon Rammasun which made landfall in the central Philippine province of Sorsogon on Tuesday and was seen as heading towards Manila, later shifted away from the capital towards China. Insurance losses are not expected to be significant.
US-headquartered catastrophe modelling firm AIR Worldwide noted that, “although smaller and much less intense than deadly and highly destructive Super Typhoon Haiyan - which devastated parts of the Philippines in November 2013 -Typhoon Rammasun nonetheless prompted sizeable evacuations and resulted in some disruption of transportation, as well as school and office closings. Widespread damage is not expected, but some areas could experience storm surge flooding, flash flooding, and/or mud slides, as well as wind damage.”
More than 423,000 fled to emergency shelters, according to the National Disaster Risk Reduction and Management Council. Rammasun caused at least 20 deaths compared to more than 6,300 in the case of Haiyan. Many areas lost power and telephone connections.
In an alert posted at Rammusan's landfall in the Philippines, AIR said that “typhoon and flood damage are usually covered together in the Philippines and are given under separate fire policies with named perils extensions. Insurance penetration varies by region. Typhoon Rammasun will affect some densely populated and urban areas, including Manila, where insurance penetration for residential lines would be around 5-10%, 25-30% for commercial/industrial. Still, given that insurance penetration in this area is around 10% to 20%, insured losses are not expected to be significant as a result of this typhoon.”
In a post-landfall report, AIR noted that Rammusan weakened as it crossed Luzon and passed to the south of Manila.There have been no reports of major flooding to the Metro Manila area.
Rammasun is the seventh typhoon to lash the Philippines this year. About 20 typhoons and storms hit the Philippines each year, making it one of the world’s most disaster-prone countries
Subscribe to:
Posts (Atom)
