Suspend higher rates, IC urged
IC said it was moving the implementation of a new rating structure and revised rates for nonlife insurers’ catastrophe risk policies
Daily TribuneIC said it was moving the implementation of a new rating structure and revised rates for nonlife insurers’ catastrophe risk policies
The Insurance Commission should suspend a circular that increases premium rates on catastrophes such as typhoons, floods and earthquakes, as it may lead to higher commodity prices.
A lawmaker sought a congressional probe last 12 December to revisit the untimely adjustment of the minimum catastrophe insurance rates nationwide mandated under IC's Circular Letter 2022-34, which according to the solon, was implemented without prior consultation with the private sector and even the end-user who will be negatively affected by the increase.
In October, the IC said it was moving the implementation of a new rating structure and revised rates for nonlife insurers' catastrophe risk policies from 1 November to 1 January 2023.
However, these adjusted rates will result in a sudden massive increase in insurance premiums ranging from 40 percent to as high as 400 percent that most likely be an additional burden to the general public.
Agri Rep. Wilbert Lee, who sought the House's assistance to look into the said issue under his House Resolution 632, questioned IC's move to increase the catastrophe premium rates without consulting first the end-users.
Added cost
"Who is protected by this policy? Why now that our commission controls are the minimum? There is no maximum, no ceiling," he asked.
IC Commissioner Dennis Funa was asked to respond to the issue.
"It's a domino effect. The price of food will increase because just in production, in storage, in machines, when it comes to the distribution center, to retail, everything is affected by this increase in insurance premium because almost everyone is taking insurance," the lawmaker stressed.
The premium rate hike, Lee said, also alarms the detrimental impact of the said insurance hike on the agriculture sector and on the government's effort to achieve food security.
Several organized business groups and private firms expressed their strong opposition to the said policy in the absence of proper consultation considering the very high increase in insurance.
The neophyte lawmaker previously said that given that the country is still recovering from the devastating effects of the Covid-19 pandemic, Agri Representative Wilber Lee, the proponent of the resolution, said it is incumbent on the government to respond to the critical needs.
He pointed out that not only will the farmers suffer, but also the food security that the President desires.
The Chief Executive, the concurrent head of the Department of Agriculture, has vowed that agriculture is one of his administration's top priorities, as he envisions a food-secure and resilient Philippines in the coming years.
In a recent press conference, Employers Confederation of the Philippines and PHILEXPORT chairperson Sergio Ortiz-Luis and Philippine Chamber of Commerce and Industry president George Barcelon expressed their solidarity in calling to stop the implementation of the said adjustment.
