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IC processes all money claims, product applications

<p>Insurance Commissioner Dennis Funa</p>

Insurance Commissioner Dennis Funa

MANILA– The Insurance Commission (IC) has processed 100 percent of monetary claims as well as license and product applications last year to meet the growing needs of the insurance industry, which expanded to PHP1.79 trillion as of the third quarter of 2020 amid the pandemic.
 
In its report to Finance Secretary Carlos Dominguez III, the IC said it also issued 114 circulars in 2020, the highest in the history of the commission, which were mostly on assisting the industry mitigate the economic impact of the Covid-19 pandemic on its clients as well as its workforce. 
 
IC commissioner Dennis Funa said that amid the challenges resulting from the pandemic, the insurance industry grew 2.83 percent year-on-year (YOY) as of end-September 2020, with assets increasing from PHP1.74 trillion in 2019 to PHP1.79 trillion last year.
 
The life insurance sector grew 0.96 percent YOY as of the third quarter of 2020 to PHP1.4 trillion, while the non-life sector expanded 9.92 percent YOY in the same period to PHP274.5 billion. 
 
Funa said the industry’s total premium income amounted to PHP216.5 billion as of the October-December 2020 period, down by PHP8.47 billion compared to the amount in the same period in 2019. 
 
Of the PHP216.5-billion figure, PHP173.7 billion accounted for the increase in renewal premiums in the life sector.
 
As of Sept. 30, 2020, some PHP2.41 billion in aggregate claims were paid by insurance companies, with the health maintenance organization (HMO) segment paying the largest chunk of coronavirus disease 2019 (Covid-19)-related claims amounting to PHP1.32 billion or 54.6 percent of the total claims paid, Funa said. 
 
As a result, he said 61.3 percent of the claims paid by the insurance industry was for hospitalization benefits as of September 2020. 
 
He said the life sector paid PHP817.86 billion in claims, followed by Mutual Benefit Associations (MBAs) with PHP222 billion in claims paid. 
 
The non-life sector paid PHP56.5 billion in claims as of the third quarter of 2020. 
 
Death benefits accounted for 26.7 percent of the total Covid-19 related claims amounting to PHP614.86 million, while medical reimbursement benefits made up PHP9.62 million of the claims (0.42 percent), and critical illness benefits, PHP77.42 million (3.36 percent), Funa said. 
 
He said assets of the HMO segment increased 30.69 percent to PHP48.7 billion as of end-September 2020. 
 
HMO revenues increased 2.17 percent while expenses went down 14.1 percent, resulting in a 653.8-percent increase in its net income for the same period, he said.
 
In the pre-need segment consisting of 12 active licensed firms, Funa said the total assets reached PHP90.39 billion and premium income amounted to PHP12.73 billion as of the third quarter of 2020. 
 
Last year, Funa said the IC examined the books of 26 life insurance companies, five composite firms, 35 MBAs, 54 non-life companies, 74 brokers, 12 pre-need firms and 29 HMOs --representing 100 percent of its target for 2020. 
 
The IC also settled all disputes and mediation proceedings brought before it, and acted on 100 percent of premium rate applications last year, which earned for it a 98.9-percent customer satisfaction rating, he said.
 
Many of the circular letters that the IC issued in 2020 were related to the Covid-19 pandemic.  
 
These include the circulars on extending the grace period for all insurance-related payments; guidelines on initiatives aimed at providing additional benefits or free insurance coverage to Covid-19 affected clients without the need for prior approval from the IC; and guidelines on the continuity of selling insurance products to the public even amid the strict lockdowns. 
 
Funa said the IC also released circulars calling on industry players to waive provisions in insurance contracts that may become barriers to health care access and treatment; and providing emergency assistance to insurers' sales agents and other commission-based workers during the crisis. 
 
Moreover,  the IC issued circulars encouraging insurance firms to adopt technological innovations, such as online selling platforms, electronic payment systems, and remote communication technologies to adapt to the new global conditions arising from the Covid-19 pandemic, he added. 
 
This year, Funa said the IC aims to better serve the insurance industry and its clients by continuing to adopt digitalization initiatives and amending or introducing certain rules involving insurance claims, fees and sanctions, investigation of unlicensed entities, liquidation proceedings, accounting and reporting standards and foreign currency-denominated investments.
 
Funa said the IC will also improve its electronic payment system and put in place an online complaints (e-reklamo) system this year. (PR)
 
 

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