A SOLON has submitted a resolution asking the Insurance Commission (IC) to postpone its approval of an increase in insurance premium rates for calamities including earthquakes, floods, and typhoons that would go into effect on January 1.
Rep. Wilbert T. Lee of the AGRI Party List stated in House Resolution 632 that the “abrupt, arbitrary, and untimely increase” in disaster insurance rates will lead to an increase in the cost of staple goods.
“This will have a cascading impact. As insurance premiums rise, production, storage, machinery, transportation to distribution centers, and retail pricing will all be affected, he stated in a statement on Sunday.
“We regulate the insurance sector in order to make sure that insurance companies are honest and not exploitative. But why didn’t end customers get a say in the increase in insurance premiums? “Mr. Lee noted that the IC has not yet replied to a letter of inquiry he sent regarding the matter.
The updated schedule of minimum catastrophic rates, which must be followed by all non-life insurance companies and intermediaries, was first published by IC in July of last year.
This would have applied to all earthquake, typhoon, and flood insurance coverage for both new and renewed enterprises. The new premium rates become effective on November 1st.
Lower house legislators recently urged the IC to postpone the rise since it would only boost inflationary pressures. It will depend on whether concerns have already been clarified, specifically, whether queries coming from Congress will be met,” Funa said in response to the question of when it will be lifted and put into effect.
Given the anticipated increase in insurance premiums and its potential effect on policyholders, he stated, “there is a need to ventilate the concerns originating from the amended schedule of minimum catastrophic rates.”
The agreement between the IC, the Philippine Insurers and Reinsurers Association lnc., and the National Reinsurance Corp. of the Philippines for the implementation of the Philippine Catastrophe Insurance Facility is allegedly what caused the increase (PCIF).
According to the MOU, the PCIF’s overall structure will include a study of the current catastrophic insurance rates and rating structure in order to replace it with one that is more risk-appropriate and long-lasting.
The parties previously stated that it was necessary to phase in the rate adjustments to allow the market to adjust over time and to lessen their impact. According to the congressman, starting in 2023, the revised rates “would result in a sudden significant increase in insurance premiums ranging from 40% to as high as 400%.”
According to the type of disaster (earthquake, typhoon, or flood) and the type of occupation of the structure, different minimum catastrophe rates apply (commercial, industrial, warehouse, residential).
The agriculture industry and initiatives to achieve food security, according to Mr. Lee, would be impacted by the increase in insurance rates. Even the Philippine Crop Insurance Corporation (PCIC) will raise insurance rates as a result of the situation. We might not attain food security if agricultural workers are treated unfairly.