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April 24, 2024

New disaster premiums delayed until IC completes public consultations

The Insurance Commission (IC) stated that the postponement of the increase in catastrophe insurance premiums is only temporary, pending public consultations.

“This temporary suspension shall be without prejudice to ‘further appropriate action on the matter’ that may be undertaken by the IC,” IC commissioner Dennis Funa said.

Funa added that the delay in implementation would allow for the necessary public consultations to be conducted, with the timeframe for non-life insurance and reinsurance businesses to implement the new rates for disaster risk insurance to be defined once these consultations were completed.

In July 2022, IC announced guidelines for the adoption of the updated minimum catastrophe rates, which must be followed by all non-life insurance firms and intermediaries.

This would have applied to all earthquake, typhoon, and flood insurance coverage for both new and renewed enterprises.

The supposed increase follows after the IC, the Philippine lnsurers and Reinsurers Association lnc., and the National Reinsurance Corp. of the Philippines signed a Memorandum of Understanding (MOU) for the implementation of the Philippine Catastrophe lnsurance Facility (PCIF).

According to the MOU, the PCIF’s overall structure will include a review of the present catastrophe insurance rates and rating system so that it could become more risk-appropriate and sustainable.

The parties earlier suggested a phased implementation so that the market can adjust and cushion the impact of the increased rates.

Lawmakers urged the IC to temporarily suspend the hike as it would further add to inflationary pressures.

The premium for disaster insurance was last adjusted in 2006.

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