Quantcast
Latest Stories

Insurance Code amended; insurers’ capital raised

By

President Aquino III has signed into law the bill amending the country’s 38-year-old Insurance Code.

Finance Secretary Cesar Purisima said the new Insurance Code, which raises capital requirements for insurers among other reforms, will pave the way for a stronger insurance sector that can better compete with foreign counterparts.

He said the new Code would help prepare the country’s insurers for the integration of member-economies of the Association of Southeast Asian Nations (Asean) by 2015.

“We [Department of Finance] welcome the amendment of the 38-year-old Insurance Code which would not only improve the regulation and supervision of the insurance industry but, equally important, propel it to become more competitive in time for 2015 Asean market integration,” Purisima told the Inquirer.

Under the new Insurance Code, the capital requirement for insurance firms will increase every three years until 2022. The objective of the increases is to ensure that insurance firms have sufficient buffer against risks amid rising demand for financial instruments and a growing economy.

The required net worth—defined as the sum of paid-up capital, retained earnings, unimpaired surplus, and revalued assets—is set at P250 million this year, P550 million effective June 30, 2016, P900 million starting June 30, 2019, and P1.3 billion by June 30, 2022.

The new Insurance Code likewise institutionalizes bancassurance—the partnership between a bank and an insurance firm that allows sale of insurance products in the bank’s branches—and micro-insurance activities.

As such, Purisima said, the new law will help encourage more Filipinos to avail themselves of insurance products, some of which have savings and investment features.

“[The new Insurance Code is expected to] help the insurance industry become a stronger leg in savings mobilization and capital market development. Insurance funds, by its long-term nature, are natural sources for infrastructure funding,” Purisima said.

The law likewise allows insurance firms to invest in more financial instruments. Previously, they could only invest in virtually risk-free instruments, mainly government securities

The law also requires the use of modern, international accounting standards in reporting and auditing financial reports of insurance firms.

Insurance Commissioner Emmanuel Dooc earlier said there was a pressing need to amend the law to enhance regulation of the industry.

The law also gives a fixed six-year term to the Insurance Commissioner.

Dooc earlier this month filed a resignation letter, saying he wanted Malacañang and the DOF, the head agency of the Insurance Commission, to have a free hand in choosing who will head the agency under the new regime.

Purisima said he would suggest to the Palace that Dooc be reappointed to serve the fixed term.


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: amendment , Insurance , insurance code , Laws , Philippines

  • katherine

    Health insurance is very important nowadays, having one would give you something to cling to in times of sickness that’s why I trust PPLIC.

  • eight_log

    Ano naman ang ginagawa ninyo para mabayaran ang mga na scam ng mga insurance companies …. Family First at yung mga kaalyado nila nagooffer ng 30% lang para masettle lang ang dapat sanang bayaran nila. Wala man lang inbestigasyon na ginagawa ang gobyerno!!!!!



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • 50 Quezon City cops each carry 30-kg crosses
  • AFP: Abu Sayyaf group, not MILF, target of Basilan operation
  • Massive infra spending set
  • DOJ to NBI: Arrest Cedric Lee, 4 others
  • Metro residents brace for long, ‘dry’ spell
  • Sports

  • Federer would skip tennis to be with wife, newborn
  • Manny Pacquiao in PBA? If so, he’ll wear No. 17
  • PSC sets Blu Girls US training
  • Power Pinoys settle for 7th place
  • Successful coaches to get raise
  • Lifestyle

  • Are your favorite malls open this Holy Week break?
  • Celebrate Easter Sunday at Buddha-Bar Manila
  • Moriones feast: A slow, steady transformation
  • Weaving ‘palaspas’ a tradition kept alive in Tayabas City
  • Finalists announced for best translated books
  • Entertainment

  • Why Lucky has not bought an engagement ring for Angel
  • Derek more private with new girlfriend
  • ‘Community’ star happy with return of show’s creator
  • Jealousy is kid stuff
  • Mommy-daughter adventure continues
  • Business

  • PH presses bid to keep rice import controls
  • PSEi continues to gain
  • Number of retrenched workers rose by 42% in ’13
  • PH seen to sustain rise in FDIs
  • Gov’t subsidies to state firms fell in first 2 months
  • Technology

  • Smart phone apps and sites perfect for the Holy Week
  • Tech company: Change passwords or suffer ‘Heartbleed’
  • Filling the digital talent gap
  • SSS to shut down website for Holy Week
  • Another reason to quit social media this Holy Week: your safety
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • First Fil-Am elected to Sierra Madre, Calif. city council
  • UC Irvine cultural night to dramatize clash of values in immigrant family
  • Filipino sweets and info served at UC Berkeley Spring Fest
  • Milpitas, California kids wrap up a successful run of ‘The Wiz’
  • Netizens welcome Japan’s visa-free travel plan
  • Marketplace