DOF warns insurance industry: Stop charging excessive premiums
Finance Secretary Carlos G. Dominguez III on Friday called on the insurance regulator and industry players to put an end to exorbitantly and unreasonably priced premiums.
“The Insurance Commission must see to it that the products sold to our consumers are fair. Insurance and pre-need industries inherently are risk-based industries. They also involve arcane actuarial computations not readily clear to the consumers patronizing these businesses. By merely tweaking these actuarial computations, huge profits can be made at the expense of the consumer,” Dominguez said in a speech at the Department of Finance-attached agency’s 68th anniversary celebration.
“The work of the Insurance Commission is to assure not only the soundness of the companies selling risk-based products but also to the fairness of the premiums collected. When premiums are overcharged, the costs of the products could be pushed beyond the reach of most consumers who need the protection these products otherwise bring,” Dominguez pointed out.
Specifically, Dominguez urged stakeholders to look more closely into insurance premiums for vehicles and homes supported by the Pag-Ibig Fund.
“Insurance coverage in these areas often involve unreasonable premiums,” Dominguez said.
Dominguez later told reporters that he was just reminding the Insurance Commission of its job to protect the public.
“It must protect the public by making sure that those who are taking the money of the public [should charge] them the right amount and [invest the money] in safe investments so that those who are saving can benefit from them. I’m just reminding them,” Dominguez said.
According to Dominguez, while it is now “safe” to buy insurance products, “the public has to be assured that the Insurance Commission has evaluated the pricing mechanism and that they are fair.”
“There’s no 100-percent safe in this world. But that’s why you have the Insurance Commission, and they are doing a very good job to assure the public that the products are fairly priced and the companies who invest their money on their behalf are doing the right thing,” Dominguez added.
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