The Insurance Commission (IC) is engaging in a last-minute push to have the Insurance Code amended and have the revised charter on the desk of President Aquino by the end of the month.
The bill must be transmitted to the Office of the President soon, said Insurance Commissioner Emmanuel F. Dooc. If not, commission officials would have to start all over when Congress opens in July,
“I just met with (Senate President Juan Ponce Enrile) to enlist his help on this, and he agreed,” Dooc said said in an interview Thursday.
That means Enrile and House Speaker Feliciano Belmonte Jr. would need to sign the bill by Tuesday.
“[The commission’s] agreement with industry players is to aim for the bill to become law by the end of May,” Dooc explained.
Once the bill is transmitted to Malacañang on April 30, the President will have 30 days to act on it. Otherwise, the bill will lapse into law.
Dooc said the proposed changes in the industry code would benefit insurers because the amended charter would provide them greater leeway with respect to business activities.
“Companies need alternative sources of revenue which the bill provides,” Dooc said.
One of these is to allow insurance firms to invest in the Bangko Sentral ng Pilipinas’ special deposit account facility, or SDA, which enables banks to earn a risk-free return by placing deposits with the BSP.
But the BSP so far this year has cut SDA rates by a total of 150 basis points. The most recent cut of 50 bps was announced yesterday.
Last January, Dooc said the bill on the Insurance Code amendment would also allow insurers to access mutual funds and salary loans given to employees.
“The bill also institutionalizes (already established activities) such as bancassurance and microinsurance,” he said. “These are currently not in the law. [But if the bill is passed], these activities will be more protected.”
As for the regulating agency itself, Dooc said, the bill provides for a fixed term of five years for the commissioner.
“That means improved stability compared to now,” he said. “In the past five or six years, there have been five different [insurance] commissioners.”