The Philippine Insurers and Reinsurers Association (PIRA), which counts 69 nonlife insurance firms as members, is applying for a self-regulatory organization (SRO) status.
Nonlife insurers believe that the industry can police itself by implementing up-to-date regulations to boost their business while protecting the interest of the public, PIRA president Emmanuel Que said.
“We are developing ourselves into becoming a self-regulated group. We are now setting up our own rules and regulations,” Que told reporters.
Once completed, the rules and regulations being formulated by Pira would be forwarded to the Insurance Commission for approval, he said.
Que expressed optimism that the Insurance Commission—the government agency that regulates insurance firms, including preneed entities and mutual benefit associations—would accredit Pira as an SRO.
He noted that the new Insurance Code, which was enacted into law in August 2013, has a provision that would allow an industry regulated by the Insurance Commission to apply for SRO status.
One of the policies Pira supports is the increase in capitalization requirement for insurance companies, as stated under the new Insurance Code.
Que said the hike in capitalization requirement would encourage weak insurance firms to merge with those that are more financially viable, further strengthening the industry, he said.
“We have to be even more competitive,” he said, citing the liberalization of investment rules in 2015, when the proposed integration of Southeast Asian economies takes place.
Having fewer and stronger domestic players will allow them to better compete with foreign companies that are expected to come in.
Also, Pira is likewise pushing for the reduction of taxes on nonlife insurance as well as the mandatory insurance coverage for homeowners, and small and medium enterprises.
Pira is calling for the passage of a bill seeking to shift the tax coverage of the nonlife insurance industry from the 12-percent value-added tax to the 2-percent premium tax. The bill likewise seeks to reduce the documentary stamp tax on nonlife insurance from the current 12.5 percent of premiums to a graduated scale of up to P100 per insurance policy.