INSURANCE players are expected to soon come out with cheaper “micro pre-need” and agricultural microinsurance products and services after the Insurance Commission this month released the rules guiding their sale.
The Micro Pre-need Regulatory Framework issued by the Insurance Commission on Oct. 9 aimed to “provide an opportunity to the low-income sector to have access to pre-need products and services that will cater to their needs.”
The framework would likewise “encourage the participation of the pre-need industry in offering micro pre-need products and services to promote the financial well-being of the low-income sector” while also ensuring that plan holders’ rights would be protected.
The Agriculture Microinsurance or “MacroAgri” Framework issued on Oct. 15, meanwhile, “provides a clear-cut policy on agriculture insurance to encourage private microinsurance providers to innovate and design products tailor-fitted to the needs of agricultural clients,” the Insurance Commission said.
With the MacroAgri framework in place, the Insurance Commission hopes to “promote and encourage the provision of agriculture microinsurance products and services that are simple, affordable and accessible to the majority of the population dependent on agriculture.”
The Insurance Commission wants to leverage on the country’s strength in microinsurance—the Philippines is widely regarded as a model in microinsurance penetration, with 28 million of the 32 million insured Filipinos to date are covered by affordable micro insurance plans.
Micro pre-need products’ paramount considerations are accessibility, affordability of contract price, and simplicity of contracts.
The Insurance Commission ordered pre-need firms to come out with products whose amount, whether in cash or installment payments, when computed on a daily basis, would not exceed 7.5 percent of the current daily minimum wage rate for non-agricultural workers in Metro Manila.
Also, the maximum sum of guaranteed benefits or services of micro pre-need should not be over 1,000 times bigger than the daily minimum wage rate for non-agricultural workers in Metro Manila, the regulator said.
The regulator would also allow companies to sell micro pre-need products in a bundle with microinsurance products, other micro pre-need products and/or micro financial products.