Makati court stops CIC from getting insurance planholders’ data

MANILA, Philippines – A Makati City court has prevented state-run Credit Information Corp. (CIC) to get customers’ data from insurance firms, the Insurance Commission (IC) said Tuesday.

In a statement, the IC said Makati Regional Trial Court (RTC) Branch 56 in a January 4 decision nullified CIC’s Circular Letter No. 2017-04 “by declaring that premium payments, insurance contracts and policy loans are not within the ambit of basic credit data required to be submitted under Republic Act (RA) No. 9510 or the Credit Information System Act [Cisa] as it does not pertain to a borrower’s performance on a loan, credit line, guarantee or any other form of financial accommodation.”

The Makati court was acting on the petition for declaratory relief earlier filed by industry group Philippine Life Insurance Association (PLIA) Inc.

“The court negated the allegation of the CIC that the law expresses the inclusion of any data reflective of a borrower’s credit worthiness and other factual and objective information related to or relevant therein in the submitting entity’s data files or that of other sources of information,” IC added.

Citing the decision of Judge Bonifacio S. Pascual, the IC said “for an information to constitute basic credit required to be submitted to the CIC under RA 9510, the information must be either positive credit information or negative credit information.”

“As stated by PLIA, ‘taking out a policy loan may or may not reflect a need for cash by the policyholder. Availing of the same is the sole option of the policyholder as it is a benefit feature of the insurance policy granted to him by law. He may use it any which way and whenever he wants to. That is not an indication of risky behavior. On the contrary, the policyholder may use the same so that he does not need to apply for a loan from somebody else. He may even just invest it to allow higher yields’,” according to the court decision.

“It is obvious then that the CIC, in requiring the submission of these information, is collecting thousands of personal information. Notably, the CIC cannot rely on the foregoing exemption under the Data Privacy Act applicable because policy loans, premium payments and insurance contracts do not constitute basic credit data,” it added.

For Insurance Commissioner Dennis B. Funa, the Makati court ruling “affirms the position of the insurance regulator that insurance contracts, premium payments and policy loans are not basic credit data.”

“The decision of the Makati RTC supports our stance that policy loans should not be treated as reportable credit transactions under the Cisa. For the past three years, [the IC] has been trying to explain and convince the CIC that policy loans, as one of the benefits of an insurance contract, are not credit data that are required to be reported under the Cisa. However, all our arguments have fallen on deaf ears,” Funa said.

“The CIC dismissed all our arguments by simply invoking that the same are bereft of probative value in relation to the coverage of the Cisa. It was at this instance that the PLIA was forced to elevate the issue before the court,” the IC chief added. /kga