IC orders insurers to implement Bayanihan 2's 60-day grace period for insurance payments | Inquirer Business
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IC orders insurers to implement Bayanihan 2’s 60-day grace period for insurance payments

By: - Reporter / @bendeveraINQ
/ 04:22 PM October 07, 2020

MANILA, Philippines — The Insurance Commission (IC) has ordered insurers and pre-need firms to implement the mandatory 60-day grace period for payments under the Bayanihan to Recover as One Law.

Insurance Commissioner Dennis B. Funa said in Circular Letter (CL) No. 2020-95 dated Oct. 1 that the two-month payment moratorium must be implemented between the period when Republic Act (RA) No. 11494 took effect until December 31.

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The grace period will cover life insurance premiums as well as pre-need installments due for payment during the implementation of the Bayanihan 2 Law.

“The mandatory one-time, 60-day grace period shall be individually/separately applied to each premium or installment falling due between the date of effectivity of RA 11494 until the prescribed coverage period of Dec. 31, 2020, whether the premiums or installments be payable on a weekly, monthly, quarterly, or any other regular payment arrangement,” Funa said.

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Funa said the moratorium will be “inclusive of any contractual grace period already provided under existing life insurance policies and pre-need plans; and shall not be interpreted as requiring a 60-day addition thereto.”

“The mandatory one-time, 60-day grace period shall apply to each life insurance policy and/or pre-need plan, whether the policyholder or planholder has a single policy or plan or multiple policies or plans with the subject life insurance company, MBA [mutual benefit association], or pre-need company,” Funa added.

In the case of payments automatically charged or debited from planholders’ cards or bank accounts, Funa said this will be continued “provided that an ‘opt-out offer’ shall be communicated to life insurance policyholders and pre-need planholders who are enrolled under such schemes” by informing them through email, text message, as well as announcements on company websites and social media.

“The ‘opt-out offer shall include an advisory that policyholders or planholders who wish to avail of the mandatory [payment moratorium] shall signify such intention in writing and request termination of their automatic debit/charge arrangement accordingly,” Funa said.

Funa reminded insurers that they cannot charge nor apply interest on interests, penalties, fees and other charges to policyholders’ future premium or installment payments during the 60-day grace period.

Also, insurers were prohibited to require planholders to waive availment of the two-month moratorium, even as the parties may agree on an even longer grace period than the relief under the Bayanihan 2 Law.

As for policy loans, Funa clarified that these were not covered by the Bayanihan 2 grace period for payments because they were “not commercial loans per se but essentially only an advance on the cash value of the life insurance policy that a policyholder himself or herself owns, and that the same are not covered by any repayment schedule agreements.

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TAGS: Bayanihan 2, Commissioner Dennis B. Funa, Insurance Commission (IC)
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