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Stop increase in catastrophe premium rates — Solon

February 26, 2023 Jester P. Manalastas 224 views

A lawmaker assailed the Insurance Commission for its move to increase the minimum catastrophe insurance rates.

According to AGRI Party-list Rep. Wilbert Lee, this is an anti-competitive policy that will just incentivize cartels while passing on additional burdens to consumers as it will result to soaring prices of basic commodities.

The solon said this in the public hearing of the House Committee on Banks and Financial Intermediaries on his House Resolution No. 632 questioning the abrupt increase in the insurance premium.

“Paano ba nagko-compete ang mga non-life insurance companies?” Lee asked the Insurance Commission. “Pataasan po ba o pababaan ng insurance premiums? Kung pababaan, then why does the Insurance Commission want to regulate the minimum rates of insurance premiums?”

“Setting the minimum rates of insurance premium is a form of price control. Sa pagtakda ng minimum rate, pinapaboran nito ang pagkakaroon ng cartel sa industriya ng insurance,” he added.

In the hearing, Anti-Red Tape Authority (ARTA) Secretary Ernesto Perez confirmed that IC Circular Letter No. 2022-34 which imposed the catastrophe insurance rate adjustment failed to comply with the requirement stated in the law.

“I would like to remind our colleagues from the Insurance Commission of the requirement under Section 5 of the Ease of Doing Business and Efficient Government Service Delivery Act or Republic Act 11032… which requires that before any regulation will be proposed or implemented, it should be subjected to Regulatory Impact Assessment to ensure that the regulation does not cause undue regulatory burden, not only to the agency but to the transacting public as well,” Perez said.

Lee stressed the lack of consultation on IC’s planned rate adjustment which will reach up to as high as 400 percent.

This was scheduled to be implemented last Jan. 1, but was deferred upon the solon’s relentless efforts, together with the overwhelming clamor from the general public, Micro, Small and Medium Enterprises (MSMEs), and business groups.

“Why call for stakeholder consultations regarding a Circular after the Circular has been issued? Why not call for these consultations before the Circular is issued? Kasi kung hindi natin ito nakita at walang nagreklamo, tumaas na ito noong Jan. 1,” Lee said.

According to Lee, the suspension of the implementation of the said IC Circular is a welcome respite to the inflation-weary Filipino, but still emphasized the need to scrap this untimely policy as the high cost of catastrophe insurance premiums will inevitably impact the unabated and 14-year record-high inflation in the country.