Finance department wants PCIC converted into a reinsurance firm

THE DEPARTMENT of Finance (DoF) wants to convert the Philippine Crop Insurance Corporation (PCIC) into a reinsurer rather than an insurance provider so it will not compete with private insurance providers.

“If somebody is offering a subsidized product and the private sector offers a fully costed product, who do you think the people will go to? That’s unfair competition so let the private sector provide the product and let the PCIC…play a more active role as a reinsurer to diversify the risks,” Finance Undersecretary Gil S. Beltran told reporters late Monday.

Mr. Beltran noted that converting PCIC into a reinsurer will not mean more expensive insurance policies for farmers.

“Sometimes, the private sector offers better protection,” he said.

Mr. Beltran earlier said that the DoF wants to increase the current 39.8 million in microinsured individuals in the country to 50 million by 2022, noting the importance of microinsurance in a disaster-prone country like the Philippines.

“Kasi yung microinsurance providers, they are limited to certain areas and if a typhoon strikes and everything is wiped out, kawawa siya. The role of PCIC will be to diversify the risk. Bibilhin niya tapos bebenta niya ulit sa kabila (It will take on the risks and sell it to another),” Mr. Beltran said.

“There’s a plan to transform this PCIC into a reinsurer instead of competing with the private sector as an insurer. So once this takes effect, then private provision of farmers’ insurance will become more competitive,” he said.

House Bill 6923 or An Act Strengthening the PCIC authored by Representative Arthur C. Yap was already approved on third and final reading last April. The bill mandates the PCIC to engage in index-based insurance and reinsurance policies.

Mr. Beltran said the DoF is waiting for Senator Cynthia A. Villar, who heads the Committee on Food and Agriculture, to file a counterpart bill for the House measure.

“Depends upon Senator Villar filing her bill. Pending na sa Senate (It is already pending in Senate)… But I think they passed it in the House, sa Senate na lang (we’re just waiting for the Senate). They can still do it during the three weeks,” Mr. Beltran said.

The official said the government also has the option to privatize the PCIC, but this will depend on lawmakers. — RJNI