IC order extensions for policies expiring during quarantine

THE Insurance Commission (IC) ordered insurance firms and health maintenance organizations (HMOs) to extend for at least 30 days current policies and agreements expiring during the month-long enhanced community quarantine period.

In Circular Letter No. 2020-05 issued March 25, the IC directed the industry to extend coverage for at least 30 days for expiring policies and HMO agreements, “subject to the written request or consent, electronically or otherwise, of insured, client or their respective authorized representatives.”

It said extensions should also adopt same terms and conditions of the policies and agreements.

“The said policy and agreements shall only become effective once applicable pro-rate premium has been made, unless a credit term has been agreed upon,” the IC said.

The directive also ordered firms to issue hold cover or temporary cover for insurance, pre-need plans or HMO agreement that require new or renewal applications, for at least 30 days.

The hold or temporary cover will also need written request or consent from clients and is also subject to the same basic terms and conditions.

“The parties, may, however, modify such basic terms and conditions for the issuance of the hold cover or temporary cover subject to the corresponding adjustment of applicable premiums,” it added.

Separately, the insurance regulator also called on insurers, mutual benefit associations (MBAs) and HMOs to voluntarily waive some provisions on contracts and agreements to provide relief for clients durng the public health emergency.

Insurance Commissioner Dennis B. Funa said some provisions that firms could waive include “waiting periods, healthcare access to non-affiliated networks and exclusion of pandemic or epidemic, among others.”

IC said companies can do so on a voluntary basis and decide based on their assessments of their financial standing.

To expedite the industry’s response to the outbreak, the regulator earlier allowed life insurers to launch their own initiatives to provide additional benefits or coverage to clients affected by COVID-19, without the need to secure prior approval from IC.

“While there is no need for prior approval from the IC, insurance companies are required to ensure that the initiative shall not be used to induce prospective clients or existing policyholders into purchasing a new product from the company,” the regulator said in a statement Friday.

Earlier, the Philippine Life Insurance Association, Inc. (PLIA) said life insurance companies have adopted general relief measures for policyholders, including an extended grace period for premium payments.

Luzon was placed under enhanced community quarantine until April 12, restricting movement to essentials only to slow the spread of the virus. — Beatrice M. Laforga