Unwavering service to Philippine insurance

Established on Jan. 3, 1949, through Republic Act No. 275, the Insurance Commission (IC) was created to regulate and supervise the insurance, pre-need, and health maintenance organization (HMO) industries in the country.

From its humble beginnings, the IC has grown into a forward-thinking agency, consistently striving to meet global standards and implement best practices to serve the Filipino people.

According to the commission’s 2024 report, insurance density reached P3,882.77, an increase of 12.58% from P3,457.84 in 2023. Insurance penetration, which measures the industry’s contribution to the country’s gross domestic product (GDP), rose slightly from 1.62% in 2023 to 1.67% in 2024.

“This is explained by the faster growth of the insurance premiums vis-à-vis the 8.84% growth in the GDP (in current prices), which underscores stronger expansion within the insurance and MBA (mutual benefit association) sectors as of Q4 2024,” said Insurance Commissioner Reynaldo A. Regalado.

The total number of licensed insurance companies grew to 137, up from 136 in 2023. However, the number of companies that submitted reports declined from 132 to 128, a 3.03% drop.

Meanwhile, the industry’s total assets grew by 6.43%, reaching P2.46 trillion in 2024, compared to P2.31 trillion in 2023. Total liabilities also rose by 7.09%, amounting to P1.98 trillion from P1.85 trillion.

Net worth also increased by 3.77%, from P462.4 billion in 2023 to P479.8 billion in 2024. The total invested assets of insurance companies also rose to P2.20 trillion, up by 7.23% from P2.05 trillion the previous year.

The report also stated that the industry collected P440.3 billion in total premiums, a 12.81% increase from 2023. Providers also paid out P160.3 billion in benefits and claims, an 18.97% jump from P134.7 billion in 2023.

The Insurance Commission also received an unmodified opinion, the highest rating, for its 2023 financial statements from the Commission on Audit (CoA).

Strengthening public service

The IC recently revoked the practice of granting provisional insurance agents’ licenses to reinforce stricter regulatory measures and ensure consumer protection and market integrity.

The IC issued Circular Letter (CL) No. 2024-21, which declares the grant of provisional authority for insurance agents pending their regular licenses as inoperative. This new directive effectively repeals previous circulars that allowed provisional licensing while awaiting regular approval.

“The issuance of this Circular Letter is also part of the IC’s initiatives on consumer protection, as it ensures that only agents with duly issued regular licenses will be allowed to transact with the insuring public,” said Mr. Regalado.

This move aligns with Republic Act No. 11032, the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, its Implementing Rules and Regulations (IRR), and related issuances from the Anti-Red Tape Authority (ARTA).

The Insurance Commission also launched its Online Billing and Collection System, integrated into Landbank’s Link.BizPortal. The new system is expected to improve IC’s efficiency in processing fees from its regulated entities, including registration, examination, and supervision fees, which contribute significantly to the IC’s revenue.

Meanwhile, the IC has issued new guidelines allowing insurance and reinsurance companies to invest in infrastructure projects under the Philippine Development Plan (PDP) 2023-2028.

The CL No. 2024-23 supports President Ferdinand R. Marcos, Jr.’s eight-point socioeconomic agenda outlined in Executive Order No. 14, series of 2023. Under the new framework, regulated insurance and reinsurance companies may engage in equity or debt investments, acting as financiers or sponsors.

“The Commission will be closely coordinating with the Department of Finance, the National Economic and Development Authority (NEDA), and the Public-Private Partnership (PPP) to ensure that requests for these kinds of investments are in line with national government policy objectives,” said Commissioner Regalado.

Boosting partnerships

Last December, the IC and National Privacy Commission (NPC) partnered to strengthen data privacy in the insurance industry by adopting Privacy-Enhancing Technologies (PETs).

The initiative, formalized through a memorandum of agreement (MoA), aims to improve consumer protection and ensure insurance providers, pre-need companies, and health maintenance organizations (HMOs) comply with the Data Privacy Act (DPA), especially since the insurance sector processes vast amounts of personal data daily, from policy underwriting to claims processing and customer service transactions.

“The insurance industry processes vast amounts of personal data daily. As the industry regulator, we are committed to strengthening privacy measures to protect consumer information and uphold the integrity of the insurance sector,” Mr. Regalado said during the MoA signing.

The IC also joined the Department of Migrant Workers (DMW) to provide a more robust support system for overseas Filipino workers (OFWs). Particularly, the initiative will create a dedicated hotline under IC’s Public Assistance and Mediation Division to handle insurance-related concerns for OFWs. This hotline will allow workers abroad to easily report complaints, seek assistance, and obtain crucial information about their insurance policies.

Furthermore, the commission has partnered with the Integrated Bar of the Philippines (IBP) to ensure accessible legal support for individuals filing claims or complaints related to insurance, pre-need, and HMO products. Through this initiative, marginalized citizens will receive free legal assistance, including consultation and representation during mediation, conciliation, and adjudication proceedings.

The Insurance Commission may now endorse complainants to the IBP, which will assess eligibility for legal aid based on a means and merit test, and the availability of volunteer lawyers.

Achieving local and global recognitions

The Philippines, through the IC, earned commendations from fellow ASEAN nations for its entry into the Takaful market at the 27th ASEAN Insurance Regulators’ Meeting (AIRM) and the 50th ASEAN Insurance Council (AIC) Meeting, held in Bandar Seri Begawan, Brunei Darussalam, from Nov. 26 to 28, 2024.

This recognition follows the recent issuance of Takaful operator licenses to two companies in the Philippines, in line with Circular Letter No. 2024-13 on the Consolidated Guidelines for Takaful Window Operations.

Investopedia defines Takaful as a type of Islamic insurance wherein members contribute money into a pool system to guarantee each other against loss or damage.

In 2023, the IC received an award from the Presidential Communications Office (PCO) in the Top Requested and Performing Agencies category. The recognition also indicated that during the third quarter of 2023, the IC achieved a 98.16% score for responsiveness and a 97.88% score for reliability and integrity, resulting in an overall satisfaction rate of 97.24%. — Mhicole A. Moral