AGRI Party-list Rep. Wilbert Lee wants the House of Representatives to probe the impending abrupt and unreasonable increase of "catastrophe insurance" premium rates, which he claimed will greatly affect the prices of basic commodities.
Lee filed House Resolution (HR) No. 632 in a bid for the lower chamber to determine the scope and impact of the Insurance Commission’s (IC) Circular Letter No. 2022-34 that adjusted the applicable minimum and maximum catastrophe rates across the country.
The catastrophe rates cover acts of nature such as typhoon, flood, earthquake, among others.
The adjusted rates, which will take effect on Jan. 1, 2023, are now diversified by determining factors such as risk zones and type of construction. As a result, there will be an sudden huge increase in insurance premiums ranging from 40 percent to as high as 400 percent.
“Taking into consideration that we are still just recovering from the effects of the Covid-19 pandemic, it is incumbent upon the government to respond to their critical needs as we slowly get back on our feet. We must not add to the burdens of the public, especially the marginalized sectors,” said Lee, who held a press conference about the issue Monday, Dec. 12.
"Paano makakabawi sa kabuhayan ang marami nating kababayan sa ganitong mga dagdag na pasanin? Paano uunlad ang ating mga magsasaka at mangingisda, kung imbes na dagdag na ayuda, ay dagdag gastos ang naghihintay sa kanila sa susunod na taon? Kapag lalo silang nalugi, madedehado rin ang isinusulong nating food security. Huwag na po nating pagdusahin lalo ang publiko sa panibagong pagtaas ng presyo ng mga bilihin (How can our countrymen recover their losses from their livelihood with this additional burden? How will our farmers and fishers survive if they are faced with additional fees instead of government assistance in the coming year? If they incur losses then it will compromise our push for food security. Let's not put the public through another round of price increases),” he added.
In HR No.632, Lee noted that the high cost of catastrophe insurance premiums will certainly impact the unabated and record-high inflation and can contribute to the further increase in prices of basic commodities, taking into account the wide scope of catastrophe insurance that covers buildings, warehouses, equipment, and residential properties.
“May domino effect po ang pagtaas na ito. Apektado dito ang manufacturing sector, at damay ang distribution, retail, pati na ang agrikultura (This will have a domino effect on prices. It affects the manufacturing, distribution, retail, and the agriculture sectors),” Lee said.
The lawmaker from Sorsogon pointed out that despite conducting consultations with the Philippine Insurers and Reinsurers Association, Inc. (PIRA), an organization of all licensed non-life insurance companies in the country, it is crucial to consult the end-user consumers who will be immensely affected by the huge increase in insurance rates.
“The extent of the consultations conducted by the Insurance Commission is very limited. Several organized business groups and private firms expressed their strong opposition to the said policy in the absence of proper consultation considering the very high increase in insurance cost that can be detrimental to the general public,” Lee stressed.