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Manila Bulletin devider Philippines devider National devider Solon plays hardball in budget debates, secures trashing of questionable Insurance Commission circular

Solon plays hardball in budget debates, secures trashing of questionable Insurance Commission circular

Published Sep 21, 2023 12:09 am

At A Glance

  • AGRI Party-list Rep. Wilbert T. Lee was able to secure a commitment from the Insurance Commission (IC) for the revocation of a circular that would have imposed a whopping 400 percent increase in minimum catastrophe insurance rates. 

FB_IMG_1664839668798.jpgAGRI Party-list Rep. Wilbert T. Lee (Facebook)

 

 

 

 

 

 

AGRI Party-list Rep. Wilbert T. Lee was able to secure a commitment from the Insurance Commission (IC) for the revocation of a circular that would have imposed a whopping 400 percent increase in minimum catastrophe insurance rates. 

Lee did so during the plenary debate on the Department of Finance's (DOF) 2024 budget Tuesday, Sept. 19, when he went as far as to ask for a deferral of the agency's budget amid IC's initial insistence on Circular Letter No. 2022-34 dated July 14, 2022. The IC is an attached agency of the DOF.
 

But the neophyte solon's hardball play paid off, as IC Commissioner Reynaldo Regalado ultimately committed to him and to the plenary that the IC would revoke the increase in insurance premium rates, as well as nullify a memorandum of inderstanding (MOU) between the IC and insurance companies involving the establishment of the Philippine Catastrophe lnsurance Facility (PCIF) should the MOU be found illegal. 

 

It was only after receiving this assurance that Lee withdrew his motion to defer the 2024 DOF budget.



In his interpellation of the DOF budget, Lee questioned the IC Circular increasing the minimum catastrophe premium rates, which he called unnecessary as the House was able to determine that insurance companies were profitable. 

“Nalulugi na ba ang insurance companies? (Are insurance companies in the red?) During our House Inquiry, we were able to expose that all insurance companies, except for two, were recording high-profit," said Lee. 

“Malinaw na sinisira ng circular na ito ang competition (This circular clearly destroys competition). Instead, the IC should look into setting the maximum rate that insurance companies can charge and let the market forces dictate the prices or rates," he explained. 

Lee earlier filed House Resolution (HR) No. 632 in December 2022 to probe the untimely and unjust increase in insurance premiums. 

He then led the House Inquiry last February, where he exposed the detrimental effects of the policy. He added that no prior consultation with the private sector and end-users were carried out in connection with the IC. 

During the deliberations, Lee inquired about the MOU signed on Jan. 28, 2020 by representatives of the IC, the Philippine lnsurers and Reinsurers Association, Inc. (PIRA), and the National Reinsurance Corporation of the Philippines (NatRe). 

The Bicolano questioned the obvious conflict of interest of the IC entering into the said MOU, and stressed that “It does not make sense that the Insurance Commission will find it prudent to enter into the subject MOU knowing fully well its obligations as both a regulatory body and a quasi-judicial body." 

"Malinaw ang conflict of interest dito (The conflict of interest here is clear). How can a regulatory agency enter into a MOU with the industry that they are supposed to regulate?” he asked. 

According to Lee, the said MOU establishing the PCIF “is just a dubious scheme to impose a premium rate no longer dictated by the market but by agreement among the insurance companies brokered by the IC".

Related Tags

Wilbert T. Lee catastrophe insurance Agri Party-list
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