Two salient provisions give small earners easier access to insurance and a measure of protection for small businesses.
It also allows payment of insurance premiums and loan obligations by government employees through salary deduction.
The measure also provides for regulations on microinsurance, which under the bill is defined as “any activity providing specific insurance that meets the needs of the low-income sector for risk protection and relief against distress, misfortune, and other contingent events.”
Liberal Party Rep. Sergio Apostol of Leyte, chairman of the House’s Committee on Banks and Financial Intermediaries, said the measure adds new forms of admitted assets such as mutual funds, real-estate investment trusts, salary loans, unit-investment trust funds and special deposit accounts and other assets which are deemed by the Insurance commissioner to be readily realizable and available for the payment of losses and claims at values to be determined by him.
Apostol said the bill also grants the Insurance commissioner the authority to register self-regulatory organizations whose operations are related to or connected to insurance.
House Bill 4867 seeks to further amend Presidential Decree 612, or the Insurance Code and expand the definition of “doing an insurance business” to include the practice of self-insurance by any person or entity extending life insurance or similar protection to its borrowers, depositors, clients or third parties.
It deems irrevocable the designation of a beneficiary in the event the insured does not change the beneficiary during his lifetime.
Under the bill, the interest of a beneficiary in a life insurance policy shall be forfeited when the beneficiary is the principal, accomplice, or accessory in willfully bringing about the death of the insured. In such case, the share forfeited shall pass on to other beneficiaries, unless otherwise disqualified. In the absence of other beneficiaries, the proceeds shall be paid in accordance with the policy contract, and if the policy contract is silent, the proceeds shall be paid to the estate of the insured.
The proposal also increases the minimum paid-up capital stock requirements for insurance companies. It provides that no new domestic life or nonlife insurance company shall, in a stock corporation, engage in business in the Philippine unless possessed of a paid-up capital stock equal to at least P500 million.
As embodied in the measure, “a domestic insurance company already doing business in the Philippines shall have a paid-up capital by December 31, 2012, of P175 million for an insurance company with less than 40-percent foreign equity, of P350 million for an insurance company with 40-percent but less than 60-percent foreign equity, and P500 million for an insurance company with at least 60-percent foreign equity.”
Other salient features of the bill includes the adoption of international standards on solvency requirement, adding a new title on “Bancassurance,” which the measure defines as the presentation and sale to bank customers by an insurance company of its insurance products within or outside the premises of the head office of such bank duly licensed by the Bangko Sentral ng Pilipinas or any of its branches under such rules and regulations which the commissioner may promulgate. It also authorizes insurance companies to engage in trust business operations.
