The Insurance Commission will revisit its compulsory catastrophe insurance proposal to align with the new administration’s priorities amid climate change.
Insurance Commissioner Emmanuel Dooc said the agency would review the proposal on the mandated compulsory catastrophe insurance coverage for middle-class residential buildings and small and medium enterprises.
“I believe they are considering other options, (and) I think we have to discuss it with them, with the leadership,” Dooc said.
“We know that the plate is full and that there are many ongoing initiatives, but we hope that this matter should also be addressed,” he added.
The Insurance Commission earlier said it would push for the passage of the mandatory catastrophe pool insurance law that would aid households and small and medium enterprises in times of calamity.
“Definitely, yes. I mentioned it to the Secretary [of Finance] but he was just listening. I’ll pursue it now that he is in the office,” Dooc said.
Finance Secretary Carlos Dominguez III said he would study the proposal when asked earlier asked about it.
The draft executive order, when signed into law, would require all households and SMEs to get insurance protection from possible damages caused by disasters, such as earthquakes and floods.
Under the proposed catastrophe insurance pool, insurers will underwrite the policies according to their corresponding subscriptions.
The proposed draft EO had been recommended by the Department of Finance to the Office of the President last year. Then President Benigno Aquino III, however, did not sign the EO.
Dooc said while the EO was the fastest process to implement the insurance pool, the IC was also open to legislative measures.
“The immediate need is for an issuance of an EO to accelerate the process but in the long term we will need a legislation,” Dooc said.
The economic exposure of the Philippines to natural threats is the highest in the world in terms of their share to the gross domestic product, according to London-based insurance specialist Lloyd’s.
“As a percentage of its average annual GDP [gross domestic product], Manila’s economic exposure is the world’s largest [50.28 percent],” Lloyd’s said, citing the results of City Risk Index, a study it conducted with the University of Cambridge Judge Business School.
The index is the first analysis of economic output at risk (GDP at Risk) in 301 major cities from 18 man-made and natural threats over a 10-year period (2015 to 2025). The index estimated that a total of $4.6 trillion of projected GDP was at risk due to man-made and natural disasters in cities around the world.
Lloyd’s Asia-Pacific managing director Kent Chaplin said natural threats accounted for over 90 percent of Manila’s economic exposure. About $109 billion or over half of the Philippines GDP was at risk, the highest percentage in the Lloyd’s City Risk Index in percentage terms.