A party-list legislator on Monday sought a congressional inquiry into the “impending abrupt and unreasonable” increase of catastrophe (typhoon, flood, earthquake, among others) insurance premium rates, saying it would greatly affect the prices of basic commodities and would be an additional burden to the public.
AGRI Rep. Wilbert Lee filed House Resolution 632 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 adjusted rates, which will take effect on January 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,” Lee told reporters.
In HR 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.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 stated.