Metro Manila (CNN Philippines, February 26) – The increase in minimum catastrophe insurance rates is “legally vulnerable” as it did not undergo regulatory assessment, the Anti-Red Tape Authority (ARTA) said on Sunday.
In a statement, ARTA Director General Ernesto Perez said the catastrophe insurance rate hike did not go through a Regulatory Impact Assessment, a requirement that must be complied with before implementing any regulation in the country.
“It should be subjected to Regulatory Impact Assessment to ensure that the regulation does not cause undue regulatory burden, not only to the agency but to the transacting public as well,” he said.
“That regulation is legally vulnerable, subject to attack in view of this failure to comply with this requirement,” he added.
The Insurance Commission (IC) released a circular letter in July 2022, seeking to increase the insurance premium rates for earthquake, typhoon, and flood risks for business, except for risks rated under motor car tariff.
The IC said the rate hike includes reinsurance expense loading and applied cross subsidization in the risk zones. It was scheduled to be implemented last Jan. 1, but was deferred due to complaints from the public.
For AGRI party-list Rep. Wilbert Lee, the catastrophe insurance rate hike is an “untimely policy” amid the record-high inflation in the country.
He warned that the catastrophe insurance rate hike will result in soaring prices of basic commodities in the country, which will encourage cartels.
“Napaka-wrong timing ng polisiyang ito (The timing of this policy is very wrong). This is the reason why we, in AGRI party-list, are calling for scrapping this increase in rates. Cancellation, not just suspension. Stoppage, not just postponement,” he added.
Lee also filed a resolution seeking an inquiry into the “abrupt, unreasonable, and untimely increase of catastrophe insurance premium rates.”
https://hrep-website.s3.ap-southeast-1.amazonaws.com/legisdocs/basic_19/HR00632.pdf
