Senate Approves Amended Insurance Code
MANILA, Philippines - With only two days before going on a three-month break leading to the May 2013 mid-term elections, the Senate approved on third and final reading yesterday a bill amending the 38-year-old Insurance Code of the Philippines to regulate and supervise the insurance industry in the Philippines.
There is an urgent need introduce amendments to the Insurance Code based on Senate Bill No. 3280 "to make it relevant to the changes that have transpired in the industry but also, in anticipation of future transformation that it is bound to undergo considering the growing sophistication of industries across the globe," Sen. Sergio R. Osmena III, said in his sponsorship speech.
As chairman of the Senate Banks, Financial Institutions, and Currencies Committee, Osmena said the increased product diversity, sophistication in the sales' and clients' servicing practices, expansion of investment instruments and opportunities, evolving requirements of the industry, diversification of distribution channels to the insuring public and the need for improved and expanded protectionist provisions in the Insurance Code are some of the major changes in the industry.
"Amendments will have to be flexibly constructed to enable at pace alignment with the continuously evolving financial markets, maturing compliance standards and practices, strengthening government processes and developing insurance accounting standards," Osmena said.
Osmena said amendments to the Code would create a more relevant and nurturing operation framework for the industry.
He said regulatory amendments introduced in the Code are the recognition of processes that use advancements in technology; provision for fair protection to insurers from fraud and discriminatory mechanisms; redefinition of solvency regime to conform with internationally-accepted standards; institution of changes in company and agent licensing process; grant of a fixed six-year term and strengthening the powers of the insurance commissioner; and addition of new titles and related provisions on micro-insurance and bank assurance. …