THE Insurance Commission turned 73 this year and the celebration took place on April 1 at the Philippine International Convention Center. The event brought together government and business representatives. On January 3, 1949, the then Bureau of Banking, which oversaw the insurance industry, was renamed the Office of the Commissioner of Insurance under Republic Act 275. In 1974, Presidential Executive Order 612 was promulgated, creating the Insurance Code. from the Philippines. The code has gone through several revisions; the last was on August 15, 2013 when Republic Act 10607, also known as the Amended Insurance Code, was signed into law by President Benigno Aquino 3rd. The code covered all aspects of insurance supervision, including the provision for a gradual increase in the paid-up capital or net worth of insurance companies every three years until 2022.
There have been 11 insurance commissioners since 1949, including former senator Juan Ponce Enrile, lawyer Gregoria Cruz Arnaldo, whose tenure was the longest (1970-1985) and lawyer Eduardo Malinis, who served served two terms (1995 to 2004; 2007 to 2010) . Until now, the term of insurance commissioners was determined by the President of the Philippines, but the amended Insurance Code of 2013 now sets the term at six years without renewal. The current insurance commissioner is attorney Dennis Funa.
Faithful to their mandate to safeguard the rights and interests of the public insurer and provident and HMO customers, the agents and staff of the Insurance Commission are professionals from different fields of expertise so that we can be assured of a efficient and fast service. Many of its functions are now computerized so there has not been much disruption to its efficient service during the pandemic period. The website www.insurance.gov.ph operated 24/7 so information could easily be obtained or sent to their office.
Like all business operations, the insurance sector was also hit by the crisis in 2020, the first year of the pandemic, but in 2021 the industry was back with a vengeance! The 31 life insurance companies generated premium income of 310 billion pesos in 2021, an increase of 13% over 2020 premiums. Insurance awareness and the need for protection and savings were significantly high during this period.
The net income for 2021 was P30 billion, almost the same as the results for 2020.
The 58 non-life insurance companies wrote premiums worth 107 billion pesos, or 28% compared to the 2020 experience. Net income was 5.5 billion pesos, an increase by 41% compared to the 2020 net income of 3.9 billion pesos. The pandemic has prevented or drastically reduced the movement of people and vehicles, as well as the operation of highly combustible machinery, resulting in fewer insurance losses.
Assets of life and non-life insurance companies have reached nearly 2 trillion pesos and net worth stands at 347 billion pesos at the end of 2021. The insurance industry continues to grow. be strong enough to withstand unforeseen events, which is not uncommon in our country. Climate change is one of them, which is why the insurance industry is working hand in hand with government, including our Insurance Commission, on how insurance can protect lives and property. We continue to enjoy the trust of global players, who provide both protection and advice through reinsurance. But this trust did not happen overnight. It’s the result of many years of good operating results and healthy relationships.
On top of all this, the industry attributes part of its success to the good governance provided by the regulator. It is not only a question of respecting the code or the numerous circulars issued by the commission. But what is worth mentioning is the open communication with the officials and staff of the Insurance Commission, either directly with them or through the professional associations. For example, the requirement to increase the net worth of companies to 1.3 billion pesos has been the subject of strong objections from some industry players. The Insurance Commission listened and did not prevent the tabling of a bill in the Senate to oppose the increase. Whatever the outcome of this petition, it will certainly not spoil the healthy relationship between the regulator and the insurance industry.
Congratulations to the Insurance Commission!