Microinsurance guarantees to protect low income Filipinos from unforeseen perils. However, claim disputes may happen. If and when they do, the poor need not struggle with exorbitant court fees they may not afford.
The Department of Finance - National Credit Council (DOF-NCC) and the Insurance Commission (IC), together with members of the Technical Working Group from representatives of insurance associations, stakeholders, including GIZ, have devised mechanisms to protect the poor through the alternative dispute resolution on microinsurance (ADReM).
The one-day seminar held in Iloilo City in March 27, 2014 is the final leg in the series of seven nationwide information dissemination campaigns in key cities such as Batangas, Cagayan de Oro, Cebu, Davao, Metro Manila, Pampanga and Iloilo.
"We have been going around the country, presenting the latest circulars issued by the Insurance Commission with respect to consumer protection for microinsurance clients. The objective of the seminar is to reach out to stakeholders and institutional partners to get feedback, get information and learn what works and what problems to be addressed." Insurance Commission Deputy Commissioner for Financial Services Ferdinand George A. Florendo stressed in his welcome remarks to over a hundred stakeholders and institutional partners in Iloilo City.
George A. Florendo engaged the participants on the ultimate purpose of these campaigns when he said "now is the time to assess how the microinsurance industry is doing, whether it is successful in reaching out to the underprivileged in times of need."
Participants and partners from the micro/insurance industry in the Visayas were educated on the circulars issued to encourage various insurance providers to develop insurance products for the poor and expand their coverage. The operational elements of making redress mechanism for microinsurance claims disputes were emphasized through the Least-cost, Accessible, Practical, Effectively and Timely resolution of disputes (LAPET).
The ADReM circulars are initiatives of the Insurance Commission and the Technical Working Group of ADReM to provide an enabling policy and regulatory environment for microinsurance, primarily for consumer protection. Today, almost 20 million Filipinos out of the 97 million populations are covered by microinsurance. According to George A. Florendo, the Philippines is being looked at as good practice for microinsurance in Asia. "Particularly, Nepal, Mongolia, Indonesia are learning from our experience."
The DOF-NCC and IC worked in collaboration with key representatives from the microinsurance industry with technical support from the German Development Cooperation (GIZ) thru its regional program, Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia (RFPI Asia) to help implement the provisions of the ADReM Framework.
A recent GIZ co-funded study entitled "The Landscape of Microinsurance in Asia and Oceania 2013" cited that the Philippines tops countries in Southeast Asia with most number of covered underprivileged Filipinos in microinsurance.
Dr. Antonis Malagardis, RFPI Asia program director, emphasized that the Philippines is a priority country with a very long standing cooperation of almost 40 years with GIZ. We are working in the last five years to support and facilitate the process of developing inclusive insurance.
"We were working in the last five years with our core partners, the Department of Finance and IC to support and facilitate the process of developing inclusive insurance mostly through the creation of an enabling regulatory environment. The main objective was to develop and implement a regulatory framework, a strategy and a financial literacy roadmap on microinsurance. This has been achieved while sustainability is the next challenge."
Dr. Antonis Malagardis further highlighted the Philippines’ achievement in the last four years. Nowadays 20 % of Filipinos are covered through microinsurance compared to only 3% in 2008. "The challenge is not only to increase the coverage further but to make it sustainable in the years to come", he declared.