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Microinsurance dispute resolution guidelines issued in the Philippines

The Philippine Insurance Commission (PIC) has issued concrete guidelines to implement the Alternative Dispute Resolution for Microinsurance (ADReM) framework.

The guidelines for the Implementation of ADReM will require all insurance entities, agents and brokers who are engaged in the microinsurance business to follow mediation-conciliation processes of claims dispute based on parameters offset under the banner, Least cost, Accessible, Practical, Effective and Timely or LAPET.

“The ADReM is another milestone for the initiatives on microinsurance. With it, we can ensure consumer protection to the more than 4 million lives covered by microinsurance,” Insurance Commissioner Emmanuel Dooc expressed during the circular signing event. ADReM aims to provide options to resolve disputes outside the courtroom and to minimize the expense and delays of litigation.

The circular took reference from the ADReM Framework adopted by the PIC and the industry in October 2012 after a series of stakeholder consultations around the country.

“The ADReM is about building bridges, closing the distance – physically and administratively – between conflicting parties and the insurance regulator,” stated Department of Finance – National Credit Council Director Joselito Almario.

To implement the resolution procedures, the PIC will accredit a pool of mediator-conciliators from which the parties in dispute can select. The conflict will then be settled through a graduation of levels, beginning at community-level mediation, prior to reaching the PIC level, if necessary.

Distinct ADReM procedures have been designed for commercial insurance companies, for mutual benefit associations, and for cooperative insurance societies.

The ADReM Framework is an output of a public-private collaboration through a working group composed of the DOF-NCC, Life and Non-Life insurance associations (PLIA and PIRA), Rural Bankers Association of the Philippines (RBAP), Chamber of Mutual Benefit Associations (CHAMBAI), Microfinance Council of the Philippines (MCPI), Society of Independent Insurance Intermediaries of the Philippines (Triple I), Life Underwriters Association of the Philippines (LUAP) and MicroEnsure Insurance Brokers Philippines (Microensure). The Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) has been providing technical assistance and funding.

“The German Development Cooperation has committed, through the ‘Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia’ (RFPI) program, to support consumer protection measures in the field of (micro)insurance and will be providing further assistance in the dialogue process and the information dissemination campaign for the ADReM to be rolled out in seven regions beginning in September,” said GIZ-RFPI Program Director Dr. Antonis Malagardis.