THE Insurance Commission (IC) said premiums for catastrophe risk were last adjusted in 2006 and need adjustment because the old premium structure was “unsustainable.”
IC Commissioner Dennis B. Funa said on Monday in an e-mail that “For the longest time, the other non-life insurance business lines have been subsidizing catastrophe insurance products and claims — a situation that is unsustainable given the constant, if not growing, exposure to catastrophe risks,” Mr. Funa said in an e-mail.
Mr. Funa was responding to a legislator’s query about the state of the catastrophe insurance market.
AGRI Party-list Representative Wilbert T. Lee had queried via a Dec. 12 resolution whether there was a gap in coverage for earthquakes, typhoons, and floods.
“Our country has a huge catastrophe insurance gap that leaves millions of Filipinos in poverty after every catastrophe,” Mr. Funa said.
The commissioner added that higher premiums would be warranted given the Philippines’ vulnerability to natural disasters.
“Since insurance is an important risk transfer tool for the recovery of communities after large loss events, it has been the view of the World Bank, the Department of Finance (DoF), the IC, and non-life insurers that catastrophe resilience of the Philippine insurance industry and its capacity to retain catastrophe risks should be increased,” Mr. Funa added.
The IC is in charge of Philippine Catastrophe Insurance Facility (PCIF), a World Bank initiative under the supervision of the DoF.
Mr. Funa said the IC is reassessing the PCIF program. — Beatriz Marie D. Cruz