MANILA, Philippines — The Insurance Commission (IC) has reduced the penalties slapped on life and non-life insurers, as well as mutual benefit associations and health maintenance organizations, for failing to file their operational reports on time.
Under Circular Letter 2021-70, the penalties for delays in the submission of requirements have gone down by up to 50 percent. Prior to the order, insurance firms may only get up to 30 percent reduction upon the decision of the IC and depending on the reason for the delay.
Based on the circular letter, insurers may avail of the deduction if the non-compliance or delay was proven to be beyond their control. Likewise, they may ask for the relief if such penalty will burden, disrupt or affect their business viability.
The reduction may also be obtained by insurance firms if the non-compliance or delay was due to an inadvertent accident or excusable negligence. Also, the IC may approve of other grounds with the same rational as those stated above.
All provisions of Circular Letter 2019-07, which the new order revised, will stay, especially the guidelines and rules that it set for cutting the penalties due to delays in the filing of insurance reports.
Under the IC’s procedure, an application for penalty reduction must be made within 10 calendar days from the receipt of any order or notice to pay.
In the application, the insurance firm must present the facts and allegations pertaining to any of the grounds provided by the IC.
The application must also be filed alongside relevant documents, affidavits and other proof that support the claim of the insurer on why it failed to submit the operational report on time.
The application must also contain the oath and signature of the firm’s president, asking that the penalty charged on his/her entity be reduced. The oath, according to the IC, must state that the president knew of the delayed filing and that the records relayed are authentic.
The insurance industry has gained from the rise in investments made in life and non-life policies due to the risks posed by the pandemic. However, most insurers have to increase their payouts as well with the claims for benefits demanded by policyholders.
Insurance premiums jumped by more than 37 percent to P187 billion in the second quarter, as industry players benefited from the economy’s reopening with Filipinos now recovering their usual incomes.
On the other hand, benefits released during the period also spiked by over 47 percent to P64.94 billion, from P44.26 billion.