Metro Manila (CNN Philippines, February 26) – The increase in the minimum catastrophe insurance rate is “legally vulnerable” because it did not go through a regulatory assessment, the Anti-Red Tape Authority (ARTA) said on Sunday.
In his statement, Director General of ARTA Ernesto Perez said that the increase in disaster insurance rates did not go through a Regulatory Impact Assessment, a requirement that must be met before implementing any regulations in this country.
“This should be subject to a Regulatory Impact Assessment to ensure that the regulation does not create an undue regulatory burden, not only for agencies but also for the trading public,” he said.
“The regulation is legally vulnerable, subject to attack given the failure to comply with this requirement,” he added.
The Insurance Commission (IC) released a circular in July 2022, seeking to increase insurance premium rates for earthquake, hurricane and flood risks for businesses, excluding risks ranked under auto rates.
IC said the increase in interest rates included imposing reinsurance fees and applying cross subsidies in risk zones. It was planned to be held last January 1, but was postponed due to complaints from the public.
For party list AGRI Rep. Wilbert Lee, the catastrophic insurance interest rate increase is an “untimely policy” amid the country’s record high inflation.
He warned that the increase in disaster insurance rates would have an impact on soaring prices of basic necessities in the country, which would encourage cartels to form.
“Napaka-wrong timing for the Ito police (the timing of this policy was very wrong). This is the reason why we, on the AGRI party list, are calling for the cancellation of this tariff increase. Cancellation, not just suspension. Termination, not just a delay,” he added.
Lee also filed a resolution seeking an investigation into the “sudden, unreasonable, and untimely increase in catastrophe insurance premium rates.”