Canadian Ambassador John Holmes, Commissioner Dennis Funa, Deputy Commissioners Dorothy Calimag and Ferdinand George Florendo, fellow workers in government, partners in the insurance, pre-need and HMO industries, good morning.
First of all, let me commend Funa for bringing up the need to use technology for advancing the insurance industry. This is certainly a big opportunity for us to increase the number of Filipinos who are insured. I hope everybody in the industry will help along those lines.
I would also like to thank the Canadian people through Ambassador Holmes, in their assistance in the insurance industry. It is certainly a big field that needs to be strengthened and we always appreciate your assistance. I want to assure the Ambassador that none of the taxpayers money are going to be wasted.
Allow me to first again to congratulate the Insurance Commission on its 68th year. As the regulatory agency for the insurance, pre-need and HMO industries, millions of Filipinos rely on you to ensure the reliability of the companies you regulate.
Your job is basically to assure consumers of insurance and pre-need products that their investments are safe and the companies selling them these products are sound. Without that assurance, the insurance, pre-need and HMO industries cannot thrive and our people will be deprived the benefits they seek. Millions, therefore, depend on your good work.
We have gone through ugly episodes in the past. One particularly troublesome episode was when several pre-need companies failed in succession. We have yet to arrive at a final verdict on whether these failures were due to bad management of the providers or bad policy on the part of government. I suspect, it’s the combination of both. At any rate, thousands of consumers, paying premiums with their hard-earned money, lost their valuable savings. That injury should not happen again.
I am sure that because of the reforms instituted by the Insurance Commission and better regulatory capacity, the chances for failure have been dramatically diminished. We have to build on these reforms. We have to rebuild the faith of our people on companies that sell them insurance or pre-need products. That is always a challenging job, to be sure. But I have faith that the Insurance Commission will perform its regulatory role abiding by the highest standards.
Ensuring that companies selling insurance and pre-need products are sound is half the job you must perform. The other half is less evident. The Insurance Commission must see to it that products sold to our consumers are fair.
Insurance and pre-need industries are inherently risk-based businesses. They also involve arcane actuarial computations not readily clear to consumers patronizing these businesses. By merely tweaking on these actuarial computations, huge profits could be made at the expense of consumers.
The work of the Insurance Commission is to assure not only the soundness of companies selling risk-based products but also the fairness of premiums collected. When premiums are overcharged, the cost of the products could be pushed beyond the reach of most consumers who need the protection these products otherwise bring.
I urge you to look more closely at insurance premiums charged for vehicles as well as homes supported by the Pag-ibig Fund. Insurance coverage in these areas often involves unreasonable premiums. The best way to ensure fair premium charges is to make the market as competitive and contestable as possible.
I understand that the insurance industry has begun to bloom. As of September 2016, assets have grown to P1.32 trillion. That translates into a 21.27% increase over the same period a year earlier. The insurance industry also contributed P19.38 billion in 2015 through premium taxes. This is a remarkable achievement. The Insurance Commission should take part of the credit for this booming sector of the economy.
We can only expect more dramatic growth in the insurance business as our economy is poised for a long period of high growth. Both the Insurance Commission and our industry partners should gear up for this.
The strategy for growth is laid out in “AmbisyonNatin 2040” which President Duterte adopted through Executive Order No. 5. In this strategy, we envision the Philippines a “prosperous, predominantly middle class society where no one is poor.” By that year, a full generation from now, we seek to triple real per capita incomes and to eradicate hunger and poverty.”
This might seem an ambitious goal. But, I assure you, the goal is a reachable one. It requires closing the infra gap that hold down our economic performance. It requires constantly strengthening our institutions of governance and building a high-trust society.
Over the medium term, our economy should sustain a pace of growth of 7% or better. The key to ensuring that is passage of the tax reform package that will fund investments in both infra as well as human capital. The growth is made possible by strong economic fundamentals consolidated over the past years.
I appeal to all of you to support the passage of the tax reform program to get our reforms going, to get it enacted by Congress and get this enacted into law because without it, we cannot sustain a growth that is required by our Filipino people.
Thank you and good day.
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