Life insurers are amenable to the proposed 60-day minimum grace period for payment of insurance policies but exempting insurance companies from the proposed policy would also be beneficial to the policyholders.
This was according to Sun Life Philippines chief executive officer Benedict Sison, who is the current President of the Philippine Life Insurance Association.
Sison said PLIA finds as “acceptable” the 60-day grace period compromise proposed by the Bicameral Committee on the Bayanihan to Recover as One Act.
He said this period is equivalent to the minimum grace period implemented by the industry during the enhanced community quarantine from middle of March to end of April in Luzon and end of May in the National Capital Region this year.
The payment leeway includes the 30-day policy contractual grace period plus the extension period that the Insurance Commission encouraged companies to employ.
Sison said “PLIA recognizes the difficulties policyholders may have in settling their due premiums in these trying times” thus, the additional period to pay the insurance policies leeway “offers a balanced consideration of the insuring public's interest as well as that of the insurance companies, who themselves need to ensure their continued ability to service all their commitments to their policyholders”.
“However, exempting insurance companies from this 60-day mandatory grace period would also turn out beneficial to our policyholders as steadier premium inflow would become available for investing and generating returns that would assure their readiness to respond to claims especially those related to Covid-19 (coronavirus disease 2019),” he said.
Sison said “at this time when people’s health and wealth are a bit more vulnerable, the role of the insurance industry becomes even more important as it helps people mitigate the risks they face”.
“Thus, it is also important that we work towards a balanced solution that would ease the plight of our fellow Filipinos while also ensuring the continued stability of the industries that are there to help them,” he added.
IC Commissioner Dennis Funa has written to the members of the Bicam for an alternative to the proposed 365-day moratorium on premium payments for life insurance and pre-need policies.
He said the one-year moratorium “if passed into law, will add to the life insurance and pre-need industries’ challenge of generating as much premiums from its existing business”.
“Right now, said industries need to generate such premiums from existing businesses in order to offset the decline in new business premiums resulting from the slowed market demand,” he said in a letter dated Aug. 12, 2022.