Gov't launches micro-insurance program

The government launched a program to make insurance products more affordable to poor families, to increase the number of Filipinos covered by insurance. Insurance Commission chief Evangeline Escobillo told reporters that the Department of Finance (DOF) has approved the issuance of IC Memorandum Circular 9-2006 laying down the guidelines on microinsurance. Escobillo said the new rules specify that mutual benefit associations (MBAs) should provide the poor with access to insurance products through simpler documentation, policies that are easier to understand, and by taking into account the family’s ability to pay. "We would like to encourage our providers to make insurance products affordable to the poor," she said. Under the new guidelines, microinsurance MBAs are required to set up a guaranty fund equivalent to not less than P5 million by the end of the year. The fund should be increased by five percent of their annual gross premium collections until the fund reaches 12.5 percent of the required capital for domestic life insurance companies. The guidelines stated that the premium amount of microinsurance products when computed on a daily basis should not be more than 10 percent of the P300 daily minimum wage rate in Metro Manila. Furthermore, the maximum amount of life insurance coverage should not be more than 500 times the daily minimum wage rate or about P150,000. - GMANews.TV