Philippines Insurance Information

CIA link to demographic/economic data on the Philippines

General Philippines Insurance Information

• Compulsory Insurance:
  
  1. Third Party Automobile Liability;
  2. Workers’ Compensation (part of Social Security Scheme);
  3. Personal Accident for workers abroad.
• Non-Admitted Insurance:
  Prohibited. Heavy fines for noncompliance.
• Policy Wordings & Rates / Tariffs Controlled:
  All wordings must be approved and in English. Tariff rates are recognized for fire (and the perils of lightning, earthquake fire, earthquake, riot, strike, typhoon, flood), automobile and bonds.
• Policy Language:
  English.
• Types of Insurance Restricted to Government Institutions:
  All compulsory coverages except for automobile.
• Policy Currency:
  Philippine peso (PHP). U.S.$ insurance (and other currencies) available.
• Currency Restrictions / Exchange Controls:
  No restrictions except the transfer of the Peso requires Central Bank approval.
• Policy Period:
  Annual. Contracting / Project insurance can have a longer period.
• Cancellation Provisions:
  45 day written notice. Check policy cancellation provisions.
• Premium Tax, etc. paid by Insured:
  5% - premium tax all lines;
  2% - premium tax on fire, earthquake, explosion;
  2% - Fire Service Tax;
  10% VAT and 1% Municipal Tax;
  12.5% - documentary stamp tax.
• IPT abolished on life insurance – Documentary stamp and insurance premium tax on life insurance have been scrapped. (June 12, 2009)
• Insurance Companies:
  Foreign ownership can be 100% subject to paid-up capital of Pesos 50 million.
• Brokers:
  Brokers must be licensed by the Philippine Insurance Commission, bonded and be insured by an Errors & Omissions policy. Agents also work the market.
• Brokerage Commissions:
  Fire - 35%;
  Automobile - 10% (compulsory coverages);
  Marine - 30%;
  Liability - 30%.
  Commissions cannot be paid to brokers not duly licensed.
• Broker of Record Letters:
  No legal requirement. A good business practice.
• Reinsurance:
  10% of all treaty reinsurance business must be offered to the National Reinsurance Corporation. Facultative cessions abroad are not allowed unless approved by the Insurance Commissioner. Good reasons for allowing a ‘fac’ cession include, lack of market capacity, hazardous exposure, inability to arranged adequate coverage terms locally.
• Local Natural Hazards:
  Earthquake, flood, typhoons, volcanic eruption.
• Other Information:
  All policies issued in the Philippines must contain an arbitration clause.

Property Insurance

• Fire:
  Standard fire perils include - fire, lightning. Aircraft, explosion, earthquake, flood, storm / tempest, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane, vehicle impact are available in the market for an additional premium charge.
• All Risk:
  Available. Normally reserved for Construction / Project related coverages.
• Coinsurance:
  100%.
• Blanket Insurance:
  Available.
• Business Interruption:
  UK Loss of Profits and U.S. Gross Earnings forms available.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems:
  Discount available up to a maximum of 50%.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  UK or U.S.-Business Interruption coverage available. Inspections are conducted by Government Inspectors.

General / Public Liability

• Available Wordings:
  General / Public Liability available
  including Product Liability.
• Comments:
  Product Recall coverage is not available locally. Coverage is written on an occurrence basis.

Automobile / Motor

• Compulsory Limits:
  Bodily Injury between P12,000 and P50,000 depending on category and weight.
• Comments:
  Coverage applies to the Insured and any licensed individual driving with the Insured’s permission. Passengers are deemed to be Third Parties. Note: Fleet discounts available.

Workers’ Compensation

• Comments:
  All employees are protected under the Philippine Social Security Scheme. Extra-Territorial and Medical Expenses are included under the Scheme. Occupational Disease is included but may be limited to certain specified diseases.

Marine

• Available Wordings:
  Follow the Institute of London Underwriters clauses. War Risk rates follow London scale.

Crime

• Available Coverages:
  UK and U.S. forms are most common.