The Insurance Commission (IC) and the preneed industry have adopted the implementing rules on micro preneed products to be sold by preneed companies to lower income families.
The implementing rules agreed upon by IC and the pre need industry will push for the general policy to provide a dedicated savings mechanism for the poor, particularly for needs like education, memorial services and pension.
Insurance Commissioner Emmanuel F. Dooc issued Insurance Memorandum Circular 2015-51 adopting the implementing rules agreed upon between the IC and the preneed industry after consultations last month.
“The micro preneed framework aims to [1] provide an opportunity to the low income sector to have access to preneed products and services that will cater to their needs; [2] encourage the participation of the preneed industry in offering micro preneed products and services to promote the financial well-being of the low-income sector; and [3] provide the mechanism to ensure the protection of planholders’ rights and privileges,” Dooc said in the memorandum circular.
Under the rules agreed upon, all micro preneed plans issued by preneed companies would have to abide by the three paramount considerations that the micro preneed plans be accessible, affordable, and the wordings of the contract must be clear and simple.
The micro preneed plans must also be fixed value plans, or those that the benefits and cost are fixed and predetermined at the time of the purchase of the plan.
Dooc said the offering of micro preneed plans will provide preneed companies with an additional market, while helping the country achieve inclusive growth for lower income families by providing them with a savings instrument that they can tap when emergencies happen.
The new implementing rules provide that premium payments computed on a daily basis for micro preneed plans should not exceed 7.5 percent of the current daily minimum-wage rate for nonagricultural workers in Metro Manila.
The maximum sum of guaranteed benefits or services should also be not more than 1,000 times the daily minimum-wage rate for nonagricultural workers in Metro Manila.
To further protect the interest of planholders of micro preneed plans, the IC also requires that the premium payments made to preneed companies be placed in a separate micro preneed trust fund that will be established for each of the preneed plan category such as education, memorial services and pension.
-- Business Mirror
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