Philippines Financial Sector Assessment Program : Insurance Sector - Targeted Assessment of ICPS and Development Issues
The insurance industry in Philippines is small but growing. Insurance penetration remains below that observed in many countries in the region and very low compared to countries with similar per capita incomes in other parts of the world. During the...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/en/291931629267204212/Philippines-Financial-Sector-Assessment-Program-Insurance-Sector-Targeted-Assessment-of-ICPS-and-Development-Issues-Technical-Note http://hdl.handle.net/10986/36184 |
| Summary: | The insurance industry in Philippines is
small but growing. Insurance penetration remains below that
observed in many countries in the region and very low
compared to countries with similar per capita incomes in
other parts of the world. During the last five years, the
Insurance Commission (IC) has made a significant effort to
improve insurance regulation and supervision. The IC has
considerable autonomy in practice but lacks operational
supervisory independence. Improving the independence of the
IC should be accompanied by measures to increase its formal
accountability to the government. The assessment has
identified areas for further development of IC’s supervisory
approach, like risk profiling, and stronger cooperation and
coordination among supervisors. A key recommendation is that
IC formulate a strategy with an implementation plan to
advance its risk based and market conduct supervision. While
consumer protection has improved in many respects, ongoing
oversight of insurance intermediaries should be improved. IC
should review its resources and organization to meet the
demands of a more risk-based approach. IC’s inspection
methods, data collection, and reporting infrastructure (IT
systems), analytical tools, and on-site inspection manuals
require a major overhaul. The IC should carry out a
comprehensive review of the current regulations and
supervision processes and data reporting requirements with
the view to reduce the regulatory burden on the industry. In
conjunction with strengthening governance, transparency, and
internal control requirements, own risk and solvency
assessment (ORSA), and enterprise risk management (ERM)
requirements should be developed and implemented on an
individual entity and group basis. Enabling new product
development and liberalizing tariffs should be considered as
part of an IC growth strategy for the insurance sector. |
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