Insurers protest Makati ruling

The non-life insurance companies has issued a protest on a Makati City ruling favoring only 15 non-life insurance firms under its Comprehensive General Liability (CGL) insurance ruling.

The Philippine Insurers and Reinsurers Association (PIRA) said it was “totally unfair” as there are over 80 non-life insurance firms licensed by the Insurance Commission (IC), the government agency mandated to regulate the country’s insurance industry.

In a letter to the IC, PIRA complained that the Makati government is rejecting business permit applications of companies that did not get their CGL insurance from the 15 insurance firms the city has accredited.

The rejection is stated in a Nov. 19, 2008 circular letter signed by Ferdinand T. Eusebio, officer in charge for the Makati City Business Permits Office, and addressed to Makati taxpayers.

A CGL protects a business owner from all forms of liabilities — unless specifically excluded—that would arise from the conduct of his business. A CGL policy is a requirement for getting a business permit.

PIRA spokesman Michael Rellosa said Makati has rejected the CGL policies his company has issued. The city government explained that it would only accept insurance policies from 15 insurance companies based on total assets.

“This (total assets) is not the only method of gauging the size and financial health of a company, one must look into a company’s liabilities as well, perhaps the net worth or total assets minus total liabilities would be a better measure,” Rellosa stressed.

He added that the final arbiter and lawful judge of who should continue issuing policies and covering liabilities is the IC. Licensed companies have already been vetted and scrutinized by the commission, on an annual basis.

In the same letter, PIRA noted that this new policy of Makati is discriminatory and completely unfair. “In effect, the Makati government is telling business owners that only these 15 insurance companies are capable of protecting their business – which is totally untrue,” he said.

Rellosa, who is the president and COO of Fortune General Insurance, said the rejection of insurance policies is putting companies like his under a bad light.

“My client says his business permit application was rejected so he would just return the insurance policy I issued him. The rejection made my company look bad. We are a major player in this industry and Makati doesn’t have the correct information nor the right to discriminate against us,” he said.

Rellosa added that what Makati is doing may be an abuse of authority and must not be tolerated by other government agencies, especially the Insurance Commission and its mother agency, the Department of Finance.

He fears that other cities and municipalities could follow Makati’s lead if abusive policies such as this would remain unchecked.   — TPT