"There is a need to revisit and update the Insurance Code of 1978 to make it more responsive to the globally changing market," Drilon said in his keynote address before the seventh Asean Insurance Regulators meeting at the Peninsula Manila Hotel in Makati City.
Even with the enactment of Republic Act 8179 or the Foreign Investment Act which allowed 100 percent equity in insurance and other key industries, Drilon said there is a need to strengthen the industry and protect the insuring public as well.
He said the insurance industry has remained stringent and outdated in contrast to other sectors.
"We hope to be able to formulate a responsive legislation which will address the concerns of the insurance industry of promoting a fairly moderate regulatory environment and allowing insurance companies to broaden their investment portfolio," Drilon said.
He emphasized the need for a piece of legislation that must provide for strengthened disclosure requirements and stringent sanctions for violations to protect the interest of policy holders.
"In the Philippines, the insurance sector is the second largest financial sector. Yet, it is significantly small. Assets of insurance companies account for six percent of the gross domestic product as against the 56 percent share of the banking sector in 2001," he said.
Drilon also took the occasion to congratulate the Asean Insurance Council for encouraging cooperation in the region for promoting the harmonization of insurance laws and information sharing.
"Strengthening cooperation in the insurance sector is vital to the region’s financial development. Globally, insurers are affected by the regulatory and policy decision is made by non-insurance regulators," Drilon said.
He said that the insurance industry is affected, not only by the decisions made by securities regulators and monetary and fiscal authorities, but also by political and security decisions of the government. — Jose Rodel Clapano