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PRIVATE

INSURANCE
COMPANIES

Jefferson Roberto, Andrea Camille David, Roselle Ong, Kristine Siasat


PRIVATE INSURANCE COMPANY
• An insurance company or organization is
simply a mechanism for distributing
equitably losses among a large number of
persons who are subject to a particular
risk. Clearly, risk, therefore, is the most
important factor in the business of
insurance.
PRIVATE INSURANCE COMPANY
• Insurance companies are a type of “non-
bank” financial institution that sell policies
that provide protection from various kinds of
risks. Risks that insurance policies cover include
the loss of life, income, or possessions and the
high cost of medical bills.
The Nature of Any Insurance Company
• The doubts as to whether an
insurance company is a financial
institution is clearly resolved and
settled by Section 3 of Republic Act
No. 337, as amended, otherwise
known as the General Banking Act.
The Nature of Any Insurance Company
• Needless to say, insurance companies
are engaged in lending and investing
operations concededly not their
primary and predominant business
activities. Indeed, insurance company
as defined in Section 3 of Republic Act
No. 2629, otherwise known as
investment company act is one whose
primary and dominant business activity
is writing of insurance or the reinsuring
of risks underwritten by insurance
companies.
Governing Law
• The principal law to reckon with in
the operations and business
transaction of insurance companies
is the Insurance Code of 1978,
otherwise known as Presidential
Decree No. 1460. Originally, the
law on the matter was Act No.
2427, otherwise known as the
Insurance Act, which was copied
from the Civil Code of California.
Governing Law
• The laws creating the Government
Services Insurance System (GSIS), the
Social Security System(SSS) and the
Philippine Crop Insurance
Corporation(PCIC) are Presidential
Decree No. 1146(Revised Government
Service Insurance Act of 1977),
Republic Act No. 1161 as
amended(Social Security Act), and
Presidential Decree No.
1467(Philippine Crop Insurance
Corporation), respectively, may be
alluded to as the other specials law.
Governing Law
• Republic Act No. 10607 entitled,
“an act strengthening the
insurance industry, further HOME
amending Presidential Decree
No. 612, otherwise known as
“The Insurance Code”, as
amended by Presidential Decree
Nos. 1141,1280,1455,1460,1814, and
1981 and Batas Pambansa Blg.
874, and for other purposes”;
otherwise known as the
Insurance Code as amended.
Kinds of Insurance
1.) Life Insurance
A life insurance policy is a
contract with an insurance company.
In exchange for premiums, the
insurance company provides a lump
sum payment, known as death
benefit, to the beneficiaries in the
event of the insured death.
FAMILY
Kinds of Insurance
Key Elements
• Insurer is the insurance company
in the Philippines that offers life
insurance products.
• Insured is you, the person whose
life the insurance covers.
• Policy is simply the contract
between you and the insurer. It FAMILY
contains everything that concerns
the product.
Kinds of Insurance
• Policyholder is the person who owns the policy.
• Beneficiaries are the people who will receive the money after
you’ve passed on.
• Sum insured is the amount of money that the insurer promises to
give to your beneficiaries.
• Premium is the amount of money you pay to the insurer so that
your policy is enforced.
• Period of coverage describes how long the policy is in effect.
• Riders are supplementary contracts. They can be attached or
removed from the main policy, adding more options on customizing
your plan to better suit your particular needs.
Kinds of Insurance

2.) Non-Life Insurance


It is basically an
insurance policy to protect an
individual against losses and
damages other than those
covered by life insurance.
Kinds of Insurance
Types of Non-Life Insurance
• Property Insurance
Provide protection
against more risks to property
such as the special perils of
earthquake, flood, typhoon, riot
and strike, falling aircraft, and
impact of vehicles are written
usually in conjunction which fire
coverage.
Kinds of Insurance
Types of Non-Life Insurance
• Marine Insurance
This includes cargo, hull
freight, and liability of the ship
owner to the crew, passengers, or
property of the third parties.
Inland marine, covering shipment
of goods by trucks, railways or
ferry is included in this
classification.
Kinds of Insurance
Types of Non-Life Insurance
• Casualty Insurance
This is broadest
classification which includes those
lines of business that do not fall
under Fire or marine such as
motor car, workmen’s
compensation, personal accident,
crime insurance, liability
insurance etc.
Kinds of Insurance
Types of Non-Life Insurance VEHICLE
• Motor Insurance
Any kind of insurance pertaining
to the ownership, maintenance, or use of
motor vehicle may be referred to, in
general, as automobile insurance. It also
refers to insurance on auto home,
motorcycles, scooters, mobiles, buses, road
building equipment, trailers, etc.
Automobile Insurance required in the
business of selling, repairing, servicing
motor vehicles comes in the category.
Kinds of Insurance
Types of Non-Life Insurance
HEALTH
• Health Insurance
A types of insurance
coverage that pays for medical and
surgical expenses that incurred by
the insured. Health insurance can
either reimbursed the insured for
expenses incurred from illness or
injury or pay the care provider
directly. Often included in employer
benefit packages as a means of
enticing quality employees.
Types of Life Insurance
Term Insurance
It will give you cover for limited period of time, typically one year,
it can’t be renewed when you reach the age of 70.

Permanent Insurance
It covers you for your entire lifespan, typically until you are 100
years old.
Other Insurances
Personal Accident Insurances
A particular type of insurance which provides benefits/indemnity in case of losses
to the person or physical well-being of an insured, individual arising out of accident.

Direct Losses
Accidental Loss of life or death which results out of injuries sustained by the
individual and accidental loss sight or eyes.

Indirect Losses
The individual may be disabled for some time, either totally or partially. He
could be confined in the hospital or bed-ridden at the house in which case he is unable to
engage in his usual means of livelihood.
Entities Engaged in Insurance Business

There are two different institutions engaged


in insurance business in the Philippines. These are
the public and the private. The public sector refers to
government insurance corporations and the private
sector refers to private insurance companies
(domestic and foreign) which are subject to the
provisions of the Insurance Code of the Philippines
(PD 612 as amended by RA 10607).
Entities Engaged in Insurance Business
As mandated by the Amended Insurance
Code R.A. 10607, entities engaged in insurance
company doing business in the Philippines shall
terminate its fiscal period on the 31st day of
December every year, and shall annually on or before
the 30th day of April of each year render to the
Commissioner a statement showing the exact
condition of its affairs on the preceding thirty-first
day of December. In addition, the Commissioner
may require other relevant information.
The Private Insurance Companies

According to the Insurance Commission as of November 11,


2017, there are 3 domestic composite companies (life/non-life), 2
foreign composite companies (life/non-life), 21 domestic life
companies, 6 foreign life companies, 53 domestic non-life companies,
7 foreign non-life companies, 1 domestic professional reinsurers and
6 domestic service insurance company doing or transacting an
insurance business in the county.
Top 10 Life Insurance Companies in the Philippines

1. Sun Life of Canada (Philippines) Inc.

Founded in 1895, Sun Life of Canada


(Philippines), Inc. is a subsidiary under Sun
Life of Canada (Netherlands) and offers
services a wide range of financial products:
Insurance, wealth, and asset management.
These include financial services for education,
estate preservation, health protection, income
continuation, retirement, group life, and other
insurance products.
Top 10 Life Insurance Companies in the Philippines

2. Philippine AXA Life Insurance, Corp.

Founded in 1962, Philippines AXA


Life Insurance Corporation is a major player
in the insurance industry. Their products
range from educational, health, income
protection, investments, and many others.
The company is headquartered in Makati
City.
Top 10 Life Insurance Companies in the Philippines

3. Pru Life Insurance Corp. of U.K.

Pru Life Insurance Corp. of U.K. was


founded in 1848 and has headquarters across
the world, with its main in London, UK. They
offer a wide range of retail financial products
and services, and asset management services in
Asia, which has a strong presence in the
Philippines.
Aside from life insurance products,
they also offer health and protection services
and have partnered with a long list of banking
institutions.
Top 10 Life Insurance Companies in the Philippines

4. Philippine American Life and General


Insurance Company, Inc.

Founded in 1947, Philippine American


Life and General Insurance Company, Inc.
specializes in life insurance and investment
products which include: protection, health and
accident, savings, education, and investment
plans, as well as wellness programs and
financial plans. Their main offices are located
in Taguig.
Top 10 Life Insurance Companies in the Philippines

5. BPI-Philam Life Assurance Corporation

Established in 1933, the company used to


be known as Ayala Life Assurance Incorporated. It
operates as a subsidiary of Philippine American Life
and General Insurance Company, Inc.
It offers a vast array of financial products
which include: savings, investment, educational
fund, retirement fund, personal accident, motor
insurance, income protection, and much more.
Top 10 Life Insurance Companies in the Philippines

6. BDO Life Assurance Company Inc.

Originally called Generali Pilipinas


Holding Co. Inc., BDO Unibank Inc. acquired
the company in 2016 and is currently operating
as a subsidiary of BDO Unibank, Inc. They
offer a host of financial and investment
services that range from insurance, health,
education, and other financial services.
Top 10 Life Insurance Companies in the Philippines

7. Manulife Philippines

The Manufacturers Life Insurance


Company Philippines, Inc or more popularly
known here as Manulife, is a financial
company that specializes in pension and
education, investment, medical, employee
security, corporate, student personal accident,
credit life, and other insurance plans. Their
Philippine arm is operating under Manulife
Financial Asia Limited.
Top 10 Life Insurance Companies in the Philippines

8. FWD Life Insurance Corporation

FWD Life Insurance Corporation, also


called FWD Insurance or FWD Life, is one of the fastest-
growing insurance firms in the Philippines. Launched in
2014, it has the highest paid-up capital among life insurance
companies in the country. FWD Insurance allows its
customers to manage their policies on their mobile devices
through an app called Tapp.
FWD Insurance has an array of life insurance
and health insurance plans as well as life insurance with
investment products. Among its unique offerings are a life
insurance plan that offers financial protection against
terrorist acts and another one with an investment component
in US dollar denomination.
Top 10 Life Insurance Companies in the Philippines

9. United Coconut Planters Life


Assurance Corporation

Founded in 1966, UCPB Life


Assurance Corp specializes in life insurance
underwriting. They also offer services for non-
life, healthcare, mutual fund products –
covering protection, education,
pension/retirement, and memorial insurance
plans.
Top 10 Life Insurance Companies in the Philippines
10. Insular Life Assurance Company, Ltd.

Founded in 1910, Insular Life Assurance


Company, Ltd. provides saving plans for education
and retirement; accident, health, disability, and
payer’s protection plans; and investment plans for
Filipinos.
They also offer health, group protection,
and retirement plan services. They have strong
connections with the country’s 2,868 hospitals,
outpatient facilities, and dental clinics. Their main
headquarters is located in Muntinlupa.
Function of the Business of Insurance
The business of insurance has for its function the distribution and equalization of
individual losses incident to any of life’s activities.

The functions of insurance can be studied into two parts;

a) Primary Functions

b) Secondary Functions
Primary Function
PRIMARY FUNCTION
Insurance provides certainty Insurance provides protection
01 Insurance provides certainty of 02 The main function of the
payment at the uncertainty of insurance is to provide
loss. The uncertainty of loss can protection against the probable
be reduced by better planning chances of loss. The time and
and administration. There is the amount of loss are uncertain and
uncertainty of happening of time at the happening of risk, the
and amount of loss. Insurance person will suffer the loss in the
removes all these uncertainties absence of insurance.
and the assured is given
certainty of payment of loss. The
insurer charges the premium for
providing the said certainty.
Primary Function
PRIMARY FUNCTION
Risk-Sharing
03 The risk is uncertain, and
therefore, the loss arising from
the risk is also uncertain. When
risk takes place, the loss is
shared by all the persons who
are exposed to the risk.
Secondary Function
PRIMARY FUNCTION
Prevention of loss It Provides Capital
01 The insurance joins hands with 02 The insurance provides capital to
those institutions which are society. The accumulated funds
engaged in preventing the losses are invested in the productive
of the society because the channel. The death of the capital
reduction in loss causes the of the society is minimized to a
lesser payment to the assured greater extent with the help of
arid so more saving is possible investment in insurance.
which will assist in reducing the
premium.
Secondary Function
PRIMARY FUNCTION
It Improves Efficiency It helps Economic Progress
03 The insurance eliminates worries 04 The insurance by protecting the
and miseries of losses at death society from huge losses of
and destruction of property. The damage, destruction, and death,
carefree person can devote his provides an initiative to work
body and soul together for better hard for the betterment of the
achievement, it improves not masses.
only his efficiency but the
efficiencies of the masses are
also advanced.
Form of Business Organization
“Under the Republic Act 10607”

Under SECTION 190.


• The term insurer or insurance
company shall include all partnerships,
associations cooperatives or corporation,
including government-owned or
controlled corporations or entities
engaged as principals in the insurance
business, excepting mutual benefit
associations.
Form of Business Organization
The term shall also include professional reinsurers defined in Section 288.

• Domestic company shall include companies formed, organized or existing


under the laws of the Philippines.

• Foreign Company when used without limitation shall include companies


formed, organized, or existing under any laws other than those of the
Philippines.

• SECTION 191. The provision of the Corporation Code, as amended, shall apply
to all insurance corporations now, or hereafter engaged in business in the
Philippines insofar as they do not conflict with the provisions of this chapter.
Form of Business Organization
The term shall also include professional reinsurers defined in Section 288.

• SECTION 192. No corporation, partnership, or association of persons shall transact any


insurance business in the Philippines, except as agent of a corporation, partnership or
association authorized to do the business of insurance in the Philippines

• SECTION 193. No insurance company shall transact any insurance business in the
Philippines until after it shall have obtained a certificate of authority for that purpose
from the Commissioner upon application therefor and payment by the company
concerned of the fees hereinafter prescribed.
Paid in capital of Domestic Insurance companies
Under SECTION 194.
• Except as provided in Section 289, no VEHICLE
new domestic life or non-life insurance
company shall, in a stock corporation,
engage in business in the Philippines
unless possessed of a paid up capital
equal to at least One billion pesos
(P1,000,000,000.00)
• Domestic insurance company already
doing business in the Philippines shall
have a net worth by June 30, 2013 of
Two hundred fifty million pesos.
(P250,000,000.00).
Paid in capital of Domestic Insurance companies
Under SECTION 194.
• The said company must have by December 31, 2016, an additional Three hundred
million pesos (P300,000,000.00) in net worth; by December 31,2019, an additional
Three hundred fifty million pesos (P350,000,000.00) in net worth; and by December
31, 2022, an additional Four hundred million pesos (P400,000,000.00) in net worth.

• The Commissioner may as a pre-licensing requirement of a new insurance company, in


addition to the paid-up capital stock, require the stockholders to pay in cash to the
company in proportion to their subscription interests a contributed surplus fund of not
less than One hundred million pesos (P100,000,000.00). He may also require such
company to submit to him a business plan showing the company's estimated receipts
and disbursements, as well as the basis therefor, for the next succeeding three (3) years.
Paid in capital of Domestic Insurance companies

Under SECTION 194.


• The minimum paid up capital
and net worth requirement
must remain unimpared for
the continuance of the license.
For the purpose of this section, net worth shall consist of:
• Paid-up capital;

• Retained Earnings;

• Unimpared surplus; and

• Revaluation of assets as may be approved by the


Commissioner.
Certificate of Authority

• Before a domestic insurance


company can do and engage in the
business of insurance, it must first
obtain a certificate of authority from
the insurance commissioner.
Certificate of Authority

• No such certificate of authority shall be granted


to any such company until the Commissioner shall
have satisfied himself by such examination as he
may make and such evidence as he may require
that such company is qualified by the laws of the
Philippines to transact business therein, that the
grant of such authority appears to be justified in
the light of local economic requirements, and that
the direction and administration, as well as the
integrity and responsibility of the organizers and
administrators, the financial organization and the
amount of capital, reasonably assure the safety of
the interest of the policyholders and the public.
Certificate of Authority

• Any person of good moral character,


unquestioned integrity and
recognized competence may be
elected or appointed director or
officer of insurance companies in
accordance with the pertinent
provisions contained in the corporate
governance circulars prescribed by
the Commissioner.
Certificate of Authority
• The Commissioner shall prescribe the qualifications of directors, executive officers and
other key officials of insurance companies.

• Before issuing such certificate of authority the Commissioner must be satisfied that the
name of the company is not that of any other known company transacting a similar
business in the Philippines, or a name so similar business in the Philippines or a name so
similar as to be calculated to mislead the public. The Commissioner may issue ruled and
regulations on the use of names of insurance companies and other supervised persons or
entities.

• The Certificate of authority issued by the Commissioner shall expire on the last day of
December, three (3) years following its date of issuance and shall be renewable every
three (3) years thereafter, subject to the company’s continuing compliance with the
provisions of this code, circulars, instructions, rulings, or decisions of the Commission.
Investment of Insurance Funds

Section 206 of Insurance


Code of the Philippines (P.D. 612
as amended by the RA No.
10607) is cited below to serve
the purpose of knowing where
the funds of insurance
companies are utilized for
investments.
Investment of Insurance Funds
(A) An insurance company may
purchase, hold, own and convey such
property, real and personal, as may have
been mortgaged, pledged, or conveyed
to it in good faith in trust for its benefit by
reason of money loaned by it in
pursuance of the regular business of the
company, and such real or personal
property as may have been purchased by
it at sales under pledged, mortgages or FAMILY
deeds of trust for its benefit on account of
money loaned by it
Investment of Insurance Funds
(B) An insurance company may purchase,
hold, and own the following:

• Real properties which serve as its main


place of business and/or branch offices.
• Bonds or other instruments of
indebtedness of the Government of the
Philippines FAMILY
• Bonds or other instruments of debt of
government-owned
Investment of Insurance Funds
(B) An insurance company may purchase,
hold, and own the following:

• Bonds, debentures or other instruments of


indebtedness of any solvent corporation
or institution created or existing under
the laws of the Philippines
• Preferred or guaranteed stocks of any
solvent corporation or institution created FAMILY
or existing under the laws of the
Philippines
Investment of Insurance Funds
(B) An insurance company may purchase,
hold, and own the following:

• Common Stocks of any solvent


corporation or institution created or
existing under the laws of the Philippines
• Securities issued by a registered
enterprise, as this term is defined in
Executive Order No. 226, otherwise FAMILY
known as the Omnibus Investments Code
of 1987, as amended
Investment of Insurance Funds
(B) An insurance company may purchase,
hold, and own the following:

• Certificates, notes and other obligations


issued by the trustees or receivers of any
institution created or existing under the laws
of the Philippines
• Equipment trust obligations or certificates
which are adequately secured or other
adequately secured instruments evidencing
FAMILY
an interest in equipment wholly or in part
within the Philippines
Investment of Insurance Funds

(C) Any domestic insurer which


has outstanding insurance, annuity or
reinsurance contracts in currencies other
than the national currency of the
Philippines may invest in

FAMILY
Investment of Insurance Funds
An insurance company may:

• Invest in equities of other financial institutions; and

• Engage in the buying and selling of long-term debt instruments:

• Provided, that any or all of such investments shall be with the prior
approval of the Commissioner. Insurance companies may, however,
invest in listed equities of other financial institutions without need of
prior approval by the Commissioner.
Investment of Insurance Funds
Insurance firms allowed to invest in infrastructure
projects

TRAVEL
• Insurance companies in the country have been
given the go-ahead by regulators to invest their
funds in state-led infrastructure project, in a bid to
boost the growth of the Philippine economy and
help these firms meet higher net worth
requirement imposed on them for this year.
Investment of Insurance Funds
Insurance firms allowed to invest in infrastructure projects

• Under Republic Act 10607, or the Amended Insurance Code of the Philippines, new
insurance industry players are required to have P1 billion in paid-up capital, while
existing insurance companies need a paid-up capital of P550 million by December
2016, P900 million by December 2019 and P1.3 billion by December 2022.

• The circular states that investments in infrastructure projects without guaranty or


contingent liability fund may be considered as reserve investment.
The Insurance Commission
• A governmental agency that exercises supervision and regulation over the
operation and formation of entities that will engage in the business of insurance in
the Philippines. On December 18, 1974, P.D. 612 was promulgated, ordaining and
instituting the Insurance Code of the Philippines, thereby repealing Act 2427 or
the Insurance Act.
HOME
• It is used to be an Insurance Division of the Bureau of the Treasury but during the
occupation period of the Japanese Imperial Forces, the Insurance Division became
part of the Bureau of Banking (was changed to Bureau of Financing which was
later renamed as the Bureau of Credits and Investments).
The Insurance Commission
OBJECTIVES

• To promote growth and financial


stability of insurance, pre-need, and
Health Maintenance Organization
(HMO) companies HOME

• To professionalize insurance, pre-need,


and HMO services, and develop
insurance, pre-need, and HMO
consciousness among the general
populace
The Insurance Commission
OBJECTIVES

• To establish a sound national insurance


market

HOME
• To safeguard the rights and interest of
the insuring public, pre-need and HMO
customers
The Insurance Commission
FUNCTIONS
• Promulgation and implementation of
policies, rules and regulations governing
the operations of entities engaged in
insurance, pre-need, and HMO
activities as well as benevolent features.
• Licensing of insurance, reinsurance
companies, its intermediaries, mutual
benefit associations, trusts for charitable
uses, pre-need companies, pre-need
intermediaries, and HMO companies.
The Insurance Commission
FUNCTIONS
• Conducting insurance agent’s
examinations, as well as processing of
reinsurance treaties and request for
investments of insurance companies.
• Examination/verification of the
financial condition and methods of
doing business of entities engaged in
insurance business, pre-need, mutual
benefit association, trusts for charitable
uses, and HMO companies.
The Insurance Commission
FUNCTIONS
• Evaluation and preparation of statistical report, studies, researches,
annual reports, and position papers relative to insurance, pre-need
matters, and HMO matters.
• Review of premium rates imposed by life and non-life companies,
mutual benefit associations; statistical reports of adjusters to determine
compliance with establish standards.
• Adjudication of claims and compliance involving loss, damage or liability
incurred by an insurer under any kind of policy or contract of insurance
or suretyship;
• Review and approval of all life and non-life policies, pre-need, and HMO
plans before sale to prospective clients.
The Insurance Commission
The Insurance Commission is being tasked to
implement, execute, and require compliance of
insurance companies doing business doing business
in the Philippines of the new provisions of the
Insurance Code of 1978. They are as follows:

1) Casualty Insurance
2) Suretyship
3) Consolidation and Merger of Insurance
Companies
The Insurance Commission
The Insurance Commission is being tasked to
implement, execute, and require compliance of
insurance companies doing business doing business in
the Philippines of the new provisions of the Insurance
Code of 1978. They are as follows:

4.) Mutualization of Stock Life Insurance Companies


5.) Holding Companies
6.)Compulsory Motor Vehicle Liability Insurance
7.)Mutual Benefits Association
8.)Trusts for Charitable Uses
SALAMAT PO!

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Insurance PowerPoint Template
4.) Mutualization of Stock Life Insurance Companies
(of Title 17, Chapter III)
5.) Holding Companies (of Title 20, Chapter III)
6.)Compulsory Motor Vehicle Liability Insurance (of
Chapter VI)
7.)Mutual Benefits Association (of Title 1, Chapter
VII)
8.)Trusts for Charitable Uses (of Title 2, Chapter VII)
Insurance PowerPoint Template
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TRAVEL
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