House members on Tuesday expressed support for a proposal to ensure the continued financial capacity of insurers to provide industries with coverage for risks from terrorism.
The lawmakers backed the proposal embodied in House Bill 817, principally authored by Rep. Rodel Batocabe, which aims to allow the national government to help insurers cover losses in the event of a terrorist attack under certain conditions, and impose assessments on the insurance industry to recover all or a portion of the insurance payments.
The bill was filed amid the reality that many businesses are not able to purchase insurance protection against future terrorist attacks. This situation is a serious threat to industries where lenders and investors required terrorism protection for their investments. Real estate, transportation, construction, energy, and utility sectors of the economy are vulnerable, creating broader threats to the national economy, the bill states.
During the hearing presided by committee chairman Rep. Ben Evardone, Rep. Alfredo Garbin, Jr. expressed concern over the refusal of insurers to cover acts of terrorism in insurance contracts.
He said this policy is implemented through non-insurance coverage of construction companies operating in rebel-infested areas in the country.
Garbin cited several incidents of extortion allegedly committed by the New People’s Army in the Bicol region wherein public works contractors were asked to dole out money as revolutionary tax, otherwise, their heavy equipment would burned to the ground.
Garbin’s sentiment was shared by Rep. Henry Oaminal who said a similar incident occurred in his district.
Garbin said insurance companies generally exclude “terrorism” from the coverage of local businesses, in particular infrastructure contractors. He said this has created an unfair situation because foreign investors are covered by insurance provided by multilateral agencies based abroad for risks, including terrorism.
The lack of insurance protection has created a broader threat to the national economy, including President Duterte’s advocacy of a “Build, Build, Build” program, he said.
The hearing was attended by Insurance Commission (IC) Commissioner Atty. Dennis Funa, Deputy Commissioners Ferdinand Florendo and Randy Escolango, and Legal Liaison Officer Atty. Dennis Cabucos; Government Service and Insurance System Vice President for Insurance Group Atty. Ma. Obdulia Palanca and Assistant Chief Legal Counsel Atty. Lucio Yu, Jr.; and Philippine Deposit Insurance Corporation (PDIC), General Counsel, Legal Affairs Sector, Atty. Ma. Antonette Bolivar.
The committee also discussed HB 3742, seeking to raise the total indemnity claim for death or serious physical injury to any passenger or third party without the necessity of proving fault or negligence, amending for the purpose Section 378 of Presidential Decree 1460, as amended, otherwise known as the Insurance Code of the Philippines; HB 4431, seeking to amend Section 385 of PD 1460, as amended, by including fortuitous events in the comprehensive motor vehicle insurance policy and House Resolution 1633, seeking an inquiry into the actions taken by the Philippine Deposit Insurance Corp (PDIC) on the defunct Export and Industry Bank (EIB) case.(JA Menorca)
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