THE INSURANCE COMMISSION (IC) has revised the framework for passenger personal accident insurance covering public utility vehicles (PUV), introducing stricter rules on claims, fund adequacy and public disclosure.
In a circular dated Sept. 8, the regulator said the guidelines update and consolidate rules issued in 2020 under Circular Letter No. 2020-96A.
Under the framework, nonlife insurers are now required to adopt a standard passenger personal accident insurance policy form with an “all risk, no fault” provision to ensure uniform coverage and adequate protection for passengers.
Insurance pools — groups of insurance companies participating in the program — must also adhere to the premium rates set in Circular Letter No. 2018-59.
The IC also adjusted requirements for claim funds, which serve as reserves for payouts. While the minimum remains at P50 million, the regulator may now require higher amounts depending on a pool’s risk profile and coverage data.
The management company or the lead insurer in a pool will be responsible for monitoring fund levels.
If the fund falls below the prescribed threshold, all member insurers will be jointly and solidarily liable to replenish it within a period set by the commission.
The updated rules also set a stricter timeline for claims. Payments must be made within five working days from submission of requirements. Claims settled later without valid justification will be subject to a 12% annual interest rate, computed starting on the sixth working day until actual payment.
To improve accountability, management companies must submit quarterly reports detailing the number of claims received, the average processing time, delayed cases and reasons for delay and total disbursements.
The IC also ordered insurers and pools to boost public awareness. They must disseminate information about the benefits of accident insurance, claim procedures, contact details for assistance and details of the “all risk, no fault” provision to ensure passengers understand their entitlements.
The program was introduced to provide financial protection to passengers of PUVs in the event of accidents, with coverage financed through premiums included in fares. — Aaron Michael C. Sy