The Insurance Commission is studying a proposed mandatory calamity insurance coverage for residential unit owners and small and medium enterprises (SMEs) eyed to be in place before end-2015.
Insurance Commission Chief Emmanuel Dooc, said yesterday in a briefing at the sidelines of the two-day Disaster Risk Finance APEC Roadmap for Resilient Economies that started at the SMX Convention Center in Bacolod City, that the proposed insurance product covers destruction from typhoon, flooding caused by typhoon, earthquake, and fire.
He said the IC and the Bureau of Treasury (BTr) are now reviewing the proposal for presentation "hopefully soon" to DoF Secretary Cesar Purisima.
We hope that the proposed Executive Order, if DoF will endorse it, will be with the President, hopefully, before the end of the year, Dooc said.
The proposed product was formulated together with the Insurance and Surety Association of the Philippines and World Bank's financing arm, International Finance Corporation.
Dooc said the proposed product is different from the pending bill in Congress calling for the reduction of taxes imposed on non-life companies, which to date is 27 percent annually and is the highest in the world.
To date, non-life insurance companies are required to pay 12 percent Value Added Tax (VAT), 12.5 percent Documentary Stamp Tax (DST), two percent property insurance and local government unit (LGU) tax of between 0.3-0.7 percent depending on the host city or LGU.
Dooc said they propose to tax non-life insurance companies with a five percent premium tax, which is similar to the Gross Receipt Tax (GRT) imposed on banks, and a 0.5 percent DST.
"I surveyed the players, the non-life insurance industry, and that is acceptable to them, he added.*PNA
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