In its efforts to fast track regulatory enhancements and greater efficiency in the insurance industry, the Insurance Commission’s reorganization proposal involving modifications in the organizational structure, staffing pattern, and compensation plan has been approved by the Department of Budget and Management.

Under the approved plan, IC will create four Deputy Insurance Commissioner positions (Financial Examination, Technical Services, Legal Services, and Management Support Services), a Brokers Division, an Information Technology Division, and a Planning Division.

In particular, the Financial Examination unit is now structured by a product per division:Â Â (1) Life/MBAs/Trust (2) Non-Life (3) Pre-Need and (4) Brokers.

“With this structure, each division can focus on the specific industry assigned to them as compared to the previous set up when an assigned insurance examiner is assigned to several different product types on a given year,” Insurance Commissioner Emmanuel Dooc said.

“The new division on Information Technology will maintain and automate the systems of the Commission for efficient and effective delivery of services to the public.”

The Insurance Commission is authorized to complement its filled up positions of 175 to 244 employees for its 4 major operating groups, 19 divisions and three district offices that shall be entitled to the same allowances and benefits enjoyed by employees of agencies covered by RA No. 6758.

Furthermore, the Dagupan district office will be transferred to Baguio City while main district offices in the Visayas (Cebu) and Mindanao (Davao) will be maintained to give better accessibility to their clients outside Metro Manila.

“From being undermanned in the last few years, IC can now speed up and improve its service to the public and the industry as a result of the additional manpower,” Dooc said. “Each of these district offices can cater to local public complaints against insurance, pre-need companies, and their intermediaries.

Estimated at P137.4 annually, the increase in Personal Services cost will be sourced from the retained amount of fees, charges and other income derived from the regulation of pre-need companies and from the Insurance Fund.

“The total proposed personal service expense of the Insurance Commission as reorganized starting 2012 is only 5% of the Insurance Fund balance of P3.5 billion as of December 31, 2011 and represents 1.57% of the total tax collections from the Insurance Industry,” Commissioner Dooc said, explaining how the increase can be sustained.

Data from IC show that excluding earned interests credited to the general fund (P100 million/yr), the insurance fund consistently registered an upward trend, posting an average annual growth rate of P7.97% from 1999 to 2011 on principal alone. “We expect that this will further increase in the coming years,” he highlighted.

The 133% increase in personal services shall be a one-time event assuming that 100% of the additional headcounts proposed in the plan will be filled up during the first year. For subsequent salary increases, IC projects 2% per annum only as compared to the projected growth rate of 7.97% of the Insurance Fund.

In 2017, when personal services will increase at 2% annually, the Insurance Fund balance is expected to exhibit increasing growth rate which can fully cover the total expenses of the Insurance Commission.

Approved by the president on May 19 this year, the reorganization plan will be implemented in phases starting the month of July until positions are sufficiently filled, subject to approval by the Finance department.

Existing IC personnel will start receiving their increased salary advanced from the commission’s savings fund for reimbursement by the Department of Budget and Management.

The approved plan is expected to execute the needed reforms in the Insurance Commission in accordance with the core principles of the Insurance Code of the Philippines and its insurance regulations and supervision guidelines.
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