Legal Updates,  Legally Yours

Insurance at the Time of COVID-19

By: Milcielo Claire S. Villamayor

This article is originally commissioned and published by Gorriceta Africa Cauton & Saavedra.

What seemed like the peak of commercial and industrial development all over the world crashed in a matter of months—nay, in a matter of weeks. The COVID-19 pandemic is without precedent. In these trying times, life and health take precedence more than any material wealth. The Philippines, to a certain extent, is fortunate, as the Philippine Insurance Commission (“Commission”) has been taking an increasingly proactive approach in addressing possible concerns and issues in the aftermath of COVID-19.

On March 16, 2020, a day after the effectivity of the community quarantine in Metro Manila as announced by President Rodrigo Duterte, Insurance Commissioner Atty. Dennis Funa issued a circular enjoining all insurance and reinsurance companies, mutual benefit associations (“MBA”) and health maintenance organizations (“HMO”) to adopt and implement claims management policies which will relax and streamline company procedures and mechanisms aimed to facilitate immediate processing and payment of COVID-19 related claims. The circular, in addition, relaxes the notice of claim period and the period for completion of claim requirements and enhances services designed to improve the overall customer claims experience.

Meanwhile, on March 23, 2020, the Commission issued a circular which allows insurance companies to launch initiatives aimed at providing additional benefits and free insurance coverage to customers and stakeholders affected by COVID-19 without need of obtaining the prior approval of the Commission. The foregoing issuance is further supplemented by the Commission’s Circular Letter No. 2020-29 dated March 30, 2020 , which provides that all life insurance companies doing business in the Philippines shall be allowed to launch initiatives that aim to sell their existing life insurance products by utilizing Information and Communication Technology or any other technology via remote communication, which includes teleconferencing and video conferencing, provided that the proposed mechanics of the initiative shall first be filed and registered with the Commission.

Further, on March 25, 2020, the Commission ordered insurance and HMO companies to issue an extension of the coverage of the insurance policies or HMO Agreements which are about to expire during the effectivity of the Enhanced Community Quarantine (“ECQ”) subject to the written request of the insured. For insurance policies, pre-need plans or HMO Agreements which are subject to new application, renewal or negotiation prior to or during the effectivity of the ECQ, the concerned company may issue a hold cover or temporary cover for insurance or HMO Agreement coverage for at least thirty (30) days subject to the written request or consent of the insured, plan holder, client or their respective authorized representatives.

On the same date, the Commission issued a call for responsive action on the coverage of COVID-19 related conditions in health insurance policies and HMO agreements, strongly encouraging all insurance companies, MBAs and HMOs to extend the coverage of their health insurance policies and HMO agreements to customers infected with COVID-19 or any related conditions. The companies are likewise encouraged to waive certain provisions in their respective health insurance contracts and HMO agreements such as on waiting periods, healthcare access to non-affiliated networks, exclusion of pandemic or epidemic, among others, which may become barriers to healthcare access and treatment.

Nevertheless, such extension of coverage and waiver of provisions shall still be on a voluntary basis, which shall be decided upon by each concerned company based on their respective financial standing and capability. For this reason, it is still best to contact one’s respective insurance companies or their agents for confirmation and/or clarification.

Milcielo Claire “Mic” S. Villamayor is a Junior Associate at Gorriceta Africa Cauton & Saavedra.  She is a member of the Corporate and Litigation Groups of the Firm. Her practice includes general corporate law, technology law, litigation, labor law, and transportation law. 

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