The newly elected Board of Trustees of the Philippine Insurers and Reinsurers Association (PIRA) recently named eight priority areas to focus on this 2019.
At a strategic planning session at the Asian Institute of Management, the PIRA Board of Trustees led by Chairman Allan Santos charted the association's directions, identifying the eight priority areas as follows:
- Develop incentives and sanctions for its members.
- Help develop new products/markets/pools.
- Influence legislative action through lobbying.
- Restructure IC-PIRA dialogue.
- Help members understand IFRS17 and other new regulations.
- Strengthen its role as a rating organization.
- Influence IC to accept new investments.
- Conduct a trust survey.
Santos urged PIRA trustees to use not only their vast experience in the industry but more so their creative and inventive minds to come up with new solutions to what he labeled as "age-old problems".
The new PIRA Chairman noted that the association, under the leadership of his two predecessors Rebecca dela Cruz and Augusto Hidalgo Jr., has played an important role in promoting industry advocacies and helping PIRA members navigate through the major changes the industry is experiencing.
"Our organization has helped our members keep abreast of and cope with the major developments in the regulatory front, namely the revised reserving requirements, the amended Risk-Based Capital framework, the new financial reporting framework, and increases in the minimum net worth. We worked with the Insurance Commission in phasing in these regulatory changes to allow a smooth transition for the industry," he said.
Santos also reported as major accomplishments the introduction last year of the PIRA Code of Ethics, the PIRA TV Youtube Channel, the feasibility study on PIRA becoming a Self Regulatory Organization, the participation of PIRA in the discussion to lower taxes on insurance through the government's Tax Reform (TRAIN) package 4, the continuing studies on creating a natural catastrophe pool, and the partnership with other insurers in the region through the ASEAN Insurance Council.
"What can we do this year so we can build on these past achievements. What else can and should we do to make PIRA more relevant?" he added.
For his part, PIRA Executive Director Michael Rellosa said the eight priority concerns are what the new trustees see as the most relevant and doable among PIRA members in the short and medium term. He cited the first concern as an example. Rellosa said PIRA members usually do not follow certain directives mutually agreed upon by them simply because there is no motivation to do so.
"It's the simple carrot-and-stick principle. There has to be incentives or rewards for doing good and punishment for doing bad," he said.
Rellosa explained also that PIRA, with its Committees composed of the best and most experienced technical minds of the industry, should take the lead in developing new products, exploring new markets, or forming new insurance pools.
Insurance pools are groups composed of insurance companies that have banded together to take on a certain risk which is normally too big to be taken by any one of their members. An example of these is the Philippine Machinery Management Services Corporation or Macpool created to offer engineering insurance in the country.
Other priority concerns are lobbying for legislations, especially the law that would lower taxes on insurance; restructuring of the dialogue between PIRA and the Insurance Commission to make it more efficient and effective; assisting PIRA members to understand regulations such as the International Financial Reporting Standards (IFRS) for insurance companies; and the move to really serve as a rating organization for the industry, a role diluted when the Insurance Commission agreed to allow companies to come up with their own rates using the PIRA as a guide and basis for their own.
The PIRA Trustees believe that for PIRA to truly become important, it must go back to its original reason for being and develop rates that the industry would follow.
The final two concerns identified as priority by the PIRA trustees involve convincing the Insurance Commission to accept as part of companies' net worth, new forms of investments and for the association to conduct a trust survey among its members and the general public to find out the level of confidence they have in PIRA and what can be done to increase this.
Aside from Santos and Rellosa, the PIRA Trustees who joined the 2019 Strategic Planning were Frank Ramos, Butch Rosario, Andrew Co, Denden Tesoro, Shankar Sinha, Abet Santos, former trustees Becky dela Cruz, Art Reyes and Jun Benedicto, PIRA GM Roger Concepcion and heads of various PIRA committees. The session was facilitated by Jene Aliwalas of the Insurance Institute for Asia and the Pacific (IIAP).