Philippine regulator issues outsourcing rules for insurers

Philippine regulator issues outsourcing rules for insurers | Insurance Business

Philippine regulator issues outsourcing rules for insurers

The Philippines’ insurance regulator has prohibited insurance companies from outsourcing functions directly related to insurance decisions, such as underwriting risks or approving claims.

According to the Insurance Commission (IC), the order aims to protect the public by restricting the functions, which also includes solicitation and loss adjustment activities, to licensed insurers, agents, and brokers.

Furthermore, the order states that insurers will be ultimately responsible to their policyholders for any outsourced activities and actions performed by business process outsourcing (BPO) providers they have contracted. It also requires BPO firms to comply with relevant data privacy laws as they may have access to clients’ personal information.

“We recognize that insurance companies can benefit from outsourcing their business processes - such as [through] improved productivity of existing operational capacity and trimmed down overall capital expenditures,” said IC head Dennis Funa.

“We expect insurers to take into account the general guidelines set forth in the new regulation in formulating and monitoring their outsourcing arrangements for the protection of the interests of their existing and potential policyholders.”