Government soon to extend insurance for OFWs

MANILA, Philippines —  The government is moving closer to releasing the guidelines on extending the availability of insurance products to overseas Filipino workers (OFWs) this year.

The Insurance Commission (IC) said it is now coordinating with the Department of Migrant Workers (DMW) on a circular that will lay out the guidelines on the new regulation.

“We are making sure that the manner in which we will be executing this in those particular jurisdictions would not be violative not only of our laws, but also the laws and rules of the host country,” IC commissioner Reynaldo Regalado said.

The insurance industry has been lobbying to lift the restrictions in the existing regulations on selling insurance policies to OFWs while they are working abroad.

Current regulations require OFWs to be physically in the country to complete a purchase of life protection products from local-based companies.

There are close to two million OFWs abroad contributing $135 billion in remittances or roughly 10 percent of the overall economy. However, a huge chunk of them do not have social protection, which was only highlighted by the pandemic.

Regalado said the guidelines were originally targeted to be released last month but there are a lot of adjustments that need to be considered.

“We are even looking at having it on a pilot basis in certain countries. We want to have one in the Middle East, one in Asia and one in North America, at least,” Regalado said.

“We also have to coordinate with the Department of Foreign Affairs,” he said.

Despite the delay, the IC is still hoping that the guidelines can be released before the year ends.

“What happens is they are all covered mandatorily before they leave. But with the second wave of arrivals and departures, that’s what we want to get as well,” Regalado said.

“And we want to make sure that what they provide is directly paid for the premium on insurance because sometimes, if they do it through relatives or friends, we are not sure that the money is being paid exactly for this insurance,” he said.

Insurance firms have been emphasizing that tapping OFWs would also improve insurance penetration, which is currently at less than two percent of gross domestic product.

This would also improve financial inclusion and social protection of a sector that remains at risk of being left unserved due to current regulatory restrictions.

Allowing OFWs to purchase life insurance from local firms while they are abroad is also helping cover the risks that would be more prevalent as they return to the country in their retirement years.