The Department of Finance (DOF) is investigating allegations by a steel manufacturer against the Insurance Commission (IC) for supposed “cartelized transactions” with banks and insurance companies.
In a statement late Wednesday, the DOF said Finance Secretary Carlos Dominguez 3rd ordered an independent probe into the complaint against the IC and its Commissioner, Emmanuel Dooc, by Steel Corp. of the Philippines (SCP).
An SCP letter-complaint addressed to President Rodrigo Duterte was published as full-page newspaper ad on November 2.
In the letter, SCP Chairman-chief Executive Officer Abeto Uy accused the IC of inaction with regards to successive letters the steel company sent to the commission over nearly eight years about the alleged failure of nine of its 10 insurance companies to settle separate claims for material damages, and business interruption losses that SCP had sought following the fires that struck the company’s Cold Rolling Mill (CRM) plant in Balayan, Batangas in 2008 and again in 2009.
“With the above actuations of the IC, it is now doubtful if the Commission indeed is there to protect the insuring public, or in actuality protects the interest of the insurance companies,” said Uy.
“Having been associated with big insurance firms for several years in the past, it is doubtful if the present Insurance Commissioner is fit to hold the position, as he might be biased in favor of insurance companies he is very familiar and friendly with,” he added.
The IC clarified that what is pending before its office are administrative cases seeking the suspension or revocation of licenses of the insurance companies that issued the insurance policies in favor of SCP on grounds of unfair claims settlement as provided under Section 241 of the Insurance Code, as amended by Republic Act 10607.
“These cases do not seek to recover any insurance proceeds issued by the insurance companies against whom the cases were filed,” it said in a reply to the complaint.
In addition, the IC said the administrative cases filed by SCP before the regulator will necessarily tackle the issue of whether or not the denial of the claims by the insurers were justified, but a ruling in favor of SCP does not mean it will receive the more than P1 billion in insurance proceeds.
“Assuming that what SCP filed before the Insurance Commission is a complaint for the recovery of the insurance proceeds, the same cannot be given due course by this Commission as the amount of claim involved exceeds the jurisdictional amount of Five Million Pesos (P5,000,000.00) that can be adjudicated by this Commission,” it said.
The IC reiterated that its jurisdiction on administrative complaints primarily involves determining the issue of whether or not insurance companies are guilty of unfair claims settlement which would warrant the suspension or revocation of the licenses of such companies.
“The jurisdiction of the regular courts in insurance claims collection cases, on the other hand, involves the determination of the issue of whether or not the claimant is legally entitled to receive the proceeds of the insurance policy and the determination of the correct amount of the insurance proceeds due,” it said.
The commission pointed out that SCP appears to be trying to insinuate that the IC is favoring the insurance companies, and that the allegation that Commissioner Dooc might be biased in favor of insurance companies is utterly “unfounded, unjustified and unreasonable.”
“It is important to note that the insurance companies involved in these cases are non-life insurance companies, which Commissioner Dooc was never associated with prior to his appointment as Insurance Commissioner.
During his previous involvement in the insurance industry, he was then employed by one (1) life insurance company only,” it said.
The DOF said Finance Undersecretary Bayani Agabin, National Treasurer Roberto Tan and Finance Assistant Secretary Mark Dennis Joven were directed to conduct the investigation into SCP’s.
Dominguez instructed the DOF officials to submit a preliminary report on November 15.