Serving the 'unbanked' in the Philippines
Manila Bulletin, 18 April 2010
Filipinos who believe in the importance of life insurance were surely ecstatic at the recent passage of Republic Act 10001, which reduced taxes on insurance premiums and made it more affordable for them to invest in their future.
Life insurance, as most of us know, financially prepares policy holders and their families for eventualities such as illness and death.
However, this law would probably fail to resonate among the poor and marginalised, who could not afford to pay thousands of pesos in annual insurance premiums.
In this light, the Bangko Sentral ng Pilipinas (BSP) and the Insurance Commission (IC) have found what could be an answer to this predicament by making insurance readily available to the poor.
The BSP’s Monetary Board recently approved the marketing, sale and servicing of microinsurance products by rural, cooperative and thrift banks through BSP Circular No. 683. This is in line with BSP’s inclusive finance policy to provide services to the previously “unbanked” sector.
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