Asean Marine, Aviation and Goods in Transit insurance

Asean insurers offering cross-border Marine, Aviation and Goods in Transit (MAT) insurance have been identified as servicing one of the three lines of insurance important to the development of Asean economies under the Asean Insurance Integration Framework (AIIF).

The other two are: catastrophe reinsurance and reinsurance. In this regard, Asean member-countries have committed to “open” or to “liberalize” cross-border MAT insurance to further Asean insurance integration and to lower the costs to businesses. This was part of the seventh package of financial sector commitments under the Asean Framework Agreement on Services (Afas), which was ratified on June 23, 2016. This is seen as facilitating intra-Asean trade. The policy objective is obvious, as the MAT insurance sector is related to cross-border trade. The Asean Economic Community (AEC) was formally launched on December 31, 2015, as a major milestone toward regional economic integration.

Under the AIIF, MAT insurance has been defined as “insurance of risks comprising (a) international maritime shipping, commercial aviation and freight, with such insurance to cover one or both of the following: i) the goods being transported; ii) the vehicle transporting the goods and any liability arising therefrom; and (b) goods in international transit.”

Likewise, under the AIIF, MAT insurance policy is defined as “a policy of insurance—a) upon vessels or aircraft, or upon the machinery, tackle, furniture or equipment of vessels or aircraft; b) upon goods, merchandise or property of any description whatsoever on board vessels or aircraft; c) upon the freight of, or any other interest in or relating to, vessels or aircraft; d) against damage arising out of or in connection with the use of vessels or aircraft, including third-party risks; e) against risks incidental to the construction, repair or docking of vessels, including third-party risks; or f) against transit risks [whether the transit is by sea, inland water, land or air, or any combination thereof] including risks incidental to the transit insured from the commencement of the transit to the ultimate destination covered by the insurance.”

Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination. This covers marine cargo insurance and marine hull insurance. Air cargo insurance is a type of policy that protects a buyer or seller of goods being transported through the air. It reimburses the insured for items that are damaged, destroyed or lost. Nowadays, marine insurance is often grouped with Aviation and Transit (cargo) risks, and in this form is known by the acronym “MAT.”

The Asean objective is to allow an insurer domiciled and licensed to offer MAT insurance in its home jurisdiction to also offer such insurance to persons in the participating jurisdictions on a cross-border basis. However, there is no existing Philippine law that deals separately and specifically with cross-border MAT insurance. Under the existing Amended Insurance Code, a licensed nonlife insurance company can offer MAT insurance subject to compliance with the licensing requirements of the Amended Insurance Code. In other words, commercial presence in the country is required. Hence, a foreign company that seeks to transact MAT insurance business in the Philippines would need to have commercial presence in the Philippines. Once licensed, that insurance company can then request for the approval of a MAT insurance policy for distribution in the country.


Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail:


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