The Insurance Commission (IC) has permitted the use of mobile phones as distribution channels for insurance products.
Insurance Commissioner Dennis B. Funa recently issued Circular Letter 2018-07 in support of the Guidelines on Electronic Commerce of Insurance Products issued in 2014.
The framework provides for the distribution of insurance products through the Internet.
Under IC Circular Letter 2018-07, insurance companies may use mobile applications in the distribution of their products provided that its use had been previously approved.
“As far as the IC is concerned, the payment of insurance premiums by charging such amount to the prepaid load, postpaid plans and other electronic means is not (in violation) of the Insurance Code.
However, these payment methods are still subject to existing rules and regulations of the National Telecommunications Commission,” Funa said.
The mobile applications allowed for the distribution of insurance products may either be preinstalled in a mobile device, an item in a SIM menu of a mobile-network carrier, or downloadable through major digital platforms, such as Apple Store, Google Play and Microsoft Windows Marketplace.
According to Funa, the new regulation provides a flexible framework as to the mode of payment of insurance products marketed and sold through mobile phones in addition to the usual payment using a credit or debit card or through accredited online-payment systems.
“Under the enhanced framework, payment of insurance premiums availed through the use of mobile phones may now be paid through automatic deduction to existing load of the user to the network carrier, billed through the postpaid plan or deducted from existing load wallet,” he said.
He added the enhanced framework addresses the emerging trend in the distribution of insurance products through alternative channels.
“This will allow insurance providers to collaborate with telecommunications and mobile companies and to develop and introduce new and innovative integrated customer experience to the insuring public with the use of a mobile phone alone,” he said.
According to the IC, the enhanced framework allows insurance companies to offer more features of their respective products under the mobile platform, with the platform being used by a majority of Filipinos.