MICROCAPITAL BRIEF: “Alternate Dispute Resolution for Microinsurance” (ADReM) Introduced in Philippines to Mediate Disputes Out of Court

The Philippines Department of Finance (DOF) and the Philippines Insurance Commission (IC), the country’s insurance regulatory authority, have introduced an “Alternate Dispute Resolution for Microinsurance” (ADReM) system to resolve complaints regarding microinsurance claims outside the court system [1]. The ADReM process is intended to be “least cost, accessible, practical, effective and timely.”  ADReM will address complaints regarding unpaid claims as well as those that have not been fully paid within ten days of receipt of the required paperwork. ADReM guidelines apply to microinsurance providers, including commercial insurance companies, mutual benefit associations and cooperative insurance societies. IC will accredit individuals who will act as mediator-conciliators to administer ADReM.

IC has accredited 18 microinsurance companies and reports that approximately 2.9 million Filipinos are covered by microinsurance as of 2013.

By Nisha Koul, Research Associate

About The Philippines Department of Finance: Established in 1897 by the Philippines Revolutionary Government, the Department of Finance (DOF) formulates the nation’s fiscal policy. DOF’s functions include supervising the country’s public debt, overseeing government revenue collections and managing the fiscal resources of the government.

About Insurance Commission (IC) of the Philippines: The Insurance Commission (IC) of the Philippines was created in 1949 and is mandated by law to regulate and supervise the country’s insurance industry. Its mission is to “protect the interest and welfare of the insuring public and to develop and strengthen the insurance industry.” Specifically, its objectives are promoting the growth and financial stability of insurance companies; maintaining a minimum standard of performance for insurance companies; educating the public about insurance; establishing a sound insurance market; and safeguarding the rights and interests of the insured. IC’s vision is that every Filipino will have the opportunity to be covered by insurance by the year 2020.

Sources and Additional Resources:

[1] Philippine Information Agency, “Alternative dispute resolution mechanism for microinsurance launched,”  http://news.pia.gov.ph/index.php?article=1561380787885

MicroCapital Story, April 4, 2013, “MicroEnsure to Retail “Triple 10” Microinsurance in the Philippines,” https://www.microcapital.org/microcapital-brief-microensure-to-retail-triple-10-microinsurance-in-the-philippines/

MicroCapital Story, April 22, 2012, “Philippine Prudential Life Insurance Company Records Increase in Paid Microinsurance Claims, Premiums,” https://www.microcapital.org/microcapital-brief-philippine-prudential-life-insurance-company-records-increase-in-paid-microinsurance-claims-premiums/

MicroCapital Story, April 4, 2012, “Microinsurance Reaches 3m in the Philippines, More Expansion Predicted in Microcredit as Commercial Banks Enter Microfinance,” https://www.microcapital.org/microcapital-brief-microinsurance-reaches-3m-in-the-philippines-more-expansion-predicted-in-microcredit-as-commercial-banks-enter-microfinance/

MicroCapital Story, March 1, 2012, “Philippine Government Promote Microinsurance With Support from Asian Development Bank (ADB),” https://www.microcapital.org/microcapital-brief-philippine-government-promote-microinsurance-with-support-from-asian-development-bank-adb/

MicroCapital Story, February 13, 2012, “Microcredit, Microinsurance Client Numbers Rising in the Philippines,” https://www.microcapital.org/microcapital-brief-microcredit-microinsurance-client-numbers-rising-in-the-philippines/

MicroCapital Universe Profile, The Philippines Department of Finance, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Philippines+Department+of+Finance+%28DOF%29

MicroCapital Universe Profile, Insurance Commission of the Philippines, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Insurance+Commission+%28IC%29+of+the+Philippines

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