What is a pre-need plan?
Are contracts, agreements, deeds or plans for the benefit of the planholders which provide for the performance of future service/s, payment of monetary considerations or delivery of other benefits at the time of actual need or agreed maturity date, as specified therein, in exchange for cash or installment amounts with or without interest or insurance coverage and includes life, pension, education, interment and other plans, instruments contracts or deeds as may in the future he determined by the Commission. (Section 4, The Pre-Need Code of the Philippines)
Are contracts, agreements, deeds or plans for the benefit of the planholders which provide for the performance of future service/s, payment of monetary considerations or delivery of other benefits at the time of actual need or agreed maturity date, as specified therein, in exchange for cash or installment amounts with or without interest or insurance coverage and includes life, pension, education, interment and other plans, instruments contracts or deeds as may in the future he determined by the Commission. (Section 4, The Pre-Need Code of the Philippines)
What is micro-insurance?
Micro-insurance fits the "tingi" culture of Filipinos since it intended to be affordable and can be sold for a short duration only.
It is product that targets low-income households or the masa to help improve our penetration rate which remains one of the lowest in Asia.
Since the target is the masa, the policy must be in plain English (or even Filipino) with no fine prints. Insofar as claims handling is concerned, the documentary requirements should be minimal and can easily be complied with.
Under the Insurance Code, it is defined as a financial product or service that meets the risk protection needs of the poor where:
To illustrate, if the minimum wage of P500, the maximum coverage is P500,000 while the premium should not exceed Php37.5 per day.
Micro-insurance fits the "tingi" culture of Filipinos since it intended to be affordable and can be sold for a short duration only.
It is product that targets low-income households or the masa to help improve our penetration rate which remains one of the lowest in Asia.
Since the target is the masa, the policy must be in plain English (or even Filipino) with no fine prints. Insofar as claims handling is concerned, the documentary requirements should be minimal and can easily be complied with.
Under the Insurance Code, it is defined as a financial product or service that meets the risk protection needs of the poor where:
- The amount of contributions, premiums, fees or charges, computed on a daily basis, does not exceed seven and a half percent (7.5%) of the current daily minimum wage rate for non-agricultural workers in Metro Manila; and
- The maximum sum of guaranteed benefits is not more than one thousand (1,000) times of the current daily minimum wage rate for non-agricultural workers in Metro Manila. (Section 187, New Insurance Code)
To illustrate, if the minimum wage of P500, the maximum coverage is P500,000 while the premium should not exceed Php37.5 per day.
Are Health Care Agreements considered an insurance contract?
Yes. A health care agreement is in the nature of non-life insurance, which is primarily a contract of indemnity. Once the member incurs hospital, medical or any other expense arising from sickness, injury or other stipulated contingent, the health care provider must pay for the same to the extent agreed upon under the contract. The insurable interest of the insured in obtaining the health care agreement was his own health. (Philamcare Health Systems, Inc. vs. Court of Appeals, G.R. No. 125678 [March 18, 2002])
In the case of Blue Cross Healthcare, Inc. v. Olivares (GR No. 169737) 12 February 2008), the Supreme Court reiterated that a health care agreement is in the nature of a non-life insurance policy. They stated further that “It is an established rule in insurance contracts that when their terms contain limitations on liability, they should be construed strictly against the insurer. These are contracts of adhesion the terms of which must be interpreted and enforced stringently against the insurer which prepared the contract. This doctrine is equally applicable to health care agreements.”
In the case of Philippine Health Care Providers, Inc. vs. Commissioner of Internal Revenue, (G.R. No. 167330 June 12, 2008), the Supreme disagreed with Philippine Health Care Providers, Inc and stated the following:
“xx its health care agreement is not a contract for the provision of medical services. Petitioner does not actually provide medical or hospital services but merely arranges for the same and pays for them up to the stipulated maximum amount of coverage. It is also incorrect to say that the health care agreement is not based on loss or damage because, under the said agreement, petitioner assumes the liability and indemnifies its member for hospital, medical and related expenses (such as professional fees of physicians). The term "loss or damage" is broad enough to cover the monetary expense or liability a member will incur in case of illness or injury. (Emphasis supplied)
Under the health care agreement, the rendition of hospital, medical and professional services to the member in case of sickness, injury or emergency or his availment of so-called "out-patient services" (including physical examination, x-ray and laboratory tests, medical consultations, vaccine administration and family planning counseling) is the contingent event which gives rise to liability on the part of the member. In case of exposure of the member to liability, he would be entitled to indemnification by petitioner.
Furthermore, the fact that petitioner must relieve its member from liability by paying for expenses arising from the stipulated contingencies belies its claim that its services are prepaid. The expenses to be incurred by each member cannot be predicted beforehand, if they can be predicted at all. Petitioner assumes the risk of paying for the costs of the services even if they are significantly and substantially more than what the member has "prepaid." Petitioner does not bear the costs alone but distributes or spreads them out among a large group of persons bearing a similar risk, that is, among all the other members of the health care program. This is insurance.” (Emphasis supplied)
Under Executive Order No. 192, Series of 2015, which transferred the jurisdiction of HMOs from the Department of Health to the IC, all HMOs are required to comply with the regulatory requirements of procuring a license to operate from the IC.
Yes. A health care agreement is in the nature of non-life insurance, which is primarily a contract of indemnity. Once the member incurs hospital, medical or any other expense arising from sickness, injury or other stipulated contingent, the health care provider must pay for the same to the extent agreed upon under the contract. The insurable interest of the insured in obtaining the health care agreement was his own health. (Philamcare Health Systems, Inc. vs. Court of Appeals, G.R. No. 125678 [March 18, 2002])
In the case of Blue Cross Healthcare, Inc. v. Olivares (GR No. 169737) 12 February 2008), the Supreme Court reiterated that a health care agreement is in the nature of a non-life insurance policy. They stated further that “It is an established rule in insurance contracts that when their terms contain limitations on liability, they should be construed strictly against the insurer. These are contracts of adhesion the terms of which must be interpreted and enforced stringently against the insurer which prepared the contract. This doctrine is equally applicable to health care agreements.”
In the case of Philippine Health Care Providers, Inc. vs. Commissioner of Internal Revenue, (G.R. No. 167330 June 12, 2008), the Supreme disagreed with Philippine Health Care Providers, Inc and stated the following:
“xx its health care agreement is not a contract for the provision of medical services. Petitioner does not actually provide medical or hospital services but merely arranges for the same and pays for them up to the stipulated maximum amount of coverage. It is also incorrect to say that the health care agreement is not based on loss or damage because, under the said agreement, petitioner assumes the liability and indemnifies its member for hospital, medical and related expenses (such as professional fees of physicians). The term "loss or damage" is broad enough to cover the monetary expense or liability a member will incur in case of illness or injury. (Emphasis supplied)
Under the health care agreement, the rendition of hospital, medical and professional services to the member in case of sickness, injury or emergency or his availment of so-called "out-patient services" (including physical examination, x-ray and laboratory tests, medical consultations, vaccine administration and family planning counseling) is the contingent event which gives rise to liability on the part of the member. In case of exposure of the member to liability, he would be entitled to indemnification by petitioner.
Furthermore, the fact that petitioner must relieve its member from liability by paying for expenses arising from the stipulated contingencies belies its claim that its services are prepaid. The expenses to be incurred by each member cannot be predicted beforehand, if they can be predicted at all. Petitioner assumes the risk of paying for the costs of the services even if they are significantly and substantially more than what the member has "prepaid." Petitioner does not bear the costs alone but distributes or spreads them out among a large group of persons bearing a similar risk, that is, among all the other members of the health care program. This is insurance.” (Emphasis supplied)
Under Executive Order No. 192, Series of 2015, which transferred the jurisdiction of HMOs from the Department of Health to the IC, all HMOs are required to comply with the regulatory requirements of procuring a license to operate from the IC.
THE DATA CONTAINED IN THIS SITE ARE FOR GENERAL INFORMATIONAL PURPOSES ONLY. THE ADVICE OF A PROFESSIONAL INSURANCE INTERMEDIARY AND COUNSEL SHOULD ALWAYS BE OBTAINED.
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THE INFORMATION CONTAINED HEREIN HAS BEEN COMPILED FROM SOURCES BELIEVED TO BE RELIABLE. NO WARRANTY, GUARANTEE, OR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, IS MADE AS TO THE CORRECTNESS OR SUFFICIENCY OF ANY REPRESENTATION CONTAINED HEREIN.