DILG: Insurance companies may transact business sans LGU accreditation

April 30, 2017 - 3:17 PM
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DILG officer-in-charge Catalino S. Cuy. FILE PHOTO FROM DILG-CAR
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MANILA – The Department of the Interior and Local Government (DILG) has reminded local government units (LGUs) to abide by the provisions of the law which allows duly-licensed insurance companies to transact insurance business anywhere in the country sans any accreditation scheme from LGUs.

DILG Secretary OIC Catalino S. Cuy said Republic Act No. 10607, otherwise known as “An Act Strengthening the Insurance Industry”, expressly states that insurance companies with a valid Certificate of Authority issued by the Insurance Commissioner should not be hindered from doing business by any LGU for whatever reason including under any kind of insurance.

“We would like to continue to streamline business processes at the local levels that is why our LGUs must always foster a business-friendly environment. We therefore advise LGUs to honor the Certificate of Authority issued to insurance companies because it is their passport to doing business anywhere in the country,” Cuy said.

He said that any local legislation imposing restrictions on any insurance company with a valid IC certificate should be deemed as null and void.

Sec. 193 of Republic Act No. 10607 specifically states that:

“No insurance company issued with a valid Certificate of Authority to transact insurance business anywhere in the Philippines by the Insurance Commissioner, shall be barred, prevented, or disenfranchised from issuing any insurance policy or from transacting any insurance business within the scope or coverage of its Certificate of Authority anywhere in the Philippines, by any local government unit or authority, for whatever guise or reason whatsoever, including under any kind of ordinance, accreditation system or scheme. Any local ordinance or local government unit regulatory issuance imposing such restriction or disenfranchisement on any insurance company shall be deemed null and void ab initio.”

Cuy cited a recent directive to local chief executives advising them of such provision when issuing business permits to insurance companies.

He also directed all Provincial Governors, Vice Governors, City and Municipal Mayors, ARMM Regional Governor, and DILG Regional Directors to cause the widest dissemination of the said memorandum circular to all LGUs within their respective jurisdiction and to strictly comply with such order.