Philippines Mulling Mandatory Earthquake Insurance Law

The Philippine legislature is set to propose a bill that would require residential owners and SMEs (small and medium enterprises) to insure their homes and structures against earthquakes.

According to the country's Insurance Commission, given that the Philippines sits on the Pacific Ring of Fire, it is essential to require the two sectors to insure their properties. Although a number of insurance companies do offer earthquake insurance, only the well-off may afford it.

The commission, apart from the mandated coverage against earthquakes, likewise suggested to the federal government to create an earthquake insurance company that is partly funded by the private sector as well as the state, in order that the marginalised may also avail of it.

"It's like an ordinary insurance company, but the thing is, it will be a government and private sector joint collaboration," Emmanuel Dooc, Insurance commissioner, said. The equity investments are needed for both participants to gain board seats into the proposed company.

"The company will manage the funds and risks, and will also disburse," Mr Dooc said.

Although details of the soon-to-be proposed bill were still being worked out, requiring compulsory coverage can help lower the rates of the insurance policies making it affordable for all.

"We need the critical mass and unless we require the compulsory coverage, not very many will purchase this kind of policy," he added.

Mr Dooc said the commission has talked to a number of Philippine senators. At least two have expressed support to sponsor the bill. Its counterpart lower house has yet to find a congressional member to sponsor it.

"But the House Speaker expressed support that he would help the bill," Mr Dooc said.

He added the Asian Development Bank fully supports the proposal, and has expressed willingness to provide a $70-million loan for the purpose.