The Philippine House Committee on Economic Affairs has revised the Philippine Crop Insurance Corporation (PCIC) mandate in a move that aims to expand its crop insurance coverage and encourage use of index-based re/insurance.
The revised mandate will allow the agency to provide index-based direct insurance and reinsurance policies to encourage private insurers and commercial banks to offer index-based re/insurance.
It also aims to expand the range of crops from rice only to corn, high-value commercial crops, livestock, aquaculture and fishery, agro-forestry and forest plantations and to extend life and accident insurance cover for farmers and fishermen.
Previously, PCIC wasn’t permitted to participate in reinsurance, hindering reinsurance companies from properly entering the region’s crop market.
Bohol Rep. and former agriculture secretary Arthur Yap of the Third District of Bohol, panel chairman, said; “this move will clearly signal to the private sector and capital markets that the Philippines is serious about this program to help our farmers, and secure food production in our country.
“We must also do a good job to promote a buy-in into this project with the government, primarily the departments of Agriculture, Agrarian Reform, Environment and Natural Resources and Science and Technology-Philippine Atmospheric Geophysical and Astronomical Services, legislators, LGU heads, farm stakeholders, cooperatives and mainstream finance entities,” he said, as reported by the Business Mirror.
In addition the new bill includes a mandate for the PCIC to re/insure government properties and facilities and offer weather index-based insurance specifically for excessive or insufficient rainfall.
According to industry reports, both Munich Re and Swiss Re had shown interest in investing in the region’s crop insurance, but were restricted by the PCIC charter.
Enabling global reinsurers to increase their participation in the country’s crop market would likely promote insurance uptake, providing farmers with more options for effective and affordable cover and help to achieve the PCIC’s objectives to bridge the crop insurance gap.
