Scribd
Upload
58 views

ICLO2021 - 04 - Geographical Limitation

This legal opinion from the Insurance Commission of the Philippines addresses East West Ageas Life Insurance Corp.'s queries regarding the geographical limitation provision in IC Circular Letter No. 2020-109. The Commission clarifies that insuring Overseas Filipino Workers or permanent Philippine residents employed abroad does not constitute cross-border selling and is allowed. It confirms the geographical limitation applies to all insurance products. Finally, it notes the opinion is based solely on the specific facts presented and not intended as a standing rule for other cases.

Uploaded by

Junior Miic
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
58 views

ICLO2021 - 04 - Geographical Limitation

This legal opinion from the Insurance Commission of the Philippines addresses East West Ageas Life Insurance Corp.'s queries regarding the geographical limitation provision in IC Circular Letter No. 2020-109. The Commission clarifies that insuring Overseas Filipino Workers or permanent Philippine residents employed abroad does not constitute cross-border selling and is allowed. It confirms the geographical limitation applies to all insurance products. Finally, it notes the opinion is based solely on the specific facts presented and not intended as a standing rule for other cases.

Uploaded by

Junior Miic
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Republic of the Philippines

Department of Finance
INSURANCE COMMISSION iCI
socoTEc B
1071 United Nations Avenue
[Manila

LegalOpinion (LO)No.: 1

Date: 14 Janua 2021

ATTY. CALVIN L. KOHCHET.CHUA


Chief Legal & Compliance Officer
East West Ageas Life lnsurance Corp.
15/F One World Place, 32nd Street,
Bonifacio Global City, Taguig City (1634)

SUBJECT Request for Legal Opinion on Geographical Limitation


in Accordance with lC Circular Letter No. 2020-109

Dear Atty. Kohchet-Chua:

This refers to your request for legal opinion dated 7 January 2021 on the subject,
particularly seeking clarification on the interpretation of Section 2 of Circular Letter No.
2020-109 dated 26 November 2020, which provides that, to wit:

"2. Geographical Limitation. - lnsurers shall onlv insure persons


and/or risks situated within the Philippines Remote Selling
lnitiatives may not be utilized in cross-border selling. Accordingly,
insurers shall adopt measures to ensure that no sellins
shall occur at the time of conduct of the sale." [Emphasis supplied.]

This Commission hereby quotes the pertinent portion of the subject request
hereunder, y2:

"Given the foregoing, we seek your guidance on the following queries

1. Troo has previously catered to the needs of realestafe buyers for a


Atlortgage Redemption lnsurance (lrtlRl) in partnership with banks,
i.e., buyers who purchase real esfafe on loan with the banks also
purchase |rtlRl from Troo to ensure the payment of fhese loans in
case an untoward event fakes place that prevents the buyers from
paying their loans.

A porTion of these buyers are Overseas Filipino Workers (OFW) who


come home to the Philippines, purchase real esfate and MRl, and
then return abroad for their work. lt is worthy to note that:

Head Office, P.O. Box 3589 Manila lTrunk Line: +(632) 8523-8461 to 70 lFax No: +(632) 8522-1434 lwww.insurance.gov.ph
a. The sale process, from application to approval of their hrlRl
applications, is commenced and completed when the clients are
in the Philippines. Hence, no cross-border selling is taking place;

b. There is an expectancy for these clients to return to the


Philippines, as fhey reside abroad only for work purposes.

Given the geographical limitation, specifically the first sentence on


'[i]nsurers shall only insure persons and/or risks sifuated within the
Philippines,'is Iroo now prohibited from catering to the OFW market
or other clients similarly situated?

2. Assuming the answerfo Quesfion #1 above is in the affirmative, Troo


seeks guidance on how to treat the previously issued insurance
policies, specifical ly:

a. For policies renewable on a yearly basis, do we outright reject


these applications upon renewal for being violative of the
geographical li mitation provision?

b. For policies nof renewable on a yearly basis, i.e., remain effective


for a certain number of years or until the insured reaches a cerlain
age, are we now mandated to terminate fhese insurance
policies?

3. Does the geographical limitation also apply to all types of insurance


products and not just /rrlRl or other group life products, such as traditional
insurance products and variable unit-linked (VUL) products? Similar to
item 1 as discussed, OFWs also purchase traditional insurance products
or VUL products from our company when there are [sic] on temporary
holiday here in the country or just before they are deployed abroad."

As regards the first (1't) question on whether your company, or any life insurer for that
matter, is "prohibited from catering to the OFW market or other clients similarly
situated,"the same should be answered in the negative.

This Commission hereby clarifies that, in the case of life insurance, the phrase
"persons x x x situated within the Philippines" used in Circular Letter No. 2020-
109 may also be construed as referring to perso ns who are permanent res idents of
the Philippines. even if the same are qainfullv emploved ide the Philippines
[Emphasis supplied.]

Accordingly, the sale of life insurance products to OFWs or similarly situated clientele
who are permanent residents of the Philippines, even if the same are gainfully
employed outside the Philippines, shall not be considered as 'bross-border selling",
which is prohibited under CL No. 2020-109.

Considering that the first (1't)question was answered in the negative, this Commission
finds no need to address the second (2"0) item and its sub-questions.
a

As regards the third (3'd) question on whether the Geographical Limitation provision
under Section 2 of CL No. 2020-109 applies "to all types of insurance producfs and
not just /'tlRl or other group life producfs, such as traditional insurance products and
variable unit-linked (VUL) products", the same should be answered in the affirmative.
It should be stressed that Section 1 of the same Circular Letter pertains lo "products,
regardless of amount of premium payable on the policy sold" without making any
distinction as regards the nature or type of said insurance "products".

Note that this legal opinion is based solely on the particular facts disclosed in the
request and relevant solely to the particular issues raised therein, and shall not be
used, in any manner, in the nature of a standing rule binding upon the Commission in
other cases whether for similar or dissimilar circumstances.

For your information and guidance

Very yours,

DEN IS B. FUNA
I nsurance Commissioner

You might also like