The Philippine life insurance industry ranks second out of the 10 ASEAN economies in the Liberalization Index, a Millman study showed.
The Liberalization Index study conducted by Millman, a global provider of actuarial and related products and services, measured the openness of the life insurance regulatory regimes of the ASEAN economies with regard to their alignment with international standards.
Finance Secretary Cesar V. Purisima said, “We are pleased to find our life insurance industry’s placement in the ASEAN rankings. This affirms that our rapidly growing sectors are underpinned by sound regulatory regimes and enabling environments.”
The Millman ASEAN Liberalisation Index (MALI) is the outcome of the study, which reflects the stages of development of insurance markets in each member state.
The MALI is published in a report entitled “Potential Implications of the ASEAN Economic Community for the Life Insurance Industry.”
Each ASEAN economy is assessed based on their relative stage of development of the life industry, covering eight, namely product, development, distribution, investment, sophistication of capital regime, policyholder protection, foreign ownership, new licenses, and talent mobility.
An economy with a high score signifies a perfectly liberal market while a low score indicates a more tightly controlled industry, with typically less exposure to foreign participation.
The Philippines ranked second next to Singapore, with a score of 58 in terms of openness of life regulatory regimes in the region.
“This is a clear indication that our life insurance industry regulatory regime is robust and that the industry is very much capable to go head to head with other life industries in ASEAN. We are better prepared than most of our neighbors and ready to face the challenges of the approaching ASEAN Economic Community (AEC) integration,” said Insurance Commissioner Emmanuel Dooc.
Regulators in member economies are called to introduce minimum standards of operation for the life insurance industry in preparation for the AEC integration.
The area of sales practices, key skills, and creating capital markets are aspects that could be further developed in achieving minimum standards for the life insurance industry, towards a smoother economic integration.
“Once greater cooperation is shown to be beneficial to member countries, and with the introduction of common minimum standards in key areas, it would then be easier for the AEC to target more ambitious goals in the future,” Millman said.(PNA)