(NAR) VOL. 25 NO. 1 / JANUARY - MARCH 2014
Republic Act (RA) No. 9285 or the Alternative
Dispute Resolution (ADR) Act of 2004, Republic Act (RA) No. 9520 or the
Philippine Cooperative Code of 2008 and Insurance Memorandum Circular
1-2010, Annex 1. I (G) on the Key Features of a Microinsurance Contract,
provide for the use of ADR to resolve various types of disputes.
Chapter 6 of the 2011-2016 Philippine Development Plan (PDP)
encourages stakeholders to “x x x b) Strengthen consumer protection by
improving the implementation of existing consumer protection laws and
regulations on transparency, disclosure, consumer assistance and redress
or grievance mechanisms.” The ADReM processes, incorporated into the
Philippine Microinsurance industry, provide its stakeholders with
options to resolve disputes outside the courtroom, and to minimize the
expense and delays of litigation.
This implementing Guidelines takes reference from the ADReM
Framework for Microinsurance developed by the Technical Working Group
(TWG) led by the Department of Finance-National Credit Council and the
Insurance Commission, including representatives from Philippine Insurers
and Reinsurers Association (PIRA), Philippine Life Insurers Association
(PLIA), Philippine Chamber of Mutual Benefit Association, Inc.
(PhilMBAl), CLIMBS Life and General Insurance Cooperative (CLIMBS),
Cooperative Insurance System of the Philippines (CISP), Microfinance
Council of the Philippines, Inc. (MCPI), Rural Bankers Association of
the Philippines (RBAP), RIMANSI Organization for Asia and the Pacific,
Inc. (RIMANSI) German International Cooperation-Microinsurance
Innovations Program for Social Security (GIZ-MIPSS) and Asian
Development Bank-Japan Fund for Poverty Reduction (ADB-JFPR)
Microinsurance Project.
Section 1. Scope - The ADReM process shall only apply to
disputes arising from denied claims or those not fully paid within 10
working days from receipt of complete documents. Nothing in these
Guidelines shall preclude the parties from seeking other modes of
settlement.
Section 2. Definition of Terms
- Mediation - a process whereby the mediator facilitates
the negotiation between disputing parties to reach a voluntary, mutually
satisfactory outcome.
- Conciliation - a process whereby a conciliator takes a
vigorous and active role in assisting disputants formulate solutions in
order to reach an amicable settlement.
- Mediator/Conciliator - A qualified individual who provides conciliation-mediation services.
Section 3. Salient Features
Features |
MEDIATION |
CONCILIATION |
Process |
Structured, with specific stages |
Less structured, following the course of the particular negotiation |
Decision maker |
The parties/disputants themselves |
The parties/disputants themselves |
Basis of decision |
Needs and interests of all parties, rather than demands or positions |
Most favorable reconciliation of positions |
Involvement of the parties |
Direct and full participation in
representing their respective interests; deciding on issues; and
creating, evaluating and agreeing on options and solutions |
With the guidance and suggestions of the conciliator, direct and full participation in agreeing on options and solutions |
Party facilitator |
Process facilitator who does not give opinions, suggestions nor judgments on disputes |
Responsible for seeking a solution to the dispute, who may give opinions and advice, but not impose a judgment |
Types of possible outcomes |
“Win-win” situation; mutual acceptance |
Best compromise solution acceptable to the parties |
Section 4. Structural Elements of ADReM - The ADReM process shall be characterized by the following:
- Least cost - must be affordable for all microinsurance stakeholders.
- Accessible - must be convenient to all parties and based on procedures that are easily understood.
- Practical - must be feasible and appropriate for the
microinsurance sector, taking into account the needs of diverse
stakeholders, and existing systems and policies. Available resources
must be maximized for sustainability.
- Effective - must result in mutually acceptable agreements that are doable.
- Timely - must be resolved swiftly and within the time prescribed by rules set by the regulators.
Section 5. ADReM Procedures
Illustration: ADReM Process for Mutual Benefit Associations (MBAs) (NAR Volume 25 No. 1, January to March 2014, page 375)
- The insured client may file their complaints with the head
office or at the nearest branch office of their respective MBA. The
complaint shall include the following information:
a. Name of insured
b. Policy number
c. Name of insurance company
d. Nature of claim
e. Amount of insurance
- The recipient of the complaint shall within 24 hours notify in
writing or through electronic means the concerned officers of the MBA on
the details of the complaint and initiate the holding of the
preliminary conference.
- Within 3 working days upon receipt of notification, a
preliminary conference shall be held among the parties to agree on a
mediator-conciliator, venue and schedule of the mediation-conciliation
meeting. Should the parties not agree on the available
mediators-conciliators within the locality, parties may choose from the
roster of mediators-conciliators in neighboring cities or
municipalities.
- The mediator-conciliator shall be chosen from the official
roster or list posted in the IC website which, for this purpose, shall
be updated on a regular basis.
- If the parties fail to agree on a mediator-conciliator, venue
and schedule of the mediation-conciliation meeting, the complainant upon
presentation of a letter issued by the recipient of the complaint
indicating such, may elevate the case to a second level process of
mediation-conciliation with the association of MBAs (example PhilMBAl)
where the concerned MBA is affiliated. In the case of MBAs not
affiliated with any association, the case may directly be elevated to
the IC.
- Mediation-conciliation proceedings shall be held in a venue or in a manner mutually agreed upon by the parties.
- Only complainants and the authorized representatives of the
insurance providers directly involved in a case must be present in all
sessions. Legal counsels are not allowed during the proceedings.
- Mediation-conciliation proceedings shall be completed within 30 working days from the date of filing of the complaint.
- If settlement is reached, the parties or their authorized
representatives must sign the agreement. Authorized representatives must
present Special Power of Attorney prior to signing the agreement.
- If no settlement is reached at the MBA level within 15
working days from the date of filling of the complaint, or where the
parties fail to appear for two consecutive sessions, the parties may
elevate the case to a second level process of mediation-conciliation
conference with the association of MBAs (example PhilMBAI) where the
concerned MBA is affiliated with, upon presentation of the Certificate
of Non-Resolution issued by the mediator-conciliator.
- In case of non- settlement at the level of MBA association
within 30 working days from the date of filling of the complaint, the
parties may elevate the case to a third level process with the IC upon
presentation of the Certificate of Non-Resolution issued by the
mediator-conciliator.
- In case an MBA is not affiliated to an association of MBAs,
and where there is no settlement reached at the first level of
mediation-conciliation conference within 30 working days from the date
of filling of the complaint, the parties may directly elevate the case
to the IC upon presentation of the Certificate of Non-Resolution issued
by the mediator-conciliator.
Section 6. Fees - Mediators-conciliators may charge fees
for their services in an amount not exceeding five hundred pesos
(Php500.00) or an amount that shall be determined by the insurance
Commission. Cost sharing arrangement may be agreed upon by both parties.
Section 7. Information Campaign - MBAs shall promote
the use of mediation and conciliation as a recourse mechanism available
to all members to address any dispute.
Section 8. Reporting - MBAs shall provide information on the outcome of cases referred to ADReM processes in the Annual Statements.
Section 9. Other Governing Rules - The rules on
confidentiality, competence, impartiality, consent and
self-determination, and enforcement of settlement agreements that govern
ADReM process shall be in accordance with RA 9285 and its implementing
rules and regulation (IRR).
This circular shall take effect immediately.
(SGD) EMMANUEL F. DOOC
Insurance Commissioner