(NAR) VOL. 25 NO. 1 / JANUARY - MARCH 2014
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. (PhilMBAI), 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
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 |
Role of third party facilitator | Independent and impartial process facilitator who does not give opinions, suggestions nor judgments on disputes | Usually an authority figure 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:
Section 5. ADReM Procedures
Illustration: ADReM Process for life and non-life commercial insurance companies
(NAR Volume 25 No. 1, January to March 2014, p. 383)
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 from time to time. Cost sharing arrangement may be agreed upon by both Parties.
Section 7. Information Campaign - Commercial insurance entities, distribution partners, agents and brokers shall promote the use of mediation and conciliation as a recourse mechanism available to all policyholders to address any dispute.
Section 8. Reporting - Commercial insurance entities 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