The Insurance Commission (IC) is closely monitoring the compliance of the Philippine Health Insurance Corp. (PhilHealth) and the Philippine Crop Insurance Corp. (PCIC) with the directive of the Department of Finance (DOF) to adopt current Philippine accounting standards.

IC has also completed a comprehensive audit of the books of the Social Security System (SSS), the first time that the pension fund’s financial condition was examined by the Commission.

Insurance Commissioner Dennis B. Funa said the audit of the SSS for the year ending 2017 was completed in 2020.

“The IC is now closely monitoring the compliance of PhilHealth and PCIC after our initial findings were transmitted to them last year,” Funa said in his report to Finance Secretary Carlos G. Dominguez III.

“We will continue to monitor the compliance of PhilHealth and PCIC with the recommendations made after the examination is completed,” he added.

Dominguez, who is also concurrent chairman of the Social Security Commission (SSC), commended the IC for its examination of the financial condition of the SSS, which has led to the pension fund’s adoption of the Philippine Financial Reporting Standards (PFRS) 4.

Last December, Dominguez directed PhilHealth, SSS, and the Government Service Insurance System (GSIS) to estimate their social benefit liabilities in accordance with PFRS 4 beginning 2020.

As chairman of the board of PCIC, Dominguez also directed the state-run corporation to adopt PFRS 4 in submitting its financial reports.

PFRS 4 is the current and interim accounting standard imposed on insurance entities in the Philippines. It is based on the International Financial Reporting Standards (IFRS).

Under PFRS 4, when an insurance entity receives money from its clients and enters into a contract with them to provide benefits when certain events occur, it must set aside a reserve to cover its liabilities.

Thus, premiums, fees, and contributions that the institutions receive must be reported both as income and liability, Dominguez said.

The examination by the IC of the financial condition of SSS and GSIS is mandated in their respective charters.

Other government insurance institutions such as PhilHealth and PCIC are also subject to the IC’s examination.

Funa said in his report to Dominguez that the IC has also issued a circular last year to ensure that insurance entities remain consistent in complying with globally-accepted regulatory standards.

The IC has allowed the online submission of reportorial requirements, adopted an electronic payment system, and is now in the process of putting in place a shared cyber defense solution with other government insurance institutions, among its other digitalization initiatives.

Source:

Chino S. Leyco, Manila Bulletin
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