Insurance Commission (IC) monitors government-run health and crop insurance agencies as they pass Philippine law Financial Reporting Standards 4 (PFRS 4) accounting standard, said the Department of Finance (DoF).
The commission oversees both the Philippine Health Insurance Corp. (PhilHealth) and the Philippine Crop Insurance Corp. (PCIC), the DoF said in a press release on Saturday.
“PFRS 4 is the current and interim accounting standard imposed on insurance entities in the Philippines. It is based on International Financial Reporting Standards,” the DoF said.
The IC submitted a first IfFindings on PhilHealth and PCIC Last Year, Insurance Commissioner Dennis B. Funa said.
“We will continue to monitor PhilHealth and PCIC’s compliance with the recommendations made once the review is complete,” Funa added.
Secretary of Finance Carlos G. Dominguez III in December ordered PhilHealth, SSS, and the Government Services Assurance System to estimate their social benefit obligations under PFRS 4.
“Under PFRS 4, when an insurance entity receives money from its customers and enters into a contract with them to provide benefitsIfts when certain events occur, he must build up a reserve to cover his debts,” the DoF said.
“Thus, the premiums, fees and contributions institutions receive should be reported as both income and liabilities.”
Mr. Dominguez said that the liability for social benefits represents the net legal obligation of institutions to pay sums of money or guaranteed benefitsIfts to their policyholders. This includes both actual claims and the required reserve for future claims. — JP Ibanez