Body
InsurTech is composed of the words “insurance” and “technology”. It is used as a collective term for the application of modern technologies in the domain of insurance services.
Digital and mobile brokers: FinTechs belonging to this category mostly act as digital insurance brokers and provide users with an overview of their insurance contracts with their respective conditions. Some FinTechs offer very short-term insurance contracts to cover specific cases which can be concluded often spontaneously via mobile devices. Oftentimes additional consulting services are offered.
Internet of things: FinTechs belonging to this category collect data by measuring for example the driving style of the customers or through wearables the customers wear to consult on, offer and/or manage the customer’s insurances.
Introduction
Attitude of the country towards InsurTech-services
Many insurers in the Philippines have their own websites and mobile applications. Some develop their own platforms or collaborate with FinTech companies to provide various products which may be bundled with other services.
Legal affairs
Obligations and requirements to provide InsurTech-services
Philippine Insurance Commission (PIC) regulations currently require the prior approval of the PIC for mobile applications, to ensure compliance with e-commerce guidelines on selling insurance.
Currently, there is no specific license required for an insurer or for a third party to provide InsurTech-services. However, PIC regulations provide that if the third party rendering the InsurTech-services provides services which require a license as an insurer or as an insurance intermediary – e.g. insurance broker, insurance agent, insurance aggregator – such third party has to obtain the requisite license. It should also be noted that the services that an insurer can outsource is also regulated.
The Philippine insurance regulator, the PIC, encourages the adoption of InsurTech. In 2020, the PIC issued Circular Letter No 2020-73, which provides “Guidelines on the Adoption of a Regulatory Sandbox Framework for Insurance Technology (InsurTech) Innovations”.
A Regulatory Sandbox is defined under the circular as “a controlled environment with a system set up by a licensed insurance provider in collaboration with another person, natural or juridical, licensed or not by this Commission, that allows a small-scale and live testing of technical innovations operating under special circumstance(s), allowance(s), and/or other limited and time-bound supervision”.
Persons or entities intending to provide services in the Philippines would generally be considered doing business in this jurisdiction and therefore, must also register and obtain a primary license from the SEC. This entails submission of documentary requirements with the SEC depending on the corporate vehicle (subsidiary or branch) intended to be established.
Additional comments regarding the legal situation for InsurTech-services or what InsurTech’s must be aware of in this business area
Technological innovations in sectors also supervised by the PIC are encouraged. In 2021, the PIC issued Circular Letter No. 2021-11, setting out the guidelines on the adoption of a Regulatory Sandbox framework for FinTech innovations for health maintenance organisations (HMOs) and pre-need companies. In the same year, the PIC also issued Circular Letter No. 2021-64, which provides similar guidelines for the Regulatory Sandbox framework for innovations that offer new insurance products and services in the insurance, HMOs, and pre-need industries.
Economic conditions
Market size for InsurTech-services and biggest companies