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Alternative dispute resolution mechanism for microinsurance launched
By: Carina L Cayon
Thursday 3rd of October 2013

DAVAO CITY, Oct. 03 (PIA) – The Department of Finance (DOF) and the Insurance Commission (IC) recently introduced in the region an alternative dispute resolution mechanism for microinsurance to address complaints on benefit claims outside the courtroom.

The DOF and IC created the Alternative Dispute Resolution for Microinsurance (ADReM) method aiming at minimizing expenses, time and delays of litigation, and providing option for out-of-court resolution of disputes arising from denied microinsurance claims.

The mechanism also covers addressing complaints from those not fully paid within ten working days from receipt of complete documents.

However, the implementing guidelines set by IC in its Circular Letters do not stop the parties from seeking other modes of settlement.

The implementing guidelines feature ADReM’s structural process described with the acronym LAPET which stands for least cost, accessible, practical, effective and timely.

IC deputy commissioner Ferdinand George Florendo said the ADReM processes are integrated as additional component in the country’s microinsurance regulatory framework seeking to strengthen consumer protection in the microinsurance sector whose beneficiaries are mostly from the low-income group.

The ADReM implementing guidelines were issued to microinsurance providers such as the commercial insurance companies, mutual benefit associations and cooperative insurance societies that provide small and short-term insurance coverages to low-income members.

The IC has accredited 18 life microinsurance companies that shall respond to the needs and paying capacities of the low-income sector.

As part of the mechanism, a separate Circular Letter was set for the procedures of accrediting mediators-conciliators to sit in the ADReM.

The IC does the accreditation of individuals who voluntarily seek to be accredited and whose qualifications include competence, knowledge and training in the process of mediation-conciliation.

The accredited ADReM mediators-conciliators shall abide by the Code of Conduct to include ensuring that “the resolution of a dispute rests will be the responsibility of the parties concerned and that at all times will not pressure any of the parties into an agreement or make a substantive decision on behalf of any party.”

Florendo said that they will be going around the country through public seminars to assure that people will know about the existence of ADReM.

“We plan to reach out to as many as we can. We will bring the mediators-conciliators to the communities,” he stated.

The IC official said that this alternative dispute resolution method has long been conceptualized, but added that it is only now that it has been formalized.

The concept, he said, is part of the government’s effort for inclusive growth in reaching out to the poorest of the poor.

Florendo disclosed that 2.9 million Filipinos are covered by microinsurance, of which figure represents slightly more than ten percent of the 25 million Filipino populace living below poverty level. (RGA/CLC/PIA-XI)

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