BIZ BUZZ: IC poised to crack whip on erring insurance firms

Looks like it’s the Insurance Commission’s (IC) turn to weed out or sanction bad actors within its sphere of influence.

This, after the ever-widening investigation into the extent of the corruption in flood control projects revealed that even nonlife insurance companies are involved.

As the Senate hearings have revealed, only a handful of closely related non-life firms wrote the insurance policies that were supposed to cover the risk of infrastructure projects not being completed on time and according to the agreed specifications.

Over the past several years, these firms were able to earn piles of money as these policies had never been activated since the projects themselves were certified as completed, even if they weren’t.

That assurance that the policies would not be used supposedly allowed these insurance companies to give “massive” kickbacks—to the tune of 70 percent of the premiums—to those who went for their companies rather than competing nonlife insurance companies who could not penetrate the market for the construction bonds covering projects of the Department of Public Works and Highways (DPWH), including flood control projects.

It should come as no surprise then, that not one of the largest nonlife insurance companies in the country are involved in the questionable projects.

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Biz Buzz sources said the IC is now poring over the records of the involved companies to determine liability.

And in the meantime, since the policies have actually been written, perhaps local government units or even the DPWH itself under the new leadership may consider making a claim, if only to recover something from these questionable projects.