Buenaventura, Anne Marieline C. Section 1

Buenaventura, Anne Marieline C.
Section 1
Health insurance is among the industries in the Philippines that are susceptible to the
most significant legislation. This industry is governed by both federal public and private
insurance corporate authorities. The two primary goals of institutional reforms are to safeguard
consumers from typically damaging operators and maintain the company's overall sustainability.
The Philippines' Insurance Commission regulates the nation's health coverage sector
(IC). The Health Coverage Act designates IC as the sole laws and regulations body for the
Philippine finance industry. In the Philippines, three kinds of insurance providers are present:
1. Life Insurance Companies

2. Non-Life Insurance Companies
3. Composite Insurance Companies
There are 63 financial institutions, 56 quasi-security businesses, and nine fusion

insurance agencies in the Philippines.
The life insurance industry accounted for 72.4 % of all profitability and stability in 2018,
while the relatively non-industry took second place with a voter turnout of 27.6 %.
The Philippine insurance industry's gross premium (GPW) increased by 11.8 percent to
PHP478.6 billion (US$9.14 billion) in 2018 from PHP429.2 billion in 2017. The insurance market
contributed 72.4% of GPW, and the relatively non-financial sector contributed 27.6%.
The industry in terms of mixed rates decreased from 101.4 percent in 2017 to 97.7
percent in 2018, principally due to the rise in the combined ratio of the quasi-insurance market.
From PHP2.67 trillion in 2017 to PHP2.96 trillion (US$56.71 billion) in 2018, the total
output income climbed by 10.6%. The main driver of the company's overall stock dividends,
which climbed by 11.9% to PHP165.8 billion (US$3.18 billion) in 2018 from PHP148.1 billion in
2017, was the rise of the health and quasi-insurance sectors.
The company's entire valuation increased from PHP1.03 trillion in 2017 to PHP1.14
trillion (US$21.68 billion) in 2018.
In 2018, the industry's solvency rate rose from 372.1 percent to 384.6 percent.
Major updates:
The IC made public the updated Implementing Rules and Regulations (IRR) of the
Insurance Code in September 2019.
The new IRR aims to promote comparatively better flexibility and fair banking services
by providing all delivering business value with an excellent balance to prosper and protect the
public from immoral and fraudulent conduct.
The following are some of the significant modifications in the updated IRR:
• Increased the percentage of overseas investment permitted in a particular

insurance provider to 100%.
• Expanded permitted overseas investment in a cluster of insurance firms to
100%
Section 1
• Raised permitted external shareholding in reinsurance companies to 100%
• Enhanced permitted external shareholding in a domestic insurance firm to
100%
Key figures:
According to premiums issued in 2018, the following ten life insurance providers are the
top ones in the Philippines:
1. Insurance Company BPI/MS

2. UK-based Pru Life Insurance Corporation
3. Sun Life of Canada, Inc., Philippines
4. Company of Philam Life Insurance
5. China Bank Life Assurance Company of Manulife
6. The AXA Philippines Inc.
7. Company Insular Life Assurance Ltd.
8. The FWD Life Insurance Company
9. Inc. BDO Life Assurance Co.
10. MBTC Life Assurance Company is a subsidiary of Metropolitan Bank & Trust
Company.
According to policies issued in 2018, the following ten non-life insurance firms in the
Philippines are the top ones:
1. Inc. Manila Insurance Company

2. Insurance and Surety Pioneer Corporation
3. Inc. Malayan Insurance Company
4. Insurance Company BPI/MS
5. AXA Life Insurance Corporation of the Philippines
6. a company called Solid Guaranty
7. Corporation for First Metro Investment
8. Life insurance provided by United Coconut Planters Corporation
9. Insurance Provident Corporation
10. Eastern West Banking Company
Financial reporting principles apply to the sector: The financial sector is subject to

several reporting requirements. A few of these requirements are:
• Accounting for Investments in Securities, including Debt and Equity

• Reinsurance Contract Accounting
• Accounting for Contracts with Limited Duration
• Taking into account long-term contracts
• Insurance Agreements
• Share-Based Compensation
• Rentals
• Income from Customer Contracts
Factors for audits:

Section 1
There are several identifications of issue categories to consider while inspecting an
insurance provider. These crucial auditing topics include:
These crucial auditing topics include:
• Reinsurance agreements
• Insurance agreements
• Share-based compensation
• Letting accounting
• Revenue acknowledgment Audit techniques:
When assessing an insurance provider, many assessment techniques can be used.

Such preceded by deep analysis include, among others:
• Reviewing the investment portfolio.

• Examine the reinsurance agreements.
• Examine insurance agreements
• Examine share-based compensation
• Examine lease accounting
• Examine the revenue recognition
Critical audit matters: When conducting this project for an insurance provider, it is
essential to take the following into account:
• The portfolio's investment valuation

• Reinsurance contracts' accounting
• Insurance contracts' accounting
• Accounting for share-based compensation
• Leases are accounted for
• Revenue acknowledgment
Considerations and takeaways
1. One of the American sectors subject to the most regulation is insurance.

2. The Insurance Commission (IC) oversees the insurance sector in the
Philippines.
3. In the Philippines, there are three kinds of insurance firms: composite
insurance firms, non-life insurance firms, and life insurance firms.
4. The updated Implementing Rules and Regulations (IRR) of the Insurance
Code were published by the IC in September 2019.
5. A few of the substantial improvements in the amended IRR have included the
following: 100 percent foreign direct possession is now permitted in solitary
insurance providers, 100 percent foreign holdings are already permitted in
groups of insurance providers, 100 percent foreign possession is now
permitted in the insurance company, and 100 percent foreign possession is
now permitted in subjugated insurance providers.
6. A few audits reporting categories, including the equity investment, insurance
agreements, implied warranties, continue sharing compensation, and
bookkeeping for leasing, should be factored into the equation while inspecting
an insurance carrier.
7. When evaluating an insurance carrier, several audit methods can be carried
out, including assessing the investment strategy, underwriting agreements,
Section 1
bank guarantees, continuing sharing payments, leasing accounts, and
revenue recognition.
References:
McGeachy, D., & Arnold, C. (2017, December 12). Auditor Reporting Standards
Implementation: Key Audit Matters. IFAC.
https://www.ifac.org/knowledge-gateway/supporting-international-standards/discussion/
auditor-reporting-standards-implementation-key-audit-matters
Key Audit Matters: what they are and why they are important. (2022). Google.com.
https://www.google.com/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiTvKTunvv4A
hX7TGwGHXeZBq4QFnoECEsQAQ&url=https%3A%2F%2Fwww.ey.com%2Fen_ph
%2Fassurance%2Fkey-audit-matters--what-they-are-and-why-they-are-
important&usg=AOvVaw3aqGEKsWc-TsXZ4O-QWwvf
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Buenaventura, Anne Marieline C.

1. Life Insurance Companies

There are 63 financial institutions, 56 quasi-security businesses, and nine fusion

• Increased the percentage of overseas investment permitted in a particular

1. Insurance Company BPI/MS

1. Inc. Manila Insurance Company

Financial reporting principles apply to the sector: The financial sector is subject to

• Accounting for Investments in Securities, including Debt and Equity

Factors for audits:

When assessing an insurance provider, many assessment techniques can be used.

• Reviewing the investment portfolio.

• The portfolio's investment valuation

Considerations and takeaways

1. One of the American sectors subject to the most regulation is insurance.

McGeachy, D., & Arnold, C. (2017, December 12). Auditor Reporting Standards

Implementation: Key Audit Matters. IFAC.

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