ACC125 AUDITING & ASSURANCE: SPECIALIZED INDUSTRIES BSA3

IINSURANCE

Written Report
Gordon College
Olongapo City

In Partial Fulfillment of the Course

Requirements in ACC 125 Auditing and Assurance: Specialized Industries

Callo, John Lester

Edquiban, Lenar Dean
Matias, Joan Nicole

MARCH 8, 2024

CHAPTER TITLE: INSURANCE

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Insurance is a contract, represented by a policy, in which a policyholder receives financial protection or

reimbursement against losses from an insurance company.
-A lot of people are scared after hearing the word insurance; they get scared of the money they get to use
or that they do not need it. Insurance as per the Merriam-Webster dictionary is a “means of guaranteeing
protection or safety.” Protection of your property, life, health, money, and many more.
Insurance is great for what-if situations we do not like to happen like “What if I get sick?,” “What if my
luggage gets stolen?,” “What if my car gets broken?”, “What if I die early.” Or for preparing like when
we get old or when the kids are going to school.
A lot may think they won’t need it as it is less likely to happen but we don’t really know what the future
entails for us. So it is better safe than sorry. Insurance is an investment, not an expense. When bad things
or accidents happen, the cost of insurance is sometimes less than 10% of the expense you may incur if
you don’t have one.
We will be discussing the types of insurance policies in the Philippines and you can think which one
would be most suitable to get’ if not all.

11 TYPES OF INSURANCE IN THE PHILIPPINES

1. Life Insurance
Provides financial support to beneficiaries upon the death of the insured. In case the principal has died, a
lumpsum amount will be given to the principal’s family.
2. Term Life insurance
You will get benefit in case the policyholder dies, if s/he doesn’t die in the period of coverage, you may
have nothing back. The terms depends on you – what age you will purchase or for how many years.
3. Whole Life Insurance
The insurance is good for the entire lifetime of the policyholder, however premiums should be paid,
sometimes until the policyholder dies. When the policyholder dies, the death benefit will be given to the
beneficiaries.
4. Universal Life Insurance
In universal life insurance, not only will the policyholder have death benefits but also you can have
savings. To make it simple, let’s say you need to pay 20,000 a year – a portion will be on your premium
let’s say 15000 and the rest are invested; you will be paying for 30 years and until your death, the savings
plus interest will cover you. So you won’t have to pay anymore like the whole life insurance but still get
benefited.
5. Variable Life Insurance
Variable life insurance is a bit similar to universal, however, you could control where to invest. While the
interest in Universal is stagnant, in the variable you could go higher but it’s a bit risky since you may get
losses too.
Having life insurance is really good especially for breadwinners. Let’s say Person A pays 5,000 monthly
for 30 years = Php 1,800,000 all in all. In case the policyholder dies, your beneficiary will have more than

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Php 1,800,000 that can cover Person A’s funeral expenses, house expenses, and children’s education even
if the breadwinner isn’t there anymore.
6. Health Insurance
Most people have PhilHealth, insurance under the Philippine government. However, it is sometimes not
enough especially if you are many in the family or if you have a weak immune system.
If you are working, most employers would give you health insurance which they fully or partially pay.
This is in case of emergencies like getting sick or injured at work, then you can get to spend money. Also,
some include free medical check-up (laboratories, x-rays) to see whether you are still physically fit or if
you have conditions that may affect you in the long run or is contagious (e.g. TB.) You can also have free
tooth extractions and cleaning.
Health insurance can also let you cover your immediate family at an additional price so that you can also
pay less on their check-ups or incase they get hospitalized.
For example, Person B has health insurance of Php 5,000 a year. He needs to get his tooth extracted and
the regular cost is Php 1,000 but free with medical insurance. He gets hospitalized for 10 days and the
room fee is Php 500.00 a day but free according to his policy. So the expenses without insurance are Php
6,000 but since he paid Php 5,000 he saved Php 1,000.00 and much more if we include doctor’s fees and
laboratories. So health insurance is definitely great insurance to have.
7. Educational Insurance
Tuition fees are increasing and we are not sure if we could afford to let our kids go to prestigious schools
or universities, so we might as well invest in their future. Educational Insurance lets you save money in
advance and you can cash-outs for tuition payments or school allowance and education benefits.
You could save for 10 years for your child’s brighter future. If you pay Php 20,000 monthly for 10 years
then you could have Php 2.4M, not including of interests, so if tuition fee is Php 100,000 in the future,
you could definitely be ready – it could include allowance, housing, uniforms and for projects. It’s a great
investment for your kid’s future.
8. Vehicle and Accident Insurance
If you have a car or a motorcycle, then you need to have this insurance. In case your car gets damaged or
you or your family members riding the vehicle gets in an accident. The cost will depend on your car’s
cost and how many persons are in the vehicle. There might be deductibles too.
9. Compulsory Third Party Liability
If you have a vehicle, a CTPL is a compulsory requirement when renewing the license of the vehicle. For
renewal, you need Emission tests, MVIS, CTPL, and payment.
10. Property Insurance
The most common insurance for homeowners is property insurance in case of accidents like fire, theft,
earthquake, floods and many more. If your area is prone to fire or flood, then it is better if you own this so
that if such happens, you don’t start from scratch. It covers the house and what is inside. You’ll have
money to repair your house and buy new equipment.
11. Travel Insurance

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Off to travel? Ride a plane or a boat or go to another country? Well, you need to have travel insurance
that covers you in case you will lose your baggage, you’ll have delays or you get into an accident. I
recently encountered a car accident in Pakistan, and I was glad that I have Safetywing Insurance by my
side that covered all my medical expenses.
Top 15 Best Insurance Companies in the Philippines (Must Have in 2024)
1. Sun Life
Sun Life of Canada (Philippines), Inc. is the number one life insurance company in the Philippines in
terms of invested assets – traditional and variable life insurance. It offers a wide range of health, life
protection, and wealth management products that cater to individual and institutional clients’ unique
needs.
2. AIA Philippines
AIA Philippines American Life and General Insurance Company, Inc. is formerly known as Philam Life.
It is a subsidiary of AIA Group. The largest independent publicly listed pan-Asian life insurance group in
the world today. Aside from life insurance, AIA offers its clients health insurance, education plans, and
retirement solutions.
3. Pru Life UK
Pru Life Insurance Corporation of UK is one of the top insurance companies in the Philippines. It is a
subsidiary of Prudential PLC, one of the world’s leading financial services groups. Pru Life UK was
established in the Philippines in December 1996 and is currently one of the fastest-growing life insurance
companies in the country.
4. AXA Philippines
AXA is among the most popular insurance providers in the Philippines. It is a subsidiary of AXA Group,
a giant insurance and asset management firm in France. AXA offers life and general insurance products
for almost 2 million individuals.
5. InLife
Insular Life Assurance Company, Limited (InLife) is the first and largest Filipino life insurance company
in the Philippines. It was founded in 1910 and provides financial protection, savings, investments, and
retirement plans to Filipinos. InLife reported PHP9.35 billion in gross benefits and claims paid in 2022.
6. Manulife
Manulife Philippines is a subsidiary of Manulife, a Canadian company founded in 1887 that is now one of
the world’s biggest insurers. Manulife Philippines was established in 1907. It offers insurance, group
plans, and investment management.
7. BPI-AIA
BPI AIA Life Assurance Corporation is a business partnership between two well-known financial
companies in the Philippines: AIA Philippines and the Bank of the Philippine Islands (BPI).
8. BDO Life

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BDO Life Assurance Company, Inc. is the insurance business segment of BDO Unibank, the Philippines’
largest bank in terms of assets, deposits, capital, and loans. It offers comprehensive insurance coverage,
education, savings, retirement, and estate planning.
9. Allianz PNB Life
Allianz PNB Life Insurance, Inc. is a strategic partnership between the Philippine National Bank and
Allianz Group, a giant financial company in Germany. It’s also among the fastest-growing life insurance
firms in the Philippines.
10. Manulife China Bank Life
Manulife Philippines has partnered with China Bank to launch Manulife China Bank Life Assurance
Corporation, a financial platform offering outstanding insurance products to individuals and groups.
11. Sun Life Grepa Financial
Sun Life Grepa Financial is a business alliance between Sun Life Philippines and the Yuchengco Group
of Companies. YGC, a massive Philippine conglomerate, also owns RCBC, a famous banking empire.
12. FWD Philippines
FWD Philippines is a subsidiary of FWD Group, a Pan-Asian life insurance firm launched in 2013. FWD
Group has over 10 million customers across Hong Kong, Macau, Japan, Thailand, Philippines, Indonesia,
Vietnam, Singapore, Malaysia, and Cambodia.
13. Cocolife
United Coconut Planters Life Assurance Corporation (Cocolife) is the largest Filipino-owned stock life
insurance firm and the first company of its kind to be ISO-certified. It’s also among the best healthcare
program providers in the country.

Insurance Commission (Laws)

Vision
Strong, sustainable and globally competitive regulated entities, as pillars of the economy, to serve every
Filipino.
Mission
We are committed to implement prudent and progressive regulatory and supervisory policies at par with
international standards.
Insurance touches all our lives in a multitude of ways. It is an essential element in our present day life,
securing our standards of living and the stability of our families, as well as our property rights. Everyone
in this country feels the protecting arm in some form of insurance and most of us are affected by the many
forms of its protection.

Contract of Insurance
Provisions

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A “contract of insurance” is an agreement whereby one undertakes for a consideration to indemnify

another against loss, damage or liability arising from an unknown or contingent event.
Parties
Every person, partnership, association, or corporation duly authorized to transact insurance business as
elsewhere provided in this code, may be an insurer.
Insurable interest
Every person has an insurable interest in the life and health:
(a) Of himself, spouse and children;
(b) Of any person on whom he depends wholly or in part for education or support
(c) Of any person under a legal obligation to him for the payment of money
(d) Of any person upon whose life any estate or interest vested in him depends.
Concealment
- A neglect to communicate.
- whether intentional or unintentional entitles the injured party to rescind a contract of insurance.
Representation
- Oral or written
- may be made at the time of, or before, issuance of the policy.
Policy
The written instrument in which a contract of insurance is set forth, is called a policy of insurance.
Warranties
Either expressed or implied.
Premium
An insurer is entitled to payment of the premium as soon as the thing insured is exposed to the peril
insured against. Notwithstanding any agreement to the contrary, no policy or contract of insurance issued
by an insurance company is valid and binding unless and until the premium thereof has been paid, except
in the case of a life or an industrial life policy whenever the grace period provision applies.
Loss
An agreement not to transfer the claim of the insured against the insurer after the loss has happened, is
void if made before the loss except as otherwise provided in the case of life insurance.
Reinsurance
A contract of reinsurance is one by which an insurer procures a third person to insure him against loss or
liability by reason of such original insurance.

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Amended Insurance Code (R.A. 10607)

- Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand twelve.
- The revisions embodied in the Amended Insurance Code are intended to reinforce the provisions
of the previous code so as to further strengthen the insurance industry and ensure the economic
viability and financial stability of companies operating in the country, to the end that each and
every Filipino is amply protected and secured.
Pre-Need Code
It is the policy of the state to regulate the establishment of pre-need companies and to place their
operation on sound, efficient and stable basis to derive the optimum advantage from them in the
mobilization of savings and to prevent and mitigate, as far as practicable, practices prejudicial to public
interest and the protection of planholders.

IRR of RA 9829
- otherwise known as the “Pre-need Code of the Philippines.
- These rules are promulgated consistent with the policy of the State to:
(a) Regulate the establishment of pre-need companies and place their operation on sound,
efficient and stable basis;
(b) Derive the optimum advantage from them in the mobilization of savings;
(c) Prevent and mitigate, as far as practicable, for the protection of planholders practices
prejudicial to public interest; and
(d) Regulate, through an empowered agency, pre-need companies based on prudential principles
to promote soundness, stability and sustainable growth of the pre-need industry.

Insurance guidelines on Rule XVI – R.A. 8042

(a) It is the policy of the State to afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all and to
provide adequate and timely social, economic and legal services to Filipino migrant workers.
(b) It is the policy of the State to provide adequate protection to the overseas Filipino workers (OFWs) by
ensuring coverage under the compulsory insurance requirement in Section 37-A of the Migrant Workers
and Overseas Filipinos Act of 1995, as amended. This mandatory insurance coverage of OFWs is
exceptionally different and distinct from the ordinary and usual insurance contracts provided by insurance
providers in the Philippines.
(c) It is the policy of the State to ensure the due execution and performance of insurance contracts not
only for the sound development of the national economy and business enterprises but also for the
protection of the interests and welfare of the OFWs and their families. This is because insurance is
imbued with public interest.

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TRANSFER OF HMO (E.O. NO. 192, S. 2015)

The EO, numbered 192, transferred regulatory and supervisory capacities of the DOH to IC, covering
establishment, operations, and financial activities of HMOs. The IC shall be responsible for the rules and
guidelines on establishment of HMOs (e.g., minimum capitalization) as well as licensing and registration
-Health Maintenance Organizations (HMOs) from the Department of Health (DOH)
- Insurance Commission (IC).

These statements outline the legal authority and responsibilities of various government bodies:
1. the President, under Article VII, Section 17 of the Constitution, has the power and control over
executive departments, bureaus and offices, as well as the continuing authority under existing
laws to reorganize such executive departments, bureaus, and agencies;
The President, as outlined in Article VII, Section 17 of the Constitution, has control over
executive departments and can reorganize them according to existing laws.
Refers to the authority granted to the President by the Constitution to have control over executive
departments, bureaus, and offices. The President can also reorganize these departments within the
bounds of existing laws.

2. Section 31, Chapter 10, Title III, Book III of Executive Order (EO) No. 292 (s. 1987), otherwise
known as the “Administrative Code of 1987,” grants the President the continuing authority to
reorganize the administrative structure of the Office of the President;
Executive Order No. 292 (s. 1987) gives the President the power to reorganize the
administrative structure of the Office of the President.
Executive Order No. 292, also known as the Administrative Code of 1987, empowers the
President to reorganize the administrative structure of the Office of the President. This means the
President can make changes to how the administrative functions of the Office of the President are
organized and managed.

3. Section 3(8), Chapter 1, Title IX, Book IV of the Administrative Code of 1987 mandates the
Department of Health (DOH) to regulate the operations of and issue licenses and permits to
hospitals, clinics, dispensaries, and other establishments, which include Health Maintenance
Organizations (HMOs);
The Department of Health (DOH) is mandated by the Administrative Code of 1987 to
regulate and issue licenses to hospitals, clinics, dispensaries, and Health Maintenance Organizations
(HMOs).
According to the Administrative Code of 1987, the DOH is responsible for regulating the
operations of hospitals, clinics, dispensaries, and other healthcare establishments, including
Health Maintenance Organizations (HMOs). This means the DOH oversees and issues licenses to
ensure these healthcare entities comply with regulations and standards.

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4. pursuant to PD No. 612 (s. 1974), as amended, otherwise known as the “Insurance Code of the
Philippines,” and Republic Act No. 9829, otherwise known as the “Pre-Need Code of the
Philippines,” the Insurance Commission (IC) supervises and regulates the operations of insurance
companies, insurance and reinsurance brokers and intermediaries, mutual benefit associations,
trusts for charitable uses, and pre-need companies;
The Insurance Commission (IC), as per PD No. 612 (s. 1974) and Republic Act No. 9829,
supervises and regulates insurance companies, pre-need companies, and other related entities.
PD No. 612 and Republic Act No. 9829 empower the Insurance Commission to supervise and
regulate v arious entities related to insurance, including insurance companies, reinsurance brokers,
mutual benefit associations, trusts for charitable uses, and pre-need companies. The IC ensures
compliance with laws and regulations governing the insurance industry.

5. insurance companies, pre-need companies, and HMOs function under a common concept of
receiving compensation, either through premiums or contributions, and in turn, promise certain
contractual benefits in the future; and
Insurance companies, pre-need companies, and HMOs operate on a similar basis, receiving
compensation (premiums or contributions) and providing contractual benefits in the future.
This statement highlights that insurance companies, pre-need companies, and Health
Maintenance Organizations (HMOs) all operate on the basis of receiving compensation
(premiums or contributions) from clients and providing promised benefits in the future. It
underscores the similarity in the business models of these entities despite differences in their
specific services and regulations
6. there is a need to streamline and consolidate functions related to the regulation of HMOs to
eliminate redundancy, simplify the organizational structure of the executive department, improve
accessibility and accountability, provide efficient use of specialized expertise, realize savings in
administrative costs, and promote effective sharing of best practices.
There's a need to make the regulation of HMOs simpler and more efficient. This involves
combining and organizing related tasks better, making it easier to access and understand. It also
means ensuring that the right people with the right skills are handling these tasks, which can save
money and improve accountability. Ultimately, this will help share successful approaches more
effectively.

RA 11517
Provision:
The President signed on 23 December 2020 Republic Act No. 11517 or “An Act Authorizing the
President to Expedite the Processing and Issuance of National and Local Permits, Licenses and
Certifications in Times of National Emergency” (“RA 11517“).
RA 11517 covers all agencies of the Executive branch, including departments, bureaus offices,
commissions, boards, councils, government instrumentalities, and government-owned and controlled
corporations.

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Explanation:
- Republic Act No. 11517, signed on December 23, 2020, is legislation in the Philippines that
grants the President authority to hasten the processing and issuance of national and local permits, licenses,
and certifications during times of national emergency.
- The act aims to streamline bureaucratic processes during emergencies, allowing for faster
decision-making and action from government agencies.
- It is applicable to all agencies within the Executive branch of the Philippine government. This
includes departments, bureaus, offices, commissions, boards, councils, government instrumentalities, and
government-owned and controlled corporations. Essentially, it covers a wide range of government bodies
involved in the regulatory processes.

Provision:
Under Section 2 of the law, the President, in times of national emergency, shall have the authority to (a)
accelerate and streamline regulatory processes and procedures for new and pending applications and
renewals of permits, licenses, clearances, certifications, or authorizations including fixing or shortening
the periods provided for under existing laws, regulations, issuances, and ordinances; (b) suspend or waive
the requirements in securing such permits, licenses, clearances, certifications or authorizations; and (c)
prescribe to be permanent the streamlines regulatory processes and procedures and the suspension or
waiver of the requirements in securing permits, licenses, clearances and certifications or authorizations,
upon consultation with or the recommendation of the affected government agencies.
The law does not provide for an automatic acceleration during a national emergency but only delegates
authority to the President, who must issue a corresponding order.

Explanation:

Under Section 2 of Republic Act No. 11517, the President is granted specific authority during times of
national emergency. Here's a breakdown of the key provisions:
1. Acceleration and Streamlining of Processes: The President is empowered to accelerate and
streamline regulatory processes and procedures for various applications, including permits,
licenses, clearances, certifications, or authorizations. This may involve shortening the periods
prescribed by existing laws, regulations, issuances, or ordinances. Essentially, the President can
expedite the processing of these documents to ensure timely action during emergencies.
2. Suspension or Waiver of Requirements: The President also has the authority to suspend or
waive certain requirements necessary for obtaining permits, licenses, clearances, certifications, or
authorizations. This flexibility allows for the removal of bureaucratic barriers that may impede
swift action during times of crisis.
3. Prescribing Permanent Changes: Additionally, the President can prescribe permanent changes
to streamline regulatory processes and procedures, as well as suspend or waive requirements for

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permits, licenses, clearances, certifications, or authorizations. However, this must be done in

consultation with or upon the recommendation of the affected government agencies. This implies
that the changes made during a national emergency can potentially become permanent measures
if deemed necessary after consultation with relevant authorities.
It's important to note that the law does not automatically trigger these measures during a national
emergency. Instead, it delegates authority to the President, who must issue corresponding orders to
implement the provisions outlined in Section 2. This ensures that the acceleration and streamlining of
regulatory processes, as well as the suspension or waiver of requirements, are carried out in a deliberate
and controlled manner, with proper consideration given to the circumstances of each emergency situation.

Provision:
As an exception to this emergency acceleration, the same Section 2 of the law makes it clear that it cannot
be used to undermine the existing procedures and processes, under applicable laws, rules and regulations,
meant to protect the environment especially those that aim to safeguard protected areas and its buffer
zones, and environmentally critical areas.
In addition to this authority and consistent with the Constitution, Revised Administrative Code, other
laws, and jurisprudence, RA 11517 also grants the President the power to suspend or remove any
government official or employee performing acts contrary to Section 2 of the law.
Pursuant to its Section 6, RA 11517 shall take effect upon its publication in the Official Gazette or in a
newspaper of general circulation.

Explanation:
- This additional information further clarifies the provisions of Republic Act No. 11517:

- These added rules make sure that while speeding up rules during emergencies, important things
like protecting the environment and holding people accountable aren't forgotten. They provide safeguards
to prevent misuse of authority and ensure that the law serves its intended purpose effectively.

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