Riding the ‘Big One’ bogeyman

Insurers and their rah-rah boys at the Insurance Commission (IC) have urged Congress to lower the tax rates slapped on the nonlife side of the insurance business, purportedly in preparation for the “Big One.”  Come on, that’s a glaring hard sell. Science has yet to successfully predict when earthquakes (whether minor or major) would happen, thus, for these insurers to make a tax plea by raising the “Big One” bogeyman is simply pathetic.

Sure, a major earthquake could happen anytime, so the public information campaign being waged by the government – on what the people should do in the event of a major temblor occurring at the Marikina fault line – is understandable and laudable. Or the “Big One” could happen hundreds or thousands of years from now, meaning not in our and our children’s lifetimes.

Those who say that we may be “ripe” for a “Big One” on account of the “cycles” seen from past earthquakes are  pseudo-scientists no different from the cultists who claim to know the time and moment of the Second Coming on account of their interpretation of the Book of Revelation.  So, it’s really disgusting how the Philippine Insurers and Reinsurers Association (PIRA) and the IC are riding the “Big One” issue.

The “Big One” spin betrays their lack of imagination on how to lobby Congress to get a tax reduction similar to that which they’ve already gotten for life insurance (from 5 percent to 2 percent).  Actually, they’ve already made their point – a valid one at that – that many Filipinos do not ensure their houses and vehicles because the policies are priced exorbitantly, what with the 24.5 percent to 26.5 percent tax rates slapped on them by government.

Typhoon Yolanda is a better selling point for this industry in that the government has  had to shoulder the bulk of the estimated P571 billion spent for rehabilitation works precisely because even the rich Filipinos in the affected areas had no insurance. Also, the comparison with Singapore’s 7 percent and Thailand’s 11.3 percent tax rates on nonlife insurance should be easy enough to understand even for our lawmakers.

One thing is no bogeyman though: That Filipinos would still not buy nonlife insurance policies if any reduction in the tax rates by Congress would not be passed on by insurers to consumers, but instead just used to pad the former's profits.  Likewise, the ranks of insurers must be cleansed of the profiteers and buccaneers who are only good at taking premium payments and who invent every loophole so as not to pay their obligations to the insured.-end-                                                  

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