Supplemental Guidelines on Business Process Outsourcing ("BPO") Activities of Insurers/Reinsurers

September 12, 2019

INSURANCE CIRCULAR LETTER NO. 2019-49

Supplements: CL No. 2018-72, d. 28 December 2018

 

WHEREAS, this Commission issued Circular Letter No. 2018-72 on 28 December 2018 providing for Guidelines on Business Process Outsourcing ("BPO") Activities of Insurers/Reinsurers; ETHIDa

WHEREAS, this Commission finds it important to evaluate the outsourcing agreements/contracts entered into by insurers/reinsurers and BPO Providers to determine compliance with the provisions of Circular Letter No. 2018-72 dated 28 December 2018 in the interest of protecting both the insurance industry and the insuring public;

WHEREAS, to ensure compliance with the provisions of Circular Letter No. 2018-72 dated 28 December 2018, this Commission further finds the need to institute supplemental guidelines as regards pre-approval of outsourcing agreements/contracts and evaluation of the same during regular and special examinations conducted by this Commission pursuant to Section 253 of the Amended Insurance Code of the Philippines;

NOW, THEREFORE, pursuant to the undersigned's powers under Section 437 of Republic Act No. 10607, otherwise known as the Amended Insurance Code, "to x x x issue such rulings, instructions, circulars, orders and decisions as may be deemed necessary to secure the enforcement of the provisions of [the Amended Insurance Code], to ensure the efficient regulation of the insurance industry in accordance with global best practices and to protect the insuring public," the following Supplemental Guidelines on Business Process Outsourcing ("BPO") Activities of Insurers/Reinsurers are hereby adopted and promulgated, viz.:

1. Pre-Approval of Outsourcing Agreements. — An insurer/reinsurer shall not enter into an outsourcing agreement/contract with a BPO Provider unless said agreement/contract has been pre-approved by this Commission.

2. Division in Charge. — An application for pre-approval of an outsourcing agreement/contract shall be made in writing and filed with this Commission's Regulation, Enforcement and Prosecution Division ("REPD"). Upon receipt of such application, the REPD shall:

a. Determine whether or not the proposed outsourcing agreement/contract violates any of the provisions of Circular Letter No. 2018-72 dated 28 December 2018; and shall consequently submit its recommendation/s to the Insurance Commissioner whether to approve or disapprove the application; and

b. Maintain records of all approved outsourcing agreements/contracts. cSEDTC

3. Examination of Outsourcing Agreements. — An insurer's/reinsurer's compliance with the provisions of Circular Letter No. 2018-72 dated 28 December 2018 shall also be determined as part of the regular or special examination into the affairs and methods of doing business of said company conducted by the concerned Division of this Commission's Financial Examination Group in accordance with Section 253 of the Amended Insurance Code of the Philippines.

4. Effectivity. — This Circular Letter shall take effect immediately.

(SGD.) DENNIS B. FUNAInsurance Commissioner