Question & AnswerQ&A (IC CIRCULAR LETTER NO. 18/89)
IAR insurance covers risks attendant to the manufacture of commodities, specifically industrial type risks as classified in the Fire Tariff Manual, including all ancillary risks related to industrial properties.
The minimum amount of cover shall not be less than P2.5 billion for property damage per one location, covering the premises occupied by the insured within a ten (10) kilometer radius from the main plant.
The minimum amount of cover is based on the Consumer Price Index prevailing during the period the IAR policy is issued and is computed accordingly as per the steps outlined in Annex 'A'-1 and 2 of the circular.
All exclusions listed and specified in the standard IAR insurance policy form apply to the coverage.
The policy, application, rider, clauses, warranty, or endorsement must be in the standard form approved by the Insurance Commissioner pursuant to Section 226 of the Insurance Code.
The rate is non-tariff, provided that the rate is acknowledged or adopted by internationally reputable underwriters/reinsurers covering at least 20% of the entire sum insured and disclosed to the Insurance Commission.
Brokerages, commissions, taxes, overrides, and other similar charges may be added to form the gross rate, subject to full disclosure to the Insurance Commission.
The basis shall be the sound value of the risks and ancillary industrial properties contemplated in the standard fire policy. Alternatively, replacement value may be used if the insurer opts for it and manifests this choice by endorsement.
The circular took effect on October 1, 1989.
They are approved by the Insurance Commissioner pursuant to the provisions of Section 226 of the Insurance Code.