Applicability to Cooperatives and Non-Profit Organizations
- Cooperatives registered with the Cooperative Development Authority undertaking insurance activities are bound by the Insurance Code and must obtain a Certificate of Authority.
- Private entities including non-profit organizations registered with the Securities and Exchange Commission providing insurance products without proper authorization are operating unlawfully.
Protection of Members and Clients from Informal Insurance Schemes
- Members or clients involved in informal or self-insurance schemes without a Certificate of Authority are exposed to significant risks.
- The law emphasizes protecting the public from unsafe and unsound informal insurance and risk protection schemes.
Termination of Unauthorized Insurance Activities
- Entities currently engaging in unauthorized informal insurance activities are required to cease such operations within one year from the circular's effectivity.
Transitional Arrangements with Authorized Insurance Providers
- During the one-year transition, informal insurance providers may formalize coverage by:
- Partnering with commercial insurance companies for group or individual policies.
- Enrolling their members/clients in authorized cooperative insurance providers or mutual benefit associations.
Requirement to Formalize Insurance Providers Within Two Years
- Informal insurance providers wishing to continue insurance business must organize formally and obtain a Certificate of Authority within two years.
- Formal organizations may include Life or Non-Life Insurance Companies, Cooperative Insurance Providers, or Mutual Benefit Associations.
Enforcement and Regulatory Cooperation
- The Insurance Commission, Securities and Exchange Commission, and Cooperative Development Authority will collaborate to:
- Exchange relevant information.
- Undertake enforcement actions such as cease and desist orders following due notice and hearing.
- Ensure compliance with the Insurance Code and other relevant laws.
Repeal of Inconsistent Regulations and Effectivity
- All previous issuances, circulars, and regulations inconsistent with this Joint Memorandum Circular are repealed.
- The circular takes effect fifteen days after its publication in a newspaper of general circulation in the Philippines.