Law Summary
Policy Statement and General Principles
- State’s policy to protect all Filipino labor, including migrant workers, ensuring full employment and equal opportunities.
- Mandatory insurance coverage for OFWs distinct from ordinary insurance contracts.
- Insurance contracts to be executed diligently for national economic development and protection of OFWs’ welfare.
Rules on Interpretation
- Insurance policies for OFWs are to be interpreted liberally in favor of the insured.
- Ambiguities in contracts construed against the insurer and favor coverage.
Covered Migrant Workers
- Each worker deployed by licensed agencies must have compulsory insurance at no cost to the worker.
- Seafarers covered differently under POEA rules; insurance applies for principals/shipowners obtaining local coverage.
Definitions (Key Terms)
- "Act" refers to RA 8042 as amended.
- "Certificate of Authority" is IC’s license to insurers.
- Classification of insurance companies: life, non-life, composite.
- "Migrant Workers Compulsory Insurance Coverage" means the mandatory minimum coverage insurance policy secured by agencies in favor of migrant workers.
Qualifications of Participating Insurers
- Insurers must be reputable, operative for at least 5 years, with a net worth of at least Php500 million.
- Disqualified if key personnel have relatives working/interested in recruitment agencies or government involved in overseas employment.
- Scope of authority specifies which insurers can issue specific insurance types; composite companies may issue all.
- Additional qualifications: computerized operations, branch presence near POEA offices, 24-hour assistance centers including in-country representatives for large migrant worker populations.
Accreditation Procedures
- IC furnishes POEA a list of qualified insurers; only those listed may be used for the insurance contract.
- Recruitment agencies have exclusive right to choose accredited insurers; government officials barred from influencing choice.
- Annual joint assessment by DOLE and IC may blacklist underperforming insurers.
- IC empowered to impose fines, suspensions, or removal of non-compliant insurance officers.
Policy Form Requirements
- All policy forms must be IC-approved; unauthorized use results in disqualification.
- Uniform labeling as "COMPULSORY INSURANCE COVERAGE FOR AGENCY-HIRED MIGRANT WORKERS".
- Policies effective for contract duration covering minimum benefits per law.
- Premium clearly stated; payable by recruitment agency; no cost to worker.
- Additional mandatory clauses: place of payment, legal remedies, signature requirements.
- Incontestable and suicide clauses do not apply to compulsory life insurance.
Premium Rate and Payment
- Premium rates must be fair, reasonable, adequate, transparent; subject to IC approval.
- Recruitment agencies pay premiums fully; premium cost cannot be charged to workers.
- Proportionate premium refunds allowed when workers pre-terminate contracts voluntarily.
Minimum Benefits
- Accidental death: minimum US$15,000 payable to beneficiaries.
- Natural death: minimum US$10,000.
- Permanent total disablement: minimum US$7,500 with definitions of covered disabilities.
- Repatriation costs including transportation of remains and belongings.
- Subsistence allowance: US$100 per month up to 6 months during legal disputes.
- Money claims indemnity linked to three months’ salary per year of contract, capped at US$1,000/month.
- Compassionate visit transportation.
- Medical evacuation and medical repatriation under medical supervision.
- Benefits payable immediately; no advancement of expenses by workers or heirs.
Underwriting Guidelines
- No discrimination by occupation, sex, or location.
- Separate registers maintained for policies, claims, reinsurance; open to IC inspection.
Claims Procedure
- Written notice of claim with supporting documents must be submitted.
- Claims for death/disability require authenticated death certificates, police reports, medical certificates, and beneficiary documentation.
- Repatriation claims require certification from Philippine foreign post or POLO.
- Subsistence claims require certification from Labor Attaché or consular official.
- Money claims require final NLRC decisions; insurance pays insured amount; agency liable for excess.
- Failure by insurer to pay triggers agency payment; escrow may be garnished.
- Recruitment agencies must assist and disclose insurance details to workers.
Dispute Settlement
- Insurance claims disputes brought to IC for mediation/adjudication.
- NLRC has exclusive jurisdiction on enforcing final monetary decisions against agencies or insurers.
- Seafarers’ disputes handled differently including arbitration and POEA administrative penalties.
Administrative Monitoring
- IC requires periodic reports from insurers: premium, claims, reinsurance, statistical.
- Inter-Agency Committee (DOLE, IC, POEA, NLRC) created for enforcement and monitoring.
- Regular examinations coordinated by IC.
Other Matters
- Insurance proof required before issuance of Overseas Employment Certificate (OEC).
- Agencies found to charge workers for premiums face license revocation and lifelong disqualification.
- Rehires, name hires, and direct hires may opt for coverage.
- Three-year automatic review mandated for efficacy of insurance provisions.
- IC authorized to issue supplementary circulars to update guidelines.
Final Provisions
- Repeals inconsistent orders and circulars.
- Guidelines take effect five days after publication in a newspaper of general circulation.
This comprehensive framework governs compulsory insurance for agency-hired OFWs, ensuring protection, transparency, and accountability among all stakeholders involved in the overseas employment process.