Introduction

One of the notable features of Republic Act 1022 is the introduction of the compulsory
insurance coverage of Overseas Filipino Workers.

The introduction of the said insurance program in the law is a measure imposed by the
legislative department in affording additional protection to our migrant workers as well as a
response to the growing cases of OFWs having few and even no recourse in the event where they
are exposed to the different insurable risks while working overseas.

This mandatory insurance coverage is also in addition to some of the government’s well
placed programs for overseas workers such as the Overseas Workers Welfare Administration’s
(OWWA) mandatory insurance coverage and the health and medical insurance under the
PhilHealth.

The compulsory insurance scheme already took effect on November 8, 2010, however some
parties privy to its implementation are encountering some problems and confusions on the
program. One of them is the concern raised by the land based sector in where several oftheir
foreign employers communicated their oppositions on the said scheme citing that they would incur
additional financial burdens since their laws also require them to secure insurance for their migrant
workers thus a case of “double insurance” arises.

This briefing paper would present the issues and answers the numerous questions arising
from it.

Compulsory Insurance Coverage

The compulsory insurance coverage is embodied under Section 23 of the said law and clearly
states that:

“Sec.23. A new Sec. 37-A of RA 8042 as amended, is hereby added to read as follows:

Sec. 37-A. Compulsory Worker’s Insurance Coverage. – In addition to the

Under this scheme it is mandatory for all Filipino agency-hired workers to be covered by a
Philippine insurance policy, with the cost of the scheme being borne by the recruitment agency or
the foreign employer in the country of employment.

It should be noted that the program only covers agency-hired workers, for migrant workers
classified as rehires, name hires or direct hires, they may opt to be covered by this insurance
coverage by requesting their foreign employers to pay for the cost of the insurance coverage or
they may pay for the premium themselves. On the other hand, migrant workers recruited by the
POEA on a government-to-government arrangement, the POEA Foreign Employers Guarantee Fund
referred to under Section 5, Rule X of the Implementing Rules and Regulations of R.A. 10022 shall
be answerable for the workers’ monetary claims arising from breach of contractual obligations.

The insurance policy shall be effective for the duration of the migrant worker’s
employment contract and shall cover, at the minimum:

(a) Accidental death, with at least Fifteen Thousand United States Dollars (US$ 15,000.00) survivor’s
benefit payable to the migrant worker’s beneficiaries;

(b) Natural death, with at least Ten Thousand United States Dollars (US$ 10,000.00) survivor’s
benefit payable to the migrant worker’s beneficiaries;

(c) Permanent total disablement, with at least Seven Thousand Five Hundred United States Dollars
(US$7,500) disability benefit payable to the migrant worker. The following disabilities shall be
deemed permanent: total, complete loss of sight of both eyes; loss of two limbs at or above the
ankles or wrists; permanent complete paralysis of two limbs; brain injury resulting to incurable
imbecility or insanity;

(d) Repatriation cost of the worker when his/her employment is terminated by the employer
without any valid cause, or by the employee with just cause, including the transport of his/her
personal belongings. In case of death, the insurance provider shall arrange and pay for the
repatriation or return of the worker’s remains. The insurance provider shall also render any
assistance necessary in the transport, including but not limited to, locating a local and licensed
funeral home, mortuary or direct disposition facility to prepare the body for transport, completing
all documentation, obtaining legal clearances, procuring consular services, providing death
certificates, purchasing the minimally necessary casket or air transport container, as well as
transporting the remains including retrieval from site of death and delivery to the receiving funeral
home.

(e) Subsistence allowance benefit, with at least One Hundred United States Dollars (US$100) per
month for a maximum of six (6) months for a migrant worker who is involved in a case or litigation
for the protection of his/her rights in the receiving country;

(f) Money claims arising from employer’s liability which may be awarded or given to the worker in a
judgment or settlement of his/her case in the NLRC. The insurance coverage for money claims shall
be equivalent to at least three (3) months salaries for every year of the migrant worker’s
employment contract;

(g) Compassionate visit. When a migrant worker is hospitalized and has been confined for at least
seven (7) consecutive days, he shall be entitled to a compassionate visit by one (1) family member
or a requested individual. The insurance company shall pay for the transportation cost of the family
member or requested individual to the major airport closest to the place of hospitalization of the
worker. It is, however, the responsibility of the family member or requested individual to meet all
visa and travel document requirements;
(h) Medical evacuation. When an adequate medical facility is not available proximate to the migrant
worker, as determined by the insurance company’s physician and/or a consulting physician,
evacuation under appropriate medical supervision by the mode of transport necessary shall be
undertaken by the insurance provider; and

(i) Medical repatriation. When medically necessary as determined by the attending physician,
repatriation under medical supervision to the migrant worker’s residence shall be undertaken by
the insurance provider at such time that the migrant worker is medically cleared for travel by
commercial carrier. If the period to receive medical clearance to travel exceeds fourteen (14) days
from the date of discharge from the hospital, an alternative appropriate mode of transportation,
such as air ambulance, may be arranged. Medical and non-medical escorts may be provided when
necessary.

The law also requires that only reputable private insurance companies duly registered with
the IC, which are in existence and operational for at least five (5) years, with a net worth of at least
Five Hundred Million Pesos (Php500,000,000.00) to be determined by the IC, and with a current
year certificate of authority shall be qualified to provide for the worker’s insurance.

As to this date the lnsurance Commission accredited four insurance providers namely the
Paramount Life and General Insurance Corporation; Philippine Charter Insurance Corporation;
United Coconut Planters' Life Assurance Corporation and the ______

Double Insurance

Those who are in opposition on the mandatory insurance coverage raised the issue that the
need for another insurance protection for Filipino migrant workers is unnecessary since the latter are
already amply insured and protected in their worksites.

Likewise they are interposing that under our present laws, a migrant worker is already
protected, because the local recruitment agency is can be held solidarily liable with the foreign
employer whenever a breach of contract or negligence is committed by the employer.

However, it should noted that the provision was made to be applicable to all receiving
countries regardless whether the said country has an existing policy on insuring migrant workers or
not. The main intention is to afford full protection to workers from violations of labor policies by
some foreign employers which oftentimes leave workers without any remedy and recourse.
Likewise the mandatory insurance programs covers at the minimum nine (9) insurable risks which
the worksite insurance does not all provide.

Another clear intention of the lawmakers in this provision is the accessibility of workers to
the process of claiming their benefits under their insurance. There are numerous cases where
migrant workers despite having an insurance policy at the worksite failed to claim their benefits
abroad because the long process already prejudices their legal stay in the country.
 With these, a foreign employer cannot escape the responsibility of insuring his workers at
the receiving country and here in the Philippines. However, if the receiving country does not make
it mandatory for the employer to secure an insurance policy for their worker the former can just
secure a policy here.

The new insurance scheme has been also criticized for the lack of transparency as it is not
clearly provides if the foreign employer or the local hiring-agency needs to bear the compulsory
insurance cost.