The Commission on Audit (CoA) has reprimanded officials of the Insurance Commission (IC) anew for tapping private entities to hold licensure examinations for aspiring insurance agents.

In the recently released 2009 audit report of the commission, state auditors, headed by Villa DJ Bernaldo, disclosed that the government lost P7,176,000 because of the IC’s allowing the Insurance Institute for Asia and Pacific (IIAP) to conduct last year’s licensure examinations for insurance agents.

In the past two years, the IC commissioned the Philippine Life Insurance Association and IAAP to do the job supposedly mandated by law for the agency.

In 2007, the CoA said government’s loss of revenue due to the IC’s inability to hold the examinations reached P7,086,500.

“We recommended then that management stop the practice of allowing a private entity to conduct licensure examinations for insurance agents as this is contrary to the provisions of Sections 299 and 303 of the Insurance Code,” the auditors said.

In 2008, the IAAP reportedly collected a total of P7,400,500 from 14,081 examinees who paid P500 examination fee each.

“For CY 2009, a total of 14,352 examinees took the licensure examination conducted by the same private entity, equivalent to lost government revenue in the amount of P7,176,000,” the report stated.

In the same audit report, government examiners noted that the IC allowed the renewal of licenses for insurance companies, insurance, and re-insurance brokers who were remiss in paying supervision fees.

The CoA said government may have collected P2 million from them had the IC collected supervision fees before issuing the licenses.

This practice, CoA said, had previously been brought to the attention of the commissioners, but to no avail.

The CoA also chided IC for paying productivity incentive benefits to its employees when it failed to review their performance ratings for the year.

“All employees of the IC were paid productivity incentive benefits for CY 2009 of P2,000 each regardless of their performance rating in prior year, contrary to the provisions of Administrative Order No. 161 dated December 6, 1994 and the guidelines issued by the Department of Budget and Management,” the audit report stressed.

The distribution of uniform incentive benefits is a violation of the administrative directive which provides that only deserving officials who have satisfactory, very satisfactory, and outstanding performance are entitled to it.