ISAP sets bidding for non-life insurance authentication system

The Insurance and Surety Association of the Philippines (ISAP) is set to hold a bidding next month to select an information technology (IT) application service provider (ASP) that will operate an online authentication system for issued compulsory third party liability (CTPL) policies on motor vehicles.

Victoria Roman Flores, ISAP president, said non-life insurers are confident that with the forthcoming operation of the authentication facility, the illegal practices in the mandatory insurance of motor vehicles will be reduced if not totally eliminated.

Flores said the membership of ISAP approved the establishment of the authentication system to weed out fake CTPL policies or certificates of cover (COCs).

The Insurance Commission (IC), in a circular-letter dated March 22, directed all insurance companies, brokers and agents to coordinate with ISAP on the required information technology for the CTPL coverage.

Flores said bidding for the authentication system is set to start following the publication this week of a notice by ISAP inviting all interested IT application service providers to pre-qualify for the bidding. They have until April 5 to submit requirements, including registration papers with the Securities and Exchange Commission (SEC), this year’s business license/permit, income tax return for the last two years, company profile and others.

Flores said the proliferation of fake CTPL policies and COCs has long victimized the public because these have been used by unscrupulous persons and groups to make money illegally. "A lot of people have used the CTPL to extract cash from the unsuspecting public," she explained.

The menace posed by fake CTPLs and COCs, Flores added, has caused problems that can no longer be ignored. For one, fake CTPL policies prevent a motorist from securing appropriate compensation on the insurance of his vehicle. In many cases, legitimate claims of third parties are not paid within the prescribed period.

The government also suffers in terms of revenue loss due to the non-remittance of proper taxes. Because illegal CTPL business is unreported, the proper taxes are uncollected by the government.

ISAP, along with the IC and the Land Transportation Office (LTO), wants the authentication system operational in Metro Manila by late April and in provincial areas a month later.