GSIS proposal for CTPL looks good
August 18, 2006 | 12:00am
A former ambassador of our country to Moscow was complaining to me last Tuesday at the EDSA Shangri-La Tuesday Club about how he was being given the runaround by the third party liability insurer of a motor vehicle whose owner admitted fault in a road accident. The claims were for medical bills incurred by the ambassador. There ought to be a law, the frustrated ambassador fumed.
So we decided to educate the retired diplomat, who may have been away too long, on the facts of life in his home country. Our motor vehicle third party liability insurance system is a sham. No one entertains high expectations of collecting from it at all. You can even be sure that if you bought it at the LTO office just so you can register your car, it is a fake. It is so bad but we have tolerated it because it just costs P500 and we look at it the same way we look at the drug test for P300 that is required to get a license. No one believes they even examine those urine samples collected. Nor has anyone heard of the LTO refusing a license to an addict who was discovered because of the test. That too, is a sham.
This is why I am all in favor of the proposal of the GSIS to take over the responsibility of issuing motor vehicle CTPL. I am normally biased for privatization and I know this is reverse privatization. But because the private sector has proven itself so incompetent and so corrupt for so many years now, I am in favor of letting the government, through GSIS, take on this compulsory part of motor vehicle insurance.
The private sector through the Philippine Insurers and Reinsurers Association (PIRA), now wants to solely issue CTPL for private vehicles. My problem with that is they have no more credibility. Ilocos Norte Rep. Roque Ablan pointed out PIRA is composed of several private insurers that often do not have offices to service claims.
What’s more the PIRA proposal entails the creation of a clearing house, where all COCs are first validated and payment of premiums made through banks before one can register a vehicle. That punishes the ordinary citizen with more red tape that assures him nothing in the end.
The GSIS proposal is simpler. The cost of the CTPL will just be added up to the registration fees being collected by the LTO. The computer systems of the GSIS and the LTO will be integrated. And we know who to run after for claims.
On the privatization issue, I am satisfied with the assurance of GSIS president Winston Garcia that GSIS will pass on 80 percent of the CTPL business to legitimate private insurers by way of reinsurance. GSIS will also assure payment of taxes on policies to the government. In fact, 38 private insurers have already written the GSIS expressing their interest to participate in the GSIS proposal. The GSIS business model will even increase the income of private insurers because the system will prevent the proliferation of fake CTPL insurance.
Former Sen. Ernesto Herrera, meanwhile, lamented that government has been losing up to P1-billion worth of premium tax revenues each year as an offshoot of irregularities in the motor vehicle CTPL insurance market. He cited a study by the Insurance Security Association of the Philippines showing that as a result of the issuance of some P4-billion worth of fraudulent motor vehicle CTPL insurance certificates of coverage, in 2002 alone, government lost an estimated P835 million in premium tax revenues.
Herrera said "the P835 million in foregone government income was based on 2002 figures. We reckon the annual tax revenue losses have reached P1 billion by now owing to the 1.3-million increase in registered motor vehicles since then." Rotten personnel of the LTO have been blamed for conniving with syndicates in peddling spurious CTPL insurance policies, and for allowing the registration of motor vehicles backed by phony certificates of coverage. Sobra na. Tama na.
A number of foreign journalists who covered an international conference in Cebu last week complained about extortionist cab drivers in our country’s principal tourist metro area. One journalist representing a major newspaper in Shanghai who happens to be a member of our Tuesday Club, told us that the drivers of the taxis he and his associates had to take during their visit all insisted on negotiating the cab fare and not using the meter.
It was such, he said, that even a distance of a few blocks was costing them P300. It seems, he observed, that once the Cebu cab drivers noticed that they were foreigners, the extortionist impulses went into action. But because he had been living in Manila for a while, he tried to argue… to no avail.
With the Asean summit conference due to be hosted by Cebu this year, perhaps LTFRB and Cebu local officials should meet with the cab drivers and instill some fear of the law in them. For a metro area that aspires to be a major tourist destination, what happened to foreign journalists last week is bad news for Cebu. Expect those journalists to write about their sad experiences… and put to waste the millions of pesos we spend for tourism promotion.
Most major cities that seek to attract tourists make an effort of educating and disciplining their cab drivers. In Shanghai, they are so disciplined and honest that when a Pinoy violinist forgot his priceless instrument, the police assured him that his violin will be waiting for him at his hotel. It was.
Cebu should be able to make that assurance too. If our principal tourist destination can’t have honest cab drivers, let’s forget ever being able to exploit the full potential of our tourism industry.
A reader wrote this reaction to previous columns.
I have read with delight your editorials on the domestic airport. You are hitting the nail on the head. It is an embarrassment to the nation and to the government. Do you also know that the runway 13/31 has been closed for six months and it could be two more months+++. This is causing huge delays and huge cost for all travelers and airlines out of this third world airport. I can give you much much more info on what is really happening but I can not identify myself at this time.
Please continue to push and ask what they are doing with the 200 pesos which comes to close to 7-10M USD a year in revenue and no major changes to this terminal?????
Take care and keep it up..........
Got this from reader Edwin Gatia, M.Sc.
I just read your write-up on "How to Create A Tourist Destination", and you said that INFRASTRUCTURE was key to the whole thing. I could not AGREE more… you’re simply right on this notion.
The jetty port in Caticlan when I was there looked pretty much "miserable" (from my personal point of view…), if I have to compare it with even some of the simplest Tourist Transport Terminals in some parts of the globe. For instance, one of the (northern) Bus Terminals I’ve been to in Mexico City was operating more like an Airport Terminal…
You’re right, and I agree that these things SHOULD be "tourist driven"…
Reader Kimton Dy reacts to exodus of nurses and doctors out of the country.
Maybe the time has come for the Philippines to stop being selfish. The country should allow foreigners to work in this country. I know of Korean students who study in the Philippines and who would like to work as doctors and nurses in this country.
People must realize there are foreigners who like to work and live here even though the pay is not that good. The trend these days is globalism and not nationalism. It’s unfair that Filipinos can work abroad yet foreigners are not welcome to work here.
So we decided to educate the retired diplomat, who may have been away too long, on the facts of life in his home country. Our motor vehicle third party liability insurance system is a sham. No one entertains high expectations of collecting from it at all. You can even be sure that if you bought it at the LTO office just so you can register your car, it is a fake. It is so bad but we have tolerated it because it just costs P500 and we look at it the same way we look at the drug test for P300 that is required to get a license. No one believes they even examine those urine samples collected. Nor has anyone heard of the LTO refusing a license to an addict who was discovered because of the test. That too, is a sham.
This is why I am all in favor of the proposal of the GSIS to take over the responsibility of issuing motor vehicle CTPL. I am normally biased for privatization and I know this is reverse privatization. But because the private sector has proven itself so incompetent and so corrupt for so many years now, I am in favor of letting the government, through GSIS, take on this compulsory part of motor vehicle insurance.
The private sector through the Philippine Insurers and Reinsurers Association (PIRA), now wants to solely issue CTPL for private vehicles. My problem with that is they have no more credibility. Ilocos Norte Rep. Roque Ablan pointed out PIRA is composed of several private insurers that often do not have offices to service claims.
What’s more the PIRA proposal entails the creation of a clearing house, where all COCs are first validated and payment of premiums made through banks before one can register a vehicle. That punishes the ordinary citizen with more red tape that assures him nothing in the end.
The GSIS proposal is simpler. The cost of the CTPL will just be added up to the registration fees being collected by the LTO. The computer systems of the GSIS and the LTO will be integrated. And we know who to run after for claims.
On the privatization issue, I am satisfied with the assurance of GSIS president Winston Garcia that GSIS will pass on 80 percent of the CTPL business to legitimate private insurers by way of reinsurance. GSIS will also assure payment of taxes on policies to the government. In fact, 38 private insurers have already written the GSIS expressing their interest to participate in the GSIS proposal. The GSIS business model will even increase the income of private insurers because the system will prevent the proliferation of fake CTPL insurance.
Former Sen. Ernesto Herrera, meanwhile, lamented that government has been losing up to P1-billion worth of premium tax revenues each year as an offshoot of irregularities in the motor vehicle CTPL insurance market. He cited a study by the Insurance Security Association of the Philippines showing that as a result of the issuance of some P4-billion worth of fraudulent motor vehicle CTPL insurance certificates of coverage, in 2002 alone, government lost an estimated P835 million in premium tax revenues.
Herrera said "the P835 million in foregone government income was based on 2002 figures. We reckon the annual tax revenue losses have reached P1 billion by now owing to the 1.3-million increase in registered motor vehicles since then." Rotten personnel of the LTO have been blamed for conniving with syndicates in peddling spurious CTPL insurance policies, and for allowing the registration of motor vehicles backed by phony certificates of coverage. Sobra na. Tama na.
It was such, he said, that even a distance of a few blocks was costing them P300. It seems, he observed, that once the Cebu cab drivers noticed that they were foreigners, the extortionist impulses went into action. But because he had been living in Manila for a while, he tried to argue… to no avail.
With the Asean summit conference due to be hosted by Cebu this year, perhaps LTFRB and Cebu local officials should meet with the cab drivers and instill some fear of the law in them. For a metro area that aspires to be a major tourist destination, what happened to foreign journalists last week is bad news for Cebu. Expect those journalists to write about their sad experiences… and put to waste the millions of pesos we spend for tourism promotion.
Most major cities that seek to attract tourists make an effort of educating and disciplining their cab drivers. In Shanghai, they are so disciplined and honest that when a Pinoy violinist forgot his priceless instrument, the police assured him that his violin will be waiting for him at his hotel. It was.
Cebu should be able to make that assurance too. If our principal tourist destination can’t have honest cab drivers, let’s forget ever being able to exploit the full potential of our tourism industry.
I have read with delight your editorials on the domestic airport. You are hitting the nail on the head. It is an embarrassment to the nation and to the government. Do you also know that the runway 13/31 has been closed for six months and it could be two more months+++. This is causing huge delays and huge cost for all travelers and airlines out of this third world airport. I can give you much much more info on what is really happening but I can not identify myself at this time.
Please continue to push and ask what they are doing with the 200 pesos which comes to close to 7-10M USD a year in revenue and no major changes to this terminal?????
Take care and keep it up..........
I just read your write-up on "How to Create A Tourist Destination", and you said that INFRASTRUCTURE was key to the whole thing. I could not AGREE more… you’re simply right on this notion.
The jetty port in Caticlan when I was there looked pretty much "miserable" (from my personal point of view…), if I have to compare it with even some of the simplest Tourist Transport Terminals in some parts of the globe. For instance, one of the (northern) Bus Terminals I’ve been to in Mexico City was operating more like an Airport Terminal…
You’re right, and I agree that these things SHOULD be "tourist driven"…
Maybe the time has come for the Philippines to stop being selfish. The country should allow foreigners to work in this country. I know of Korean students who study in the Philippines and who would like to work as doctors and nurses in this country.
People must realize there are foreigners who like to work and live here even though the pay is not that good. The trend these days is globalism and not nationalism. It’s unfair that Filipinos can work abroad yet foreigners are not welcome to work here.
This one’s from Marilyn Mana-ay Robles. A husband came home 4 a.m. and saw his wife in bed with another man. His wife shouted at him, "Where have you been?" Husband: "Who is that man?!?" Wife: "Grabe ka! Don’t change the topic!!" Boo Chanco ‘s e-mail address is [email protected]
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