Motorists’ CTPL woes unresolved

Here comes again the Insurance Commission (IC) with another suggestion on how to resolve the P3-billion compulsory third party liability (CTPL) insurance industry’s problems that have victimized millions of motor vehicle owners as well as cost the government billions of pesos in lost tax revenues.

Late last year, the IC announced its plan to allow the insurance industry involved in issuing CTPL documents to set up a clearing house that would police the authenticity of issued certificates of cover (COC). With the tarnished image of many of these insurance companies, this was tantamount to handing the family heirloom on a silver platter to thieves.

Luckily, the finance department (which supervises the IC) as well as the Department of Transportation and Communications (which supervises the Land Transportation Office) both issued denials that the plan had been given the green light.

Clearly, the IC’s earlier proposal was a rehash of several failed self-regulation schemes, some as early as the 80s, that promised to solve the problem of fake insurance coverage and non-remittance of taxes.

Most motor vehicle owners up till today get COCs without any real assurance that they are receiving legitimate coverage because of the proliferation of fly-by-night insurance firms that issue worthless COCs, and in many instances, with connivance of personnel from the LTO.

These dubious insurance companies also deprive the government billions of taxes. In 2003 alone, based on the 4.3 million vehicles that were registered with the LTO, the equivalent total CTPL premiums booked should have been approximately P2.5 billion, or P1.2 billion short of the reported P1.3 billion worth of CTPL policies sold.

As a result, instead of earning tax revenues of P579 million, the government was only able to tally P310 million in taxes from CTPL insurance premiums. You and I can easily figure out where the missing amount went.

IC as the clearing house

The most recent IC proposal, as voiced out by Commissioner Evangeline Escobillo, is to allow the IC to be the clearing house of all CTPL insurance coverage. To enable it to authenticate CTPL policies, the commission will be linked to the LTO database.

The proposed scheme takes off in part from an earlier plan suggested by the Government Service Insurance System to be linked with the LTO so that insurance enrollments and claims processing can be monitored. But whereas GSIS recommended that the CTPL policy issuance and premiums be automatically included in the vehicle renewal registration process and fees, the IC still insists in its proposal that CTPL issuance and payments be made through agents and brokers of insurance companies.

PIRA objections

The Philippine Insurers and Reinsurers Association (PIRA) continues to vigorously oppose the GSIS scheme. Aside from the obviously self-serving arguments, the private sector association has invoked the GSIS’s supposedly internal and external problems as possible deterrents to the government firm in doing a good job.

Furthermore, PIRA points out that the IC, and not the LTO, should have the last say on how insurance coverage should be implemented for motor vehicles as is indicated by pertinent provisions of the Insurance Code of 1978.

The debate thickened, however, when Justice Secretary Raul Gonzales issued the opinion that the LTO alone (not the IC) has the primary legal authority to establish and devise policies and programs that would ensure that all registered motor vehicles have authentic, legitimate and valid CTPL insurance policies.

Undaunted, PIRA also pointed out that the entry of GSIS into the private CTPL business is illegal and unconstitutional. Again this was rebuffed by the Justice Secretary’s issued opinion stating that, as contained in the Administrative Code of the government insurance firm, the GSIS is empowered to enter into a contract with any person, firm, association or corporation, either domestic or foreign.

Need for an urgent solution

Escobillo is urging the public and GSIS chief Winston Garcia to give the latest IC proposal a chance to work in the next two years, and that if the scheme will not solve the problems of fraudulent insurance policies and tax evasion, then she would concede that "perhaps the private cannot be trusted."

Many are of the view, however, that with the proposal, the IC seems more concerned about the interests of the insurance companies rather than the convenience and protection of the general public, particularly the motorist owners. Many also feel that Escobillo should not be negotiating for an industry that it is supposed to regulate and that her priority concern as insurance commissioner is the general public’s welfare.

An urgent solution to this decades-old scam that has deprived government and Filipinos of so much money and caused so much frustration and misery among motorist owners should be resolved soonest. Any compromise that will put the public’s cause second only to any other’s is not acceptable.

Airport Casino Filipino Parañaque Poker tour finals host

The grand finals of the Philippine Poker Tour (PPT) Million-Peso Hold’em Philippine Championship will be held at Airport Casino Filipino instead of Casino Filipino Pavilion-Manila. The change of venue was made to accommodate the more than 100 participants to the biggest non-wager poker skills tournament for the year. The two-day Main Event will start on Dec. 16, 2006 with registration of players at 12:30 p.m. and tournament proper at 2 p.m.

Three more qualifiers advanced to the Grand Finals after winning the satellite tournament held last Saturday at CF Pavilion-Manila. These are: John Fontanilla, Satellite Champion; and Romy Roldan and Jac Ordillano, 1st and 2nd runners-up, respectively.

The mad rush to the grand finals culminates this week with satellite tournaments scheduled at Elbow Room, Metro-Walk, Pasig (Tuesday to Friday starting at 7 p.m.) and San Mig, Alabang Town Center (Wednesday and Friday starting at 7 p.m.)

Poker players may also join the grand finals by paying the full tournament fee on Saturday, Dec. 16 at Airport Casino Filipino starting 12:30 pm on a first-come, first-served basis.

Details about venues and schedules of qualifying/satellite tournaments are posted in the Philippine Poker Tour (PPT) official web site at www.PhilippinePokerTour.com <http://www.philippinepokertour.com/> . Those interested to join these satellite/qualifying tournaments may also call the PPT Secretariat (c/o Cindy) at 817-9092 or 812-0153.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected] or at [email protected]. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.