MANILA, Philippines - The licenses of insurance agents for public utility vehicles (PUVs) have been revoked due to a string of violations that include tax evasion, the Department of Finance (DOF) said yesterday.
The violations have been committed since 2005, the DOF said in a statement yesterday.
Citing data from the Insurance Commission (IC), which ordered the revocation, the DOF said the IC has ordered the suspension of licenses of Universal Insurance Transport Accident Agency Solutions Inc. (UNITRANS) and Passenger Accident Management and Insurance Agency Inc. (PAMI), both of which also committed violations in their memorandum of agreement (MOA) with the IC and the Land Transportation Franchising and Regulatory Board (LTFRB).
“We cancelled the licenses of the two agents so in effect, they cannot sell insurance products of their insurers anymore nor can they accept application and pay claims from those insured,” Insurance Commissioner Emmanuel F. Dooc said in a statement issued by the DOF.
In the meantime, claims can be processed by Stronghold Insurance Co., Inc. and UCPB General Insurance Co., Inc. “if the LTFRB permits it,” said Denis Cabucos, chief of IC licensing division.
UNITRANS and PAMI serve as agents for Stronghold Insurance and UCPB General Insurance, respectively. The two insurance companies won the bidding to sell mandatory personal accident insurance products for PUVs.
In 2005, the four institutions signed a MOA with the LTFRB and IC, supposedly to isolate the PUV insurance business from corruption.
However, Julie Duenas, chief of IC examination division said the two agents violated provisions in the MOA including a revenue sharing scheme wherein PAMI would handle the insurance of vehicles with plates ending in odd numbers while UNITRANS is in charge of public vehicles with plate numbers ending in even numbers.
“They did not follow the rule resulting in a competition between the two. It was like they were fighting for clients,” Duenas said.
As a result, the DOF said, the two incurred “unauthorized expenses” such as marketing fees, consultancy fees, service fees, and give-aways or donations.
Furthermore, the Finance department also said that IC’s investigation revealed about P928,000 worth of “giveaways and donation;” P7.69 million in consultancy fees paid to Telesis Consultancy Services as adviser; P41.47 million in “service fees” to “liaison officers of various transport groups;” and around P30 million in “marketing expenses” paid to Philippine Jeepney Operators and Drivers/Alliance Foundation (PJODAP) and Public Transport Workers Foundation Inc.
“The above amounts are too big for donations and assistance expenses. The cheque vouchers were made payable to various transport groups thus proofs of actual receipts of the benefits were not verified,” Dooc said.
UNITRANS also did not pay a total of P35.43 million to the government in 2009, representing Stronghold Insurance’s taxes, the Finance department said.