Insurers group seeks gov't aid on eliminating spurious players

The Philippine Insurers and Re-insurers Association (PIRA) is demanding for government's attention to help the industry's effort to eliminate illegitimate players in the business.

The group will start its campaign to solidify and pull-up the "battered" insurance industry's name, through the creation of a consortium among PIRA members to handle the entire processing of Compulsory Third Party Liability Insurance (CTPL) for private vehicles.

PIRA treasurer and president of Federal Phoenix Assurance Company Inc., Ramon Yap Dimacali said the government's approval for the consortium to handle the transaction of the CTPL will help the industry strengthen its name in the Philippine market.

The insurance industry has experienced challenging times these days, primary because of the entry of illegitimate players in the market that victimized consumers.

For the CTPL program alone, there are pseudo insurance companies that entered the business inside the different Land Transportation Office (LTO) across the country, and charging double than the actual premium of the compulsory vehicle insurance.

According to Dimacali, PIRA members have pooled out their resources to put in the necessary channel in order to avoid scam inside the LTO offices that are getting money from vehicle owners.

"We want the government to recognize our expertise and legitimacy in the industry, and give us the opportunity to handle the processing of the program in partnership with banking institutions to avoid scam and corruption," Dimacali said in an interview with The FREEMAN recently.

The non-life insurance industry in the country is growing in a flat rate of four percent in the last few years. This is primary because of the weak appreciation of the Filipino market on the insurance investment vehicle.

The existence of the unscrupulous businessmen also worsens the industry's problem, as their unbecoming practices of not paying premium holders have further weaken the confidence of the market in the insurance industry in the country.

Apparently, the scheme involves the selling of fake CTPL policies by the pad at an average of P150 per policy form to "colurom" agents who in turn sell these to Land Transportation Office branch officials at P300 each. They also retail the fake policy forms at P700 each to unsuspecting vehicle registrants.

He said PIRA is already waiting for the approval of the Insurance Commission and the Department of Finance (DoF) for the proposed CTPL facility, but Dimacali said the momentum of the processing is currently interruption in the exit of Insurance Commissioner Benjamin Santos early this week.

However, he said that PIRA, which has a membership base of over 80 companies, is hopeful that the next Insurance Commissioner will prioritize on this appeal.

He cited that the CTPL only requires a little over P500 premium, excluding administrative fees which will cost vehicle owner close to P600, but the actual collection in the LTO offices would reach to P1,000. Other agents do not even have real insurance offices.

Earlier, Senator Juan Ponce Enrile has exposed an alleged ongoing scam involving the vehicular insurance industry that has deprived the cash-strapped government at least P410 million in revenues which is being perpetrated by what he called "powerful buccaneers in the non-life insurance industry".

Enrile, during a privilege speech few days back, stressed that based on the number of car registrations, their premiums should amount to at least P2.5 billion, with the government collecting more than P500 million in taxes.

But, according to him, the latest figures show the government collected only P90 million in taxes from P1.38 billion in sales reported by the industry.

Dimacali said if the government will allow the PIRA to handle the transaction through electronic processing targeted government revenue which is P2.7 billion for the almost 5 million vehicles in the country would be transparently accounted for.

"Lets keep the politics out of here, we have the model already which promotes transparency of the transaction, why can't it be rolled out immediately?" he said.

He said the PIRA"s model is feasibility, the players have already talked with several banks like BPI, Land Bank of the Philippines, Equitable PCI Bank, Philippine National Bank, RCBC, among others to make it easier for vehicle owners to register and insured their vehicles automatically.