LTO and GSIS’ CTPL monopoly

I had a great conversation last Tuesday with a colleague of the Philippine Institute of Certified Public Accountants (PICPA), Regional Director Raul B. Aguilos (of LTO Region 7).  Our discussion ran from ISO accreditation to reorganization and from the usual problems of fixers and the more controversial alleged monopoly of the compulsory third party liability (CTPL) insurance by the Government System Insurance Corporation (GSIS). 

That was my first visit since his appointment early this year.  I just felt that a congratulatory remark via SMS was so inappropriate for a man of his stature.  A warm and tight handshake was more significant. 

As a Certified Public Accountant, Director Aguilos’ biases for systematic approaches fit the agency’s need for a great technocrat.  His experiences as former President of PICPA Leyte Chapter and former National Director of the national organization are living testaments of his qualities as a great leader who can transform a splintered army into one cohesive unit.  As a multi-awarded PICPAN, he had shown not just to us fellow CPAs but to the entire citizenry that he can deliver.  A fact that never passed the eyes of the DOTC Secretary Leandro Mendoza when he nominated Regional Director Raul B. Aguilos the second straight year for the GAWAD CES award.

Today, Director Aguilos is facing a new challenge.  Delivering the same quality performance he did in Eastern Visayas in Central Visayas, that of adopting ISO 9001:2000 standards. 

For the record, in Director Aguilos’ stint as Regional Director of LTO Eastern Visayas Region, he spearheaded the adoption of ISO 9001:2000 of the Tacloban City Licensing Center.  At present, Tacloban City Licensing Center is among the 17 units awarded the ISO 9001:2000 certification.  Notably, however, it is the only unit that is ISO certified in the Visayas.

It can be recalled that as a frontline agency, LTO has adopted the ISO 9001:2000 international standards as the best approach towards service excellence. With the establishment of a Quality Management System (QMS) for Driver’s License Processing, LTO obtained a clear perspective of the system requirements and the areas of control to assure the consistency in the quality of service that it provides. 

ISO 9001:2000 “specifies requirements for a quality management system where an organization needs to demonstrate its ability to consistently provide product or service that meets customer and applicable regulatory requirements, and aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer and applicable regulatory requirements.”

With Director Aguilos at the helm, we can expect an LTO-7 that is truly performing its mandate to serve their captive patrons (the license-seeking drivers and vehicle owners) and protect the more often ignored public’s interest with utmost efficiency.

On the other hand, while the streamlining of LTO-7’s licensing operations is a sure thing, there is a big issue that they will surely be affected with, the perceived monopoly of GSIS of the Compulsory Third Party Liability (CTPL) insurance policy business.  This argument stemmed from Department Order No. 2007-28 signed last July 5, 2007 by DOTC Secretary Leandro R. Mendoza.  Though lengthy in its form, the order simply requires all motor vehicle owners in the entire country to buy their CTPL insurance policy from the GSIS.

This order caught the ire of the insurance agents, brokers and fixers since last year.  Lately, rallies and demonstrations have been staged to dramatize their pleas and condemning the act as pure fund raising for the President of the Republic of the Philippines and her cohorts. Intriguing events like Romulo Neri’s appointment as head of the Social Security System (SSS) replacing a very efficient and fellow CPA, Cora dela Paz didn’t help any. Winston Garcia’s (GSIS President) alleged harassments towards Meralco not only muddled the directive but worsened it as well. Frankly, these suspicious developments helped made the entire non-life insurance industry in an uproar. 

But let us pause for a moment and set aside our biases and preconceived notions about the directive and deeply examine it, totally devoid of political undertones.  As all vehicle owners know, upon registration of the vehicles at the LTO, they are required under the Insurance Code to file a CTPL policy.  This compliance is embodied in a document called Certificate of Cover (COC).   With the help of the agents, brokers or even fixers, the COCs can be bought from about 100 insurance companies.

This directive will certainly affect some big patrons or those with huge insurable properties, vehicles included.  Having huge insurable properties give them the clout to bargain with insurance companies.  Due to their sizes, insurance companies serve them well that claims are given outright.  Since they deal in volumes, any CTPL claims will certainly be served at once.  It is difficult to imagine that while buildings, which are insured in millions are with private insurance companies and had been efficiently served, the vehicles that could be in few thousands are with GSIS.  It is unthinkable for management of big corporations to deal with two entities, a private firm for a huge coverage and GSIS for a measly claim.

For individuals, however, who own cars or motorcycles for their own use, the perception should be different.  It is commonly known to the citizenry that some CTPLs are bogus and some claims have not been paid.  This fake or bogus coverage are normally perpetrated by the fixers with or without the knowledge of their brokers or agents or even the insurance companies they represent.  Surely, insurance companies will never pay for claims where premiums are not paid. Surely, any claimant can’t expect payment if his premiums were not remitted. 

From these scenarios, it is evident that a middle ground is workable.  To avoid the issues about monopoly, GSIS should just get involve as another player in the CTPL insurance business.  If companies with a fleet of transport buses or vans will go to them, fine.  If not, then they should accept the fact that some competitors outwit them. 

However, if insurance companies, brokers and fixers will also respect the rights of individual car and motorcycle owners, then, they should not block the involvement of GSIS.  It is a fact that individual car and motorcycle owners have been so inconvenienced by the presence of these disrespectful and irritant brokers and fixers in the LTO.  If GSIS CTPL insurance premiums can be paid through the LTO cashier, their lives can be a lot better.  First, they will be at peace knowing that their premiums are in good hands.  Secondly, they will be spared of the fixers’ shenanigans.  Disrespectful fixers who will even try to pull ones’ underwear just to get the CTPL premium upon renewal of their vehicles’ registration.

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