City Council wants auto insurance firms screened

The City Council wants the Philippine Insurance Commission to strictly screen insurance companies offering Comprehensive Third Party Liability auto insurance, and allow private insurance firms to compete in the business.

The commission recently announced that a great chunk of the P2.4 billion annual CTPL auto insurance is cornered by fly-by-night insurance firms that had devoured as much as P1.2 billion worth of premiums each year from vehicle owners.

Since the selling of CTPL is a lucrative business, the Government Service Insurance System proposed to the Department of Transportation and Communication that it be given the exclusive right to sell the CTPL automobile insurance for private and public motor vehicles.

The GSIS outlined a simplified scheme of allowing the payment of CTPL vehicle insurance directly to Land Transportation Office during registration.

But Councilor Arsenio Pacaña said that GSIS's exclusivity to corner the CTPL insurance business is against the principles of free enterprise, as it will put majority of non-life insurance firms employing at least 130,000 employees out of business.

In his proposal, which the City Council adopted last week, Pacaña suggested that the PIC, DOTC and the Department of Finance should instead consider allowing the GSIS and selected private insurance firms to offer the CTPL vehicle insurance.

Meanwhile, to address the rampant selling of fake CTPL policies and pocketing of premiums by unscrupulous fly-by night insurance firms, industry regulators like the Philippine Insurers and Re-insurers Association have proposed the adoption of a centralized processing system for CTPL.

The proposal aims to weed out miscreants of the industry, as clients will no longer buy CTPL policy outside the LTO and allow motorists to pay for insurance coverage at banks. - Cristina C. Birondo