Insurance firms seek reversal of ruling on CTPL

MANILA, Philippines – The country’s insurance companies have appealed anew a local court ruling that would allow the Department of Transportation and Communications (DOTC) to take away the car insurance business from private firms.

The Government Service Insurance System (GSIS) is set to handle the country’s P3.5 billion motor vehicle insurance business after a Makati Regional Trial Court lifted the injunction order on a previous ruling issued by the transportation department.

The Makati Regional Trial court’s June 24 decision effectively paves the way for GSIS to take over the country’s car insurance business.

The Philippine Insurers and Reinsurers Inc. (PIRA) filed a new appeal last July 10, arguing that the Makati court acted arbitrarily in dismissing their previous petition.

The DOTC earlier ordered the implementation of an integrated motor vehicle insurance scheme, which was blocked by private insurance companies that filed a petition in court.

Judge Cesar Santamaria of the Makati RTC Branch 145, however, issued an order dated June 24 dismissing the petition and denying the motion for partial reconsideration filed by PIRA.

Under the DOTC order, the issuance of compulsory third party liability (CTPL) insurance policies would be integrated with the Land Transportation Office’s motor vehicle registration system.

The CTPL is a mandatory insurance for all owners of motor vehicles. It carries a P100,000 insurance coverage for death or injuries that may result from vehicular accidents. Costing P560 for private cars, a CTPL may be a small sum but since there are 5.5 million vehicles in the country today, the business reaches more than P3.5 billion every year.

The new arrangement calls for the automatic issuance of CTPL insurance policies by LTO District Offices. Under the plan, GSIS through the publicly held National Reinsurance Corp. of the Philippines would provide the insurance coverage.

PIRA said the court ignored the insurers’ group assertion that the order by the transportation department constitutes a “political act, an administrative action and a regulatory measure outside the scope of authority” of the department.

The group said the Makati court did not give the group a chance to explain its position on the matter.

GSIS president and general manager Winston Garcia said the pension fund manager expects to implement the integrated scheme soon.

“The order has already been lifted and we see no hindrance in the implementation of the new CTPL scheme at the soonest possible time,” Garcia said.

He said motorists would only go to the LTO instead of dealing with 120 or more insurance companies.

PIRA claimed that if GSIS takes over the insurance business, car owners would no longer have a choice since it will all be a GSIS monopoly.

Michael Viray, spokesman for the Association of Lawful Advocates for Responsible Motoring (ALARM), said agents and brokers of unscrupulous insurance companies selling fake CTPL certificates of coverage (COCs) have led opposition to the DOTC order.

Viray said that these unscrupulous agents were asking for government protection to continue victimizing unsuspecting motor vehicle owners buying CTPL insurance to register their cars at the LTO. – With Rainier Allan Ronda