MANILA, Philippines – Government Service Insurance System (GSIS) president and chief executive officer Winston Garcia stressed yesterday that the state workers’ fund will not monopolize the P3.5-billion compulsory third party liability (CTPL) insurance business in the registration of motor vehicles at the Land Transportation Office (LTO).
The pronouncement came even as the LTO is now neck-deep in preparations for the full implementation of GSIS’s issuance of the CTPL on registered passenger and private vehicles, even as major transport groups have expressed strong opposition to the program.
In a press conference yesterday with LTO chief Assistant Secretary Alberto Suansing at the Manila Peninsula to discuss the controversial move of the Department of Transportation and Communications (DOTC) to integrate the issuance of CTPL insurance at the LTO, Garcia said GSIS will be accrediting legitimate and reputable insurance companies that can provide the insurance to motor vehicle owners registering their vehicles.
Garcia said GSIS will only be taking up 20 percent of all CTPL policies.
“The GSIS will also accredit reinsurance companies to which it will farm out the provision of the CTPLs. The GSIS will only take up 20 percent of all CTPL policies it will garner and farm out the provision of the other 80 percent to accredited insurance and reinsurance firms at much lower prices than the old CTPL system,” Garcia said.
The GSIS top honcho said that venerable and respected insurance companies had already expressed support for the program, and more than 50 companies had even expressed their intention to seek accreditation with GSIS.
He pointed out that representatives of the insurance companies had showed up in their press briefing yesterday to signify their support for the DOTC and GSIS program.
The insurance companies joining the program have taken out a full-page advertisement that came out in yesterday’s issue of The Philippine STAR to express their support to GSIS and DOTC.
The companies that signed the manifesto of support were AFP General Insurance Corp., Malayan Insurance Co. Inc., Bank of the Philippine Island Mitsui, Tokio Marine Malayan Ins. Co., Sumitomo Insurance Corp., Malayan Zurich Ins. Co. Inc., Mapfre Insular Insurance Corp., Meridian Insurance Corp., Pioneer Insurance and Surety Corp., Allied Bankers Insurance Corp., Pioneer Intercontinental Ins. Co. Inc., Equitable Insurance Corp., Eastern Assurance and Surety Corp., and Stronghold Insurance Co.
Garcia said there was no truth to allegations made by some members of the Philippine Insurers and Reinsurers Association (PIRA) that the DOTC move to integrate the CTPL insurance issuance will result to a monopoly by GSIS of the business and that it will lead to the loss of some 60,000 jobs for insurance industry workers.
“Those figures that PIRA are showing, are more or less, misleading,” Garcia said.
“We’re wondering where they got that figure of huge displacement of workers that will happen just because it is GSIS, in partnership with other insurance companies will do this,” Garcia said.
“The numbers of PIRA are misleading. Registered insurance agents in the Insurance Commission are only 10,000. The CTPL business in the insurance industry comprises only 2.5 percent of the entire insurance business. So where did they get that 60,000?” Garcia said.
“Almost 50 insurance companies that are members of PIRA have signed up with us and willing to participate in this program. I’m very surprised by the statements of PIRA officers as if the whole insurance industry is against it,” he said.
No more fly-by-night
On the other hand, Suansing has defended the program as a strategy to finally eradicate the proliferation of fake CTPL certificates of coverage being issued by unscrupulous fly-by-night insurance companies operating at LTO offices.
He said the program would also offer cheaper CTPL insurance policies supposedly enabling private vehicle owners to save P325; owners of utility vehicles, P375; light trucks, P355; and motorcycles P85.
CTPL is a pre-requisite in car registration with the LTO.
The insurance assures victims of car accidents, particularly those who are killed or are injured by CTPL-insured cars of a P100,000 death or hospitalization benefit.
According to Garcia, the program would certainly screen out fly-by-night insurance firms from victimizing motor vehicle owners with fake CTPL certificates of coverage, and will even break up a cartel of 10 small insurance firms that controls 75 percent of the CTPL business.
“In fact, the only ones who must fear this new system are those who had been swindling the public by selling fake CTPLs. Their days are numbered,” Garcia said.
Cartel
Garcia even identified the members of the cartel, the same group that, according to him is manipulating the PIRA, and called it an “abusive, small and manipulative group.”
These are: the Great Domestic Insurance, BF General Insurance, Plaridel Surety and Insurance Inc., Security Pacific, Far Eastern Surety, Pacific Union Insurance, Standard Insurance, South Sea Surety and Insurance, Pacific General Insurance, and Acropolis Central.
The latter (Acropolis), Garcia claims, does not even have a license to operate, while he doubts whether the members of the so-called CTPL cartel have the ability to service claims.
“Their net worth is not even a 10-percent of GSIS’ (capital),” he said.
Garcia expressed disbelief how the rest of the 94-strong non-life insurance industry is being manipulated by the cartel and how they control over 75 percent of the CTPL business.
He said that the new system will open common trust account which will pull all the money coming from the CTPL business. – Perseus Echeminada, Ted Torres