LTO denies involvement in car insurance scam

The Land Transportation Office (LTO) has vehemently denied any involvement in a scam on the Compulsory Third Party Liability (CTPL) insurance for registered motor vehicles in the country.

LTO officer-in-charge lawyer Jimmy Pesigan said the LTO has no authority to verify whether an insurance company is fake or spurious.

Pesigan said the Insurance Commission has the sole authority to issue such an insurance policy.

Pesigan issued the statement in reaction to Senator Juan Ponce Enrile’s privilege speech last Monday on the alleged scam involving the vehicular insurance industry, which has cost the government some P410 million in annual revenues.

Car owners are required to secure a CTPL when they register their vehicles.

Enrile revealed that fake CTPL policies are being sold to "colorum" agents at P150 per policy form. They, in turn, sell these policies to LTO district officials at P300 each, he claimed.

Enrile said fake policy forms are retailed at P700 per form to unsuspecting persons registering their vehicles.

The senator said that based on the number of car registrations, their premiums should amount to at least P2.5 billion, with the government getting more than P500 million in taxes. But the government collected only P90 million in taxes from the P1.38 billion in sales reported by the vehicular insurance industry.

Pesigan said that for the five million cars registered every year, the LTO does not get a single centavo from insurance policies, including passenger accident insurance.

He said the LTO’s role is purely ministerial. If a car is brought by its owner complete with its documents to the LTO for registration, the agency has no reason why they should not register the vehicle, he said.

Pesigan also said LTO chief Assistant Secretary Anneli Lontoc has already ordered all LTO district heads to strictly scrutinize the documents of vehicles for registration.

The LTO said it is willing to release the names of valid and accredited insurance companies.