LTFRB bares advantage of new insurance scheme

The new insurance policy program being implemented by the Land Transportation Franchising and Regulatory Board (LTFRB) assured holders involved in accidents that insurance companies will pay five days upon completion of requirements submitted.

LTFRB chief Elena Bautista explained the features of the new policy guidelines for the Enhanced Compulsory Third Party Liability (ECTPL) program for the public utility vehicles (PUVs) following a request for clarification by transport groups.

"The ECTPL is ‘all risk and no fault,’ to be paid within five days," Bautista said.

It also provides a 24/7 telephone hotline and on-site emergency medical assistance, bail bond for drivers, medical assistance of up to P 12,500, death benefit of P 50,000 per victim, on-line real-time computer link with the LTFRB, Land Transportation Office and other government agencies.

Bautista said passengers involved in accidents can even claim the insurance of P500 for minor injuries even without submission of a receipt to the insurance companies.

A P20,000 bail bond for the driver involved in the accident will also be provided by the insurance companies issuing the ECTPL, which started last March 1.

Bautista earlier revealed that the Insurance Commission authorized two insurance companies belonging to the Philippine Accident Managers Inc. (PAMI) and Universal Transport Solutions Inc. (UNITRANS), the providers of the Passenger Personal Accident Insurance Program (PPAIP) of the LTFRB.

Bautista earlier said that under the new set-up, the government agency can finally get rid of "fly-by-night" insurance companies.

Reports  also said 48 insurance companies have collectively withdrawn their respective letters of authority to their agents, brokers and employees, as well as persons acting in their behalf to issue, sell, distribute and release any and all Compulsory Third Party Liability (CTPL) policies for public utility vehicles except tricycles.

These companies, most of them active players in the CTPL market, are mostly members of PAMI and UNITRANS undertaking the PPAIP.

The move was made amid reports of the implementation of the ECTPL to dramatize the insurance industry’s solidarity in responding to government’s call to effect meaningful changes in the present system.

The CTPL, a liability insurance policy which is a mandatory requirement in the yearly registration of all vehicles at the Land Transportation Office (LTO), has been the subject of complaints of vehicle owners because of the proliferation of fake policies, unexplained delays in the release and even non-payment of claims, predatory pricing of premiums of insurance companies and other forms of malpractice.

Two years ago,  Transportation and Communications Secretary Leandro Mendoza issued a department order creating a committee that would look into these complaints and conduct a study whether the CTPL for public utility vehicles such as buses, jeepneys and taxis could be patterned after the PPAIP.

The PPAIP for PUVs is an "all risk, no fault policy" that guarantees payment of victims or heirs of vehicular accidents without question and regardless of circumstances within five working days.

The CTPL is a liability insurance whereby fault should be ascertained first before claims payment to vehicular accident victims could be settled which explains the various complaints of claimants.

Payment to accident victims within five working days under the ECTPL is made possible because of the combined resources of the groups of insurance companies which have allocated a sizeable amount of reserves even under extraordinary circumstances such as "force majeure" and "terrorist acts."