Court stops GSIS from taking over CTPL insurance

A Mandaluyong City judge issued Friday a 20-day temporary restraining order (TRO) stopping the Government Service Insurance System (GSIS) from taking over the compulsory third party liability (CTPL) insurance for motor vehicles in the country.

Judge Carlos Valenzuela said the TRO prohibits the GSIS, the Department of Transportation and Communications and other parties from implementing DOTC Order 2007-28, which takes away the private insurance firms’ authority to issue CTPL insurance.

Valenzuela said the order is in response to a petition filed by Belinda Martezano, a resident of Mandaluyong and a licensed insurance agent who derives her livelihood from selling CTPL insurance to car owners.

Martezano said the DOTC order would take away her legitimate source of income, an act that is both unconstitutional and immoral.

The GSIS has planned to start its integrated CTPL system at the LTO on Aug. 1.

Reports showed that Stradcom, the LTO’s technology provider, has shut down the old system of authenticating CTPL policies to give way for the testing of the new system. All this will have to stop with Valenzuela’s order. This TRO was the second issued by the court stopping the controversial DOTC order.

Last year, the Philippine Insurers and Reinsurers Association (PIRA), the umbrella organization of all non-life insurance companies in the country, was able to get a court injunction from a Makati court. The injunction was lifted when the case was dismissed on a technicality.

PIRA chairman Honorio Ramajo welcomed the Mandaluyong court’s decision. He said the industry is united in protesting the GSIS’ plan to monopolize the CTPL insurance of 5.5 million motor vehicles, which would generate premiums of more than P3 billion annually.

Included in the suit filed in Mandaluyong were technology firm Stradcom and the Insurance Commission, which signed a memorandum of agreement with the DOTC and GSIS to implement the CTPL takeover.

Ramajo said the industry is not wavering in its stand that the CTPL takeover will be damaging not only to insurance companies and their employees but more so to motorists who will be deprived of their freedom of choice.

Earlier, transport groups threatened to stage a massive strike if government insists on including them in the CTPL takeover. The DOTC backed off and agreed to exclude the transport groups because of this threat.