CA issues TRO vs GSIS monopoly on CTPL

The Court of Appeals has issued a 60-day temporary restraining order preventing the Department of Transportation and Communications (DOTC) from granting the Government Service Insurance System (GSIS) exclusivity in providing compulsory third party liability (CTPL) insurance to owners of private motor vehicles in the country who will register with the Land Transportation Office (LTO).

In a three-page resolution penned by Associate Justice Ramon Bato Jr., the CA’s Fifth Division granted the petition filed by the Alliance of Non-Life Insurance Workers of the Philippines (ANIWP), represented by its president, Jubert Maun, for the issuance of a TRO.

The court, however, stressed that the TRO is granted on the condition that the petitioner posts a P100,000 bond “to answer for whatever damages” respondents DOTC and GSIS will suffer in case it is finally decided that the petitioner is not entitled to a TRO.

In its petition, ANIWP argued that the DOTC committed grave abuse of discretion in issuing Department Order 2007-28 on July 5, 2007, which laid out the rules and regulations on the integration of the issuance and payment of the CTPL with the LTO’s information technology project systems and database.

The petitioner said the DOTC order violated the Insurance Code of 1978 and the Constitution since it delegates the GSIS as the lone insurance entity to provide CPTPL for motor vehicles to be registered with the LTO.

The exclusion of other insurance companies duly authorized by the Insurance Commission, according to ANIWP, would create a state-owned monopoly and constitute restraint of trade or unfair competition.

The GSIS is scheduled to start its integrated CTPL insurance system at the LTO on Aug. 1.

Earlier, the Mandaluyong regional trial court issued a separate TRO against the GSIS, granting a petition filed by the Philippine Insurers and Reinsurers Associate Association.