CTPL winners and losers

In the midst of court rulings being flung left and right, and the continued muddling of the issue on fake Certificate of Covers and fly-by-night insurance agencies that sell compulsory third party liability (CTPL) coverage to hapless motor vehicle owners, something good seems to be emerging.

For over three decades now, the law that requires compulsory third party liability (CTPL) insurance for every vehicle operating in the country has been robbing the public billions of pesos by way of lost taxes and fraudulent insurance certificates.

Based on 2003 figures, for example, 4.3 million vehicles were registered with the Land Transportation Office yet only P1.3 billion of the P2.5 billion premium payments were reported. This somehow says that P1.2 billion worth of CTPLs sold were fakes.

On the other hand, taxes due the government for the premiums on insurance coverage should have been P579 million but only P310 million had been remitted to the national coffers.

Plus we hear of so many stories about vehicle owners who have been unable to collect on the CTPLs, although some insurance companies are quick to point out that there are no cases filed with the Insurance Commission, hence there must be no truth to these stories.

A procession of remedies

All in all, one can’t deny that there are problems. In fact, the government has been trying to remedy the situation by introducing various remedies, which to date, have all been thrown out of the window for their inability to provide acceptable solutions.

Now comes a not-so-new tack. Last month, the Department of Transportation and Communications, IC, and the Government Service Insurance System signed a memorandum of agreement that provides for the GSIS to issue CTPL insurance coverage for all motor vehicles.

For some time now, the GSIS had been hankering for government to allow it to handle the whole CTPL business, now valued at P3 billion. The GSIS under the present leadership of Winston Garcia felt that they could solve at least two big problems: spurious COCs and tax leakages, together valued at least at an estimated P1.5 billion.

With the signed MOA, one could glean additional glaring benefits. For starters, vehicle owners would simply pay directly to the LTC (as a sort of one-stop shop) for their annual vehicle registration. This would eliminate one step in the old process, i.e., getting coverage from an external insurance firm.

Also, and which I felt is the most important come-on, the announced fees are so much lower, which makes me feel sort of gypped of thousands of pesos in the insurance coverage I had paid over the years.

GSIS-backed CTPL coverage will cost only P575 for private and utility vehicles, P625 for light trucks, and P265 for motorcycles. Presently, CTPL insurance provided by private insurers is about P900 for private vehicles, P950 for utility vehicles, P980 for light trucks, and P350 for motorcycles.

Doing the math, private vehicle owners save P325, utility vehicle owners keep P375, light trucks owners bank P355, and motorcycle owners get P85. This is such a bonanza with today’s hard times, and simply by getting your insurance coverage from GSIS.

Bringing to court

But, as most Filipinos will agree, living in a country as litigious as ours, expect the GSIS proposal and the succeeding MOA with the DOTC to be subjected to legal scrutiny.

Even as a previous injunction by the Makati Regional Trial Court was lifted, another one had been served, this time by the Mandaluyong RTC. The Court of Appeals had also issued a 60-day temporary restraining order against GSIS.

To think that the MOA had earlier been given a sort of green light by the Department of Justice when it issued an opinion that the GSIS is empowered by its charter and other laws to engage in the private insurance business, effectively squashing protests by some insurance firms that the GSIS should simply be confined to insuring government vehicles.

Giving a choice

The sticking issue though against the GSIS-DOTC deal appears to be its blatant disregard in giving vehicle owners a choice on who their insurer should be, something that apparently was the guiding principle when the Insurance Code was passed in 1974.

But it seems the LTO has recognized its faux pas by issuing in succeeding statements that vehicle owners are free to choose who they sign up with for their insurance coverage.

This has effectively emboldened LTO and GSIS to roll out, even on a pilot test basis, what it now call as an integrated CPTL insurance system.

From a failed design to become the country’s lone vehicle insurance agent, GSIS has dropped a notch down to become simply a preferred one, but still a status that should not be coughed at considering the famed convenience of LTO’s one-stop service when getting driving licenses.

On this note, I guess it is not premature to congratulate GSIS for thinking out of the box in trying to bring solutions to the CTPL problem. If there is any immediate positive change that would seem upcoming, it is the much lower cost of insuring one’s vehicle, especially if independent insurers follow suit.

Government may not yet totally eradicate dubious insurance agents peddling fake COCs or to fully collect on taxes that are lost to such illegal activities, but such is the price of a democracy. Well, the law could be changed. But that’s for another day.

Collegiate Champions League update

Two spots in the “Sweet 16” Final Challenge of the SMART-Champions League 2008 Philippine Collegiate Championship games and five zonal qualifying slots are at stake in the ongoing competitions at Cebu Schools Athletic Foundation (CESAFI) and National Athletic Association of Schools, Colleges & Universities (NAASCU).

The champion teams of CESAFI and NAASCU automatically join the elite group of 16 teams together with the champions and runner-ups of UAAP and NCAA. The 2nd and 3rd placers, however, have to pass through zonals championship to earn seats in the FilOil Flying V “Sweet 16” Final Challenge.

At CESAFI, the University of San Jose Recoletos Jaguars is currently leading with four straight wins. The University of Visayas Green Lancers, defending champion and 2007 National Collegiate runner-up, has a three-wins one-loss card followed by University of San Carlos Warriors with a 2-2 slate.

At NAASCU, the early leaders with two wins each are San Sebastian College Recoletos de Cavite Baycats, St. Claire College of Caloocan Saints and the Pamantasan ng Pasay Eagles. 

For more details about the biggest collegiate basketball event for the year sponsored by SMART, visit www.CollegiateChampionsLeague.net.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.