Third-party

Every car owner knows the scam has been going on for years and yet grudgingly shells out money (normally to the first person who volunteers to do the stenciling of the motor and vehicle numbers).

The scam is called Third Party Liability (TPL) insurance. The law requires it before a vehicle’s registration is renewed. Although the premium is obviously overpriced and the company selling the insurance coverage obviously shady, car owners mostly submit to the racket. Protesting the scam has not been worth the hassle.

TPL coverage is required even if the car already carries comprehensive insurance coverage. It is just another fee to be paid in a tedious process that asks car owners to renew their registration every year and perform such tasks as stenciling car and body numbers.

TPL coverage is basically useless. Small, fly-by-night companies dominate the trade. Some of them are not even accredited by the Insurance Commission. The coverage is basically worth less than the piece of paper on which it is printed and used to renew vehicle registration.

When a vehicle is damaged, one has to go through a wringer to get anything from the TPL cover. The documentation required is ridiculous. No wonder every accident on the road causes traffic jams while the parties involved wait for a policeman to do the formal report of the incident.

I filed a claim on my TPL coverage only once, many years ago. I was asked to produce pictures of the damage – and this was the time cameras used only film. Apart from the incident report, the insurance adjuster wanted copies of the registration papers. Then my car was sent to dome nondescript shop right across the city. Needless to say, the body repair was lousy.

Through the whole process, I was pretty sure the insurance firm was making things difficult to dissuade me from pursuing the claim. It took many weeks before the dent on my car could be repaired. It would have been cheaper and more convenient for me to pay for the repairs myself.

Now the LTO is finally doing something right about this TPL racket. The agency is requiring all peddlers of TPL insurance to be accredited by the Insurance Commission. Administrators will also be appointed to look after the rights of claimants and police the insurance peddlers.

If I had my way, I would remove the TPL requirement. It simply breeds the racket. Let every vehicle owner look after his own insurance cover, buying coverage according to his need and the attractiveness of the package offered.

That however, might be too radical an option. Even the simple requirement of Insurance Commission accreditation is being resisted by the cottage industry that must have made hundreds of millions from hapless motorists, rendered defenseless from insurance vultures by the stupid TPL requirement.

Each TPL cover, by the way, pays tariffs and taxes. The records suggest the peddlers of these shady insurance covers have evaded taxation.

Having chaired an insurance brokerage company before, I know how this industry operates. A lot of money could be made by ignoring the actuarial calculations and overpricing the premiums.

It is about time the LTO takes a long, hard look at the cottage industry that sprung out of the TPL requirement.

Discriminatory

The Senate must look carefully at the Salary Standardization Law (SSL) that passed the House of Representatives recently. The House version could spark angry protests.

Already rank-and-file employees objected the glaring disparity between the pay increases given officers and those given the lower-income brackets. Last week, several associations of retired uniformed personnel have banded together to denounce the exclusion of their pensions from indexation.

The Association of Generals and Flag Officers (AGFO), the Philippine Military Academy Alumni Association (PMAAA) and the National ROTC Alumni Association issued a manifesto to a discriminatory provision in the 2015 SSL issuing from the House. The provision, they say, smacks of class legislation.

The offending provision reads: Notwithstanding the provisions of PD 1638 and RA 8551, and considering the pendency of the passage of a pension reform law establishing a sustainable and just pension system for military and uniformed personnel, the indexation of benefits of retired and uniformed personnel with the base pay of those in the active service shall be suspended insofar as the base pay increase authorized in this Act.”

The draft law lies. There is no record of any initiative in Congress regarding a “pension reform law.” Yet the House version of the 2015 SSL uses this as an excuse for excluding retirees from the uniformed services from whatever increments may be due them from indexation of their pensions to the prevailing basic pay in the active service.

What dark inspiration might have driven the congressmen to exclude retirees from the uniformed services from the improved pay SSL promises?

Even the Constitution guarantees timely upgrades of pension benefits. Section 8 of Article VI reads: “The State shall, from time to time, review to upgrade the pensions and other benefits due the retirees of both the government and private sectors.”

The House version of the 2015 SSL chooses to defy that.

It is bad enough that many pensions and other benefits are inexplicably delayed because the DBM constantly forgets to seek budget allotments for the retirees of uniformed services. Now the draft law makes matters even worse for the retirees.

The retirees from the uniformed services did not serve the Republic any less than the other sections of the civil service. There is simply no excuse for the 2015 SSL to treat them shabbily and with contempt.