Cheaper insurance for jeepney operators eyed
The Insurance Commission is looking into the proposal to bring down insurance premiums collected from jeepney operators as part of the jeepney modernization program, Commissioner Dennis B. Funa said yesterday.
In a statement, Funa said transport group Kilusan sa Pagbabago ng Industriya ng Transportasyon (Kapit) was seeking a reduction in the upfront and recurring costs being shouldered by jeepney operators, including the premium charged by insurance firms for comprehensive motor vehicle insurance.
“The Insurance Commission was informed by Kapit that it had spoken with several insurance companies which manifested their willingness to explore ways to make motor car insurance product more affordable,” Funa said.
Also, Funa said Kapit “proposed that insurance companies be allowed to extend loans to jeepney operators, transport groups, cooperatives and transport management companies, and for the said loans to be considered as admitted asset of the lender-insurance provider.”
According to Funa, Kapit told the Insurance Commission the jeepney modernization program would require huge funding.
Citing Kapit figures, he said the cost was estimated at P66 billion yearly for three years.
“In order for jeepney operators to avail themselves of new vehicles, Kapit is proposing that insurance companies be allowed to extend loans to jeepney operators,” he said, adding that this would give jeepney operations additional funding options.
Funa said the Insurance Commission had asked the Philippine Insurers and Reinsurers Association Inc. (Pira), the umbrella organization of all nonlife insurance companies in the Philippines, to submit its comments on Kapit’s proposal.
Based on initial comments from Pira, the insurers had expressed willingness to lower the premiums collected from jeepney operators but subject to the compliance with the minimum tariff rates imposed by the commission, he said.
“Insurance companies offering motor car insurance products are bound to observe the minimum and maximum range of premium rate for insurance coverage to be collected in motor car insurance. This means insurance companies cannot charge premiums below the rate imposed by the Insurance Commission. At present, the basic rate for loss and damage insurance coverage is at 1.5-2 percent of the value of the motor vehicle, while the premium for acts of nature coverage is subject to a minimum of 0.5 percent of the value of the motor vehicle,” according to Funa.
