Car insurance ‘monopoly’ hit
GSIS takeover repressive, non-life firms warn
By Michelle Remo
Philippine Daily Inquirer
First Posted 05:21:00 07/16/2008
Filed Under: Insurance
MANILA, Philippines -- Non-life insurance companies warned that the Government Service Insurance System’s attempt to take over the entire third-party liability insurance business was repressive and could drive away foreign investors.
“This will be just like martial law again,” Melecio Mallillin, a trustee of the Philippine Insurance and Reinsurers Association (PIRA), told a press conference on Tuesday.
The CTPL [comprehensive third-party liability] insurance business is a P3-billion-a-year industry.
PIRA, the organization of non-life insurance companies, has denounced moves to have the GSIS, the state-run pension fund, become the sole provider of CTPL policies for vehicle owners in the country.
This would constitute a monopoly, and is therefore unconstitutional, PIRA said.
It said it would be contrary to the concept of market competition, provided for under the Constitution.
PIRA said a GSIS takeover would also mean a loss of an estimated 60,000 industry jobs, mainly insurance agents selling CTPL policies.
CTPL is an insurance policy that covers for any possible damage that an individual may cause because of the use of his or her vehicle. The Land Transportation Office requires all vehicle owners to first secure a CTPL before registering the vehicles.
GSIS president and general manager Winston Garcia said his proposal for the GSIS to be the sole provider of CTPL was the best solution to vehicle owners being victimized by the allegedly rampant sale of fake CTPL policies.
PIRA chair Hororio Ramajo said the GSIS was exaggerating reports about the allegedly rampant sale of fake CTPL policies.
“Selling of fake CTPL policies is a thing of the past. Our industry is now able to police our own ranks,” Ramajo said.
Ramajo said that out of the estimated 5 million vehicles registered with the LTO for 2008, PIRA has already evaluated the insurance policies covering 3.2 million of them.
Ramajo said the group has already established an efficient system of checking the records of insurance companies against those of the LTO.
PIRA has filed a case in the Makati Regional Trial Court against the Department of Transportation and Communications for issuing Department Order 2007-28 in July last year designating the GSIS as the sole provider of CTPL policies to vehicle owners.
The court dismissed the case last month on a technicality. PIRA has already filed a motion for reconsideration.
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