THE INSURANCE Commission has asked the Land Transportation Office (LTO) to address the concerns of a group of agents who fear losing their livelihoods due to a new scheme on the issuance of mandatory insurance for vehicle owners.
In a Nov. 5 letter to LTO chief Alfonso V. Tan Jr., Deputy Insurance Commissioner Vida T. Chiong said the Bukluran ng mga Manggagawa sa Industriya ng Seguro (BMIS), a group of Compulsory Third Party Liability (CTPL) insurance sellers, has expressed concern that the LTO’s administrative order last month concerning its proposed reformed CPTL insurance project “will duly encroach on, or restrict the livelihood of insurance agents.”
A CTPL insurance policy is required when registering a motor vehicle, whether for commercial or personal use, with the LTO. It is meant to provide protection to the riding public.
“The Insurance Commission has an interest in ensuring that the rights and lawful benefits of insurance agents are protected under the reformed CTPL insurance program [of the LTO]. In this regard, may we request your office to urgently advise the Insurance Commission how the reformed CTPL insurance program ensures that such rights and lawful benefits will remain protected,” Chiong said.
Last week, non-life insurers said they were opposing the LTO move, even as the agency maintained that its new regulation was aimed at combating “fixers.”
In a statement, Philippine Insurers and Reinsurers Association (Pira) chair Michael F. Rellosa said 44 of the group’s 55 member-firms have expressed opposition to the LTO administrative order, which will create an entity that oversees the issuance of CTPL insurance.
Rellosa said the majority of Pira’s members planned to “take all possible legal measures” in a bid to stop the implementation of the LTO order, which they feared could “introduce a cartel that would monopolize the issuance of [CTPL].”
“Our members recognize that the LTO does not have the legal right to regulate insurance business in anyway since such power and responsibility reside only in the Insurance Commission under the revised Insurance Code,” Rellosa said.
“It is illegal for the LTO to issue an order limiting the business of issuing CTPL insurance cover to a select number of insurance companies, and worse, appoint an administrator that virtually takes over the function of the Insurance Commission,” the Pira official added.
But the LTO said it came out with the administrative order in cooperation with the Insurance Commission in order to “crack down on fly-by-night motor vehicle insurance providers.”
“The LTO and the Insurance Commission of the Department of Finance are taking serious steps to reform, properly regulate and monitor the pricing and distribution of the CTPL insurance,” LTO spokesperson Jason Salvador said in a separate statement.