IC extends accreditation of insurance providers for PUV passengers
Riders of public utility vehicles (PUVs) will continue to be covered by accident insurance beyond Nov. 17 as the Insurance Commission decided to temporarily keep the accreditation of the two providers of passenger personal accident insurance (PPAI).
“A status quo shall be implemented and the existing two-group system shall be maintained. The duration of the status quo shall be designated as a transition period. In the interim, the existing insurance providers shall continue to provide insurance coverage for the PPAI on a hold-over capacity until the expiration of the transition period or upon issuance of the necessary regulation on the matter is issued by the Insurance Commission,” Insurance Commissioner Dennis B. Funa said in Circular Letter No. 59 issued last Nov. 15.
The three-year agreement between the Land Transportation Franchising and Regulatory Board (LTFRB) and the two management firms implementing the passenger personal accident insurance program (PPAIP) is set to lapse on Nov. 17.
The two management companies were SSCI Management and Insurance Agency Corp. (SCCI) as well as Passenger Accident Management and Insurance Agency Inc. (Pami).
“However, changes within the group providing insurance coverage for PPAI, specifically on the change of lead insurer shall not be covered by this status quo order. Furthermore, the existing groups shall remain open to all other insurance companies that may wish to participate in the program,” Funa said.
“The transition period shall be until such time as [the Insurance Commission] is able to consider all relevant matters and issues and to verify the complete compliance of non-life insurance companies with the capital build-up program of insurance companies as mandated by the Amended Insurance Code which requires all existing insurance companies to have a net worth of at least P900 million by Dec. 31, 2019. The statutory capital build-up is relevant to the viability of a consortium. Should a significant number of insurers, belonging to a single consortium, be negatively impacted by next round of capital increase, the insuring public could be adversely affected as well,” Funa added.
“During this period, [the Insurance Commission] will undertake a study and afterwards issue the necessary guidelines as to whether the program should shift to a new system or the extension/enhancement of the current set-up and insurance providers as agreed upon during the public consultation held last Oct. 25, 2017,” according to Funa.
“With the implementation of the status quo order during the transition period, there will be no accreditation process which has been perceived to be the source of corruption or controversy,” the Insurance Commissioner said.
Under the PPAIP, “it is mandatory upon operators of public utility vehicles to procure insurance coverage for their passengers, including the driver,” the Insurance Commission earlier said.
Also under the PPAIP, “the mandatory insurance provides for accidental death benefits and bodily injury benefits on top of the compulsory third party liability (CTPL) insurance,” according to the Insurance Commission.
The regulator had said that “the insurance coverage under the PPAIP is an ‘all risk no fault’ which means that insurance companies shall cover all authorized public utility vehicles even if the proximate cause is the mechanical failure of the insured vehicle, negligence or fault of the driver, or other vehicles, mechanical failure or ‘Acts of Gods.'”
“Under the enhanced PPIAP, the maximum amount of death benefit is in the amount of P200,000 per passenger (from the previous amount of P150,000 per passenger) while the amount of benefits for bodily injuries are based on a schedule of benefits depending on the injury sustained. The mandatory insurance coverage under the PPAIP also provides benefits for the bus driver and conductor, such as burial assistance worth P15,000 for each of them, one-time educational assistance covering one child for each worth P10,000, and subsidy for casket in the amount of P10,000 each,” the Insurance Commission had said.
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