Insurance firms rap LTFRB over ‘insurance monopoly’

Several Insurance companies assailed Land Transportation Franchising and Regulatory Board (LTFRB) for establishing an "insurance monopoly" when it allowed only two companies to issue the public utility vehicle passenger accident insurance coverage (PAIC) which generates hundreds of millions of pesos in revenues every year for the insurance sector.

In an administrative complaint filed with the Department of Transportation and Communications (DOTC), the petitioners questioned LTFRB memorandum circular 2001-010 and other related circulars which limited the authority for the issuance of the PUV PAIC to only two companies, namely UCPB Gen and Great Domestic Insurance.

The petitioners include Premier Insurance and Survey Corp., BF General Insurance Co. Inc., Alpha Insurance and Surety Co. Inc., Zenith Insurance Corp., Times Surety and Insurance Co. Inc., the Bicol Transport Service Cooperative Federation, Inc., and Perla Insurance Co.

PUV PAIC is a mandatory prerequisite for the registration of all public utility vehicles. According to the compliant, this line of insurance generates hundreds of millions in revenues from annual premiums collected and consequently a substantial source of tax revenue for the government. Licensed insurance companies duly authorized by the Insurance Commission may issue this insurance cover.

Last Feb. 28, 2001, LTFRB issued the questioned circular which accredited two groups (PAMI and PAIC2) and authorized only two insurance companies namely UCPB Gen and Great Domestic Insurance to issue all the PUV personal accident insurance cover.

This monopoly, according to the complaints, was decreed to be valid Dec. 31, 2003 by the LTFRB and would enable the two insurance companies to "amass billions of gross income from premium payment collections."

Memorandum Circular 2001-010 specially states that all PUVs whose LTO license plate with an even middle number shall be issued with UCPB Insurance (PAMI) while those with odd middle number shall be insured with Great Domestic Insurance (PAIC2).

They said the LTFRB chairman and board members violated the Constitution, particularly Article 12 Section 19 which provides that "the state shall regulate or prohibit monopolies when public interest so requires."

They emphasized that by granting this peculiar advantage to only two insurance companies, giving them exclusive right to carry on and control the business, LTFRB committed a clear violation of the Constitution.