GSIS’ bid to issue comprehensive TPL cover bucked

The country’s insurers are opposing the entry of the Government Service and Insurance System (GSIS) into the comprehensive third-party liability (CTPL) coverage business.

Herminia S. Jacinto, president of the Philippine Insurers and Reinsurance Association (PIRA), said the government pension fund is not mandated by its charter to issue CTPL to the private sector.

"They cannot insure private vehicles, only government vehicles which number only 75,000 or roughly 1.6 percent of all registered vehicles in the country," she said.

Last year, there were 4.7 million newly registered vehicles. But the taxes collected amounted to less than half the number of registered vehicles. In 2003, tax collections reached only P310 million from the estimated collection of nearly P600 million.

In a press briefing, PIRA officials said the GSIS proposition was "illegal from the outset" since none of the existing regulations clearly did not include "any legal jurisdiction for GSIS engaging in the CTPL coverage for private individuals and entities."

They argued that it has always been the claim of government that they would not dip its fingers in enterprises or businesses that are already serviced by the private sector. "Only in missionary areas are they allowed to get involved," an official from a non-life insurance company added.

However, GSIS president and general manager Winston Garcia pointed out that the government pension fund was invited by the Department of Transportation and Communications (DOTC) to make a bid for issuing CTPLs.

Meanwhile, PIRA will soon form a consortium to manage the issuance, including collections of premiums and payment of claims, of the CTPL.

Temporarily known as the PIRA COC consortium, the plan will change the system of the CTPL by using the banking system for the vehicle registration and payment system instead of the present cumbersome system "full of loopholes."

The present system requires vehicle owners needing to register their vehicles with the Land Transportation Office (LTO) to get a CTPL from any insurance firm or its agents.

Then it has to be authenticated by SQL, an IT provider, which will determine if the registrant has indeed a CTPL.