Computerized system eyed to replace DOTC’s CTPL scheme

Local insurers yesterday said the industry is working on a computerized system that will replace the Compulsary Third Party Liability (CTPL) insurance scheme proposed by the Department of Transportation and Communication (DOTC).

The insurance industry is working on a computerized system that will once and for all put to rest the controversy on the Compulsory Third Party Liability (CTPL) insurance system for motor vehicles.

The Philippine Insurers and Reinsurers Association (PIRA) conveyed to Finance Secretary Margarito Teves its plan to put in place a permanent solution to the CTPL controversy.

This developed as PIRA president Honorio Ramajo brushed off the accusations of Winston Garcia, president and general manager of the Government Service Insurance System (GSIS) that insurance companies have been running to Teves for help and that Teves was taking their side.

Garcia’s allegations against Secretary Teves were completely baseless and unfair,” Ramajo stressed.

GSIS which wants to implement a recent order from the DOTC which will effectively take away the P3.5-billion CTPL car insurance business from private insurers and transfer it to the pension fund’s hands.

The CTPL insurance is a mandatory insurance for all owners of motor vehicles. It carries a P100,000 cover for death or injuries that may result from vehicular accidents. Costing P560 for private cars, a CTPL may be a small sum but since there are 5.5 million vehicles in the country today, the business reaches more than P3.5 billion every year.

The GSIS had planned to start its integrated CTPL system at the LTO on Aug. 1.

The new arrangement, embodied in an order issued by the DOTC last year, calls for the automatic issuance of CTPL insurance policies by LTO District Offices. Under the plan, GSIS through publicly-held National Reinsurance Corp. of the Philippines would provide the insurance coverage.      

PIRA said its members are united in protesting the GSIS’s plan of monopolizing the CTPL insurance of 5.5 million motor vehicles, a business which generates more than P3.5 billion yearly.