PIRA chairman Ramon Y. Dimacali said that the connection with the LTO is the last remaining step in PIRA’s system that will protect motorists who buy CTPL insurance policies.
"We already have a system that is easy, fool-proof and at no expense to the government," Dimacali said in a statement. "We just need to connect it with the LTO to make it function as it was designed."
PIRA’s system is similar to the system used by banks in clearing checks. Five years in the making, the system will ensure that all CTPL policies sold are genuine and that all taxes are remitted to the government.
The CTPL is a mandatory insurance cover that every vehicle owner is required to get before his vehicle is registered with the LTO. A policy for P50,000 is normally sold at P500.
However, some unscrupulous people who operate in LTO branches sell fake CTPL policies, or reproduce one policy number and resells it many times.
These anomalies is depriving the government of billions of pesos annually, and it is leaving persons and property unprotected.
PIRA’s system will be managed by the Compulsory Insurance Processing Center Corp., a clearing house that will check if the CTPL policy bought by a vehicle owner is genuine.
Dimacali assured the system is very easy for vehicle owners since most of the work will be done by insurance company personnel.
The CIPCC will not charge management fees but merely a minimal processing fee computed based solely on costs.
CIPCC also will preserve the present "open-market" in CTPL issuance and will not be a monopoly.
However, the Government Service and Insurance System (GSIS) is likewise interested in the CTPL business, offering to write the insurance cover for all motor vehicles, with LTO serving as collecting agency.
The GSIS proposal is a monopoly that stands to put medium-size insurance companies out of business, and it is again a government agency competing directly with existing private sector enterprises.
"CTPL claimants are usually commuters or passengers. In accidents, there is normally more than one claimant. Our system can process the claims faster because we have 97 companies with thousands of branches nationwide," the PIRA said.