The Philippine Insurers and Reinsurers Association (PIRA) has proposed what it described as a “win-win” solution to settle the problem in the issuance of compulsory third party liability (CTPL) insurance to car owners registering their vehicles with the Land Transportation Office (LTO).
PIRA vice chairman Ramon Dimacali said the proposal would be more acceptable than the controversial and allegedly illegal integrated CTPL issuance program being pushed by the Department of Transportation and Communications (DOTC), wherein the Government Service Insurance System (GSIS) would be given control of the CTPL insurance registration at the LTO.
Dimacali said he proposes an automatic payment system to collect the value-added and documentary stamp taxes due each time a CTPL is issued by agents of private insurance companies selling CTPL policies or certificates of coverage (COC) to motor vehicle owners registering their cars at the LTO.
“It’s win-win because, first, its an open system, there will be no monopoly,” Dimacali said. “Because there is no monopoly, there will be no job loss for thousands of employees of private insurance companies who service the CTPL insurance business.”
He also said the Bureau of Internal Revenue will be assured of getting the value-added and documentary stamp tax collections, which could easily reach P750 million, automatically.
Under the proposal, all insurance agents will be made to open “e-wallet” accounts from which the value added tax and documentary stamp tax of every CTPL they sell will be deducted automatically from their account.
It was learned that the PIRA has presented with win-win solution along with others to the Presidential Management Staff two weeks ago in a meeting with representatives from the LTO and the Insurance Commission.
The Court of Appeals issued last July a temporary restraining order against the implementation of DOTC Order 28-2007, which effectively gives the GSIS total control of the CTPL insurance registration at the LTO.
The LTO said the implementation of the order will eradicate the issuance of fake CTPL COCs and ensure that the government collects taxes due from the insurance polcies.
Private insurance companies said that the GSIS monopoly of the CTPL insurance business would throw them out if business resulting to the loss of some 60,000 jobs for workers of the industry.
Dimacali said the authentication process started by the LTO in August 2007 had already eradicated the issuance of fake CTPL COCs.