IC cancels licenses of PUV insurance agents

The Insurance Commission (IC) has canceled the licenses of two non-life insurers that sell personal accident insurance coverage to public utility transport operators. Stripped of their licenses were Universal Insurance Transport Accident Agency Solutions (UNITRANS) and Passenger Accident Management and Insurance Agency (PAMI). UNITRANS is an agent of Stronghold Insurance while PAMI is an agent of UCPB General Insurance Co. Inc. “We canceled the licenses of the two agents so in effect, they cannot sell insurance products of their (parent) insurers nor can they accept applications and pay claims from those insured," Commissioner Emmanuel F. Dooc of the Insurance Commission said. Dooc issued the suspension order April 28 but made the announcement only on Tuesday. IC Licensing Division chief Dennis Cabucos explained that although UNITRANS and PAMI may no longer transact business with their customers, their principals may process the insurance of their clients as long as they first get clearance from the Land Transportation and Franchising Regulatory Board. In 2005, the insurers and their agents entered into an agreement with the LTFRB for the provision of mandatory personal accident insurance to operators of public utility vehicles (PUVs). The insurers agreed to sell risk cover to PUV operators on the basis of an odd-even scheme wherein one agent would transact with odd-numbered vehicle owners and the other only with even-numbered vehicle owners. The odd-even scheme was designed to keep the agents from using ‘predatory pricing tactics’ but the IC found that the agents “fought for clients" by undercutting each other and claiming “unauthorized expenses" for marketing, consultancy and service costs, plus giveaways and donations. The IC discovered irregular PAMI transactions such as P7.69 million in consultancy fees to Telesis Consultancy Services and P41.47 million in service fees to ‘liaison officers’ of various groups. The commission also exposed some P30 million in marketing expenses paid to the Philippine Jeepney Operators and Drivers/Alliance Foundation and the Public Transport Workers Foundation Inc. Also uncovered were P928,000 in giveaways and donations. The IC said UNITRANS also violated their agreement by booking P20 million worth of interest earnings as ‘common claims’ and failure to remit P35.43 million in 2009 Stronghold Insurance taxes. Dooc said the commission will confer with the LTFRB on these alleged anomalies. — ELR/VS, GMA News