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DOF to hold dialogue on vehicle insurance row


The Department of Finance (DOF) and the Insurance Commission (IC) are scheduled to meet with non-life insurance companies, agents and other shareholders to discuss the controversial insurance system for motor vehicles. Finance Secretary Margarito Teves told reporters that he would meet with members of the 95-strong Philippine Insurers and Reinsurers Association Inc. (PIRA) as well as insurance agents this week to talk about the compulsory third party liability (CTPL) scheme. Teves said the DOF together with Insurance Commissioner Eduardo Malinis would also have to consult with Transportation and Communications Secretary Leandro Mendoza on the implementation of the transportation and communications Order No. 2007-28. “Definitely I will step in. We plan to meet with the groups this week and consult with Secretary Mendoza," he said. CTPL is a mandatory insurance that is a requirement in the registration or renewal of registration of motor vehicles. It provides a P100,000 coverage for death or bodily injuries and protects vehicle owners from damages to the public in case of accidents. The government through Department of Transportation and Communications Department Order 2007-28 was supposed to implement an integrated Compulsory Third Party Liability (CTPL) system last July 25 wherein a clearing house for the authentication and verification of CTPL policies would be operated by Stradcom Corp. Under the proposal, the issuance of CTPL insurance policies would be integrated with the LTO IT project’s Motor Vehicle Registration System (MVRS) and Revenue Collection System (RCS) during the registration or renewal of registration by motor vehicle owners The implementation, however, was put on hold after insurance companies and agents threatened to go to court. Instead, the DOF and the DOTC agreed to put in place an interim solution. PIRA president Ramon Dimacali last week urged the DOF to make permanent the interim solution as this has effectively stopped the proliferation of fake insurance policies to motor vehicles. “Since July 25, the system already blocked thousands of CTPL policies. Unscrupulous persons at LTO can no longer register vehicles using fake CTPL policies because the system will not allow them," Dimacali stressed. For his part, Teves said this week’s meeting would help the government decide on the implementation of the new CTPL scheme. “We will see if the interim solution is still the practical solution," he added. Malinis earlier made it public that he favors the integrated insurance system for motor vehicles of the state-run Government Service Insurance System (GSIS) in order to put an end to the proliferation of fake insurance policies. PIRA together with the insurance agents has successfully obtained a preliminary injunction from the Makati Regional Trial Court stopping the government from implementing a new CTPL scheme embodied under DOTC Order No. 2007-28. In its petition to the court, PIRA argued that the DOTC order is an invalid exercise of administration power on the part of the DOTC, which is already encroaching on the functions of the IC. It also argued that the order is a violation of the Constitution because it would result to a monopoly by the GSIS through publicly held National Reinsurance Corp. of the Philippines. - GMANews.TV

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