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THE
Regional Trial Court (RTC) of
Makati
City
has temporarily stopped the Department of Transportation
and Communications (DOTC) from implementing a
controversial order on motor-vehicle insurance.
Judge
Cesar Santamaria of Branch 145 of the RTC in Makati on
Monday ordered the DOTC to maintain the status quo and
refrain from implementing DOTC Order 2007-28, or the
Integrated Compulsory Third-Party Liability (CTPL)
system for a period of 20 days or until August 26.
This
means that all insurance companies now legally selling
CTPL could still do so. The present “interim system,”
implemented on July 25, that required the authentication
of all CTPL policies and verification with the Land
Transportation Office (LTO) database would also
continue.
The
Philippine Insurers and Reinsurers Association (Pira),
the umbrella organization of all non-life insurance
companies in the country, welcomed the court’s ruling.
Pira
earlier asked Santamaria to stop the implementation of
the DOTC order because the order allegedly limits the
issuance of CTPL to only one insurance provider.
In its
petition, Pira said the DOTC order “is an invalid
exercise of administrative power” because through such a
directive, the department is already encroaching on the
functions of the Insurance Commission (IC).
The
group also stressed that the order is a violation of the
Constitution because it would summarily put out of
business insurance companies relying mostly on CTPL and
put out of work more than 12,000 licensed insurance
agents.
CTPL is
a mandatory insurance that is a requirement in the
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 Service Insurance System, which was earlier
reported as being the sole “insurance provider” being
referred to the DOTC order, has expressed a desire to
intervene in the ongoing court case.
Santamaria has scheduled another hearing on the case on
August 17.
Earlier,
the LTO said it rejected thousands of insurance policies
issued by non-IC-accredited insurance companies or mere
duplicates of previously issued certificates of cover (COCs)
for CTPL.
LTO
chief Reynaldo Berroya said that as a result of a new
scheme implemented by the office, insurance companies
that are operating without IC accreditation and not
connected to the LTO computer system were unmasked.
The
unscrupulous insurance companies were unmasked by the
LTO’s COC Verification Facility (COCVF) and can no
longer continue with their activities, officials added.
Berroya
said the main cause of the proliferation of fake COCs
for the CTPL is that most insurance agents are not
uploading their sales to the authentication facility as
claimed before. Insurance agents also deliberately issue
duplicate insurance policies to different motor-vehicle
owners.
The LTO
chief also added that the rejection of the thousands of
policies by the LTO system last week proves that the
COCVF is effective in ensuring that only COCs issued by
IC-accredited insurance companies connected to the LTO
IT system will be accepted and processed by the LTO.
Berroya appealed to motorists having their vehicles
registered to verify first with the LTO if the insurance
company of choice is accredited by the IC and if the
company is also hooked up with the LTO real-time and
online. This way, their registration process can go
smoothly. (J. Perez) |
