EDITORIAL

GSIS taking over P3.5 billion motor vehicle insurance, a boon or a bane?

Whether it is a boon or a bane remains to be seen but the Government Service Insurance System is set to handle the country’s P3.5-billion motor vehicle insurance business after a Makati Regional Trial Court lifted the injunction order on a previous ruling issued by the transportation department.

The Department of Transportation and Communications earlier ordered the implementation of an integrated motor vehicle insurance scheme, which was blocked by private insurance companies that filed a petition in court.

Judge Cesar Santamaria of the Makati RTC Branch 145, however, issued an order dated June 24 dismissing the petition and denying the motion for partial reconsideration filed by the Philippine Insurers and Reinsurers Inc. With the lifting of the injunction, GSIS is now set to take over the P3.5-billion motor vehicle insurance business as ordered by the DOTC.

Under the order, the issuance of compulsory third party liability (CTPL) insurance policies would be integrated with the Land Transportation Office’s motor vehicle registration system.

The CTPL is a mandatory insurance for all owners of motor vehicles. It carries a P100,000 insurance coverage for death or injuries that may result from vehicular accidents. Costing P560 for private cars, a CTPL may be a small sum but since there are 5.5 million vehicles in the country today, the business reaches more than P3.5 billion every year.

The new arrangement calls for the automatic issuance of CTPL insurance policies by LTO District Offices. Under the plan, GSIS through the publicly held National Reinsurance Corp. of the Philippines would provide the insurance coverage. GSIS president and general manager Winston Garcia said the pension fund expects to implement the integrated scheme soon.

The order, according to Garcia, has already been lifted and “there would be no hindrance in the implementation of the new CTPL scheme at the soonest possible time.” He said registrants would only have to go to the LTO instead of dealing with 120 or more insurance companies.

Industry sources said Transportation Secretary Leandro Mendoza already met with GSIS officials as well as the Insurance Commission and Stradcom last week to sign a memorandum of agreement putting the CTPL insurance of all 5.5 million vehicles in the country under the GSIS.

PIRA said it would file a motion for reconsideration of the Makati RTC ruling. Michael Rellosa, PIRA board member, said that the insurance firms believed that their petition had not been decided on its merits and was only dismissed on a mere technicality. Garcia says, with the vehicle insurance business under the government, fixers would be eliminated.

But to the pessimistic public reeling from a series of corruption charges against top government officials reaching all the way to Malacanang, this remains to be seen.