GSIS unperturbed by protests, critics of CTPL

07/20/2008

Critics of the new Compulsory Third Party Liability (CTPL) system for motor vehicles can hold protest rallies all they want before the Government Service Insurance System (GSIS) as long as they are peaceful, legal and are not disruptive of the State pension fund’s work.

This statement was issued by GSIS chief legal counsel and spokesman Estrella Elamparo in reaction to a rally staged yesterday by what she said were merely some 300 persons and not 8,000 as “exaggeratedly reported by their leaders,” at the GSIS headquarters in Manila.

“The GSIS fully believes in the merits of the new CTPL system which it conceptualized and which had been approved for implementation by the Department of Transportation and Communications (DoTC),” Elamparo said.

“The new system will provide the public CTPL policies that are not only cheaper, but are also guaranteed to be genuine by the GSIS and our more than 60 partners in the private insurance business, majority of whom are the biggest in the industry,” she stressed.

Elamparo noted the “motley composition” of the protesters yesterday, who were described by some as having the markings of a “hakot (paid) crowd.”

She said many of the supposed rallyists, including children, had blank stares on their faces, seemingly lost on what the diatribes of their leaders on the GSIS CTPL program were all about.

Elamparo said only fake insurance firms that had been selling bogus CTPLs under the old system are possibly behind the protest.

“Our challenge is for them to also rally at the offices of the 60 or so insurance firms, so their despondency over losing their scam trade can be made more apparent to the public,” she said.

Last month, the Makati City Regional Trial Court dismissed the case filed by the Philippine Insurance and Re-Insurance Association contesting the entry of the GSIS into the CTPL business.

The Department of Justice had also issued a legal opinion that the GSIS is empowered by its charter and other laws to engage in the private insurance business.

Elamparo pointed out the majority of the big-name insurance firms are participating in the new CTPL system. She said this proves the GSIS would have no monopoly on issuing CTPLs or that it would lead to many working in the insurance sector losing their jobs, as alleged by critics.

The Insurance Commission (IC), which had signed a memorandum of agreement with the DoTC, the Land Transportation Office (LTO), GSIS and Stradcom in adopting the CTPL, also debunked the claims that 60,000 insurance employees would lose their jobs with the adoption of the new system.

The IC said based on its records, there are only 11,000 registered insurance agents and their intermediaries and that only a small percentage of them are involved in the CTPL business because of the small margin of profit to be derived from selling genuine CTPLs.

The commission said only the “insurance buccaneers” will go out of business and not the legitimate insurers registered with it.

To show that motor vehicle registrants and the government are being duped big-time by providers of fake CTPL policies, the commission cited CTPL data for the whole of 2003.

For the 4.3 million vehicles registered with the LTO that year, only P1.3 billion of the P2.5 billion premium payments made were reported, showing that P1.2 billion worth of CTPLs sold then were fakes.

Taxes due the government for the premiums should have been P579 million but only P310 million made it to the national coffers, the IC said.

The commission said the problem persists to the present, which is why it is giving its full support to the new GSIS CTPL system.

Under the GSIS CTPL system, the CTPL cover is already made part of the vehicle registration process of the LTO, to which the GSIS will be interconnected electronically for CTPL enrollment and claims purposes.

Because vehicle owners only have to deal with the LTO, and the GSIS will in turn farm out the provision of CTPLs to accredited insurers, the public gets the assurance of getting only genuine policies which they can rely on in case of accidents.

“Actually, there will be no job losses, no legitimate business losses, only racket and racketeers’ losses,” Elamparo quipped.

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