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The chief of the state pension fund named companies that allegedly
compose a cartel in a sector of the country’s insurance industry.
Winston Garcia, the president and general
manager of Government Service Insurance System, or GSIS, on
Wednesday identified the members of the cartel as Great Domestic
Insurance, BF General Insurance Corp., Plaridel Surety and
Insurance, Security Pacific Assurance, Far-Eastern Surety, Pacific
Union Insurance, Standard Insurance, South Sea Surety and Insurance,
People’s General Insurance and Acropolis Central Guarantee.
These firms also allegedly corner the insurance
sector involving compulsory third-party liability, or CTPL, an
insurance policy that shoulders any possible damage resulting from a
person’s use of his car. The sector is said to be worth P3 billion
a year.
The 10 companies, according to Garcia, control
about 70 percent to 75 percent of the insurance business in the
Philippines.
He said Acropolis is defunct but still sells
policies. He added that its owners are being investigated.
“There are 110 insurance companies in the
country, and if most of the insurance business is only controlled by
eight to 10 firms, what do you call them? All of them, apparently
charge the same overpriced CTPL insurance policy. Instead of P575,
they charge P900 to P970 per vehicle,” he told reporters during a
press briefing.
He called these companies “not a monopoly but
an abusive cartel, which GSIS is trying to break up.”
Philippine Insurers and Reinsurers Association (Pira)
earlier said it was the government pension fund that was trying to
monopolize the country’s compulsory third-party liability sector.
The charge arose when the Department of Transportation and
Communications picked GSIS as sole provider of such insurance
policies to car owners.
Pira last week filed a motion for
reconsideration on the selection made by the Transportation
department before the Makati Regional Trial Court.
It said the department naming GSIS as the only
provider of the compulsory third-party liability policies amounted
to creating a “monopoly,” which is banned by the Constitution.
The court dismissed the petition.
“Aside from being patently unconstitutional, a
monopoly is always detrimental to public welfare because it robs
consumers of their freedom to choose,” said Fortunato Peralta, the
deputy general manager of Pira.
Reaction to graft case
Meanwhile, Malacañang also on Wednesday denied
illegally holding P1-billion unassigned surplus of the Government
Insurance Fund, saying President Gloria Arroyo already remitted the
money to the national treasury.
Executive Secretary Eduardo Ermita said GSIS
remitted in December 2004 to the national government P1 billion
through President Arroyo, but the amount was turned over by the
President to the Bureau of Treasury.
“We have the official receipt number of the
check. Some say it was lost but it is covered under the law and it
is already with the [Treasury bureau],” Ermita added. “There is
no anomaly.”
He said the cases filed against Garcia over the
allegedly illegal remittance may be part of a black propaganda
because of Garcia’s advocacy to lower power rates.
“I believe that he can be cleared if it
reaches the proper forum which is the Office of the Ombudsman.
Let’s face the music in the Ombudsman,” Ermita added.
Despite the two cases filed on Tuesday by three
separate parties accusing the GSIS chief of corruption and other
criminal and administrative charges, Ermita said Garcia still enjoys
the “confidence” of the President and he will stay at the state
pension fund.
-- Chino S. Leyco, James Konstantin Galvez and Angelo S. Samonte
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