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Reacting to my July 14 column, titled “Last days for auto
insurance buccaneers,” reader Ron Dumlao said in an email that the
new Compulsory Third Party Liability (CPTL) insurance system would
dislocate “60,000 employees, including my mom.”
I have no way of determining the authenticity of
the email sender’s identity, although he did indicate his e-mail
address Rhondee.E.Dumlao@ph.ey.com. Just the same, here are portions
of his electronic missive:
“You mentioned in your article that owners of
motorized vehicles should welcome the GSIS CTPL scheme because, for
one, it will save them money and, two, it will ensure that the CTPL
cover they (insurers) pay for are genuine. However, it is submitted
this move will leave 60,000 employees jobless, my mom included. You
may say that some of these numbers are spurious brokers or insurers.
However, the majority remains genuine.
“I think what better way to solve the issue is
not to govern-mentalize the insurance, but rather, to come up with a
win-win solution. If the government wants the motorists to save
money, then it can ask the insurance companies to lessen the price
they impose.
“Further, if it wants to ensure that the CTPL
[policies] are genuine, then it can ask the companies to make
accreditation and inform the public to transact with those
accredited by the government, or any ruling body.
“Sir, I hope you see my point here. What will
happen to many employees who strive hard to feed their families, not
to mention the rising cost of fuel and electricity? Besides, this
goes against the employment objective of the government.”
Relief for victims
I do not wish to trivialize the reader’s
anxiety. Loss of employment, especially in these trying times, can
indeed be disastrous for his mother and their whole family. However,
if Ron Dumlao’s mother works for a legitimate insurance company
that has a good track record, officials of the Government Service
Insurance System (GSIS) have assured they could still participate in
the new CTPL system.
The way I understand it, GSIS will function as a
clearinghouse of sorts that will farm out the business of issuing
CTPL premiums to what it calls “creditable” insurance companies.
Over three dozen such firms have reportedly indicated their
readiness to take part in the new system.
I do not know whether or not “60,000
employees” would indeed lose their livelihood once the new CTPL
program is enforced. However, Ron Dumlao failed to note the reasons
that compel the abolition of the current auto insurance scheme.
No less than data from the Insurance Commission
show, for instance, that of the P2.5 billion in premiums sold for
the 4.3 million vehicles registered with the Land Transportation
Office (LTO) in 2003 only P1.3 billion were officially reported.
Meaning, the difference of P1.2 billion was actually paid—by
unsuspecting motor vehicle owners—for fake premiums. And that was
just for one year.
Moreover, taxes due the government for the
premium payments should have totaled P579 million. However, only
P310 million actually made their way to the national coffers. Again,
that was just for 2003.
The fake premiums, the switching of certificates
of cover, unpaid claims and other irregularities have persisted,
according to the Insurance Commission. No wonder then that the
commission has indicated its support for the new, GSIS-designed CTPL
system.
Clear choice
Between the alleged “60,000 employees” who
stand to lose their jobs and relief for the millions of motor
vehicle owners victimized by bogus auto insurance premiums, COC
switching and other rackets, the choice is clear. The old CTPL
scheme must go.
Again, reader Ron Dumlao needs to be assured
that if the insurance company his mother works for has not engaged
in any of those malpractices, then they have nothing to fear.
The insurance companies joining the new CTPL
system have, in fact, taken out full-page ads in several newspapers
to express their support for the Department of Transportation and
Communications and GSIS. They included AFP General Insurance,
Malayan Insurance, BPI Mitsui, Tokio Marine Malayan, Sumi-tomo
Insurance, Malayan Zurich, Meridian, Pioneer, Allied Bankers,
Pioneer, Eastern Assurance and Surety and Stronghold.
As to the potential loss of “60,000 jobs,”
the Insurance Commission officially lists down just 10,000 insurance
agents throughout the country. In addition, the CTPL line makes up
just 2.5 percent of the entire insurance business. Obviously, some
quarters have exaggerated the possible economic dislocation due to
the new auto-insurance system—with motives not hard to deduce.
GSIS President Winston Garcia may have sounded a
bit blunt when he pointed out: “Only the racketeers who had been
selling to the public fake CTPL policies for years will go out of
business.” Nonetheless, his logic is unassailable.
Legitimate insurance companies and their
employees have nothing to fear.
dansoy26@yahoo.com
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