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By Chino S. Leyco, Reporter
A regional trial court stopped state-run
Government Service Insurance System (GSIS) from taking over the
compulsory third-party liability (CTPL) insurance for motor vehicles
in the country.
Judge Carlos Valenzuela of Mandaluyong City on
Friday issued a 20-day temporary restraining order (TRO) prohibiting
not only the government pension fund but also the Department of
Transportation and Communications and other parties from
implementing an order of the department that takes away the
third-party insurance business from the private sector.
The Philippine Insurers and Reinsurers
Association earlier challenged the order of the Transportation
department before the Makati City Regional Trial Court.
Valenzuela said the restraining order was in
response to a petition filed by an individual complainant,
identified as Belinda Martezano, a resident of Mandaluyong and a
licensed insurance agent who derives her livelihood from selling the
insurance to car owners.
The GSIS had planned to start its integrated
compulsory third-party liability insurance system at the Land
Transportation Office on August 1.
The CTPL is an insurance policy that shoulders
any possible damage resulting from a person’s use of his car.
In the previous year, the reinsurers
association, the umbrella organization of all non-life insurance
companies in the country, obtained a court injunction from the
Makati City court. The injunction was lifted when the case was
dismissed on technicality.
Honorio Ramajo, the chairman of the association,
said the insurance industry agreed that the GSIS plan of taking over
the third-party liability insurance of 5.5 million motor vehicles
amounted to monopolizing a sector of the industry. The compulsory
third-party liability insurance sector generates premiums of more
than P3 billion annually.
Also named as respondents in the suit filed
before the Mandaluyong Regional Trial Court were technology firm
Stradcom and the Insurance Commission, which had signed an agreement
with the Transportation department and the government pension fund
to implement the CTPL takeover.
Ramajo said the insurance industry is sticking
to its stand that the CTPL takeover will be damaging not only to
insurance companies and their employees but more so to motorists who
will be deprived of their freedom of choice.
GSIS suprised
Estrella Elamparo, GSIS chief legal counsel,
said they were surprised that the court had issued the TRO when the
five days given the pension fund to comment on the case had not
lapsed.
“This [issuance of the restraining order] is
highly irregular. But we will study what will be our next step after
this [issuance],” Elamparo added during a telephone interview.
The restraining order came a day after the Court
of Appeals voided a cease-and-desist order issued by the Securities
and Exchange Commission (SEC) against the Manila Electric Co. (Meralco)
in a bid by the commission to stop Meralco’s election of board
members during the annual stockholders’ meeting almost two months
ago.
The cease-and-desist order was issued by the SEC
at the behest of the GSIS and was served during the stockholders’
meeting on May 27.
The appellate court dismissed the commission’s
order “due to forum shopping by respondent GSIS and due to
splitting of action” by the government pension fund.
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