Saturday, June 26, 2010

CTPL insurance set to rise

NON-LIFE group Philippine Insurers and Reinsurers Association (PIRA) warned yesterday that compulsory third party liability (CTPL) insurance would become more expensive with the increase in the connectivity fee charged for the use of a verification system at the Land Transportation Office (LTO).

In a telephone interview, PIRA President Micheal F. Rellosa said insurance companies were informed last week by the Stradcom Corp., which manages the LTO’s car registry system, that due to the upgrade of this system, the fee for the use of the system would be raised.

“They said they upgraded the system and bought new servers so they are raising the connectivity fee. Insurance companies currently shoulder the P40 connectivity fee. The increase... we would have to pass this on to the consumers,” Mr. Rellosa said.

He said the connectivity fee would be raised to P60 for insurance policies for motorcycles, and to P80 for other vehicles.

He said premiums for the CTPL policies could rise by P20 for motorcycles and P40 for other vehicles.

He said PIRA has asked Stradcom to meet to discuss the reason for the adjustment later this month or before the hike is implemented.

Insurers link to the LTO system to check the authenticity of insurance policies issued and to ensure these are not assigned to multiple motor vehicles.

The CTPL is a requirement for the registration of all motor vehicles with the LTO. In case the motor vehicle causes the injury or death of another person, the insurer would provide the payment for the aggrieved party.

Late last month, the Insurance Commission put in place a software called the IC Gateway that links to the insurers’ database as well as the LTO’s database to serve as a double security against fake vehicle policies.

All CTPL certificates of cover issued by insurance companies are now required to go through the IC Gateway under the Insurance Commission’s Circular Letter No. 19-2010 dated May 20, 2010.

Upon issuing a CTPL, the insurance company must send the data to the Insurance Commission through the IC Gateway. The insurer will then check the validity of the CTPL certificate of cover.

The link between the insurers and the IC also allows the LTO to check whether the motor vehicle corresponding to the CTPL exists.
The IC Gateway is programmed to send an authentication code to insurance companies after the CTPL has been checked.

No comments:

Post a Comment