Rules vs redundant vehicle insurance issued

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ALL motor vehicle insurers are now required to ensure that the period of coverage of policies issued with Compulsory Third Party Liability Insurance (CTPL) coverage coincides with the month of registration of the insured vehicle, the Insurance Commission said. (IC).

In Circular Letter 2021-54, Insurance Commissioner Dennis B. Funa said this decision was taken in order to avoid redundancy in car insurance coverage and to make it easier for the insurer public.

The synchronization of the period of coverage of comprehensive automobile insurance policies with the month of registration of the insured vehicle, as indicated by the last digit of the license plate number, will apply whether these policies are stand-alone CTPL policies or insurance. multi-risk automobile. fonts with CTPL layouts.

The latest circular letter was issued following a consultation meeting between the IC and officials from the Anti-Red Tape Authority (ARTA), the Land Transportation Office (LTO) and the Philippine Insurers and Reinsurers Association. Inc. (PIRA).

“This circular letter is intended to address ARTA’s concern regarding the perceived redundancy of the requirement to obtain CTPL insurance when a motor vehicle is already covered by a full auto insurance policy,” Funa said. in a press release.

The Arta recommended last July the removal of the CTPL as part of the registration process for vehicles already covered by a comprehensive auto insurance policy, stressing that it “appeared to be redundant and to inflict expense on the public.”

Seeking clarification as to why the CTPL was not lifted as requested by Arta, Funa told BusinessMirror that “both the IC and the LTO noted that the CTPL requirement cannot be waived because this is necessary for the registration of motor vehicles “.

Funa said ARTA is aware of this need as well.

“The problem is with CTPL coverage, which is included in a comprehensive auto policy where in some cases does not coincide with the dates and expiration date. [of] motor vehicle registration, ”Funa told BusinessMirror. “So, such CTPL coverage is not honored by the LTO; and the owner of the motor vehicle will now obtain stand-alone CTPL coverage for the purposes of vehicle registration. It is redundancy that the circular addresses.

Nevertheless, the circular letter provides that insurers and their agents are also required to inform the insured that the respective periods of their multi-risk automobile policies with CTPL cover may be extended at the latter’s choice, as well as the terms of such extension.

In addition, insurers issuing automobile policies, whether they are multi-risk automobile policies with CTPL provisions or stand-alone CTPL policies, must issue a Confirmation of Coverage for the registration of motor vehicles with the LTO. Likewise, the insurer must also ensure real-time authentication of the COC issued.

Prior to the publication of the new circular letter, ARTA expressed its gratitude to IC “for its immediate action on the matter and for supporting ARTA’s continued efforts to facilitate business and the efficient delivery of government services to the public. “.


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