THE Insurance Commission (IC) on Monday expressed its support for the proposal increasing the insurance benefits of riders of public-utility vehicles (PUVs) and has referred the proposal to the Land Transportation Franchising and Regulatory Board (LTFRB) for approval.
According to Insurance Commissioner Dennis B. Funa, the IC referred to the LTFRB the proposal from 1-United Transport Koalisyon (1-Utak) to increase the insurance benefits under the Passenger Personal Accident Insurance (PPAI) program prescribed under LTFRB Memorandum 2015-028. This, after the regulator conducted a public consultation with all the stakeholders and the transport groups last month.
“Based on the reports submitted to the IC, particularly the amount of insurance claims paid and settled under the PPAI program and the prompt release of insurance benefits, the PPAI program proves to be an effective tool in providing immediate assistance to the riding public and their families. Thus, any proposal to increase the insurance benefits should always be considered and evaluated,” Funa said.
The IC also referred the proposal to LTFRB-accredited insurance companies through their respective management companies, such as the Passenger Accident Management and Insurance Agency Inc. (Pami) and the SCCI Management and Insurance Agency Corp. (SCCI), as well as to the Philippine Insurers and Reinsurers Association Inc. (Pira).
“Based on the study conducted by the Pira, the umbrella organization of all nonlife-insurance companies and an IC-accredited rating organization, the existing premium rates, using the historical numbers and actual insurance claims paid and settled for the period from 2015 to June 2017, could no longer sustain the proposed increase in benefits. Thus, it proposed that the premium rates be increased,” he added.
Funa said the final consensus reached during the public consultation was a proposal to increase the existing P200,000 death benefit to P400,000, and the existing P20,000 medical reimbursement benefit to P100,000, as well as to include a family allowance benefit in the maximum amount of P30,000 in case of hospitalization and P7,000 during interment subject to the increase in premium rates, subject to the requests of Pami and SCCI that its memorandum of agreement with the LTFRB be extended for another three years, among others.
“Considering that these proposals would require a modification in the PPAI program, which is primarily being implemented by the LTFRB and would require the revisit of the LTFRB’s three-year memorandum of agreement with Pami and SCCI that will expire on November 2018, we referred the same to the LTFRB,” he said.
The last increase in benefits under the passenger insurance program was in 2015, which was without a corresponding increase in premium rates, except for the bus segment that was raised by P500.
“Should the LTFRB approve the proposals on the enhancement of the PPAI program, the necessary amendment in the existing benefits as embodied in an insurance policy, as well as any changes in the premium rate, should have prior approval from the IC,”
Funa added.
In July transport group 1-Utak submitted its proposal to increase the benefits under the PPAI program to the IC.
Under the current PPAI program, the maximum medical treatment benefit is only P5,000 without need to be supported by receipts and P20,000 if substantiated by receipts.
The transport group also requested for the establishment of a Drivers’ Training Fund to be administered by the LTFRB, to help operators who lack the financial ability to train its drivers in support of the LTRFB’s Drivers Academy Program.