THE Passenger Personal Accident Insurance (PPAI) program, administered jointly by the Land Transportation Franchising and Regulatory Board and the Insurance Commission, is legally sanctioned under Section 387 of the Insurance Code and the LTFRB charter. The PPAI provides for mandatory insurance coverage for public-utility vehicles (PUVs).
Data, as reported to the Insurance Commission, shows that accidents involving PUVs have been increasing every year. From 654 in 2014, to 941 in 2015, to 1,044 accidents in 2016. For 2016, most of the accidents involved jeeps (432 accidents), followed by buses (at 354 accidents), sedans (at 112), AUVs (at 82) and trucks (at 64 accidents). The biggest jump in accidents involved buses, from 247 accidents in 2015 to 354 accidents in 2016, or an increase of 43.32 percent. This trend only shows the continuing importance of the PPAI program. Data, however, from the Philippine Statistics Authority (PSA) show a grimmer picture. According to the PSA, 10,012 people died due to road accidents in 2015, which is a 45.76-percent increase from 6,869 deaths recorded in 2006. This could only mean that more accidents occur involving private vehicles or that a significant number of accidents involving PUVs are not reported to the insurers. In any case, data from the PSA also shows an increasing trend in car vehicular accidents.
In Metro Manila, according to the Metropolitan Manila Development Authority, it is reported that in 2016 motorcycles had the “highest fatality accident rate” with 218 total number of deaths, followed by trucks (103) and private cars (98). According to the MMDA, 23,105 motorcycles were involved in road accidents in 2016. Motorcycles, however, are not
covered by the PPAI.
As provided under the rules established by the LTFRB, two consortia of insurance companies were accredited. Each consortium will have at least 10 insurance companies and a lead insurer will be chosen by the members of the consortium. At the option of its members, the consortium may be managed by a management company. The issuance of certificates of cover under the PPAIP shall be on a “free market” basis, meaning a PUV operator has the right to choose from the accredited providers in obtaining the passenger insurance coverage.
The LTFRB entered into a three-year (2015-2018) MOA with two insurance consortia managed by two management companies: SCCI Management and Insurance Agency Corp. (SCCI) and the Passenger Accident Management and Insurance Agency Inc. (Pami). Pami’s lead insurer is UCPB General Insurance Co., while SCCI’s lead insurer is Alliedbankers Insurance Corp.
In 2015 the Insurance Commission approved the increase in benefits. Notably, among others, death benefit was increased from P150,000 to P200,000. It should be emphasized that this was done without increasing the premiums, except in the case of buses, which was increased from P1,780 to P2,280 for Metro Manila buses, and from P2,180 to P2,680 for provincial buses. The premiums are inclusive of the documentary stamp tax, premium tax and local government tax.
For calendar year ending 2016, a total of 392,299 public utility vehicles were insured. These vehicle units include Asian utility vehicles (AUVs), buses, jeeps, sedans and trucks. Pami insures about 80.68 percent of all the PUV units. Leaving SCCI with a 19.32 percent share. Of the total PUVs, the jeepney (PUJ) comprised the highest number of units at 176,213 vehicles. It has been observed, however, that the number of jeeps has declined by 2 percent compared to calendar year 2015 (179,815 jeepneys). The year 2014 saw 183,585 units of jeepneys. This, perhaps, can be attributed to the government’s effort to phase out the jeep. For sedans, it has increased by 35,801 units (to 90,930), or by 64.94 percent from calendar year 2015 (55,129). This can be attributed to the introduction of transportation network vehicle services, such as Grab and Uber. AUVs, buses and trucks were practically at a standstill.
For calendar year ending 2016, a total of P63.01 million in benefits were paid. The majority of these were death benefits totaling P46.25 million for the 296 death claims, or 73.40 percent of the total. Medical claims totaled 2,167 incidents. Because of the increase in benefits approved by the Insurance Commission, the total benefits paid increased by 28.52 percent, or by P13.98 million, compared to the previous year 2015.
In terms of the vehicle type from which claims emanated, the jeepney segment had the highest number of claims with 1,066, of which 925 were for medical claims while 138 were for death claims. Jeepney accidents comprised about 43.32 percent of the total accidents. On the other hand, claims from the truck segment only totaled 87.
In terms of taxes collected from the program, the annual average was P38.42 million from 2014 to 2016. In 2016, P29.22 million came from collections made by Pami. The taxes included the 2 percent premium tax, documentary stamp tax and the local tax.
Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.