ALL motorized-vehicle insurers are now required to ensure that the period of coverage of policies issued with Compulsory Third Party Liability Insurance (CTPL) cover shall be coterminous with the month that the insured vehicle was registered, the Insurance Commission (IC) said.
In Circular Letter 2021-54, Insurance Commissioner Dennis B. Funa said this move was done in a bid to avoid redundancy in the motor-car insurance coverage and to provide convenience for the insuring public.
The synchronization of the period of coverage of comprehensive motor car insurance policies with the month the insured vehicle was registered—as indicated by the last digit of the plate number—shall apply regardless whether such policies are stand-alone CTPL policies or comprehensive motor car insurance policies with CTPL provisions.
The latest circular letter was issued after a consultation-meeting between the IC and officials of the Anti-Red Tape Authority (ARTA), the Land Transportation Office (LTO) and the Philippine Insurers and Reinsurers Association Inc. (PIRA).
“This Circular Letter aims to address the concern of the ARTA as regards the perceived redundancy of the requirement of getting CTPL insurance when a motor vehicle is already covered by a comprehensive motor-car insurance policy,” Funa was quoted in a statement as saying.
The Arta has recommended last July the removal of the CTPL as part of vehicle registration process for vehicles already covered by a comprehensive motor insurance policy, pointing out that this “appeared to be redundant and inflicting expense to the public.”
Sought for clarification on why the CTPL was not waived as requested by Arta, Funa told the BusinessMirror that the “IC and LTO both noted that the CTPL requirement cannot be dispense as this is needed for motor-vehicle registration.”
Funa said the ARTA is, likewise, aware of this need.
“The concern is with regard to the CTPL cover, which is included in a comprehensive motor policy where, in some instances, do not coincide with the dates and expiration date [of] motor vehicle registration,” Funa told the BusinessMirror. “Thus, such CTPL cover is not honored by the LTO; and the motor-vehicle owner will now secure a stand-alone CTPL cover for purposes of vehicle registration. This is the redundancy which the circular addresses.”
Nonetheless, the circular letter provides that insurers and their agents are also obliged to inform the insured that the respective periods of their comprehensive motor car policies with CTPL cover may be extended at the latter’s option, as well as the terms of such extension.
Moreover, insurers issuing motor-car policies—whether comprehensive motor car policies with CTPL provisions or stand-alone CTPL policies—shall issue a Confirmation of Cover for motor-vehicle registration with the LTO. Likewise, the insurer shall also ensure real time-authentication of of the issued COC.
Prior to the issuance of the new Circular Letter, the ARTA expressed its gratitude to the IC “for its immediate action on the matter and for supporting ARTA’s continued efforts towards ease of doing business and the efficient delivery of government services to the public.”