NEW PHILIPPINES MOTOR INSURANCE SYSTEM BEGINS IN TWO WEEKS

The Philippines Land Transportation Office (LTO) will implement its controversial Compulsory Third Party Liability System (CPTL) two weeks from now. The Government Service Insurance System (GSIS) will handle the new scheme, which LTO chief Alberto Suansing claimed would benefit “more than 5m car owners” across the country. Insurers have been less keen on the plan, asserting that the new system was a back-door nationalisation of third-party motor cover. The integration of third-party motor insurance with the LTO was proposed as a means to prevent the use of forged motor documents, but the GSIS was given an exclusive contract to run the new scheme. The full guidelines on how the CTPL system will be implemented are still being drawn up. One possible compromise proposed last year was the introduction of an “open” CTPL, with premiums distributed equally among members of the Philippine Insurers and Reinsurers Association and claims also shared equally, and the GSIS administering the collection of premiums and payouts of claims.