Transport Secretary Mar Roxas has instructed the new chairman of the Land Transportation Franchising and Regulatory Board (LTFRB), Jaime D. Jacob, to help transport operators and drivers cut costs amid rising fuel prices by reviewing the existing insurance policy guidelines for public utility vehicle (PUVs) operators.
Currently, LTFRB requires operators of PUVs to get passenger insurance from only two entities as a registration prerequisite.
The current monopoly in passenger personal accident insurance is held by PAMI for those registering odd-numbered plates and by UNITRANS for those registering even-numbered plates.
“Sa kabila ng patuloy na pagtaas sa presyo ng diesel, isang kongkretong paraan upang makatulong sa mga jeepney operators at mga tsuper ay ang pagbaba sa premium na kanilang ibinabayad sa insurance, at ang pagpalawak sa sakop ng insurance coverage,” Roxas said.
Presently, jeepney operators pay almost P1,000 for an annual coverage. Given that there are approximately 230,000 jeepneys registered, this amounts to P230 million in premiums yearly. For the roughly 170,000 buses and other PUVs, the average P1,000 annual premium they pay for coverage amounts to P170 million.
“Ang pangunahing responsibilidad natin sa DOTC ay isulong ang kaligtasang pampubliko sa pamamagitan ng isang komprehensibong insurance coverage sa mas mababang halaga.”
“While we hope and pray for safe journeys, we must be prepared in case accidents happen. Immediate and proper payment of claims is a prerequisite for this type of insurance,” Roxas said.
Roxas ordered Jacob to review the existing monopoly structure and find ways such that there will be prompt payment of claims, with lower premiums, higher coverage, and better service.
“Tulad sa cellphones rates, ang kompetisyon sa kalakalan ay siyang nagbunga ng mas mababang presyo at mas mabuting serbisyo tulad ng UNLI na tawag,” Roxas added. “ Halintulad dito, kapag mas marami ang kompetisyon sa pag-alok ng insurance coverage sa pampublikong sasakyan, inaasahan na bababa ang singil at gaganda rin ang serbisyo.”
Under the present LTFRB Passenger Personal Accident Insurance Program (PPAIP), which expires on September 15, 2011, PUV operators can only get insurance from the two LTFRB-accredited insurance groups.
“Now that the 5-year accreditation program of the two insurance groups has expired, we are now opening the accreditation to more participants. These include management companies representing insurance groups or individual insurance companies,” Jacob said.
In opening the closed monopoly, PUV operators will be able to choose from any of the OIC-LTFRB-accredited insurers. LTFRB plans to give accreditation to at least five qualified insurance groups.
“LTFRB is assuring the public that while we are in the process of accrediting other insurance groups, application of insurance coverage for new and existing PUV operators will be business as usual,” said Jacob.
“They may continue to patronize existing providers, PAMI and/or UNITRANS, if they should so choose; what is important is that there will be other alternatives para walang taga-an sa singil,” Roxas added.
Likewise, LTFRB will no longer adopt a scheme that assigns specific vehicles to a specific insurer.
Opening the monopoly to other insurance companies will bring the premiums paid by PUV operators down by an average of 17 percent, according to a report prepared by the Insurance Commission. Every month, jeepney operators fork out third-party liability (TPL) premiums of P990. The Commission’s report shows that premiums can be reduced to P841, or P149 lower than the previous premium, once new insurers are accredited by LTFRB.
“We understand the transport operators’ plight in view of the alarming and continuous increase of fuel products. We shall exhaust all means to help cut costs for transport operators and drivers,” added Roxas. “The bottom line is that we want to provide safe, affordable and reliable transport systems.”
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