BY ASHZEL HACHERO

WINSTON Garcia, president of the Government Service Insurance System, yesterday named eight firms that he said make up the "cartel" in the car insurance industry.

The GSIS is poised to take over the task of providing compulsory third party liability (CTPL) insurance to vehicles being registered with the Land Transportation Office.

The CTPL, which will provide P100,000 in coverage to third parties killed or injured in accidents, is a requirement for vehicle registration.

The Philippine Insurers and Re-Insurers Association (PIRA) has aired opposition to the GSIS takeover.

Garcia identified the eight firms as Great Domestic Insurance Company, VF Insurance Corp., Plaridel Surety and Insurance Corp., Security Pacific Assurance Corp., Far Eastern Insurance, Pacific Insurance Corp., Standard Insurance Corp., South Sea Surety and Insurance Corp., and People's General Insurance.

He said these are "small" insurance firms whose net worth is not even 1/10th of GSIS business." He said there are 113 insurance firms but these eight cornered the "majority" of CTPLs sold last year.

LTO and Insurance Commission records showed 5.5 million vehicles were registered last year.

From 2000 to 2007, 39.7 million vehicles were registered, but only about 17 million held valid CTPLs, according to the LTO which also said two of every three CTPLs sold during the same period were spurious.

"This is an abusive cartel which GSIS is trying to break up," Garcia said.

Garcia said named a ninth firm, Acropolis Central Guaranty, which he said is no longer in existence but its agents continue to sell car insurance.

"The only ones who should fear this new system are the swindlers who sell fake CTPLs. Their days are over," Garcia said at a press conference at the Manila Peninsula hotel in Makati City.

Under the new scheme, applications for vehicle insurance would be integrated in the vehicle registration process of the LTO Information Technology (LTO-IT) system.

"This is a big convenience. The people can now purchase insurance during the registration," Garcia said.

He said based on a memorandum of agreement among the GSIS, LTO and the transportation department, the new scheme is already being implemented in certain "pilot areas."

He said he expects an annual collection of at least P2.5 billion with the new scheme, which he said is nearly as much as the annual overpricing from the current procedure.

He said the new scheme will be cheaper for vehicle owners.

Private vehicles are now being charged P900, public utility vehicles like jeepneys P950, light trucks P980, and motorcycles P350.

Under the new scheme, private vehicle owners will save P325, utility vehicles P375, light trucks P355, and motorcycles P85.

Garcia belied PIRA's claims that the entire insurance sector is against his agency's control of CTPL.

"The majority of the biggest names in the insurance industry including PhilNaRe (National Reinsurance Corporation of the Philippines) expressed their support," he said.

He said these big insurance firms would be backing the claims being guaranteed by the GSIS.

He said PhilNaRe alone has a budget capitalization of P6 billion.

PIRA and the Bukluran ng mga Manggagawa sa Industriya ng Seguro have said the new scheme would displace 60,000 workers in the industry.

Garcia said this is "misleading" because there are only around 10,000 registered insurance agents.

On claims the new scheme would be disadvantageous to vehicle owners, he said: "I am surprised why despite the figures and facts we have shown, some PIRA officials still made those claims. Maybe, they are doing this for personal reasons. What they have presented are irresponsible figures that they cannot justify."

"They are just perpetuating a myth that is clearly debunked by facts and figures at the GSIS," he added.

GSIS said it can service more than five million CTPL holders because of the agency's 48 branches and 78 satellite offices nationwide.

The agency also said its 24-hour call center and SMS facility can handle inquiries and claims.

Also present in the conference were LTO chief Alberto Suansing, and Cesar Quiambao, chairman of Stradcom Corp. which is implementing the LTO-IT project.

Stradcom is a leading private sector proponent for government information technology projects under the build-own-operate scheme of the build-operate-transfer law.

GSIS Commissioner Eduardo Malinis said the agency also has a network of accredited adjusters, hospitals, and clinics to attend to the claimants and victims of a vehicular accident.

Roberto Cruz, spokesman of the Private Motorists Alliance Coalition, expressed doubt on the GSIS's capability to pay the claims.

"Although we see nothing wrong with the present CTPL set-up being handled by the private insurance firms, we believe that it will further simplify the process once the GSIS steps in. The problem is when it comes to the payment of claims, because everybody knew how bad the GSIS service is," Cruz said.

The broad transport alliance 1-United Transport Koalisyon (1-Utak) said it is gearing for a transport holiday in protest of the new scheme.

It said the GSIS has no need to interfere in the car insurance business.

"Kung hindi naman sira bakit papalitan pa? Natatakot kami baka maging laganap pa ang mga pekeng CTPL," 1-Utak president Melencio Vargas said.

The Makati Jeepney Operators and Drivers Association said it does not need the GSIS for the insurance coverage.

"Kung kelan marami nang mabibigat na problema ang buong transport sector, tapos papasukan pa ng problema ng plano ng GSIS, nagkakaisa kaming lahat na hindi namin kailangan ang GSIS para sa CTPL insurance," said its president, Orlando Marquez.