QuestionsQuestions (IC CIRCULAR LETTER NO. 10-2005)
To implement the 3-Year Compulsory Third Party Liability (CTPL) insurance requirement for the initial registration of brand new motor vehicles, replacing the prior 1-year CTPL requirement.
It mandates that a 3-year CTPL policy shall be taken in connection with the initial registration of all brand new motor vehicles, instead of the traditional 1-year CTPL previously required.
The LTO must require the owner/operator to present and file substantiating documentation in an approved form evidencing that the required insurance policy (or guaranty in cash or surety bond) is in effect.
No policy/certificate/contract of insurance may be issued or delivered within the Philippines unless in a form previously approved by the Commissioner; likewise, no application form or rider/clause/warranty/endorsement may be used unless its form has been approved by the Commissioner.
A list of insurance companies authorized to issue the insurance policy (or surety bond) required by the chapter.
All non-life insurance companies must commence issuance of 3-year CTPL policies not earlier than May 2, 2005.
To ensure compliance with the strict statutory requirements on approved policy forms and to prevent confusion or improper bundling; therefore the CTPL coverage must use separate forms distinct from comprehensive motor vehicle insurance.
Submit the 3-year CTPL coverage forms (separate and distinct from comprehensive policies) to the Insurance Commission and ensure they are duly approved by the Insurance Commissioner.
To provide the insurance coverage for the 3-year CTPL through a coordinated industry arrangement under the auspices of the Philippine Insurers & Reinsurers Association.
By implementing a system of mandatory insurance coverage for vehicle registration that eliminates or minimizes irregularities such as proliferation of fraudulent policies and unpaid claims.
It states there has been serious damage to the Filipino public’s confidence in the integrity of CTPL coverage obtained for purposes of registering motor vehicles, attributed to irregularities.
It indicates that prior circulars covering the same topic are replaced/overridden by IC Circular Letter No. 10-2005.
SEC. 376 governs the LTO’s gatekeeping of registration/renewal based on evidence of an in-effect policy; SEC. 226 governs the validity and acceptability of the insurance contract/policy form itself—requiring prior Commissioner approval of the exact form and any riders/endorsements.
It sets a regulatory effective timing for implementation, meaning insurers must wait until that date before commencing issuance of the 3-year CTPL policies.
The Insurance Commission, in cooperation with PIRA; its objective is to ensure the public obtains the appropriate coverage while eliminating or minimizing irregularities linked to CTPL issuance.