Question & AnswerQ&A (LTFRB JOINT LTO-LTFRB MEMORANDUM CIRCULAR NO. 01, SERIES OF 2004)
The main purpose is to mandate insurance coverage for Public Utility Vehicles (PUVs) prior to their confirmation by the LTFRB and registration with the LTO, ensuring that PUVs have necessary passenger accident insurance and comprehensive third party liability insurance before operating on public highways.
A Comprehensive Third Party Liability (CTPL) insurance and a Passenger Accident Insurance from LTFRB-accredited insurance management groups (Passenger Accident Managers, Inc. and Special Alliance Management, Inc.) are required prior to LTFRB confirmation and LTO registration.
Registering a PUV without the required insurance coverage and LTFRB confirmation is tantamount to registering an unauthorized Public Utility Vehicle, which is a violation subject to penalties under the law.
Section 374 of Republic Act 1460, also known as the Insurance Code of the Philippines, provides the legal basis for the mandatory insurance coverage of motor vehicles for indemnifying third-party death or bodily injury arising from the use thereof.
All concerned officials of the Land Transportation Office (LTO) and the Land Transportation Franchising and Regulatory Board (LTFRB) are ordered to strictly implement the provisions of this memorandum circular.
The LTFRB-accredited insurance management groups mentioned are Passenger Accident Managers, Inc. (PAMI) and Special Alliance Management, Inc. (SAMI).
It is unlawful to operate a motor vehicle on public highways without an insurance policy, guaranty, or surety bond that indemnifies death or bodily injury of third parties or passengers, as provided under Section 374 of Republic Act 1460.
The joint memorandum circular took effect immediately upon its adoption on March 15, 2004.
Public Utility Vehicle operators must secure confirmation from the LTFRB before registering their vehicles with the LTO.
Failure to comply will be dealt with in accordance with existing laws, including provisions under the Insurance Code and applicable transportation regulations, and may result in sanctions against the PUV operators including cancellation of registration or franchise.