LTO Online Insurance Verification MOA

It is based on jurisdictional division: the Insurance Commission (IC) has jurisdiction over insurance companies and contracts of insurance, while the BIR has jurisdiction over assessment and collection of national internal revenue taxes, fees, and charges on insurance coverage. Thus, LTO must ensure that insurance coverage is valid (IC jurisdiction) and that taxes due thereon are properly paid (BIR jurisdiction).

The MOA is between the LTO and the relevant agencies (IC and BIR) for use of IC gateways/facilities to verify certificates of cover and facilitate tax collection. It is dated January 20, 2010.

The ICG serves as the sole electronic facility for recording all Certificates of Cover (COCs) as proof of coverage under the CTPL and comprehensive insurance for motor vehicle registrations.

The ECOCVF serves as the sole verification and tax collection facility for all COCs as proof of coverage under CTPL and comprehensive insurance for motor vehicle registrations.

The IC shall require/mandate accredited insurance companies to submit/file their COCs for CTPL and comprehensive insurance policies into the ICG.

The IC will impose administrative sanctions upon insurance companies and their directors/officers/agents for willful failure or refusal to comply with or violation of the requirement to submit/file COCs into the ICG.

LTO shall perform, host, manage, and maintain the ECOCVF for subsequent verification of COCs, and it shall interconnect with the ICG for proper monitoring of tax, fees, and charges due to the BIR.

It took effect on February 16, 2010.

Only insurance policies recorded through the ICG and verified through the ECOCVF shall be accepted as requirements for transactions in the LTO IT System involving proof of CTPL and comprehensive insurance coverage.

Compulsory Third Party Liability (CTPL/COC-CTPL) and comprehensive insurance policies for motor vehicle registrations.

The ICG and ECOCVF replace the prevailing systems, specifically the current Certificate of Cover Verification Facility (COCVF) and COCVF System A.

Because collection and assessment of national internal revenue taxes, fees, and charges fall under BIR authority; compliance is needed for LTO to accept insurance policies as valid registration requirements.

Policies not recorded in the ICG and not verified in the ECOCVF will not be accepted by LTO as proof of CTPL or comprehensive coverage for LTO transactions, effectively imposing a system-based compliance requirement.

It specifies that the IC may impose administrative sanctions on insurance companies and their directors/officers/agents for willful noncompliance with submitting COCs to the ICG.

The MOA was published in full text nationally within the BIR through Revenue Memorandum Circular No. 7-2010 dated January 20, 2010, and a copy is attached and made integral part of the Circular.

The Circular was adopted/signed by (SGD.) ARTURO C. LOMIBAO, Assistant Secretary.