Question & AnswerQ&A (IC CIRCULAR LETTER NO. 18-99)
The main purpose is to prevent the illegitimate appearance of ownership of carnapped or illegally obtained vehicles by requiring insurance companies to report and document motor vehicles acquired through total loss claims and their subsequent disposition.
The Insurance Commission consulted with the National Law Enforcement Coordinating Committee (NALECC), the Land Transportation Office (LTO), and the Insurance and Surety Association of the Philippines (ISAP).
Insurance companies must provide the Insurance Commission with descriptions of all motor vehicles they have paid for as total loss claims.
They must submit the corresponding copy of the deed of sale and proof of cancellation of the registration by the LTO to the Insurance Commission.
The company must retain the original registration papers and submit them to the LTO for cancellation.
Proof that the registration of the vehicle has been cancelled by the LTO must be provided.
Because it can make proof of ownership of carnapped or illegally obtained vehicles appear legitimate, facilitating illegal vehicle use or sale.
It serves as official documentation supporting the legitimacy of the sale transaction between insurance companies and buyers.
The insurance companies are required to report these sales to the Insurance Commission with supporting documents such as the deed of sale and proof of LTO registration cancellation.