Law Summary
Background
On January 20, 2010, a Memorandum of Agreement (MOA) was executed among the Insurance Commission (IC), the Land Transportation Office (LTO), and the Bureau of Internal Revenue (BIR). The MOA aims to enhance the management of Compulsory Third Party Liability (CTPL) Insurance through a Comprehensive Program focused on proper registration of Certificates of Cover (COC) and timely payment of related taxes.
- Key Parties Involved: Insurance Commission (IC), Land Transportation Office (LTO), Bureau of Internal Revenue (BIR).
- Objective: Address issues regarding CTPL Insurance, registration of COCs, and tax compliance.
Establishment of the IC COC Gateway (ICG)
The Insurance Commission has established the IC COC Gateway (ICG) to ensure that all issued COCs are authenticated, and that corresponding premiums, taxes, and commissions are duly recorded and paid.
- Function: To serve as a platform for the registration and transmission of COCs to the LTO.
- Real-time Monitoring: Information will be shared online and in real-time with both LTO and BIR.
Requirements for Insurance Companies
All non-life insurance companies, agents, and brokers are required to comply with specific requirements to ensure the authenticity and processing of COCs through the ICG.
Registration through ICG:
- All COCs must be registered through the ICG to be considered authentic.
Automated COC Issuance System:
- Insurance companies are required to have an automated system that is compatible with the ICG.
- Specific Requirements:
- Contract with preferred IC accredited payment centers for interconnectivity.
- Automated cash management system that allows secure electronic transmission of collection files.
- Real-time debit and credit capabilities for funds.
- Up-to-date online reporting systems.
Compliance and Enforcement
The Insurance Commission will only submit COCs that comply with the outlined requirements and procedures to the LTO for monitoring, verification, and registration purposes.
- Non-compliance Consequences:
- COCs that do not meet the requirements will not be accepted or processed by the LTO.
- Effective immediately, this requirement is mandatory for all insurance entities involved.
Key Takeaways
- The issuance and processing of COCs for motor vehicles must comply with the guidelines set forth by the Insurance Commission through the implementation of the IC COC Gateway.
- Insurance companies are mandated to have automated systems in place for the issuance of COCs and must ensure real-time compliance with tax and premium requirements.
- Non-compliance with these guidelines will result in the rejection of COCs by the LTO, emphasizing the need for strict adherence to the established protocols.