3-Year Compulsory 3rd Party Liability Insurance

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IC CIRCULAR LETTER NO. 10-2005: 3-Year Compulsory 3rd Party Liability Insurance

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Title Supreme Court: 3-Year Compulsory 3rd Party Liability Insurance

Law: Ic Circular Letter No. 10-2005

Decision Date: Apr 11, 2005

The Insurance Commission mandates the implementation of a 3-Year Compulsory Third Party Liability (CTPL) insurance policy for the initial registration of all brand new motor vehicles, aiming to enhance public confidence and eliminate fraudulent practices in vehicle insurance.

compulsory insurance

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Legal Basis and Compliance with Insurance Code

Section 376 mandates the Land Transportation Office (LTO) to require proof of insurance before vehicle registration or renewal
Section 226 requires all insurance policies or related documents to be in forms approved by the Insurance Commissioner
Section 375 requires the Insurance Commissioner to provide LTO a list of authorized insurance companies for issuing CTPL policies

Issuance and Approval Procedures for 3-Year CTPL Policies

Non-life insurance companies to start issuing 3-Year CTPL policies no earlier than May 2, 2005
3-Year CTPL forms must be distinct from comprehensive motor vehicle policies and be approved by the Insurance Commissioner
Accredited insurance companies will collectively provide 3-Year CTPL coverage under the Philippine Insurers & Reinsurers Association (PIRA)

Role of the Insurance Commission and PIRA

Insurance Commission, in cooperation with PIRA, will implement a mandatory insurance coverage system linked to vehicle registration
Aims to ensure the public obtains appropriate CTPL insurance coverage
Seeks to eliminate or minimize widespread irregularities such as fraudulent policies and unpaid claims

Restoring Public Confidence

This policy intends to repair loss of public trust regarding the integrity of CTPL insurance used for vehicle registration

Supersession of Previous Regulations

This Circular Letter supersedes all prior circulars on the subject matter

Administrative and Legal Effect

Issued and adopted by Insurance Commissioner Benjamin S. Santos on April 11, 2005
Forms part of ongoing reforms in the Philippine insurance sector to strengthen regulatory compliance and consumer protection

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