BAGUIO CITY – The City Council approved on first reading a proposed ordinance requiring all insurance companies, agents, brokers, underwriters and similar entitles to apply for accreditation with the local government before issuing third party liability (TPL) insurance coverage to all city business establishment owners applying for and renewing business permits, as well as vehicle owners applying for registration and annual renewal with the Land Transportation Office (LTO), and providing penalties for violations.
The ordinance, authored by Councilor Leandro B. Yangot, Jr., stated that any insurance company, agent, broker, underwriter and similar entities found violating the provisions of the ordinance shall be penalized by a fine of P5,000 and shall be banned from doing business in the city and recommended for revocation of license with the Insurance Commission (IC).
Under the law, business establishments, commercial entities, entrepreneurial outfits and similar business undertakings in the city, are mandated to apply or renew their business licenses and permits on or before the 20th of January every year.
For motor vehicles, registration renewal is done annually on its registration anniversary date.
During the renewal period, Yangot claimed these entities would be dealing with and issuing third party liability insurance coverage to all business establishment owners and motor vehicle owners.
According to him, it is the moral duty of the local government to protect business establishment owners securing new or renewing their business permits as well as motor vehicle owners securing new or renewing their LTO registrations, thus, the need to regulate the business activities of the different insurance companies, agents, brokers, underwriters and similar activities.
Yangot opined, without the aforesaid safeguards, said business establishment owners and vehicle owners would not be protected against unscrupulous TPL-related companies and agents.
For the protection of the city’s business establishment owners and vehicle owners, he explained it is mandatory for all the insurance companies, insurance agents, insurance brokers, underwriters and similar entities to seek the endorsement of the City Council for accreditation with the Office of the City Mayor as a condition before they can deal with and issue TPL insurance coverage for their prospective clients.
The application for the letter of accreditation is open to all insurance companies, insurance agents, insurance brokers, underwriters and similar entities without qualification, except show of proof that they are duly licensed to act as such and certified to be in good standing with the Insurance Commission.
By Dexter A. See