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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 291
TO
: The Secretary of Finance
The Insurance Commissioner
The Chairman, Board of Transportation
The Chairman, Land Transportation Commission
The Chief, Philippine Constabulary
1. Integrated National Police
Forces (all levels)
2. Constabulary Highway Patrol
Group
SUBJECT : Effectivity of 'Compulsory Motor Vehicle Liability Insurance' under P.D. No. 612.
Pursuant to Proclamation No. 1081 dated September 21, 1972 and in order to provide some sufficient time for —
1)
non-life insurance companies authorized at present
to engage in the casualty insurance line of business, aware of their
duty and obligation to extend the compulsory insurance coverage
required but incapable to do so individually and independently
considering the underwriting pitfalls attendant to the enormous risk
involved coupled with the need of continuous coverage, to organize and
form a Pool among themselves and combine their facilities and resources
to discharge effectively such duty and obligation;
2) such
insurance companies also to establish
adequate insurance premium rates, devise the terms and conditions of
the corresponding policy contracts, and set up such underwriting
mechanics as may be necessary for the purpose;
3) land
transportation operators to make adjustment
in their fiscal and budgetary setups on the additional overhead of
premium payments for the required insurance cover;
4) owners of
private motor vehicles to prepare
likewise to meet similar premium payments on the compulsory of their
units;
5) the Board
of Transportation and the Land
Transportation Commission to modify as may be necessary their
respective administrative rules on the procedure of registration of
motor vehicle units and renewal thereof;
6) the
Insurance Commission to promulgate the
necessary implementing rules and regulations on the matter subject to
the approval of the Secretary of Finance; and
7) the Chief
of the Philippine Constabulary to
disseminate the rules and regulations to be promulgated among members
of the Police Integrated Forces on all levels, as well as those of the
Constabulary Highway Patrol Group, charged with the duty to enforce
traffic laws and investigate traffic accidents;
It is hereby directed that effectivity of all provisions under Chapter VI captioned, "Compulsory Motor Vehicle Liability Insurance," Presidential Decree No. 612, otherwise known as the Insurance Code, are suspended until June 30, 1975.
The registration of motor vehicles and renewal thereof may proceed accordingly without, in the meantime, requiring the presentation and filing of a substantiating documentation prescribed under aforementioned chapter of the code until June 30, 1975. Thereafter, or beginning July 1, 1975, such presentation and filing shall be required of new applicants prior to registration of their motor vehicle units. In the case of those already registered, however, such requirement shall be complied with by the owners or operators upon renewal of registration beginning January 1, 1976.
To avoid any economic dislocation in the business of land transportation operators and notwithstanding the provision of Sec. 77 of the Code, such operators may pay the premiums on the necessary insurance cover so procured on quarterly basis.
DONE in the City of Manila, this 8th day of July, 1975.
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