Requirement for Owners/Operators of Motor Vehicles To Secure an Insurance Policy Before Registration

October 7, 1980

LETTER OF INSTRUCTIONS NO. 1071

WHEREAS, under Letter of Instructions No. 291, dated July 8, 1975, owners and/or operators of motor vehicles are authorized to pay the annual premiums for the insurance of their motor vehicles on a quarterly basis;

WHEREAS, with the said provision, it has been observed that many vehicle owners and/or operators intentionally or unintentionally fail to pay the succeeding quarterly installments for their annual premiums, especially after the motor vehicles have already been registered, thence, resulting to the subsequent cancellation of their insurance coverage such that when accidents involving such vehicles happen, people who are affected are not properly compensated; and casia

WHEREAS, by 1981, the Bureau of Land Transportation will start implementing the system of staggered registration of motor vehicles based on the last digits of the plate numbers issued to them such that public utility vehicle operators who or companies which own a number of units will not be so financially affected if required to pay in full the annual insurance premiums considering that such payment will likewise be staggered depending on the time they are supposed to register their vehicles;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and direct:

1. Pursuant to Presidential Decree No. 612, as amended, every land transportation operator and/or owner of a motor vehicle shall, before applying for the registration or renewal of registration of any motor vehicles, secure an insurance policy issued by an insurance company authorized by the Insurance Commissioner. Such operators and/or owners of motor vehicles shall be required to pay in full the annual insurance premiums needed for one whole year insurance coverage before the issuance of the insurance policy; Provided, That such operators and/or owners authorized to be exempted from the compulsory insurance requirements under Section 377 of the same Decree shall also be required to post with the Insurance Commissioner the full amount of cash deposit or surety bond required under the said section. cdt

2. The Insurance Commissioner shall furnish the Bureau of Land Transportation a list of insurance companies authorized to issue the insurance policy or surety bond required by the aforesaid Decree as well as an updated information on insurers whose authority has been suspended, cancelled or reinstated, within ten (10) working days from the date the authority to insure is issued, suspended, cancelled or reinstated, as the case may be. All such information shall be prominently displayed by the Director of the Bureau of Land Transportation in all the agencies and/or offices of the said Bureau.

This Letter of Instructions hereby repeals the provisions of Letter of Instructions No. 291, dated July 8, 1975. Such other letters of instructions, orders, and rules and regulations or parts thereof which are in conflict with this Letter of Instructions are hereby deemed amended, modified or revoked accordingly.

This Letter of Instructions shall take effect immediately.

DONE in the City of Manila, this 7th day of October, in the year of Our Lord, Nineteen Hundred and Eighty. acd