Lawmaker calls for inquiry on PPA memorandum circular

ORIENTAL MINDORO Rep. Rodolfo Valencia has called for a congressional inquiry on what he described as “malicious and arbitrary non-renewal” by the Philippines Ports Authority (PPA) of permit to operate granted to companies engaged in the sale of “voluntary personnel accident insurance” to passengers of domestic sea transport.

Valencia (1st District, Oriental Mindoro), chairman of the House Committee on Housing and Urban Development, was referring to a decision of the PPA through Memorandum Circular 06-2010 prohibiting the insurance companies from collecting “mandatory sale” of passenger insurance coverage.

Valencia said the PPA also ordered the insurance companies to remove their booths from the ports’ premises.

According to Valencia, the memorandum circular did not comply with the requirements under Chapter II, Book VII of the Revised Administrative Code, which provides that every agency shall file with the University of the Philippines Law Center certified copies of every rule it adopted.

Valencia said the circular was not approved by the PPA General Manager or the PPA board. “The order specifically refers to insurance agencies selling mandatory insurance and does not apply to voluntary insurance being sold to passengers of domestic sea transport,” he said.

Valencia said the denial of applications for the renewal of permits to operate by insurance companies is “malicious and arbitrary constituting a grave abuse of discretion amounting to lack or in excess of jurisdiction.”

“The decision caused moral and psychological sufferings to the employees and the families of these insurance companies as a result of the closure of their legitimate business operations,” Valencia said.

”The voluntary personal accident insurance is a public service by bridging that gap between accident or death and the ultimate payment of the mandated insurance of P200,000 under Republic Act 9295,” Valencia added.

Valencia said it would take months or even years before the relatives of the victims of sea disaster could claim from the mandated insurance of P200,000. “In the meantime, the dead could not even be brought home and decently buried,” he said.

Valencia said with a measly premium of P20, the insured passenger is covered with P20,000 in case of death; P20,000 for permanent disability; P5,000 in medical reimbursement and P2,000 form loss of baggage.

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