Republic of the Philippines
HOUSH OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
First Regular Session
HOUsEB|LLNo.8498
Introduced by Representative Wilbert T. Lee
AN ACT
INCREASING THE COMPULSORY THIRD PARTY LIABILITY INSURANCE
(CTPLI) FOR COMMERCIAL VEHICLES AND TOTAL INDEMNITY CLAIM
FOR DEATH 0R INJURY 0F ANY PASSENGER, THIRD PARTY, OR
PEDESTRIAN WITHOUT THE NECESSITY 0F PROVING FAULT 0F
NHGLIGENCE, AMENDING FOR THE PURPOSE SECTIONS 386, 387, AND
391 0F THE "INSURANCE CODE 0F 2013"
EXPLANATORY NOTE
Despite  a  driver's  skill  and  caution,  accidents  nevertheless  occur.  One  method  of
reducing risk is through motor vehicle insurance.  The Philippine  Statistics Authority (PSA)
accounted that 17-18 in every  1,000 deaths each year from 2011  to 2020 were caused by road
traffic accidents. This number slightly increased from 2011 -2019 with a noticeable decline in
2020  due  to  the  COVID-19  pandemic.  From  7,938  in  2011,  to  8,234  in  2012,  to  8,685  in
2013,  to  8,943  in  2014,  to  9,954  in 2015,  to  11,214  in  2016,  to  11,351  in 2017,  to  12,471  in
2018, to  12,755  in 2019,  to  8,746 accidents in 2020.  Metro  Manila Accident Reporting and
Analysis System (MMARAS) Annual Report in 2021  likewise reported a total of 58,447 road
crash  statistics  in  Metro  Manila  (per  district),  accounting  a  total  of 42,812  for  damage  to
property,  385  for death,  and  15,250  for non-fatal  injury.  The  average road crash per day  is
160.12  cases, reporting a total  of 117.29 cases  for damage to property,1.05  cases for death,
and 41.78 cases for non-fatal injury.
Motor vehicle  insurance  serves  as  a protection  against  any  unforeseen  expenditures
that may arise in the course of business. This is vital especially for those involved in business
or commercial purposes who oblige themselves to transport people or goods from one place
to  another.  Commercial  vehicle  insurance  is essential  since  it represents  the  industry to  the
general public, from the nature of their business and for the reason of public policy. As such,
extreme measures  of care and caution are required to be observed  in  securing  safety to the
person and/or goods it transports or those pedestrians walking on or near the roadway.
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.I
Republic Act No.  10607  or the  Insurance  Code  of 2013  mandates  all  operators  and
owners of a motor vehicle, before applying for registration or renewal of registration of any
motor vehicle, to first secure a policy of insurance or guaranty in cash or surety bond issued
to indemnify the death, bodily injury, and/or damage to property of a third party or passenger,
as the case may be, arising from the use thereof.
The  most  fundamental  kind  of motor  vehicle  insurance  is  Compulsory  Third  Party
Liability  Insurance  (CTPLI),  which  covers  costs  paid  when  a  vehicle  owner  negligently
causes bodily injury or death to a third party or passenger in an accident resulting from the
usage of the insured motor vehicle.
The Code likewise fixed the amount of any claim for death or injury to any passenger
or third party without the necessity of proving fault or negligence of any kind at P15,000.00
pursuant to  Section  391.  This  amended  Section  378  of the  Insurance  Code  of  1978  which
fixed the amount of indemnity from P5,000.00 to P15,000.00.
Through this "No Fault Indemnity" provision,  an insurer may be held liable without
the necessity of proving fault or negligence of any kind given the following are present:  (a)
claim is for death or injury to any passenger or third party; (b) total indemnity in respect of
any one person shall be P15,000;  and (3) necessary proof of loss under oath to  substantiate
the claim must be submitted.
In the  case of Compcz#z.c7 v.  ,4%fecfc},/  the  Supreme  Court provided that the "no  fault
indemnity" clause is part and parcel of the provisions on compulsory motor vehicle liability
insurance and should be read together with the requirement of compulsory passenger and/or
third party-liability insurance which was mandated in order to ensure ready compensation for
victims of vehicular accidents. Likewise, the Court laid the rules on claim under the "no fault
indemnity" provision where proof of fault or negligence is not necessary for payment of any
claim  for  death  or  injury  to   a  passenger  or  a  third  party  provided  the   following   are
established:  (1) a claim may be made against one motor vehicle only;  (2)  if the victim is an
occupant  of a vehicle,  the  claim  shall  lie  against  the  insurer  of the  vehicle  in  which  he  is
riding,  mounting  or  dismounting  from;  (3)  in  any  other  case,  (z..e.,  if the  victim  is  not  an
occupant of a vehicle), the claim shall lie against the insurer of the directly offending vehicle;
and (4) in all cases, the right of the party paying the claim to recover against the owner of the
vehicle responsible for the accident shall be maintained.
Years have passed since the effectivity of the Insurance Code of 2013, the insurance
claim  for  death  or  injury  to  any  passenger  or  third  party  should  be   sufficient  for  the
circumstances met at hand. Although, there is no dispute that human life is worth more than it
is  worth in peso  as  human  life  is  priceless  and  is  not  a commodity,2  every  injury  or death
must be justly compensated under the law.
I  G.R. No.  L-49699,  August 8,1988
2  People v. Oandasan, Jr., G.R. No.194605, June  14, 2016
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This measure,  therefore,  centers on motor vehicles used for business or commercial
purposes, such as transporting goods or passengers, as these vehicles hold themselves out to
the  public.  Given the  earning  capacity  of the  industry,  this  measure  seeks  to  increase  the
CPTLI  from  P100,000  to  P6,700,000.00  to  cover  the  death  or  bodily  injury  incurred  per
accident. The measure likewise seeks to increase the amount of insurance claim for death or
injury  per  accident  to  any  passenger,  third  party  or  pedestrian  without  the  necessity  of
proving  fault  or negligence  from P15,000.00  to  at  least  P1,000,000.00  for any  four  (4)  or
more  commercial  motor  vehicle  designed  to  transport  goods/cargoes  and/or  persons,  with
gross vehicle weight (GVW) of up to 4,500 kgs or P2,000,000.00 for any four (4) or more
wheeled commercial motor vehicle designed to transport goods/cargoes and/or persons, with
GVW of more than 4,500 kgs. There is a difference in the amount of insurance claim because
the  likelihood of an accident increases with the  commercial  motor vehicle  size.  Hence, the
increase  depends  on  the  weight  and  nature  of services  offered  by  the  commercial  motor
vehicle.
In view of the foregoing, the approval of this bill is earnestly sought.
____i_
LBERT T. LEE
esentative
PARTYLIST
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Republic of the Philippines
HOUSE 0F REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
First Regular Session
HousEBILLNo.8498
Introduced by Representative Wilbert T. Lee
AN ACT
INCREASING THE COMPULSORY THIRD PARTY LIABILITY INSURANCE
(CTPLI) FOR COMMERCIAL VEHICLES AND TOTAL INDEMNITY CLAIM
FOR DHATH 0R INJURY OF ANY PASSENGER, THIRD PARTY, OR
PEDESTRIAN WITHOUT THE NECESSITY OF PROVING FAULT OF
NEGLIGENCE, AMENDING FOR THE PURPOSE SECTIONS 386, 387, AND
3910F THE "INSURANCE CODE OF 2013"
Be  it  enacted  by  the  Senate  and  House  of  Representatives  Of  the  Philippines  in
Congress assembled..
1       SECTION  I.  Section  386  of Republic  Act No.10607,  otherwise  known  as  the  "Insurance
2       Code of2013," is hereby amended by inserting following provisions after letter (I) of the said
3        Act:
4                      "(a) A4lo/or  ye fez.c/e is  any  vehicle  as  defined  in  section  3,  paragraph  (a)  of Republic
5                     Act No. 4136, otherwise known as the `Land Transportation and Traffic code'.
6                     (b) Pczsse#ger is any (1) fare paying person being transported and conveyed in and by
7                     a motor vehicle for transportation of passengers for compensation, including THOSE
8                   WHO HAD NOT YET PURCHASED 0R HAS BOARDED THE MOTOR OR
9                   MOTOR  VEHICLE  AND  (2)  NON  PAYING  persons  WHO  ARE  expressly
10                     authorized by law or by the vehicle's operator or his agents to ride without fare
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(c) 7lfe!.rdporty is  any  person  other  than  a  passenger  as  defined  in  this  section  and
shall also exclude a member of the household,  or a member of the family within the
second   degree   of  consanguinity   or   affinity,   of  a   motor   vehicle   owner  or   land
transportation  operator,  as  likewise  defined  herein,  or  his  employee  in  respect  of
death,  bodily  injury,  or  damage  to  property  arising  out  of  and  in  the  course  of
employment.
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1                     (d) (h4/#er or mo/or veAz.c/e ow#er means the actual legal owner of a motor vehicle, in
2                    whose name such vehicle is duly registered with the Land Transportation office;
3                     (e) £a#c7 /ra#`5por/a/z.o#  apcrcr/oj~ means  the  owner or  owners  of motor vehicles  for
4                    transportation of passengers for compensation, including school buses.
5                     (I) J#.``#rcJ77cc po/I.cj; or p()/7.c,v refers to  a contract of insurance  against passenger and
6                    third-party liability for death or bodily injuries and damage to property arising from
7                     motor vehicle accidents.
8                (G) con£MERci4£ ra#fczE REFERS TO ANT TypE OF VEHlcLE THAT
9                   IS   USED   FOR  BUSINESS   0R   COMMERCIAL   PURPOSES,   SUCH   AS
10                  TRANSPORTING GOODS OR PASSENGERS FOR HIRE.
11                 (H) pEziEsrRI4IV MEANS ANT pERsoN TRAVELING By FoOT AND ANT
12                  MOBILITy-IrmAIRED PERsoN USING A WHEELCHAIR ON OR NHAR A
13                   ROADWAY.
14       SEC. 2. Section 387 of Republic Act No.10607 is hereby amended as follows:
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"Section 387.  It shall be unlawful for any land transportation operator or owner of a
motor vehicle to operate the  same in the public highways unless there is  in force  in
relation thereto  a policy of insurance  or guaranty in  cash or surety bond  issued in
accordance with the provisions of this chapter to indemnify the death, bodily injury,
and/or damage to property of a third-party or passenger, as the case may be, arising
from   the   use   thereof.   PROP7DED,   THOSE   LAND   TRANSPORTATION
OPERATOR 0R OWNER OF A COMMERCIAL VEHICLE SHALL SECURE
AN INSURANCE POLICY 0F AT LEAST SIX MILLION SEVEN HUNDRED
PESOS (P6,700,000.00) TO COVER THE NO FAULT INDEMNITY CLAUSE
PER ACCIDHNT. "
25       SEC. 3. Section 391  of Republic Act No.10607 is hereby amended as follows:
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"Section  391.  Any  claim  for  death  or  injury  to  any  passenger  or  third  party  OR
PHDESTRIAN pursuant to the provisions of this chapter shall be paid without the
necessity of proving fault or negligence of any kind: Prt)v7.cfec7, that  for purposes  of
this section:
(a) The total indemnity PER ACCIDENT in respect of any person shall not
be less tban Fiftcon thourmd PODOB 015,OcO.00):
(I) ONE MILLION PHSOS (Pl,000,000.00) FOR ANY FOUR (4)
OR MORE WIIEELED COMMERCIAL VEHICLE, WIIICH
IS PROPELLED BY  GAsOLINE, DIESHL, ELECTRICITY
AND ANT OTHER MOTlvE roin7ER AND pRINclpALLy
DESIGNED TO TRANSPORT GOODS/CARGOES AND/OR
PERSONS, WITH  GROSS  VEHICLE WEIGHT  (GVW)  OF
UP TO 4qu KGS.;
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(2) TWO MILLION PESOS (P2,000,000.00) FOR ANY FOUR (4)
OR MORH WHEELED COMMERCIAL VEHICLE, WHICH
IS  PROPELLED  BY  GASOLINE,  DIESHL,  ELECTRICITY
AND ANY OTHER MOTIVE POWER AND PRINCIPALLY
DESIGNED TO TRANSPORT  GOODS/CARGOES AND/OR
PERSONS,  WITH  GROSS  VEHICLE  WEIGHT  (GVW)  OF
MORE THAN 4,500 KGS.
(b)   The   following   proofs   of  loss,   when   submitted   under   oath,   shall   be
sufficient evidence to substantiate the claim:
(1) Police report of accident; and
(2)  Death  certificate  and  evidence  sufficient  to  establish  the  proper
Payee; Or
(3) Medical report and evidence of medical or hospital disbursement in
respect of which refund is claimed;
(c)  Claim  may  be  made  against  one  motor  vehicle  only.  In  the  case  of an
occupant  of a  vehicle,  claim  shall  lie  against  the  insurer  of the  vehicle  in
which  the  occupant  is  riding,  mounting  or  dismounting  from.  In  any  other
case, claim shall lie against the insurer of the directly offending vehicle. In all
cases, the right of the party paying the claim to recover against the owner of
the vehicle responsible for the accident shall be maintained."
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22      SEC.   4.  Implementing  Rules   and  Regulations.   -  W±thir\  Ninety  (90)  days  from  the
23       effectivity of this Act, the Land Transportation (LTO), Insurance commission (IC), and other
24       government  agencies  concerned,  shall  coordinate  with  government  agencies  concerned  to
25       formulate the rules and regulations for the proper implementation of this Act.
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27       SEC.  5.  Scparmbi./dy  C/¢wsc.   Should  any  provisions  of this  Act  be  declared  invalid,  the
28       remaining provisions shall continue to be valid and subsisting.
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30       SEC.  6.  j[cpc¢/J."g  C/¢wsc.  All  laws,  executive  orders,  administrative  orders,  rules  and
31       regulations  or  parts  thereof,  which  are  inconsistent  with  this  Act  are  hereby  amended,
32       repealed, or modified accordingly.
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34       SEC. 7. E/Tcc/J.tJJ.fy. This Act shall take effect after fifteen (15) days following its publication
35       in the official Gazette and one (1) newspaper of general circulation.
Approved,
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