Lawyers flag lack of transparency in expanded PPAI insurance scheme

The Lawyers for Commuters Safety and Protection (LCSP) on Tuesday raised concerns over the decision to expand the number of accredited management companies under the Passenger Personal Accident Insurance (PPAI) Program from two to three, questioning the lack of transparency and public consultation surrounding the move.

LCSP founder Atty. Ariel Inton said the two-group structure of the PPAI Program was originally adopted to address long-standing issues such as fake insurance coverage, delayed claims, and unhealthy competition.

“Over time, it has provided stability, predictability, and reliable passenger protection. To date, no publicly available determination has been issued showing that this structure had become ineffective or insufficient,” Inton said.

He noted that the accreditation of an additional management company was implemented without prior public disclosure or consultation with public utility vehicle (PUV) operators, drivers, and commuters.

“Notwithstanding the significance of this change, the accreditation of an additional management company was adopted without prior public disclosure, sector consultation, or notice to PUV operators, drivers, and commuters,” Inton said.

He added that there has been no clear disclosure of the consortium members, participating insurers, and affiliated entities of the newly accredited company, despite the compulsory nature of the PPAI Program.

Even the Land Transportation Franchising and Regulatory Board (LTFRB) reportedly expressed surprise over the move. In a letter dated 4 December 2025 addressed to Insurance Commission (IC) Commissioner Reynaldo Regalado, LTFRB Chairperson Vigor Mendoza raised concerns over the lifting of the previous limitation of two insurance pools for the PPAI Program effective 1 December.

“Maintaining only two (2) groups is therefore integral to sustaining a non-discretionary, corruption-resistant, and easily enforceable system,” the LTFRB chair said in the letter. “The two-group odd-even assignment mechanism has likewise served as an important anti-graft safeguard.”

Inton cited Article II, Section 28 of the 1987 Constitution, which mandates full public disclosure of transactions involving public interest, stressing that the PPAI Program directly affects passenger safety and compulsory insurance payments.

“The PPAI Program… is unquestionably imbued with public interest,” Inton said, adding that the lack of notice and consultation also raises due process concerns under the Constitution and the Administrative Code of 1987.

According to LCSP, the expansion from two to three management companies affects risk pooling, claims handling, premium stability, and program oversight, and should strictly comply with the program’s terms of reference and accreditation guidelines.

“To date, these have not been publicly explained, nor has it been disclosed how the newly accredited entity met the required standards, or who ultimately composes and controls the consortium,” Inton said.

LCSP formally called on the Insurance Commission and the LTFRB to disclose the identities of all consortium members, explain the legal basis for the expansion, and suspend or reconsider implementation of the three-group system pending a transparent review.

“If it’s not broken, why fix it?” Inton said.