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By law, jurisdiction over contracts of insurance and insurance companies is reposed upon the Insurance Commission (IC) while the powers and duties to comprehend the assessment and collection of all national internal revenue taxes, fees and charges rest with the Bureau of Internal Revenue (BIR). At the LTO, insurance coverage is a mandatory requirement for registration and, as a government agency, it is imperative that LTO ensures that the insurance coverage is valid and that taxes thereon have been properly paid.

In recognition of the foregoing jurisdiction and powers of the IC and BIR, LTO entered into a Memorandum of Agreement (MOA) with these agencies dated January 20, 2010, for the utilization of the IC COC Gateway (ICG) and the Enhanced Certificate of Cover Verification Facility (ECOCVF) for the verification of Certificates of Cover (COCs) and efficient collection of taxes for Compulsory Third Party Liability (COC-CTPL) and Comprehensive Insurance policies relevant provisions of which read as follows:

“The ICG shall serve as the sole electronic facility for recording all COCs as proof of coverage under the CTPL and Comprehensive Insurance for motor vehicle registrations….” (1^st par., Sec. 1)

“The ECOCVF shall serve as the sole verification and tax collection facility for all COCs as proof of coverage under CTPL and Comprehensive Insurance for motor vehicle registrations…” (2^nd  par., Sec. 1)

“The IC shall require/mandate accredited insurance companies to submit/file COCs pertaining to CTPL and Comprehensive Insurance policies into the ICG. For this purpose, the IC shall impose administrative sanctions upon insurance companies, their directors/officers/agents, for any willful failure or refusal to comply with or violation of the aforesaid requirement.” (2^nd  par., Sec. 2)

“The LTO shall perform, host, manage and maintain the ECOCVF for the subsequent verification of COCs and shall interconnect with the ICG for proper monitoring of collection of taxes, fees, and charges due to the BIR.” (3^rd par., Sec. 2)

Pursuant to the MOA,

1. Effective February 16, 2010, to ensure that the COCs as proof of the CTPLs and Comprehensive Insurance coverage are valid according to the requirements of the IC, and the taxes due to the BIR and other government institutions for have been properly paid, only insurance policies recorded through the ICG and verified through ECOCVF shall be accepted as requirements for transactions in the LTO IT System;
   
   
2. The ICG and ECOCVF shall replace the prevailing systems specifically the current Certificate of Cover Verification Facility (COCVF) and COCVF System A.

Relative hereto, the MOA has been published in full text nationally within the BIR, through Revenue Memorandum Circular No. 7-2010 dated January 20, 2010, copy^* of which is hereto attached and made integral part of this Circular.

For strict compliance.

Adopted: 10 Feb. 2010

(SGD.) ARTURO C. LOMIBAO
Assistant Secretary

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^* Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City