Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

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seventeenth Congress
‘st Regular Session

HOUSE BILLNO, 4782 _

Introduced by Representative JOEY SARTE SALCEDA

AN ACT MANDATING THE INSURANCE OF ALL
GOVERNMENT PROPERTIES AND INTEREST WITH THE GSIS,
AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Each year, numerous typhoons enter the Philippines Area of Responsibility and
several of these typhoons are but catastrophic. In recent events, numerous experiences
have shown us the significance of having our government properties insured. Last
December 2016, Typhoon Nina struck the heart of the Bicol Region and its neighbors in
our country. Several government infrastructures were devastated by the catastrophic
typhoon and numerous infrastructures were owned by different government offices and
various municipalities. In the case of the national government agencies, their properties
were insured and indemnified by the GSIS for damages wrought by the typhoon.
However, most of the damaged properties belonged to municipalities were not insured,
Municipal administrations have appealed for financial aid not only to address the impact
of the disaster to their ci s but also to rehabilitate government properties that were
damaged within their jurisdiction.

Evidently, these municipalities have to rely on appropriations from the national
government, financial aid from donors, and their strained budgets to fund the
tation of their damaged properties. This common experience of municipalities of

ring the brunt of several typhoons and other disasters makes it imperious for
municipalities (o insure their respective properties. It is in their superlative interest if their
properties were to be insured than be unprotected to the risk of non-indemnification in
case of damage during a natural calamity. Hence, mandating the insurance of all
government properties and interest with the Government Service Insurance em is a
must in developing and promoting a sound social security system by means of
indemnifying or compensating the Government for any damage, or loss of, its properties
due to fire, earthquake, typhoon, or other natural catastrophes. This bill seeks to propose a
provision mandating universal insurance of public school buildings whose premiums shall



by the NDRRMF in the GAA and whose claims proceeds shall be automatically released
to the town or city where the school building is located, or to the barangays whose
population is higher than 2,500 based on the latest PSA census.

In light of the foregoing, the passage of this bill is most earnestly sought:



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session
HOUSE BILL No, 4732

Introduced by Representative JOEY SARTE SALCEDA

AN ACT MANDATING THE INSURANCE OF ALL
GOVERNMENT PROPERTIES AND INTEREST WITH THE GSIS,
AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Short Title.
of 2016.”

‘is Act shall be known as the “Property Insurance Law

SECTION 2. Purpose, - In order to indemnify or compensate the Government as
defined in this Act for any damage to, or loss of, its properties due to fire, earthquake,
typhoon, or other natural catastrophes there is hereby established the "General Insurance
Fund" (hereinafter the “Fund”), which shall consist of all moneys resulting from the
liquidation of the insurance constituted in section three hundred forty of the Revised
Administrative Code and from premiums and other incomes.

SECTION 3. Administration of the Fund / Powers Granted to the GSI
administration of the Fund is hereby placed under the Government Service Insurance Sys
with the following authority:

(a) to engage in the business and operation of all kinds of insurance and reinsurance
and all other forms of undertaking to indemnify any person or patty against loss, damage, or
liability, including third party liability, arising from unknown or contingent events, except
life insurance, subject to pertinent Bangko Sentral ng Pilipinas rules, regulations and
policies;

(b) to reinsure with insurance and reinsurance companies in the Philippines and
abroad, under such terms and conditions that may be mutually agreed upon, any excess risk
the may deem advisable, subject to pertinent Bangko Sentral ng Pilipinas rules,
regulations and policies;

(©) to issue policies denominated in any foreign currency;


(d) to issue surety and/or in any performance bonds both in Philippine peso and/or in
foreign currency, provided that the amount of the bond to be issued on any one tisk or
undertaking shall be limited to ten per centum (10%) of the net worth of the General
Insurance Fund, and that the excess over said limit shall be reinsured with domestic and/or
foreign insurance and reinsurance companies; Provided, That the Fund's bonding exposure in
any foreign currency shall be covered by a minimum amount of foreign exchange assets in
accordance with rules and regulations to be formulated by the System in consultation with the
Insurance Commission subject to Bangko Sentral ng Pilipinas rules, regulations and policies;

(e) to insure all insurable as
government financial institutions;

ts serving as collaterals for loans extended by

(1) to prescribe necessary rules and regulations, including such incidental powers as
are necessary for its operation;

(g) to appoint personnel, who are certified as eligible by the Civil Service
Commission, prescribe their duties, and fix their remuneration.

SI

“TION 4. Definitions. - For the purposes of this Act —

(a) “GSIS” means the Government Service Insurance System created under
Commonwealth Act Numbered One hundred and eighty-six, as amended by Presidential
Deeree (P.D.) No. 1146 and further amended by Republic Act (R.A.) No. 8291, otherwise
known as the “GSIS Act of 1997”.

(b) “Fund” means the “General Insurance Fund” created under this Act.
(©) “Property” includes vessels and craft, motor vehicles, machineries, permanent

buildings, properties stored therein, including contents, furniture, fixtures, equipment,
improvements or in buildings rented by the Government, or properties in transit

(d) The word “Government” as used in this Act refers to the national, provincial, city,
or municipal government, agency, commission, board or enterprises owned or controlled by
the Government and other agency, department, bureau, office, instrumentalities, and
chartered institution of government, as defined under Section 2 of E.O. No. 292.

(c) “Insurable interest” means every interest in property, whether real or personal, or
any relation thereto, or liability in respect thereof, of such nature that a contemplated peril
might directly indemnify the insured. Accordingly, the insurable interest of government
parent, subsidiary and acquired asset corporations, including government financial
institutions, as these corporations are defined in Presidential Dectee No. 2029, shall also
extend to their physical assets which by declared policy of the government are required to be
privatized.

SECTION 5, Every Government is hereby required to insure with or secure insurance
from the GSIS on or of all properties or assets, contracts or agreements, causes or rights of
action, or other insurable interests, to the extent of the interests of the government, with the
Fund against any insurable risk herein provided and pay the premiums thereon, which,
however, shall not exceed the premiums charged by private insurance companies


No property and/or insurable interest of the Government, or any part or portion
thereof, shall be covered by or insured with, and no bonds to the extent of such interest shall
be obiained from, any entity, firm, person, corporation, or partnership, or any other juridical
person other than the GSIS. Provided, however, That the GSIS reserves the tight to
disapprove the whole or a portion of the amount of insurance applied for: Provided, further,
That such property or part thereof as may not be insurable or acceptable for insurance may be
insured with any private insurance company.

SECTION 6. Collection and payment of premiums. - In accordance with such rules
and regulations as the GSIS may prescribe under section three of this Act, the premiums on
insurance under section five hereof shall be paid to the GSIS by the government concerned.

SECTION 7. Custody of Statistical Data for Determination of Risk and Rates of
Premiums. ~

(a) There shall be collected, classified, analyzed, and kept under the custody of the
GSIS such statistical data as may be necessary for the proper determination of risks and rates
of premiums for the issuance of properties herein defined.

(b) The records and accounts of the Fund shall be kept separate and distinct from
those of other fuunds of the System.

(c) During the month of October of each year, the GSIS shall submit to the President
of the Philippines a report of the operations of the Fund during the preceding year.

SECTION 8. The Chairman of the Commission on Audit or his/her authorized
representative, and the Government Corporate Counsel shall be the ex-officio auditor and
legal adviser and consultant of the Fund, respectively. The Chairman of the Commission on
Audit, or his/her authorized representative, shall submit to the System soon after the close of
cach fiseal year audited statements showing its financial condition and progress for the fiscal
year just closed and the actuary shall likewise make an actuarial examination and valuation of
the fund

SECTION 9. Government Guarantee. - The Government of the Republic of the
Philippines hereby guarantees the fulfillment of the obligations of the Fund when and as they
shall become due.

SECTION 10. Inventory of Government Property. - Upon approval of this Act, the
GSIS shall require the inventory of the properties belonging to the Government with the
corresponding appraised values, and advise the Government concerned of the total premiums
each shall pay to the Fund.

SECTION 11. Duty to Include Premiums for Insurance of Government Properties in
Annual Appropriations, - Each Government as defined herein shall include in its annual
appropriation the amount necessary to cover the premiums for the insurance of its properties
and other properties with government insurable interest during each fiscal period and pay the
same immediately to the GSIS as provided in section ten hereof.

SECTION 12. Penal Provisions. —


(a) Failure of heads of the offices of the national government, its political
subdivisions, branches, agencies and instrumentalities, including government-owned or
controlled corporations and government financial institutions to insure the properties and
insurable interest of Government shall be a ground for the filing of administrative
disciplinary action against the erring officer(s) and/or employee(s). Such erring officer(s)
and/or employee(s) shall, after hearing and due proceedings, be penalized with suspension
from the service without pay from six (6) months to one (1) year, at the discretion of the
disciplining authority.

(b) Failure of heads of the offices of the national government, its political
subdivisions, branches, agencies and instrumentalities, including government-owned or
controlled corporations and government financial institutions to comply with the subm
of the inventory under Section 10 of this Act, despite demand, within the periods presi
under the Implementing Rules and Regulations (IRR), or to comply with any provision of this
Act shall be a ground for the filing of administrative disciplinary action against the erring
officer(s) and/or employee(s), Such erring officer(s) and/or employee(s) shall, after hearing
and due proceedings, be penalized with suspension from the service without pay from six (6)
months to one (1) year, at the discretion of the disciplining authority.

(©) Failure of heads of the offices of the national government, its political
subdivisions, branches, agencies and instrumentalities, including government-owned of
controlled corporations and government financial institutions to include in the annual budget
the amount corresponding to the premium payments for the insurance of the properties and
insurable interest of the Government, shall be a ground for the filing of administrative
disciplinary action against the erring officer(s) and/or employee(s). Such erring officer(s)
and/or employee(s) shall, after hearing and due proceedings, be penalized with suspension
from the service without pay from six (6) months to one (1) year, at the discretion of the
disciplining authority.

(d) The heads of the offices of the national government, its political subdivisions,
branches, agencies and instrumentalities, including government-owned or controlled
corporations and government financial institutions, and the personnel of such offices who are
involved in the payment of premiums due the GSIS who shall fail, refuse or delay the
payment, turnover, settlement or delivery of such accounts to the GSIS within sixty (60) days
from the time that the same shall have been due and demandable shall be liable
administratively. Such erring officer(s) and/or employee(s) shall, after hearing and due
proceedings, be penalized with suspension from the service without pay from six (6) months
to one (1) year, at the discretion of the disciplining authority.

(e) Any employee who appropriates or keeps premiums payable or deliverable to the
GSIS, or takes or misappropriates or uses the same for any purpose other than authorized by
this Act, or permits another person to take, misappropriate or use of premiums by expressly
consenting thereto, or through abandonment or negligence, or is otherwise guilty of the
misappropriation of said fund or property, in whole or in part, shall suffer the penalties
provided in Article 217 of the Revised Penal Code, and in addition, shall suffer absolute
perpetual disqualification from holding public office and from practicing any profession or
calling licensed by the government,



Ss

(0 Any employee who, fails to settle the premiums payable or deliverable to the GS
within sixty (60) days from the date they should have been paid under Section 6, shall be
presumed to have misappropriated such premiums and shall suffer the penalties provided in
Article 315 of the Revised Penal Code, and in addition, shall suffer absolute perpetual
disqualification from holding public office and from practicing any profession or calling
licensed by the government.

(g) Whoever fails or refuses to comply with the provisions of this Act or with the
rules and regulations adopted by the GSIS, shall be punished by a fine of not less than Five
thousand pesos (PS,000.00) nor more than Twenty thousand pesos (P20,000.00) or
imprisonment of not less than six (6) years and one (1) day to twelve (12) years, or both, at
the discretion of the court,

(h) For the charges or complaints referred to in this section, the liabilities therein set
forth shall be construed as waiver of the State of its immunity from suit, hence, the above-
mentioned officials and/or personnel may not invoke the defense of non-suability of the State.

SECTION 13. Implementing Rules and Regulations. - The implementing rules and
regulations to carry out the provisions of this Act shall be adopted and promulgated by the
GSIS not later than ninety (90) days after the approval of this Act.

TION 14. Non-impairment of Benefits, Powers, Jurisdiction, Rights, Privileges,
Functions and Activities. - Nothing in this Act shall be construed to repeal, amend or limit
any provision of existing laws, Presidential Decrees and Letters of Instructions, not otherwise
specifically inconsistent with the provisions of this Act.

SECTION 15. Separability Clause. - Should any provision of this Act or any part
thereof be declared invalid, the other provisions, so far as they are separable from the invalid
‘ones, shall remain in force and effect.

“TION 16, Repealing Clause. - Republic Act No. 656, and Chapter sixteen of the
Revised Administrative Code, as amended, are hereby repealed; Provided, that the properties
insured under the Property Insurance Fund shall continue to be governed by existing law until
they shall have been insured anew with the fund under the provisions of this Act

All laws and any other law or parts of law specifically inconsistent herewith are
hereby repealed or modified accordingly: Provided, That the rights under the existing laws,
rules and regulations vested upon or acquired by an employee who is already in the service as
of the effectivity of this Act shall remain in force and effect: Provided, further, ‘That
subsequent to the effectivity of this Act, a new employee or an employee who has previously
retired or separated and is reemployed in the service shall be covered by the provisions of this
Act.

ctivity. - This Act shall take effect fifteen (15) days after its
publication in the Oficial Gazette or in at least two (2) newspapers of general circulation