REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO._ 5273

INTRODUCED BY HONORABLE RANDOLPH S, TING

EXPLANATORY NOTE

This bill seeks to require the insurance of all government properties with the
General Insurance Fund, amending for the purpose Republic Act (RA) No. 656, as
amended, otherwise known as the “Property Insurance Law.”

The Property Insurance Law, as amended by Presidential Decree No. 245,
established the General Insurance Fund which is administered by the Government
Service Insurance System (GSIS). The law requires the national, provincial, city, and
municipal governments, except the municipal governments below first class, to
insure their properties with the General Insurance Fund against any insurable risk as
provided in Property Insurance Law and to pay the premiums thereon. Under RA
656, as amended, the term “government” refers to the national, provincial, city, or
municipal government, agency, commission, board or enterprises owned or
controlled by the government. However, the law makes it only optional for
municipalities below first class to insure their properties subject to the rules and
regulations issued by the GSIS.

Every year, at least 19 typhoons enter the Philippine area of responsibility and
several of these typhoons are destructive. Recent experiences have shown us the
importance of having our government properties insured. When Typhoon Yolanda
struck our country in November 2013, many government infrastructure in the path of
the typhoon were destroyed. Many of these infrastructure were owned by the
different government offices and various municipalities. Unlike agencies of the
national government which insured their properties and were indemnified by the
GSIS for damages wrought by Typhoon Yolanda, many of the damaged properties
belong to municipalities below first class which were not insured. Municipal
governments have appealed for financial assistance not only to address the impact of
the disaster to their constituents but also to be able to repair or rebuild damaged
government properties in their jurisdiction.

Local government units (LGUs), particularly the municipalities, have to rely
on appropriations from the national government, financial assistance from donors,
and their already stretched budgets to be able to finance the repair, rehabilitation, or
re-construction of their damaged properties. This common experience of
municipalities of suffering the brunt of several typhoons and other disasters, whether
natural or human-induced, makes it imperative for municipalities below first class to


insure their respective properties. It is to their best interest if their properties are
insured rather than be exposed to the risk of non-indemnification in case of damage
during a disaster.

In view of the foregoing, approval of this bill is earnestly sought.

RANDOVPH S. TING
Représentative
3" District of Cagayan


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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Second Regular Session

9
HOUSE BILL NO. 5273

INTRODUCED BY HONORABLE RANDOLPH S. TING

AN ACT
MANDATINGTHE INSURANCE OF ALL GOVERNMENT PROPERTIES
WITH THE GOVERNMENT INSURANCE FUND, AMENDING FOR THE
PURPOSE REPUBLIC ACT NO. 656, AS AMENDED, OTHERWISE
KNOWN AS THE “PROPERTY INSURANCE LAW”

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

SECTION. 1. Section 5 of Republic Act No. 656, as amended, is hereby
amended to read as follows:

“Section 5. Every government[, except a municipal
government below first class,] is hereby required to insure its
properties, 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: Provided,
however, That the System reserves the right 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. [A municipal government below first class may upon


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application insure its properties in the Fund under such rules and

regulations as the System may prescribe.]”

SEC. 2. Within ninety (90) days from the approval of this Act, the
Government Service Insurance System, as the administrator of the General
Insurance Fund established pursuant to the Property Insurance Law, as amended,
shall promulgate the necessary rules and regulations for the effective
implementation of this Act,

SEC. 3.This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation.

Approved,