EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
Second Regular Session 
)
SENATE 
S.B. No. 1765
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TIME
NOFX
Introduced by Senator Richard J. Gordon
AN ACT
CREATING THE INSURANCE FRAUD DETECTION DIVISION UNDER THE 
NATIONAL BUREAU OF INVESTIGATION, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
This bill is a result of the various hearings of the Committee on Accountability of 
Public Officers and Investigations or the Blue Ribbon Committee regarding its 
Investigation on the alleged Philippine Health Insurance Corporation (PhilHealth) 
corruption and scam.
According to the 2018 Governance Commission for GOCC (GCG) Performance 
Scorecard of PhilHealth, PhilHealth has an overall score of only 78.17%, collection 
efficiency of 16.73%, claims processing of 11.44%, prosecution rate of 0%, and 
percentage of employees meeting required competencies of 10%.
Noteworthy is the overall 0% rating in the resolution of cases filed within the 
applicable time in the 2018 GCG Scorecard. Although PhilHealth's Fact Finding 
Investigation and Enforcement Department (FFEID) was able to process 4,357 cases 
within the 45 day period or 75% of the 5,797 cases received for 2018, its Prosecution 
Department processed 0 cases of the 4,146 total cases the department received for 2018. 
Moreover, the Arbitration Department of PhilHealth resolved only 1 case out of the 730 
total cases it received for 2018 within the required 60 day period or 0.14%. Given these 
data, there is clear Inefficiency, if not outright nonfeasance.
The alleged fraudulent transactions being employed by the PhilHealth employees, 
its members, and health care providers are: (i) creation of ghost membership, 
irregularities in the conduct of the proceedings, fast-tracking of claims, and procurement 
of IT projects; (ii) fake receipts, and fake membership; and (iii) up-casing, non-admitted 
patients, recruitment, over bed capacity, and multiple claims.1
These fraudulent acts have no place in our society. These acts not just cause 
damage to the government but also to the millions of Filipinos who rely on our insurance
11ntelligence Report on Philhealth Insurance Corporation by Presidential Anti-Corruption Commission (PACC) 
Commissioner Greco B, Belgica, as submitted to the Committee on the Whole Hearing on August 11, 2020.
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government agencies for their heaith care, retirement, and an overaii better quaiity of 
living.
This bill proposes to create an Insurance Fraud Detection Division which shall be 
organized under the National Bureau of Investigation (NBI). The Insurance Fraud 
Detection Division shall be the primary division under the NBI which shall Investigate and 
prosecute government insurance fraud to ensure that similar schemes and other 
government insurance fraud would be detected, investigated, and prosecuted speedily.
Thus, the passage of this bill Is earnestly sought.
Senator


EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
Second Regular Session 
)
SENATE 
S.B. No.
U1 DATE
I
Introduced by Senator Richard 3. Gordon
AN ACT
CREATING THE INSURANCE FRAUD DETECTION DIVISION UNDER THE 
NATIONAL BUREAU OF INVESTIGATION, AND FOR OTHER PURPOSES
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Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:
SECTION 1. Short Title. This Act shall be known as the "Insurance Fraud 
Detection Act of 2020."
SEC. 2. Declaration of Policy. -The State recognizes that the country's insurance 
systems, by its nature, are susceptible to fraud and the need to proactively fight the 
same. Thus, It is the policy of the state to ensure that our Insurance government agencies 
are viable and sustainable. Fraudulent schemes and transactions have no place in our 
insurance systems as millions of Filipinos depend on this for their health, retirement, and 
an overall better quality of living. Therefore, It is also the policy of the state to detect, 
investigate, and prosecute government insurance fraud speedily and actively.
SEC. 3. The Insurance Fraud Detection Division. - It is hereby created and 
established an Insurance Fraud Detection Division which shall be organized under the 
NBI within sixty (60) days after the effectivity of this Act.
SEC. 4. Composition. -The Insurance Fraud Detection Division shall be composed 
of one (1) Head Agent and thirty (30) agents. Being a highly specialized office, agents In 
this division shall consist only of individuals with high level of competence, as proven by 
their educational background and/or work experience, in any of the following areas: 
information technology, data science/data analytics, accountancy with required 
specialization on forensic accounting, and engineering management/management 
engineering.
The NBI Director shall ensure that all areas of specialization as specified in this 
section are adequately represented in the staffing requirements of the proposed 
Insurance Fraud Detection Division.


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SEC. 5. Mandate and Scope. - The Insurance Fraud Detection Division shail be 
the primary division under the NBI which shaii investigate and prosecute government 
insurance fraud involving government owned and controiied corporation, such as but not 
limited to, the Philippine Heaith Insurance Corporation (PhiiHeaith), Social Security 
System (SSS), Government Service Insurance System (GSIS), and other government 
agencies engaged in insurance.
SEC. 6. Powers and Duties of the Division. - The Insurance Fraud Detection 
Division shaii have the foiiowing powers, functions, and duties, among others;
(a) 
Shaii conduct an inventory of aii cases of government insurance fraud from 
aii government sources;
(b) 
Shaii undertake investigation and detection of aii crimes and offenses of 
government insurance fraud;
(c) 
Issue subpoena for the appearance of any person for investigation or 
production or production of documents, through the NBI officers from the 
ranks of Regionai Director to Director;
(d) 
Create a nationai clearing house of criminai records and other reiated 
information regarding government insurance fraud, for the benefit of the 
government;
(e) 
Render technical assistance to government agencies and instrumentaiities, 
when so requested;
(f) 
Set-up fieid offices in the various insurance government agencies;
(g) 
Shaii have access to aii data of the various insurance government agencies;
(h) 
Conduct inteiiigence operations in furtherance of the foregoing powers and 
functions; and
(i) 
Perform such other functions as the NBI Director may assign.
SEC. 7. Inter-governmentai Cooperation.- The Insurance Commission, 
Department of Heaith, Securities and Exchange Commission, Governance Commission for 
GOCC, Commission on Audit, shaii provide its technical skills and knowledge, cooperation 
and share information and inteiiigence for investigation with the Insurance Fraud 
Detection Division of the NBI.
SEC. 8. Phiiippine NationaiPoiice Assistance. - The Phiiippine Nationai Poiice shaii 
provide investigative teams and field agents to directly coordinate and assist in the 
various government insurance fraud.
SEC. 9. Appropriations. -The amount necessary to carry out the impiementation 
of this Act shaii be sourced from the budget of the NBI.
SEC. 10. Separabiiity Ciause. - If any provision of this Act is deciared 
unconstitutionai, such sections or parts not affected thereby shaii remain in fuli force and 
effect.
SEC. 11. Effectivity Ciause. -This Act shaii take effect fifteen (15) days after its 
pubiication in the Officiai Gazette or in a newspaper of generai circulation.
Approved,