Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

Eighteenth Congress
First Regular Session

HOUSE BILL No,_ 1034

Introduced by Representative JOEY SARTE SALCEDA

AN ACT
MANDATING THE INSURANCE OF ALL
GOVERNMENT PROPERTIES AND INTEREST WITH THE
GOVERNMENT SERVICE INSURANCE SYSTEM (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 citizens 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
rehabilitation of their damaged properties. This common experience of municipalities
of suffering the brunt of several typhoons and other disasters makes it imperious for
municipalities to 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 System 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 be reflected in the National Disaster Risk Reduction
and Management Fund (NDRRMF) in the General Appropriations Act (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 view of the foregoing, the aaa sought

J TE SALCEDA


Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City
Eighteenth Congress
First Regular Session

HOUSE BILL No. 1034

Introduced by Representative JOEY SARTE SALCEDA

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

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

SECTION 1. Short Title. — This Act shall be known as the “Property Insurance Act
of 2019"

SEC. 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.

SEC. 3. Admimstration of the Fund / Powers Granted to the Government Service
Insurance System (GSIS). ~ The administration of the Fund is hereby placed under the
Government Service Insurance System 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 party 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 GSIS may deem advisable, subject to pertinent Bangko Sentral ng
Pilipinas rules, regulations and policies;

(c) 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
risk 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;

(c) to insure all insurable assets serving as collaterals for loans extended by
government financial institutions;

(f) 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.

SEC. 4. Definitions. — For the purposes of this Act —

(a) “GSIS" means the Goverment Service Insurance System created under
Commonwealth Act Numbered One hundred and eighty-six, as amended by
Presidential Decree (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.

(c) “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 Decree No. 2029, shall also extend to their physical assets
which by declared policy of the government are required to be privatized.

SEC. 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 obtained from, any entity, firm, person, corporation, or partnership, or any other juridical
person other than the GSIS. Provided, however, That the GSIS 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.

SEC. 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.

SEC. 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 funds 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

SEC. 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 fiscal 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.

SEC. 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.

SEC. 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 concemed of the total premiums
cach shall pay to the Fund.

SEC. 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 cach fiscal period and pay the
same immediately to the GSIS as provided in section ten hereof.

SEC. 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 submission of the inventory under Section 10 of this Act, despite
demand, within the periods prescribed 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 officers)
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

(c) 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 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.

() Any employee who, fails to settle the premiums payable or deliverable to the
GSIS 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 (P5,000.00) 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.

SEC. 13. /mplementing 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.

SEC. 14. Non-impairment of Benefits, Pawers, 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.


SEC. 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.

SEC. 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

SEC. 17. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in a newspaper of general circulation.

Approved,