Amending Section Three Of Republic Act Numbered Six Hundred And Fifty-Six, Otherwise Known As The "Property Insurance Law", And Other Purposes
Download as PDF
Download as Word
Collections
Create new Collection
Overview
Full Text
Details
Case
Agency Issuance Number
Published Date
Amending Section Three Of Republic Act Numbered Six Hundred And Fifty-Six, Otherwise Known As The "Property Insurance Law", And Other Purposes
Presidential Decree No. 245
July 13, 1973
Case Overview and Summary
Summary of Presidential Decree No. 245Amending the Property Insurance Law (Republic Act No. 656)
I. Background and Purpose
- The Property Insurance Fund was established under Republic Act No. 656 to indemnify the government for damage or loss of its properties due to fire, earthquake, storm, or other casualty.
- Despite the law, most government assets worth around P4 billion remain uninsured, exposing the government to unnecessary losses.
- Private domestic non-life insurance companies have limited capacity to reinsure large risks from the GSIS due to their combined net worth of approximately P200 million.
- To address this, the GSIS needs to develop its capacity to cede reinsurance abroad.
- The GSIS also needs the authority to accept inward reinsurance from abroad to earn foreign exchange for the country.
II. Amendments to Section 3 of Republic Act No. 656
1. Authority to engage in insurance and reinsurance business (Section 3(a))
- The GSIS is authorized to engage in all kinds of insurance and reinsurance, except life insurance, subject to Central Bank rules and regulations.
2. Authority to reinsure and accept reinsurance (Section 3(b))
- The GSIS can reinsure with and accept reinsurance from insurance and reinsurance companies in the Philippines and abroad, subject to Central Bank rules and regulations.
3. Authority to issue policies denominated in foreign currency (Section 3(c))
- The GSIS can issue policies denominated in any foreign currency, provided that a minimum percentage determined by the GSIS in consultation with the Insurance Commission is reinsured abroad.
- The GSIS's liability in any foreign currency must be covered by a minimum amount of foreign exchange assets, including forward purchases of foreign exchange from the Central Bank, in accordance with rules and regulations formulated by the GSIS in consultation with the Insurance Commission and subject to Central Bank rules and regulations.
4. Authority to issue surety and performance bonds (Section 3(d))
- The GSIS can issue surety and performance bonds in Philippine peso and foreign currency.
- The amount of the bond issued on any one risk or undertaking is limited to 10% of the net worth of the Property Insurance Fund.
- The excess over the limit must be reinsured with domestic and/or foreign insurance and reinsurance companies.
- The GSIS's bonding exposure in any foreign currency must be covered by a minimum amount of foreign exchange assets in accordance with rules and regulations formulated by the GSIS in consultation with the Insurance Commission and subject to Central Bank rules and regulations.
5. Authority to insure collaterals for government financial institution loans (Section 3(e))
- The GSIS can insure all insurable assets serving as collaterals for loans extended by government financial institutions not otherwise authorized to issue insurance policies.
6. Authority to prescribe rules and regulations (Section 3(f))
- The GSIS can prescribe necessary rules and regulations, including incidental powers necessary for its operation.
7. Authority to appoint personnel (Section 3(g))
- The GSIS can appoint personnel who are certified as eligibles by the Civil Service Commission, prescribe their duties, and fix their remuneration.
- Section 15 of Commonwealth Act No. 186 shall not be applicable to the personnel of the Fund.
III. Renaming of the Property Insurance Fund
- The Property Insurance Fund shall henceforth be known as the General Insurance Fund.
IV. Repealing Clause
- All laws, orders, proclamations, rules and regulations, or parts thereof, which are inconsistent with this decree are hereby repealed or modified accordingly.
V. Effectivity
- This decree shall take effect immediately.
Amends
n/a
Amended by
n/a
Tags
Executive Issuances
Presidential Decrees
Property Insurance Fund
Government Service Insurance System (GSIS)
insurance
reinsurance
foreign currency
surety bonds
performance bonds
government assets
collateral
loans
government financial institutions
Central Bank
Insurance Commission
rules and regulations
personnel
Civil Service Commission
General Insurance Fund
Law
Amending Section Three Of Republic Act Numbered Six Hundred And Fifty-Six, Otherwise Known As The "Property Insurance Law", And Other Purposes
Presidential Decree No. 245
•July 13, 1973
MALACAÑANGM a n i l a
PRESIDENTIAL DECREE No. 245 July 13, 1973
AMENDING SECTION THREE OF REPUBLIC ACT NUMBERED SIX HUNDRED AND FIFTY-SIX, OTHERWISE KNOWN AS THE "PROPERTY INSURANCE LAW", AND OTHER PURPOSES
WHEREAS, under Republic Act 656, the Property Insurance Fund was established and placed under the administration of the Government Service Insurance System, which Fund is separate, segregated, and distinct from the trust funds of government employees comprising the Life Insurance Fund and the Retirement Insurance Fund as established by Commonwealth Act 186, as amended, and from the Medicare Fund as established by Republic Act 6111;
WHEREAS, the Property Insurance Fund was established "in order to indemnify or compensate the Government . . . from any damage to, or loss of, its properties due to fire, earthquake, storm, or other casualty";
WHEREAS, in spite of the provisions of Republic Act 656, the bulk of the insurable assets and properties of the Government worth about P4 Billion remains uninsured, thus exposing the Government to unnecessary losses in the event of damage to, or...
Login to see full content
Amends
n/a
Amended by
n/a