THIRD CONGRESS OF THE REPUBLICOF THE PHILIPPINESSecond Session(REPUBLIC ACT NO.656)

AN ACT TO CREATE AND ESTABLISH A " PROPERTYINSURANCE FUND" AND TO PROVIDE FORITS ADMINISTRATION AND FOR OTHER PURPOSES.Be it enacted by the Senate and House of Representatives of the Philippinesof the Philippines in Congress assembled:

SECTION 1. This act shall be known as the "Property Insurance Law."

SEC. 2. 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, storm, or other casualty there is hereby established the "Property Insurance 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. For the effectuation of the purpose of this Act, the administration of the Fund is hereby placed under the Government Service Insurance System with powers and authority to reinsure with private insurance companies under such terms and conditions that may be mutually agreed upon any excess risk it may deem advisable; to prescribe necessary rules and regulations, including such incidental powers as are necessary for its operation; and to appoint personnel, who are certified as eligibles by the Civil Service, prescribe their duties, and fix their remuneration. Section fifteen of Commonwealth Act Numbered One hundred eighty-six shall not be applicable to the personnel of the Fund.

SEC.4. Definitions. - For the purposes of this Act - (a) "System" means the Government Service Insurance System created under Commonwealth Act Numbered One hundred and eighty-six.(b) "Fund" means the "Property Insurance Fund" created under this Act.(c) "Property" includes vessels and craft, motor vehicles, machineries, permanent buildings, properties stored therein, 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.(e) "Disposable Surplus" means the amount left after the necessary insurance reserves and other reserves have been set aside together with the expenses incidental to the administration of the Fund.

SEC.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 application insure its properties in the Fund under such rules and regulations as the System may prescribe.

SEC.6. Collection and payment of premiums. - (a) In accordance with such rules and regulations as the System may prescribe under section three of this Act, the premiums on insurance under section five hereof shall be paid in advance to the System by the government concerned.(b) Penalties - Any cashier, treasurer or any government official responsible for the collection and/or remittance of the premiums hereinabove prescribed, who refuses or habitually neglects to comply with the instructions of the System and to collect or accept payments of the said premiums, issue receipts therefor, and/or remit the same within the time prescribed by the System, shall be held liable for the payment of said premiums and shall pay to the System a fine of two per centum per month of said premiums from their due dates until received by the System.

SEC. 7 (a) There shall be collected, classified, analyzed, and kept under the custody of the System such statistical data as may be necessary for the proper determination of risks and rates of premiums for the insurance 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. During the month of October of each year, the System shall submit to the President a report of the operations of the Fund during the preceding year.

SEC.8. The Auditor General and the Government Corporate Counsel shall be the ex-officio auditor and legal adviser of the Fund, respectively. The Auditor General, or his authorized representative, shall submit to the System soon after the close of each 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. Any disposable surplus that may result from the operation of this Fund once declared by the System shall be apportioned in accordance with the schedule approved by the System among governments whose properties are insured in the Fund.

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. Upon approval of this Act, the System shall require the inventory of the property belonging to each government, determine the value thereof for purposes of insurance, and advise the government concerned of the total premiums each shall pay to the Fund. The government concerned shall, upon receipt of advice from the System, set aside from any savings in its appropriation the amount needed for such premiums and certify to the availability thereof, and the Auditor General or his duly authorized representative shall forthwith release the same to the credit of the System by means of a journal voucher drawn for the purpose. Thereafter, the official concerned shall remit it to the System immediately: Provided: That the premiums corresponding to the insurance of properties belonging to an entity operated with a special fund shall be payable from said Fund; otherwise, from the general fund.

SEC.11. Each government as defined herein shall include in its annual appropriation the amount necessary to cover the premiums for the insurance of its properties during each fiscal period and remit the same immediately to the System as provided in section ten hereof.

SEC.12. Chapter sixteen of the Revised Administrative Code, as amended, is hereby repealed, and all the present assets and liabilities of the Property Insurance Fund created thereunder shall be liquidated upon approval of this Act and turned over to the System. The Auditor General and the Commissioner of the Budget or their authorized representative shall carry out the provisions of this section: 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.

SEC.13. This Act shall take effect on the first day of the third calendar month following that of its approval.

Approved, June 16, 1951.

MALACANANGMANILA

PRESIDENTIAL DECREE NO. 245AMENDIND 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 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, inspite 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 loss of, such assets and properties;

WHEREAS, the non-insurance of such government assets and properties is due in part to the limited capacity of private domestic non-life insurance companies to accept the reinsurance of large risks from the GSIS, considering that the combined net worth of private domestic non-life insurance companies in the country is approximately P200,000,000 not more than then per centum (10%) of which represents their maximum retention capacity on any single risk in accordance with law;

WHEREAS, in view of the limited capacity of local non-life insurance companies to absorb the reinsurance to be ceded by the GSAIS in the event that it ensures a large portion of the existing insurable assets and properties of the government, it is necessary for the GSIS to develop its capacity to cede reinsurance abroad;

WHEREAS, considering that the placement of reinsurance abroad by the GSIS entails foreign exchange outflows in the form of reinsurance premium payments, it is desirable, from the country's point of view, for the GSIS likewise to have powers, authority, and capacity to accept inward reinsurance from abroad and thus earn foreign exchange for the country by way of premium earnings;

WHEREAS, in a multitude of a cases, shipments to and from the Philippines are insured by foreign insurance companies in view of the limited capacity of the domestic insurance industry to cover such risks and to denominate the corresponding insurance policies in foreign exchange, which, in many cases is imposed as a requirements by the suppliers of Philippine imports or the buyers of Philippine exports ;

WHEREAS, there are Philippine contractors undertaking work in foreign countries who are required to present surety or performance bonds denominated in foreign exchange, and who find it necessary to have such bonds issued by foreign insurance companies, thereby contributing to the foreign exchange outflows from the country in the form of premium payments;

WHEREAS, the rectification of the impediments cited above will not only save but will also earn foreign exchange for the country and, at the same time, place principal government assets, properties, and installations under adequate insurance protection;

WHEREAS, such impediments can be rectified by authorizing the Property Insurance Fund established by republic Act 656 to cede and receive reinsurance placements within the Philippines and abroad; to issue policies, surety and/or performance bonds denominated in foreign exchange; and to perform all acts necessary and/or incidental to such functions;

WHEREAS, the powers and authority granted herein to the GSIS will not, in any way, diminish the business conducted by domestic insurance companies, but on the contrary, will increase the total volume of insurance transactions in which private insurance companies shall participate through increase reinsurance cessions and restrocessions to them by the GSIS;

NOW, THEREFORE, I FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all Armed Forces of the Philippines and pursuant to proclamation No. 1081 dated September 22, 1972, as amended, do hereby decree and order the amendment of section 3, Republic Act Numbered Six Hundred Fifty Six, otherwise known as the "Property Insurance Law," to read as follows:

" Sec. 3. For the effectuation of the purpose of this Act, the Administration of the Fund is hereby placed under the Government Service Insurance System with the following powers and authority: (a) to engage in the business and operations of all kinds of insurance and reinsurance and all other forms of undertakings to indemnify any person or party, against loss, damage, or liability including third party liability, arising from the unknown or contingent events, except life insurance, subject to pertinent Central Bank rules, regulations, and policies; (b) to reinsure with and accept reinsurance from insurance companies in the Philippines and abroad, under such terms and conditions that may be mutually agreed upon, any excess risk the System may deem advisable, subject to pertinent Central Bank rules, regulations and policies; (c) to issue policies denominated by any foreign currency provided that a certain minimum percentage to be determined by the System in consultation with the Insurance Commission shall be reinsured abroad and provided that Fund's liability in any foreign currency shall be covered by a minimum amount of foreign exchange assets, which may include forward purchases of foreign exchange from the central bank, in accordance with rules and regulations to be formulated by the System in consultation with the Insurance Commission and subject to pertinent Central bank rules, regulations and policies; (d) to issue surety and/or performance bonds in Philippine peso and/or in any foreign currency, provided that the amount of the bond be issued on any one risk or undertaking shall be limited to ten per centum (10%) of the net worth of the Property Insurance Fund, and that the excess over said limit shall be reinsured with the domestic and/or foreign insurance and re-insurance 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 the rules and regulations to be formulated by the System in consultation with the Insurance Commission subject to central Bank rules, regulations and policies; (e) to insure all insurable assets serving as collaterals for loans extended by government financial institutions not otherwise authorized to issue insurance policies; (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. Section fifteen of Commonwealth Act Numbered One Hundred Eighty- Six shall not be applicable to personnel of the Fund;"

To reflect faithfully the functions of the Fund in accordance with this decree, the Property Insurance Fund shall henceforth be known as the General Insurance Fund.

All laws, orders, proclamations, rules and regulations, or parts thereof, which are inconsistent herewith are hereby repealed or modified accordingly.

All concerned shall act accordingly pursuant to the contents of this decree.

This decree shall take effect immediately.

Done in the City of Manila, this 13th day of July in the year of our Lord, nineteen hundred and seventy-three.

(SIGNED) FERDINAND E. MARCOS President of the Philippines

New GSIS Processing Time

Loans Granting

Salary Loan

8 hours

Regular Policy Loan

8 hours

Optional Policy Loan

8 hours

Housing Loan

5 days

Pension Loan

4 hours

Policy Issuance

Regular Policy

8 hours

Optional Policy

2 days

General Insurance Policy

2 days

Claims Settlement

Compulsory Life

Maturity

date of maturity

CSV, Death, Disability

5 days

Optional Life

Maturity

date of maturity

CSV, Death, Disability

5 days

Retirement

5 days

Survivorship

5 days

Death of a member

8 days

Death of a pensioner

5 days

Employees' Compensation

6 days

Pre-need

5 days

Funeral Benefits

8 hours

General Insurance

Motor

5 days

Non-motor

5 days

Social Security Contributions

Effective January 2002, your social insurance contribution consists of:

Employee's ShareEmployer's Share

9% of the Basic Monthly Salary for the first P16,00012 % of the employees' basic monthly salary

Additional 2% in excess of P16,000 12% of the employee's basic monthly salary

Your social insurance contributions entitle you to the following benefits:

2% for Life Insurance Benefits7% for Retirement and other Social Security Benefits

Maturity

Cash Surrender Value

Policy Loan

Dividends

Waiver of premiums due to Permanent Total Disability

Death benefit

Accidental death benefit

Free Accidental Death Insurance of P10, 000 (FADI)

Burial benefit Unemployment benefit

Separation benefit

Retirement

Disability

Permanent Total & Carer's Allowance

Permanent Partial

Temporary Total

Survivorship

Due to death of a member or retiree-pensioner

Pension Increases

Christmas Gift/Bonus

Burial benefit

PrivilegesPrivilege

Service loans

Salary and Emergency Loans

Bahay-Ko Housing Loan

Socialized/ Special Housing Pension loan

Processing Time: 5 days

There are four retirement modes available to government employees. Those who were in the service on or before May 31, 1977 may avail of retirement benefits under RA 660, RA 1616, PD 1146 or RA 8291. While those who entered government service after May 31, 1977 may avail of retirement benefits under PD 1146 or RA 8291.

The GSIS offers four retirement benefit packages under the following laws:

HYPERLINK "http://www.gsis.gov.ph/services_benefits/retirement/retirement_ra8291.html" Retirement Under RA 8291Retirement under RA 7699 or the Portability Law The retirement mode applicable if your years of service to the government does not meet the required number of years under a certain retirement law and you have enough number of years service in the private sector to compensate/substitute for the service requirement.Retirement under Presidential Decree 1146 The retirement mode applicable if you have been in service after May 31, 1977 but before June 24, 1997.

HYPERLINK "http://www.gsis.gov.ph/services_benefits/retirement/retirement_ra660.html" Retirement under Republic Act 660 or the Annuity (Pension) Benefit Plan as Amended The retirement mode applicable if you were in the service on or before May 31, 1977.

Retirement under Republic Act 1616 or Gratuity Retirement BenefitThe retirement mode applicable if you were in the service on or before May 31, 1977.