PH makes it easier for reinsurers to bid for insurance of public assets in disaster-prone areas | Inquirer Business

PH makes it easier for reinsurers to bid for insurance of public assets in disaster-prone areas

By: - Reporter / @bendeveraINQ
/ 03:49 PM May 26, 2020

The Philippines will invite reinsurers for the re-bidding of the planned P2-billion national indemnity insurance program to insure and protect public assets in disaster-prone areas, this time with less stringent documentary requirements.

In Resolution No. 10-2020, the interagency Government Procurement Policy Board (GPPB) said it this month amended the bidding documents for procurement of international brokers and reinsurers for the national indemnity insurance program to be undertaken by the state-run pension fund Government Service Insurance System (GSIS).

In particular, the GSIS will now only require a statement of sovereign or government clients within the past 10 years, instead of a statement of the prospective bidder of all its ongoing and completed government and private contracts, including contracts awarded but not yet started, if any, whether similar or not similar in nature and complexity to the contract to be bid, within the relevant period, in the past.

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The upcoming rebidding will also require audited financial statements for calendar years 2018, 2019, 2018-2019, or 2019-2020 in accordance with international financial reporting standards, instead of the earlier requirement of having bidders’ audited financial statement received or stamped by the Bureau of Internal Revenue (BIR).

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Also, the GPPB said the proposed new public bidding documents will no longer include five technical proposal forms and four financial proposal forms included during last year’s bidding; included a revised format of curriculum vitae for the proposed professional staff to reflect that it needed not be notarized; as well as the inclusion of an errors and omissions policy as an allowable form of performance security, equivalent to 5 percent of the awarded contract price.

In January, National Treasurer Rosalia V. de Leon told the Inquirer that there will be a rebidding among interested reinsurers for the GSIS’s national indemnity insurance program.

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De Leon had said they were “still discussing” the timetable for the rebidding.

In December, de Leon disclosed that there was “failed bidding” for the program, even as the GSIS had allowed reinsurers to submit bids until Dec. 11, a one-week extension from the initial Dec. 4 deadline.

The contract would have had covered the period Dec. 19 last year until Dec. 19 this year.

According to the GSIS, the national indemnity insurance program was aimed at “[obtaining] indemnity insurance with reinsurance support from the international market through the services of a reinsurance broker.”

“The reinsurance broker shall structure an indemnity insurance policy and secure reinsurance placement. The indemnity insurance policy shall be backed by catastrophe modeling and risk analysis for the government’s strategically important assets. The reinsurance broker shall also help in accessing the reinsurance market, secure the best reinsurance arrangement and rate, and ensure prompt claims handling and settlement and loss recoveries from the reinsurer for the national government’s strategically important assets and its subsequent reinsurance,” according to the GSIS.

In particular, the reinsurance contract will insure against fire, lightning and natural catastrophes—including earthquakes, floods, storm surges, typhoons, and volcanic eruptions—bridges and roads of the Department of Public Works and Highways (DPWH) in 25 provinces, as well as schools of the Department of Education (DepEd) in  Metro Manila and 32 provinces.

Last year, the GSIS and the Bureau of the Treasury signed a memorandum of understanding (MOU) for the indemnity insurance program, which will insure government assets in 25 provinces in the eastern seaboard for P1 trillion—the total insurance covering strategically important assets in coastal areas facing the Pacific Ocean.

According to de Leon, the Treasury had a P2-billion allocation for indemnity insurance premium, which nonetheless takes some more time to tap unlike quick-disbursing parametric coverage wherein payouts were immediately released after hitting loss triggers.

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Indemnity insurance entailed adjustments based on losses and transferring them to reinsurers, de Leon had explained.

TAGS: Bureau of Internal Revenue, National Treasurer Rosalia V. De Leon

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