Reminding All Local Government Units to Insure Properties with GSIS in Compliance with the Property Insurance Law

May 11, 2016

DILG MEMORANDUM CIRCULAR NO. 063-16

 

This has reference to Republic Act No. 656, otherwise known as the Property Insurance Law, which, under Section 5, reads, quote:

"Sec. 5. Every government, except a municipal government below first class, is hereby required to insure its properties, with the Fund (Property Insurance 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 (Government Service Insurance 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." (Underscoring supplied)

Recently, the GSIS provided this Department with an updated list of uninsured local governments as of March 2016, which shows that three (3) Provinces, nine (9) first class municipalities and 53 other municipalities have not yet insured their properties, copy of which is hereto attached, for easy reference.

Relative thereto, all Local Chief Executives concerned are hereby reminded to:

1. Comply with the Property Insurance Law;

2. Include in their 2017 budget the premiums for such insurance coverage with the GSIS;

3. Settle premium payments in a timely manner; and

4. Contact the GSIS Insurance Group at Telephone Number (02) 976-4900 local 3431, for insurance requirements and related queries.

Further, local governments with budgetary constraints may also consider using the Local Disaster Risk Reduction and Management Fund. Section 21 of R.A. No. 10121, also known as the Philippine Disaster Risk Reduction and Management Act, reads, quote: CAIHTE

"The present Local Calamity Fund shall henceforth be known as the Local Disaster Risk Reduction and Management Fund (LDRRMF). Not less than five percent (5%) of the estimated revenue from regular sources shall be set aside as the LDRRMF to support disaster risk management activities such as, but not limited to, pre-disaster preparedness programs including training, purchasing life-saving rescue equipment, supplies and medicines, for post-disaster activities, and for the payment of premium on calamity insurance." (Emphasis supplied)

All DILG Regional Directors and the Regional Governor of the Autonomous Region in Muslim Mindanao are hereby directed to immediately disseminate this Memorandum Circular to all local authorities within their regional jurisdictions, and to ensure an active local government compliance on this Issuance.

(SGD.) MEL SENEN S. SARMIENTOSecretary