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Gov’t saves US$8.5M from reinsurance bids of ‘big ticket’ agencies — GSIS

The Government Service Insurance System today announced that for the first semester of the year, the National Government has generated US$8.5 million or P370 million in savings after the competitive bidding for the reinsurance needs of the National Power Corporation (NPC), the Power Sector Assets and Liabilities Management Corporation (PSALM), the National Grid Corporation of the Philippines (NGCP), and the Metro Rail Transit Corporation (MRTC).

‘The public bidding forms part of the commitment of the new GSIS Board and Management to heed the President’s call for good governance by upholding transparency in all business transactions’ Robert G. Vergara, President and General Manager said.

Vergara explained the GSIS started to bid out the individual insurance covers of these ‘big ticket’ items (based on the value of their insured assets with GSIS), as early as the last quarter of 2010 in full compliance with the Government Procurement Reform Act or RA 9184.

As a result of the transparent and competitive bidding process, the following agencies incurred savings from the lower bids submitted by the winning re-insurers compared to the approved budget for the contract and last year’s premium: MRTC – P132.8 million; PSALM – P131.8 million; NGCP- P87.4 million; and NPC- P17.5 million.

‘The insurance companies actively participated in the bidding process with several companies purchasing the bid documents and submitting their bids,’ Vergara said.

The pension fund chief further pointed out that ‘apart from the savings generated from reduced premium, the insured agencies get improved coverage as well by having lower deductibles which allow them to claim against their insurance for losses or damages at lower participation limits.’

The Property Insurance Law or RA 656, requires every government, except a municipal government below first class, to insure its properties with the GSIS against any insurable risk.