House Speaker Pantaleon Alvarez has sought an investigation into whether the Government Service Insurance System (GSIS) has awarded reinsurance contracts to unqualified domestic firms, citing unspecified allegations “Congress has received.”
House Resolution No. 1502 seeks to direct the committee on government enterprises and privatization to conduct a “comprehensive investigation, in aid of legislation.”
To help fulfill its mandate of providing retirement schemes to public sector employees and insuring the government’s assets, the GSIS is allowed to reinsure its interests with any domestic or foreign private company under Section 27 of Republic Act No. 8291.
Capitalization
Reinsurance is the practice of spreading out portions of an insurance system’s portfolio to third parties to give it security and provide stability.
Alvarez raised concerns on whether domestic reinsurers had enough capitalization and financial reserves to comply with their reinsurance obligations to the GSIS.
He said that there were “other insurance providers that have more capability in terms of capital and experience” to handle the GSIS reinsurance needs.
“The GSIS may be awarding reinsurance contracts to unqualified companies which may put the government at a more serious financial difficulty in case the reinsurance claims are not awarded,” read the resolution.
Alvarez said that existing rules and policies “unduly limits and restricts” GSIS from obtaining contracts with the best possible value.