Pantaleon Alvarez, current Speaker of the House of Representatives of the Philippines, has called for the House Committee on Government Enterprises and Privatization to investigate reinsurance contracts awarded to domestic insurers by the Government Service Insurance System (GSIS), according to reports from the country.
The Manila Bulletin reports that Alvarez is calling on the House to “immediately conduct a comprehensive investigation” on the reinsurance contracts, amidst concerns some companies might not be entitled to the reinsurance they are awarded.
“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. There are other insurance providers who have more capability in terms of capital and experience to handle reinsurance needs of the GSIS,” said Alvarez, as reported by the Manila Bulletin.
Alvarez has filed House Resolution 1502, noting that Congress has received allegations that the GSIS has entered into reinsurance contracts with a number of domestic insurance firms.
According to reports, Section 27 of the Republic Act 8291, authorises GSIS to enter into reinsurance contracts with a private company or a reinsurance company.
“The existing rules and policies unduly limit and restrict GSIS from obtaining reinsurance contracts with the best possible value. There are also concerns on whether the domestic reinsurance companies possess the necessary capitalization and financial reserves which would ensure that they comply with their reinsurance obligations should the need arise,” said Alvarez.