State-run Government Service Insurance System is now requiring a minimum credit rating of B+ for interested reinsurers who will join the pension fund’s bidding for reinsurance contracts.
“We needed to have a clearer perspective about credit risk because GSIS cedes part of its general insurance businesses to minimize exposure to risks. Thus, it is vital to set a minimum credit rating as a requirement for potential bidders of reinsurance contracts. In this way, we are confident that our reinsurers can meet their financial obligations when they fall due,” GSIS president and general manager Jesus Clint O. Aranas said.
“Our reinsurance contracts undergo public bidding. This is to ensure that all potential reinsurers, whether local or foreign, have access to a fair and transparent bidding process. The General Insurance Bidding and Awards Committee ensures that reinsurance accounts for bidding strictly adhere to the requirements for an open and competitive procurement process,“ Aranas added.
To be eligible, potential bidders are now required to submit a certified true copy of proof of latest Credit Rating of at least B+ issued by the A.M. Best.
In addition, the securities or panel of reinsurers, whether foreign or domestic, should be rated at least “A” by the A.M. Best.
The foreign securities or panel of reinsurers must be duly authorized to transact reinsurance business in the Philippines through their appointed resident agent.
Interested bidders may download the complete list of eligibility and technical requirements for bidding of reinsurance from the GSIS website (http://www.gsis.gov.ph/downloads/reinsurance/20180529-GI-Eligibility_Technical%20Requirements.pdf).
They may also access the terms of reference and other bidding documents of reinsurance contracts from the websites of the Philippine Government Electronic Procurement System (www.philgeps.gov.ph) and GSIS (www.gsis.gov.ph).
Republic Act 656 (Property Insurance Law) requires national, provincial, city, or municipal government (up to first-class municipalities), agency, commission, and board or enterprises owned or controlled by the government to insure their properties GSIS against any insurable risk and pay the corresponding premiums.
Under the law, GSIS is the sole administrator of the Property Insurance Fund, which was established to indemnify or compensate state-run agencies or offices for any damage to or loss of its properties due to fire, natural catastrophes, or other threats.