Question & AnswerQ&A (Republic Act No. 656)
The official short title of Republic Act No. 656 is the "Property Insurance Law."
The purpose of the Property Insurance Fund is to indemnify or compensate the Government for any damage to, or loss of, its properties due to fire, earthquake, storm, or other casualty.
The Government Service Insurance System (GSIS) is placed in charge of the administration of the Property Insurance Fund.
Every government, except a municipal government below first class, is required to insure its properties with the Fund. Municipal governments below first class may insure their properties upon application under rules prescribed by the GSIS.
Property includes vessels and craft, motor vehicles, machineries, permanent buildings, properties stored therein or in buildings rented by the government, and properties in transit.
Any cashier, treasurer, or government official who refuses or habitually neglects to comply with the instructions of the GSIS regarding premium collection and remittance shall be liable for the payment of said premiums and fined two percent per month from the due date until received by the GSIS.
Yes, the GSIS has the authority to reinsure any excess risk it deems advisable with private insurance companies under mutually agreed terms.
Key definitions include: "System" as the Government Service Insurance System; "Fund" as the Property Insurance Fund; "Property" as various government properties; "Government" as national or local government entities; and "Disposable Surplus" as the amount left after reserves and expenses are set aside.
Premiums are to be paid in advance to the GSIS by the government concerned, under rules and regulations prescribed by the GSIS.
The Auditor General is the ex-officio auditor, and the Government Corporate Counsel is the ex-officio legal adviser of the Fund.
The disposable surplus, once declared by the GSIS, shall be apportioned among the governments whose properties are insured in the Fund according to a schedule approved by the GSIS.
Each government must include the amount necessary for premiums in its annual appropriation and remit the premiums immediately to the GSIS. Savings from appropriations are to be set aside for premium payments.
The Act took effect on the first day of the third calendar month following the month of its approval, which is June 16, 1951.