Law Summary

I. Rationale

• The guidelines aim to ensure that only reputable and financially qualified insurance and surety companies, along with their re-insurers, are permitted to engage in business with the Department of Public Works and Highways (DPWH).

II. Coverage

• The accreditation process is applicable to all surety and insurance companies, including their re-insurers, operating nationwide with the DPWH.

III. Creation of an Accreditation Committee and its TWG

• An Accreditation Committee will be established to:
  • Receive and evaluate applications.
  • Recommend approval or disapproval of accreditations.
• The Bureau of Construction (POCW) will serve as the Technical Working Group (TWG) to assist the Committee.

IV. Development of the Accreditation System

• The Monitoring and Information Service, in collaboration with the Committee, will create an accreditation system for monitoring the profiles and financial capabilities of surety and insurance companies engaging with the DPWH.

V. Accreditation Requirements

V.a. Qualifications

• The following criteria must be met for a company to qualify for accreditation:
  • Minimum Capital: A paid-up capital of at least Five Hundred Million Pesos (₱500M).
  • Experience: A minimum of ten (10) years in the surety or insurance business prior to application.

V.b. Documentary Requirements

• Legal Documents:

  • DTI/SEC Registration Certificate, Articles of Incorporation, and By-Laws.
  • Current mayor’s permit/city or municipal licenses.
  • Tax Clearance Certificate for the current year.
  • Statements under oath regarding blacklisting, unsettled claims, and litigation status.
  • Names and registration details of agents and re-insurers.
  • Board Resolution or Special Power of Attorney authorizing DPWH to verify submitted documents.

• Financial Documents:

  • Audited Financial Statements stamped by the BIR for the last three (3) years.
  • Details of the applicant’s exposure and that of its re-insurer.

• Processing Fee:

  • A non-refundable fee of Five Thousand Pesos (₱5,000) is required for accreditation applications and renewals.

VI. Procedure for Accreditation

• Steps:
  • Submission of an accreditation form with complete documents and fee.
  • Evaluation and validation by the Committee on Accreditation.
  • Recommendation for approval/disapproval.
  • Final approval/disapproval by the Secretary.
  • For renewals, submission of a renewal form and fee is required.
• Timeframe: All applications must be forwarded to the Secretary within fifteen (15) calendar days after submission for approval/disapproval.

VII. Grounds for Disqualification

• Disqualification criteria include:
  • Submission of forged or spurious documents.
  • Failure to comply with obligations under bonds or insurance policies.

VIII. Reservation Clause

• The DPWH reserves the right to suspend or cancel accreditation if it is found that:
  • Accreditation was obtained through fraud or misrepresentation.
  • The company’s capability to fulfill obligations has significantly diminished.

IX. Effectivity Clause

• These guidelines will be effective fifteen (15) days after publication in a newspaper of general circulation or the Official Gazette.

Key Takeaways

• The DPWH establishes stringent accreditation guidelines to ensure that only qualified insurers and sureties operate within its sphere.
• Companies must meet financial and operational qualifications, submit extensive documentation, and pay a processing fee.
• An Accreditation Committee will oversee the application process, which includes a clear timeline for approval.
• Disqualification can occur for fraudulent submissions or failure to meet contractual obligations.
• These guidelines take effect 15 days post-publication to ensure compliance among future applicants.