GSIS now covers LGUs and NGAs under catastrophe risk insurance

State pension fund Government Service In surance System (GSIS) now provides gov ernment agencies with a parametric insurance cover that grants immediate pay-out for postdisaster recovery.

with the World Bank and the Department of Finance for the preparation of a joint catastrophe risk insurance program. Funding was allocated by the government under the National Disaster Risk Reduction and Management Fund of the 2017 General Appropriations Act in the amount of Php1 Billion, championed by Senator Francis “Chiz” G. Escudero.

The Technical Working Group, composed of representatives from GSIS, Department of Budget and Management, Department of Finance, National Economic Development Authority, Office of Civil Defense, Department of Interior and Local Government, Commission on Audit and Bureau of Treasury, finalized the implementing guidel i n es.

World Bank considers the Philippines as one of the countries in the world that is vulnerable to natural disasters and is bound to lose an average of US$3.5 billion in assets annually due to typhoons and earthquakes.

Catastrophe risk insurance provides immediate cash crucial for post disaster activities relating to government infrastructure and facilities needed to restore operations and immediate delivery of basic services. It complements the existing type, indemnity insurance, which pays the actual loss incurred by the insured.

The World Bank helped the government achieve the best terms and conditions for this transaction by issuing a reinsurance contract to GSIS and ceding the risk to international reinsurance markets. ( GSI S)