Napocor allowed to implement ‘self-insurance’

The joint bidding committee created by Malacañang to handle the insurance coverage policy for the assets of the state power firm of the National Power Corp. (Napocor) expects to firm up a long-term insurance by end of November this year, a ranking finance official said.

"The self-insurance of Napocor will definitely be temporary and for short-term use only. We hope we would come up with a long-term insurance coverage for the power generation company by the end of November," Finance undersecretary Antonio Bernando, who chairs the said committee, said.

For the meantime, Bernardo said the committee has allowed the Napocor to temporarily adopt a "self-insurance" scheme until they have firmed up a contract with reinsurers. Bernardo said under the scheme, Napocor will be allowed to draw from a budget set aside for insurance premiums if the need arises.

For this year, it was learned that the state-owned power firm has allocated some $13 million for insurance premiums.

According to the DOF official, the committee has given Napocor enough time to submit details of a proposal called "captive company". The proposal was presented last Wednesday to the joint bidding committee headed by Bernardo who said Napocor failed to convince the former due to lack to details.

"They said they will bring in more people to explain the scheme. We have given them up to Oct. 15 to present a more detailed proposal," he said. He said the committee is not closing its doors on possible insurance schemes that would be advantageous to the government.

"We want to explore all possibilities because we have failed the first bidding," he said.

Another option they are eyeing, he said, is a second bidding to be held in the early part of November.

The finance official said they have asked Napocor and Government Service Insurance System (GSIS) to come up with a new set of terms and conditions for the second bidding. The terms, he said, will no longer carry the so-called expiry terms, which were the object of contention by the potential bidders during the first bidding.