GSIS generates P1.8-B income from insurance business

The Government Service Insurance System (GSIS) posted a net income of P1.848 billion from its general insurance business in 2003, almost quadruple from the P486 million the state pension fund earned in year 2000.

GSIS president and general manager Winston Garcia revealed over the weekend that the figure was even projected to reach P2.4 billion by the end of 2004.

Garcia said that when he assumed office in 2001, 90 percent of GSIS’ accounts were reinsured while only 10 percent were retained by the institution. As a result, GSIS’ net income for the reinsurance business was only P450 million.

However, starting this year, as part of the reform programs instituted by Garcia, GSIS decided to retain 70 percent of the accounts and reinsure only the remaining 30 percent.

This developed as GSIS executive vice president for operations Enriqueta Disuanco urged members to be vigilant in seeing to it that his or her contributions and those of the government agency concerned are being remitted promptly to the pension fund.

"Every six months, we regularly send them the status of their membership with the GSIS," Disuanco explained.

At a Da La Salle University forum, Garcia said that through the computerization program that he initiated, the GSIS discovered that 2.7 million names were registered as GSIS members when there were only 1.3 million state employees covered by the pension system.

Disuanco noted that some members reject the introduction of the Claims and Loans Interdependency Policy (CLIP) by the GSIS, a collection strategy for loan applications.

"When you apply for a loan and you have outstanding arrearages, GSIS will deduct all the arrears from the proceeds so we were able to collect. But some were dismayed by the GSIS new policy since they were not able to secure loan as there are ‘no proceeds,’" Disuanco explained.

The pension has also introduced the premium-based policy, under which the amount of pension that a GSIS member would receive would be commensurate with the amount of contributions that the member remitted to the pension.

Garcia reiterated that those who have been calling for his ouster in the GSIS "were people who had taken advantage of the inefficiencies of the GSIS in the past.