Non-life insurers blast DPWH order

MANILA, Philippines - The country’s non-life insurance companies are protesting an order issued by the Department of Public Works and Highways (DPWH) restricting the entry of smaller-capitalized firms in road and infrastructure projects.

Under the DPWH order (Department Order 03-2009), only non-life insurers with a minimum paid-up capital of P500 million and in operations for at least 10 years will be allowed to issue surety or performance bonds and risk protection on DPWH projects.

In a letter addressed to Public Works Secretary Hermogenes E. Ebdane Jr., the Philippine Insurance and Reinsurers Association (PIRA) said DO 03 “constitutes an unfair disenfranchisement and deprivation of rights of a great majority of our members without legal basis and without due process of law.”

Based on the order, only five of the over 90 non-life insurance firms in the country would meet the minimum paid-up capital requirement.

Likewise, the PIRA said these criteria were implemented without the benefit of prior notice and public hearing.

“The advisory also violates the restraint of trade and free competition provisions of the Constitution since it limits those automatically considered accredited companies with the DPWH to a select few big companies possessed of the minimum paid-up capital,” PIRA chairman Honorio J. Ramajo said.

Ramajo added that the department order violates the equal protection clause of the Constitution as it discriminates against a great majority of insurance companies already licensed by the Insurance Commission (IC).