Requesting Entity: Department of Education
Issues Concern: GSIS Bond as an Acceptable Form of Security
Whether bonds issued by the Government Service Insurance System fall within the purview of Section 27.2 (c) of the Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184 as an acceptable form of bid security.
As defined in Section 184 of the Insurance Code, surety or insurance company refers to all individuals, partnerships, associations, or corporations, including government -owned or -controlled corporations or entities, engaged as principals in the insurance business, except mutual benefit associations. The GSIS, a government -owned and -controlled corporation created by virtue of Commonwealth Act 186 , is expressly authorized under Presidential Decree 245 to engage in all kinds of insurance and reinsurance business and issue bonds in line with its administration of the general insurance fund.
GSIS may be considered within the definition of surety or insurance company under the Insurance Code. However, considering the mandate of law authorizing GSIS to engage in insurance and reinsurance business, the certification required under the IRR of RA 9184 is no longer necessary for the acceptability of GSIS issued surety bonds.
As such, a surety bond issued by the GSIS may be considered an acceptable form of security even without the certification from the Insurance Commission required under the IRR of RA 9184, provided that it is callable upon demand and in accordance with the form, amount, and validity period prescribed under said IRR.