SOP Library

SOP NO: FS-IM03

Mission: Corporate Administration

Area: Financial Services (FS)

Activity: Insurance Management (FS-IM)

Title: SOP on Fixed Assets and Stocks Insurance System

Date Approved/Issued: 02/23/2007

Date Effective: 01/01/2007

Digest:

For the information and guidance of all concerned, published hereunder is the SOP on
Fixed Assets and Stocks Insurance System which supersedes SOP No. FS-IM01
entitled SOP on Property Insurance System and SOP No. FS-IM02 entitled SOP on
Marine Insurance System issued and made effective August 1, 1990 and July 6, 1999
respectively.

1. To provide systematic guidelines to expedite the necessary activities in

securing insurance for NFA properties, ensure timely filing and collection of
insurance claims.
 2. To define the responsibilities of the concerned NFA C.O. departments/Field
Offices involved in the insurance activities to facilitate securing insurance
coverage for all insurable NFA properties, filing and collection of insurance
claims.

This SOP provides the policies and procedures covering the following activities:

1. Setting of insurance premium rates

2. requesting insurance cover for NFA insurable properties
3. payment of insurance premium
4. filing of insurance claims
5. billing and collection of insurance claims, and
6. reporting and monitoring system.

II. STATEMENT OF POLICIES

1. The NFA, as required by Republic Act 656, otherwise known as the

“Property Insurance Law,” shall insure its properties with the Government
Service Insurance System (GSIS). It shall secure from the GSIS the most
comprehensive and adequate insurance coverage for all its insurable
properties. "Property" as defined in RA 656, includes vessels and craft,
motor vehicles, machineries, permanent buildings, properties stored therein
or in buildings rented by the Government, or properties in transit.

2. The following NFA properties shall be covered by an insurance to indemnify

or compensate NFA for damages or losses due to fire, flood, typhoon,
earthquake, other allied risks and for losses during shipments/transfers of
stocks.

Ÿ Property, Plant and Equipment (PPE), previously referred to as fixed

assets, such as warehouses and buildings, equipment, machineries,
furniture and fixtures with an acquisition cost of Php10,000.00 and
above, and which are serviceable and repairable
Ÿ Grains stocks, sugar and MTS (in-warehouse & marine shipments)
 Ÿ Motor vehicles
Ÿ Aircrafts
Ÿ Cellular phones, computers (notebook/laptop) and firearms
Ÿ Supplies stock inventory

The following insurance policies shall cover the NFA insurable properties to
wit:

Policy /Insurance Cover Properties Covered

Fire and Allied Perils Policy All PPEs or fixed assets, grain
stocks/MTS/sugar
in-warehouse and supplies stock
inventory
Floater Policy Cellular phones, computers
(laptops/notebooks), firearms

Marine Cargo Open Policy Importations/Foreign shipments and

Inter-island shipments/
transfers either thru land/sea/air (grains
stocks/MTS/ eqpt./ machineries),
Accountable forms

Aviation Aircrafts

Motor Vehicle Motor vehicles

3. Insurance coverage for the abovecited NFA properties shall be contracted

with the GSIS by the NFA Administrator or his authorized representative, in
behalf of NFA. All terms, clauses and conditions stated in the insurance
policies shall be strictly followed except when both parties, NFA and the
GSIS, agree to extend or to alter such terms, clauses and conditions.

4. Premium rates and deductibles shall be set by the NFA Central Office (C.O.)
with the GSIS Head Office before the start of each calendar year. A uniform
rate and a common effectivity date shall be applied to all NFA Offices (C.O.
and F.O). Setting of insurance premium rates and deductibles shall be the
responsibility of the following:

Property Responsibility

Stocks and MTS (in-warehouse, foreign Asst. Adm. for Stabilization

shipments, inter-island shipments)

PPEs (fixed assets), aircrafts, and Asst. Adm. for Administration

 cellular phones, supplies stock inventory

Insurance policies covering NFA properties shall be evaluated yearly prior to

their expiration and renewal to assess if NFA can purchase a better insurance
package.

5. All other NFA insurance activities (requesting for insurance cover, payment
of premium, notification of loss/damage, filing and collection of claims) shall
be decentalized. Insurance of PPEs (fixed assets) including motor vehicles
in the field offices and in-warehouse stocks shall be the responsibility of the
NFA Regional/Provincial Offices where these are located. Insurance of
commodity shipments and filing of claims for damages/losses shall be the
responsibility of the issuing or the receiving province as may be provided in
the succeeding sections of this SOP. Insurance transactions in the field
offices shall be made with the nearest GSIS Branch Office.

6. Insurance activities concerning PPEs (fixed assets), motor vehicles and

supplies stock inventory at the Central Office shall be the responsibility of
the General Services Department (GSD). Insurance transactions at the C.O.
shall be made with the GSIS Head Office.

7. The respective heads of NFA Field offices shall ensure that all insurable
NFA properties within their areas of jurisdiction are adequately covered by
an insurance and that claims for any damages or losses suffered are filed
accordingly. Insurance coverage shall be renewed with the issuing GSIS
office a month prior to the expiration date of the existing insurance
coverage.

8. It shall be the responsibility of the NFA official and/or employee concerned

to retain file copies of all documents pertaining to insurance coverages
and/or claims endorsed/furnished to the concerned GSIS office, insurance
adjuster and other concerned parties. Receipt of the documents must be
duly acknowledged by the recipient person on the file copies retained.

9. In cases of damages/losses suffered from commodity shipments which were

not insured due to the negligence of concerned officer and employee in the
performance of their duty, the personnel responsible for the non-coverage of
the shipment shall be held liable for the total amount of loss/damage
incurred. Likewise, payment of damages/losses shall be without prejudice to
the right of NFA to file any administrative and/or criminal charges against the
erring personnel.

10. The Regional/Provincial Manager/OIC and the employee concerned shall be

held liable for any uninsured property shipments due to late or non-
declaration of said shipment in case damages/losses are incurred.
 11. In case of denied insurance claims, the NFA office filing the claim shall exert
the necessary efforts to work it out with the GSIS for possible
reconsideration. If cause of denial may have been based on legal grounds
and cannot be resolved within the capacity of the concerned NFA office, it
shall endorse the denied claims together with a copy of all pertinent
documents to the Department for Legal Affairs (DLA) for appropriate legal
actions.

Ÿ If denial on insurance claims is found to have legal grounds, a write off

of the insurance claims shall be effected. Copies of the documents shall
be endorsed by DLA/legal offices to COAD-DAS/Finance Units to take
up the write-off in the books.

Ÿ If grounds on the denial of insurance claims were due to negligence, the

concerned official and employee who were found negligent in the
performance of their duties shall be held liable for the total amount of
damage/loss suffered by NFA. Payment of damages/losses shall be
without prejudice to the right of NFA to file administrative and/or criminal
charges against the erring personnel.

12. Violations of any of the policies stated on this SOP shall subject the erring
personnel to Administrative and/or charges as warranted.

III. IMPLEMENTING GUIDELINES

A. Insurance Coverage

1. Fire and Allied Perils Insurance Policy - this covers all NFA owned
buildings and structures including contents and stocks in-warehouse in
various locations nationwide. Insurance cover shall be against all risks
of physical loss, destruction or damage including riot, strike, malicious
damage, civil commotion, robbery/burglary, volcanic eruption,
earthquake, typhoon, flood, tsunami, storm, collapse and losses where
proximate cause is construction related.

2. Marine Cargo Insurance Open Policy - covers the transfer of

properties/cargoes (i.e. machineries and equipment, grains stocks/MTS)
either by land, sea or air from its origin to the final destination . NFA’s
Marine Open Policy (MOP) provides automatic cover for all its
commodity shipments with a maximum automatic insurance liability limit
to be determined separately for inter-island transfers and importations
(foreign shipments) from time to time as the need arises. However, NFA
is obligated to declare all its shipments for which risk notes will be
issued by the GSIS under the MOP on a per declaration basis. The
insurance attaches from the time the cargoes leave the warehouse or
place of storage and terminates either on delivery to the final warehouse
 or to any other warehouse prior to or at the destination which NFA elect
to use for storage.

3. Motor Vehicle Insurance Policy - shall cover all NFA motor vehicles
against hazard and liabilities arising from the use, maintenance and
ownership of the vehicle insured.

4. Floater Policy - shall cover cellphones, computer (notebook/laptop)

and firearms against all risk of direct physical loss or damage from any
external cause to the insured property except as provided.

5. Aviation Insurance - shall cover NFA aircrafts against accidents both

on air and on ground.

B. Setting of Insurance Premium Rates and Deductibles

1. PPEs (fixed assets) Premium Rates

During the last quarter of the year, the Regional/Provincial Administrative

Units shall provide the Property Supply and Management Division of the
General Services Department (PSMD -GSD) with the updated inventory
report of PPEs in their respective offices. PSMD -GSD shall consolidate
the inventory reports submitted by the field offices and provide the Asst.
Administrator for Administration with the National Inventory of PPEs
(fixed assets) to be used as basis for setting up the insurance premium
rates. The inventory report shall include the following information:

Ÿ Warehouse and buildings

Name of building
Property Code
Floor area
Location
Acquisition cost/Date of Acquisition (based on the Certificate of
Acceptance)

Ÿ Equipment, Machineries, Furnitures and Fixtures (Serviceable and

Repairable)

Description Type/model
Property Code
Acquisition cost/Date of Acquisition
Quantity
Location
 2. Grains Stocks and MTS Premium Rates

2.1. The Provincial Marketing Operation Units shall provide the

Operations Coordination Division of the Department for Marketing
Operations (OCD-DMO) with their Stock Inventory Report as of
September 30 covering all warehouses in their area of jurisdiction.
OCD-DMO shall consolidate the submitted inventory reports and
submit the consolidated data to the Office of the Asst. Administrator
for Stabilization for purposes of setting up the insurance premium
rates for in-warehouse stocks and inter-island transfers.

2.2. The Foreign Operations Division (FOD-DMO) shall provide the

Office of the Asst. Administrator for Stabilization with the necessary
data on importation for puposes of setting up the insurance
premium rates for foreign shipments.

3. The respective Asst. Administrators shall coordinate with the GSIS in

connection with the setting of premium rates.

4. After the premium rates have been set, the Offices of the Asst.
Administrator for Stabilization and the Asst. Administrator for
Administration shall inform GSD/DMO and the Regional/Provincial
offices of the approved insurance premium rates.

C. Request for Insurance Cover

1. Upon receipt of advice regarding the approved insurance premium

rates, the field offices shall prepare and submit a request for insurance
cover of their insurable properties to the GSIS branch office in their
respective areas. For C.O. insurable properties, GSD shall submit their
requests for insurance cover of PPEs, aircrafts, cellphones/computer
notebooks/firearms and motor vehicles and supplies stock inventory to
the GSIS Head Office while DMO-FOD shall request insurance cover of
grains stocks importations. The responsibility for the preparation and
submission of the request for insurance cover shall be as follows:

Property Responsible For submission to

Frequency

Ÿ PPEs/Fixed Assets, aircrafts,

cellular phones/firearms/
Computers, motor vehicles
and supplies stock inventory
Central Office PSMD-GSD GSIS Head Office
annually
 Field Offices NFA RO/PO (where the GSIS Branch Office annu
properties are located)
Ÿ Foreign shipments
- grain stocks/sugar DMO GSIS Head Office
per shipment
- machineries/eqpt. GSD GSIS Head Office
per shipment

Ÿ Inter-island shipments GSIS Branch Office

per shipment, - grainsstocks/MTS, NFA PO
with weekly (source province)
declaration
- machineries/eqpt., PSMD-GSD
accountable forms

Ÿ In-warehouse stocks NFA PO GSIS Branch Office

annually (grains & sugar) (where the stocks
are located)

1.1. Insurance cover of PPEs

1.1.1 For PPEs, aircrafts, cellular phones/computer notebooks/firearms and

motor vehicles at the Central Office, GSD shall request the GSIS Head
Office for insurance cover of the said properties. In the field offices, the
NFA Regional Office and NFA Provincial Office where these properties
are located shall request the nearest GSIS Branch Office in their area
for insurance cover of the said properties. Insurance coverage shall be
for a period of one (1) calendar year. The request shall be supported by
an updated inventory of the said properties together with their insurable
values.

1.1.2 For cellular phones/computer notebooks/firearms, the request shall state

the brand/model of the phone, IMEI number, serial number, acquisition
date and cost, accountable officer and place of assignment. However, for
cellular phones, the insurable value shall be the remaining balance
payable of the plan.

1.1.3 Shipments of Machineries and Equipment and Accountable Forms

a) GSD shall be responsible for securing marine insurance coverage

for foreign shipments (importation) and local shipments/transfers
(from C.O. to the field offices) of machineries and equipment and
Accountable Forms.

b) In the field offices, the source province shall secure the marine
insurance coverage for its local shipments of machineries and
 equipment. The NFA Provincial Office (Administrative Unit) in the
source province shall request insurance cover for every inter-island
shipments to be made. The request shall be submitted to GSIS
branch office having jurisdiction in the area at least three (3) days
before the shipment is effected. However, request for insurance
cover of property shipments with values exceeding the maximum
insurance liability limit and whose Estimated Time of Departure
(ETD) falls on Saturday/Sunday/Holiday must be submitted to the
GSIS branch office not later than the close of office hours on Friday
or on the working day before the holiday.

c) The following data shall be indicated in the request for insurance

cover of machineries and equipment shipments:

For importations

Ÿ Opening bank
Ÿ Letter of credit number
Ÿ Name of supplier
Ÿ Quantity/Item /Description of property
Ÿ Total cost and freight
Ÿ Serial number
Ÿ Place of Origin and destination
Ÿ Name of carrying vessel
Ÿ Estimated time of departure and arrival

For local shipments

Ÿ Bill of lading number

Ÿ Quantity/Item/Description of property
Ÿ Total cost/value of property
Ÿ Serial number
Ÿ Place of origin and destination
Ÿ Name of carrying vessel
Ÿ Estimated time of departure and arrival

1.1.4 GSD and the concerned NFA Field Offices shall immediately inform
GSIS in writing, of any change, whether inclusion or deletion of
serviceable properties in the inventory report submitted. For aviation
insurance, GSD shall also inform the GSIS Head Office immediately if an
NFA aircraft is grounded. In such cases, an additional premium/return
premium will be charged/credited to the concerned NFA office’s account.

1.1.5 In case of equipment which are purchased by the C.O. for deployment to
the field offices, insurance cover of the equipment while still at the C.O.
shall be secured by GSD-PSMD. For this purpose, the concerned
 departments (MSD for IT equipment, TSD for PHF, and TRDD and FDC
for laboratory equipment) shall immediately inform GSD-PSMD of new
acquisitions and furnish it with the deployment schedule.

Once the properties are deployed, GSD shall immediately inform GSIS of
the new location of the properties. The receiving office shall include the
said properties in their insurance cover for the succeeding year.

1.1.6 Insurance policies for Fixed Assets and Supplies, Aircrafts, Cellular
phones and motor vehicles shall be issued in the name of the NFA Office
(Central Office, Regional Office or Provincial Office) where the insured
properties are located. However, for foreign shipments, insurance
policies shall be issued to DMO while insurance policies for inter-island
shipments shall be issued to the NFA Provincial Office in the source
province. Insurance policies shall be issued by the GSIS Branch Office
that has jurisdiction over the area.

1.2 Insurance cover of Grains Stocks/MTS and Sugar

1.2.1 In-Warehouse Stocks

The Provincial Offices shall request insurance cover for their in-
warehouse stocks based on their respective allocated insurable amounts
as advised by the Office of the Asst. Administrator for Stabilization. The
request shall be made on a yearly basis to be submitted to the nearest
GSIS Branch Office in their area.

1.2.2 Foreign Shipments (Importations)

a) FOD-DMO shall request insurance cover for every foreign

shipment of grains stocks/sugar to be submitted to the GSIS Head
Office within five (5) working days from receipt of vessel
nomination. The following information regarding the intended
shipment shall be indicated in the request:

Ÿ Name of Supplier
Ÿ Commodity/Quantity (bags and kilograms)
Ÿ Value of shipment (cost and freight)
Ÿ Origin
Ÿ Estimated time of departure and arrival
Ÿ Name of carrying vessel/flag
Ÿ Age of vessel/year built
Ÿ Registry classification of vessel

b) The request for insurance cover shall be confirmed by FOD-DMO

upon receipt of the Bill of Lading. FOD-DMO shall write GSIS a
 letter confirming the scheduled arrival of the shipment stating the
actual quantity loaded, price per metric ton (MT), date of departure
and arrival of the vessel and disport/destination province. The Bill
of Lading and Commecial Invoice shall be attached to the
confirmation letter to validate the disport, quantity loaded and price
per MT.

c) For insurance purposes, the value to be declared for importations

shall always be at Cost plus Freight. The dollar value of imported
commodities shall be converted to its peso value using the
prevailing BAP (Bankers Association of the Philippines) exchange
rate on the day of receipt of request for insurance cover by the
GSIS.

1.2.3 Inter-island Shipments

a) The NFA Provincial Office (Marketing Operations Unit) in the source

provinces shall request insurance cover for every inter-island
shipments to be made at least three (3) days before the scheduled
shipment. However, as agreed upon by both GSIS and the NFA,
submission of request for insurance cover of inter-island shipments
may be done on a weekly basis. The request shall be supported by
a weekly declaration (summary of shipments made for the week) and
submitted to the GSIS Branch Office having jurisdiction in their area
not later than Tuesday following the week that the shipments were
made. GSIS shall bill NFA for insurance premiums based on the
weekly declarations.

b) Exempted from this rule are shipments with values exceeding the
maximum insurance liability limit and whose ETD falls on
Saturday/Sunday/Holiday. In such cases, the request must be
submitted to GSIS before the close of working hours on Friday or on
the working day before the holiday.

c) The request for insurance cover of inter-island shipments shall

indicate the following information:

Ÿ Bill of Lading Number

Ÿ Variety/quantity/value of commodity
Ÿ Origin and destination
Ÿ Name of carrying vessel/barge/tugboat
Ÿ Estimated time of departure and arrival

d) For insurance purposes, the value of the local commodities to be

shipped shall be declared based on its book value.
 1.2.4 DMO-FOD and the concerned source NFA Provincial Offices shall
immediately inform the concerned GSIS office, in writing, of any
changes in the schedule and the volume of foreign and inter-island
shipments that they have submitted.

D. Payment of Insurance Premium

1. Payment of insurance premiums shall be through the usual voucher

processing system. Preparation of the disbursement voucher for
payment of insurance premiums shall be the responsibility of the
NFA office/department that prepared the request for insurance cover
as follows:

Policy/Insurance
Cover Property
Responsible

Fire & Allied Perils All PPEs/fixed assets, GSD-PSMD

-C.O.
Supplies stocks inventory Administrative
Unit- F.O.

Grains stocks/sugar in- PO - Mktg. Opns. Unit

warehouse & MTS

Floater Policy Cellular phones, computers GSD-PSMD

-C.O.
(laptops/notebooks),firearms Administrative Unit-
F.O.

Marine Cargo Open Importation/foreign shipments DMO-FOD

Policy (either thru Inter-island shipments:
Land/sea/air) Grain stocs/sugar & MTS Mktg.
Operations Unit of
Issuing Province

Equipment/machineries/ GSD-PSMD
-C.O.
Accountable forms Administrative
Unit- F.O.
of Issuing Province

Aviation Aircrafts GSD-PSMD

-C.O.
Motor Vehicle Motor Vehicles GSD-PSMD
-C.O.
Administrative Unit -
F.O.

For insurance policies issued to NFA C.O., release of check for payment of
insurance premiums shall be done by DTBFM-Cash Division while in the field
offices, release of check shall be done by their respective Cashiers. The
DBTFM-Cash Division shall furnish GSD/DMO-FOD with a photocopy of GSIS
O.R., while F.O.- Cashiers shall furnish the Administrative Unit/Mktg. Operations
Unit with a photocopy of the GSIS O.R. Similarly, DMO-FOD shall furnish the
disport/destination province with the photocopy of the GSIS O.R. and the Risk
Note.

2. Insurance premiums for Fire and Allied Perils Insurance for PPEs
and In-warehouse Stocks, Floater Policy for cellular
phones/computers (notebooks)/firearms, Aviation and Motor Vehicle
Insurance shall be paid annually in full to the issuing GSIS Office.

3. Insurance Premium for inter-island shipments shall be based on the

individual billings issued for each of the weekly declarations
submitted by NFA.

4. Insurance Premium for foreign shipments shall be based on the

individual bills and risk notes issued by the GSIS Head Office for
every foreign shipment.

5. The disbursement voucher for the premium payment of the

insurance coverage shall be prepared immediately upon receipt of
the GSIS insurance premium billings. To facilitate processing and
payment, the disbursement voucher must be supported by the
following documents :

For PPEs, Cellphones/Computers(notebooks)/Firearms and In-Warehouse

stocks

a. Summary of sum insured and premium

b. GSIS Bill and
c. Insurance Policy

For Local Shipments

a. Letter of request for insurance coverage

b. Summary schedule of local shipments indicating the following:

Ÿ Vessel name
Ÿ Origin
Ÿ Destination
Ÿ BL number
Ÿ ETD/ETA
Ÿ Variety
Ÿ Quantity
Ÿ Book Value

c. Copy of wires re: advice of shipment

d. Computation sheet re: insurance premium due
e. Risk note
f. Premium billings of GSIS

For Foreign Shipments/Importation

a. Premium billing from GSIS

b. Risk Note
c. Computation Sheet
d. Confirmation of Insurance Cover
e. Bill of lading
f. Commercial Invoice

6. Insurance premiums shall be paid within sixty (60) calendar days

from receipt of the bill from GSIS. Failure to pay the said amount
within the specified period shall mean cancellation of the Insurance
Policy but after due notice. However, if premiums are paid within
thirty (30) calendar days from receipt of the bill, the concerned NFA
office shall be entitled to an extra remuneration in accordance with
the GSIS guidelines issued for the purpose.

7. The concerned C.O. Departments (DMO/GSD and DTBFM) and the

NFA Field Offices shall ensure that insurance premiums are paid on
time to avoid having a lapsed policy. The counting of the 30-60
calendar day payment period shall start from the date of receipt of
the bill. It is important therefore that the date of receipt of bill shall
be written on the face of the bill.

8. In case of lapsed insurance policy (for Fire and Allied Perils,

Theft/Robbery, Accident), payment of premium after the sixty (60)
calendar day period shall not revive the lapsed policy. Should a risk
happen after the said period, no insurance claim shall be paid. NFA
still has to pay GSIS the prorated premium corresponding to the sixty
(60) calendar day period and secure a new policy to cover the
remaining months of the year.
 9. To ensure that the insurance premium are paid on time, DBTFM-
Cash Division shall specifically state in its fund remittance that the
funds remitted shall be used exclusively for payment of insurance
premium.

E. Filing of Claims for Damages/Losses

1. Claims Under Fire and Other Allied Perils Insurance Policy

1.1 In case of damages/losses after incidence of fire, flood and

typhoon, or earthquake, and other allied perils, the
RegionalManager/Provincial Manager of the concerned field
office shall, upon detection of damage/loss, immediately advise
in writing (provisional claim), the GSIS Office in their area for
insurance claims. For Central Office, GSD shall file the
provisional letter claim with the GSIS Head Office immediately
upon detection of damage/loss. The provisional claim letter
shall specifically state the following information necessary to
facilitate investigation by the insurance adjusters:

Ÿ Property damaged
Ÿ Estimated volume/value of loss/damage
Ÿ Probable cause/nature of damage/loss
Ÿ Date and place of occurrence
Ÿ Policy/Risk/Endorsement number

1.2 Within five (5) days from recipt of NFA’s notice of loss, the
GSIS shall send an adjuster to inspect the extent of
damage/loss. Failure of the GSIS adjuster to conduct
inspection within this period shall entitle the NFA to proceed
with the disposition of the damaged properties.

1.3 Disposition of damaged properties shall be done in

accordance with existing NFA guidelines on this matter. The
concerned NFA office shall request the GSIS office in their
area for the presence of an adjuster to witness the disposition
proceedings at least three (3) days before the actual
disposition of the damaged properties. The absence of the
adjuster during the actual disposition will not nullify the
proceedings provided that the NFA has properly notified the
GSIS in writing.

1.4 Once the damaged properties are disposed, the concerned

field office/GSD shall file formal insurance claims with the
GSIS Office in their area within one (1) week from the date of
disposition of damaged properties. The following are the
 supporting documents required for insurance claims for PPEs
and in-warehouse stocks):

a) Picture of fire debris

b) Approved Inspection and Inventory Report
c) Inventory list of the properties before and after
the incident occurred
d) Fire Department's Report (in case of fire)
e) PAGASA/PHIVOLCS Report (For Typhoon/Flood
and Earthquake Claims).
f) Proof of loss
g) Disposition Proceedings:

Ÿ Minutes of bidding
Ÿ Notice of Award
Ÿ Authority to Withdraw, FAIR
Ÿ O.R. Issued to the salvage buyers
Ÿ Statement of Actual withdrawal of damaged
properties
Ÿ List of prospective bidders
Ÿ Copies of Tender forms duly accomplished
Ÿ Disposition Report

h) Other documents as may be required by the

GSIS/assigned Insurance Adjuster.

1.5 The total insurance claims collectible for damages/losses

sustained on properties shall be computed based on the
sound value of the property less salvage proceeds, if any,
and deductible franchise. Losses net of salvage proceeds
that fall within the Deductible Clause of the Fire and Other
Allied Risks Policy need not be claimed or they have to be
waived, in which case a letter waiving the claims shall be
sent to GSIS.

1.6 In case the total insurance claims computed by NFA

(GSD/F.Os) do not tally with the billing, the final claim shall
be mutually agreed upon by NFA and the GSIS.

1.7 The R.O./P.O.’s Finance Unit/DTBFM shall be

responsible for the billing and collection of the final claims
from the GSIS.

2. Claims Under the Marine Insurance Policy

2.1 Claims for damages/losses for foreign and inter-island
shipments shall be filed by the NFA
DISPORT/DESTINATION PROVINCE to expedite
adjustment, processing and payment of claims. For this
purpose, the GSIS Office where the insurance premium was
paid shall provide the GSIS Branch Office in the
disport/destination province with a copy of the Official
Receipt (OR) of insurance premium paid by the NFA and a
Letter Authority for the said GSIS Branch Office to process
and pay such claims.

2.2 The concerned disport/destination province shall file a

provisional letter claim (or notice of loss) with their
respective GSIS Branch Office once damaged stocks are
detected. The provisional letter claim shall specifically state
the following information necessary to facilitate investigation
by the insurance adjusters:

Ÿ Type of commodity
Ÿ Estimated volume/value of loss/damage
Ÿ Probable cause/nature of damage/loss (indicate
whether damaged by oil, sea water, etc.)
Ÿ Location and Date of discovery of damage/loss
Ÿ Name of mother/carrying vessel and date of arrival
Ÿ Date Letter Protest was filed and received by bailee

2.3 Within five (5) days from recipt of NFA’s notice of loss, an
adjuster shall be sent by the GSIS to inspect the extent of
damage/loss. Failure of the GSIS adjuster to conduct
inspection within this period shall entitle the NFA to proceed
with the disposition of the damaged properties.

Disposition of damaged properties shall be done in accordance

with existing NFA guidelines on this matter. The concerned NFA
office shall request the GSIS office in their area for the presence
of an adjuster to witness the disposition proceedings at least
three (3) days before the actual disposition of the damaged
properties. The absence of the adjuster during the actual
disposition will not nullify the proceedings provided that the NFA
has properly notified the GSIS in writing.

2.4 An Official Receipt (OR) shall be issued for the payment of

salvage proceeds. Dumping or Burning activities must be
properly documented for purposes of filing formal insurance
claim with the GSIS.
 2.5 Claims Against Bailees

2.5.1 Simultaneous with the filing of provisional letter

claim, the disport/destination province shall also
file a Letter of Protest against the bailees: e.g.
Supplier, vessel owner, arrastre contractor,
forwarding contractor and/or stevedoring
contractor, as the case may be, within 24 hours
from discovery of damage/loss during unloading
at the port. The letter of protest shall indicate the
following information:

Ÿ Type of commodity
Ÿ Actual volume/value of damage/loss
Ÿ Cause/nature of damage/loss
Ÿ Date and place of occurrence
Ÿ Name of carrying vessel
Ÿ Date of vessel arrival

For losses/damages discovered upon arrival at the destination

warehouse, it shall be determined whether the losses suffered
occurred during hauling or the losses originated from the vessel
(undetected at the port).

For damaged/lost commodities on importations/foreign

shipments, FOD-DMO shall assist the disport/destination
provinces and furnish them with the necessary documents and
information (i.e. Name, address of supplier and etc.) to facilitate
filing of claims against supplier/vessel owner and to support the
formal claim to be filed with the GSIS.

2.5.2 Receipt of the letter protest shall be duly

acknowledged by the bailee. If the bailee refuses
to receive the same, the disport/destination
province shall note the refusal and the service
shall be deemed complied with.

2.5.3 A Marine Protest shall be secured from the vessel

captain/shipping agent in case of loss/damage
due to extraordinary perils of the sea by the
following:

For stocks that reached For stocks

that did not reach
destination province the
destination province
 For local shipments Destination Province
Province of origin
For foreign shipments Destination Province
DMO/FOD

The Marine Protest shall be executed by the vessel captain/shipping

agent within 24 hours upon arrival at the port of distress. A weather
report/casualty report from the coast guard may also be secured to
support the allegation of the vessel captain.

2.5.4 Freight claims by the Shipping Company

(particularly for local shipments) shall be applied
to the loss as computed by the Marketing
Operations Unit. Should the loss/damage be
greater than the freight due, the difference shall
be charged against the insurance. Should the
loss/damage be equal or less than the freight due,
the claim shall be waived.

2.6 The Marketing Operations Unit of the disport/destination

province concerned shall file a formal claim with the GSIS
branch office within one (1) week from the date of
disposition of the damaged stocks. It shall accomplish the
GSIS insurance claim bill form supported by the following:

Ÿ Notice of Loss
Ÿ Policy/Premium Certification
Ÿ Pictures of damaged commodities
Ÿ Claims vs. Bailees (Supplier, Shipping Company,
Customs Arrastre Contractors, Stevedoring
Contractors or Trucking Contractors and their replies
thereto, if any. The claims filed must be acknowledged received
by the addressee)
Ÿ Bill of Lading
Ÿ Commercial Invoice (for foreign shipments only)
Ÿ Statement of Facts (for foreign shipments only)
Ÿ Statement of Unloading/Discharge Report (for
foreign shipments only)
Ÿ Laboratory Analysis Report
Ÿ Inventory and Inspection Report (IIR)
Ÿ Reconditioning cost, if any
Ÿ Delivery Way Bill/WSR/WSI/ESR/ESI
Ÿ Bad order certificate from arrastre services
Ÿ Proof of Disposal/O.R. for Sale proceeds issued
by NFA
 Ÿ Minutes of the bidding
Ÿ Bid forms submitted by the bidders

If Issued for burning/dumping

Ÿ Pictures of actual dumping/burning

Ÿ AI/WSI
Ÿ Schedule of dumping/burning cost
Ÿ Inventory and Inspection Report
Ÿ Certificate of dumping and burning

2.7 The concerned disport province shall compute the total

insurance claims on marine damaged commodities based
on the declared value of the commodities upon shipment as
covered by the marine insurance less salvage proceeds and
other deductibles, if any. In computing for the amount of
insurance claim, the following formula may be used:

Value of damaged commodities = (damaged quantity x

unit cost)
where:
Unit Cost = insured value ¸ insured quantity

In case of total loss of the entire shipment, total insurance

claims against GSIS shall include total insured value of the
damaged commodities plus all other incidental expenses
incurred in the unloading and warehousing of the damaged
commodities, if any.

2.8 Losses/damages net of salvage proceeds that fall within the

deductible clause need not be claimed against the GSIS.
Should a provisional claim have been filed before knowledge
that the loss falls within the deductible clause, a letter to
GSIS waiving the claim shall be made by the concerned
NFA office.

3. Motor Vehicle Insurance Claims

3.1 The filing of claims for losses incurred on motor vehicles

shall be the responsibility of GSD (for C.O. Vehicles) and the
Regional/Provincial Office (for F.O. vehicles), at the GSIS
branch office.
 3.2 GSD/RO/PO shall send a notice of the vehicular accident to
GSIS within 24 hours upon occurence giving the following
information:

Ÿ Date and Place of occurence

Ÿ Persons involved in the accident
Ÿ Nature/Cause of accident
Ÿ Insurance Policy Number

3.3 GSD/RO/PO shall take photographs of the damaged vehicle

and stencil the vehicle's engine/chassis numbers to be used
as supporting documents in filing claim with the GSIS.

3.4 GSD/RO/PO shall submit a repair estimate to GSIS from the

NFA Motorpool. It shall also secure repair estimates from
two (2) NFA accredited motorshops. The motor shops shall
send their repair estimates of the damaged vehicle directly
to GSIS.

3.5 Repair of the NFA damaged vehicle shall be done by the

motor shop chosen by GSIS branch office to undertake the
repair in order for the claim to be compensable.

3.6 Pertinent data/documents required to facilitate insurance

claims for damages/losses sustained on motor vehicles shall
be as follows:

For own damage claim

Ÿ Formal Notice of Loss

Ÿ Automobile accident report (notarized)
Ÿ Photocopy of Policy and OR of premium payment
Ÿ Photocopy of LTO Certificate of Registration and OR
Ÿ Stencil of the motor and chassis number
Ÿ Photocopy of driver's license and OR
Ÿ Police investigation report (duplicate copy)/Affidavit of driver
or sworn statement on the accident and why it was not
reported to police authorities
Ÿ Driver's trip ticket, duly approved
Ÿ Pictures of damaged vehicle showing point of impact and
vehicle’s plate
Ÿ Two (2) repair shop estimates or one (1) dealer’s estimate

For third party property damage -motor vehicle

Ÿ Same as Nos. 1-7 requirements of Own Damage

 Ÿ Certificate of No Claim from Claimant’s Insurance
Company (original copy)
Ÿ Copy of Third Party (TP) Certificate pf Registration and
OR
Ÿ Stencils of TP motor and chassis no.
Ÿ Copy of TP Driver’s license and OR
Ÿ Pictures of damaged vehicle showing point of impact and
vehicle’s plate
Ÿ Two (2) repair shop estimates or one (1) dealer’s
estimate Automobile accident report in GSIS
prescribed form and third party

For Theft of Vehicle Parts

Ÿ Same as Nos. 1-7 requirements of Own Damage

If vehicle was stolen, the following additional documents are

needed:

ŸCopy of Alarm Sheet

Ÿ Copy of Complaint Sheet
Ÿ Certificate of Non-Recovery

For Other TP Property Damage (e.g. post, fences, etc.)

ŸSame as Nos. 1-7 requirements of Own Damage

Ÿ Repair Estimate/Bills of Materials
Ÿ Pictures of damaged property

For Third Party-Bodily Injury/Death

ŸSame as Nos. 1-7 requirements of Own Damage

Ÿ Medical Certificate (original copy)
Ÿ Statement of Account/Hospital Bills (original copy)
Ÿ OR of medicines
Ÿ Copy of Birth Certificate
Ÿ Copy of Death Certificate/Post Mortem Examination
Report
Ÿ Copy of marrriage contract
Ÿ ORs of burial/funeral expenses

All required data/documents must be submitted in four (4) copies.

3.7 GSD (C.O.)/Property Custodian (F.O.) shall file the formal

insurance claim to GSIS office concerned together with the
complete set of supporting documents required. Filing of
 the formal insurance claim with the GSIS must be made not
later than thirty (30) days from the date of accident
occurrence.

3.8 The processing and payment of claims of private motor

shops for the repair of NFA vehicles with GSIS claims shall
follow policies and procedures as provided in the SOP No.
GS-VS01, NFA Motor Vehicle Claim Settlement.

F. Billing and Collection

1. GSD and the RO/PO Administrative Units/Marketing Operations

Units shall furnish DTBFM and the RO/PO Finance Unit,
respectively, with the formal insurance claims they have filed duly
received by the GSIS with complete supporting documents. Based
on the formal insurance claims filed with the GSIS, DTBFM and the
RO/PO Finance Unit shall prepare a Bill for the final insurance
claimable with the GSIS.

2. The DTBFM-Cash Division and the RO/PO- Finance Unit shall

furnish DAS-COAD and RO/PO Accountants, respectively, with a
copy of the Bill together with the formal claim and complete
supporting documents for purposes of setting up Claims Receivable
with GSIS in the books.

3. Billing and collection of insurance claims from GSIS shall be the sole
responsibility of DTBFM (for C.O.) and the RO/PO Finance Units.

IV. Reporting and Monitoring System

1. All Regional/Provincial Offices shall maintain a set of Insurance Cover

Registry Books where all insurance covers as well as adjustments or
cancellations on issued insurance policies are recorded. The Insurance
Cover Registry Book (Exhibit 1A) for Properties with Annual Insurance
Coverage, (PPEs/fixed assets, supplies stocks inventory, cellular
phones/firearms, computers (laptops/notebooks) and in-warehouse grain
stocks/sugar, MTS, aircrafts, motor vehicles), shall be prepared to record
insurance activities under Fire and other Allied Perils, Aviation, Floater and
Motor Vehicles Insurance Policies. A separate Insurance Cover Registry
Book (Exhibit 1B) for properties under the Marine Cargo Open Policy shall
be prepared to record all properties for shipments/transfers either through
sea, air or land.

Similarly, a separate set of Insurance Claims Registry Book (Exhibit 1C)

shall be maintained by the concerned offices.
 2. The two (2) sets of Registry Books (Insurance Cover Registry Book &
Insurance Claims Registry Books) shall be maintained as follows:

Properties Covered Registry Books

Responsible

PPEs/Fixed Assets, aircrafts,cellular Insurance Cover & GSD/Administrative

Units-F.O.
phones/firearms/computers, motor Insurance Claims
vehicles & supplies stock inventory

In-Warehouse Stocks Insurance Cover & Mktg. Opns.Unit

(MOU-F.O.)
(grains/MTS & sugar) Insurance Claims

Foreign shipments Insurance Cover DMO-

FOD
Local Shipments
-Grain stocks/MTS and sugar Insurance Cover MOU-
Issuing Province
Insurance Claims MOU-
Destination/Disport
Prov.

-Machineries/equipment/ Insurance Cover

GSD/Administrative Units (F.O.)
accountable forms (Issuing
Province)
Insurance Claims
Administrative Units (Destination/
Disport
Province)

*The disport/destination province shall maintain one registry book for foreign/local
shipments received.

3. The P.O.-Marketing Operations Section shall prepare a Monthly Statement

on Shipments Sent-Out (Exhibit 2) to reconcile all marine insurance
coverage taken vis-a-vis the shipments it made It shall also prepare a
Monthly Statement on Shipments Received (Exhibit 3) to reconcile
insurance claims filed on marine damaged/lost stocks/MTS vis-a-vis the
shipments it received.

4. The NFA Provincial Managers shall ensure that all insurable properties in
their respective areas are covered by the appropriate insurance. The
Provincial Office shall submit to the Regional Office a Report on Insurance
 Premium Payments (Exhibit 4) made indicating therein the type of
insurance/properties covered, location, value of insured, date of cover,
policy/cover/note risk note number,amount of premium, GSIS O.R. Number
and date paid. The Report on Insurance Premium Payments made for fixed
assets and supplies, aircrafts, cellular phones and motor vehicles which is
done on a yearly basis shall be submitted immediately upon payment. The
report on foreign and inter-island shipments shall be submitted not later
than the 5th wording day of the following month.

5. Based on the reports of the Provincial Offices, the Regional Office shall
prepare a consolidated Report on Insurance Premium Payments made
(indicating the date and amount of insurance premium paid as well as the
type of insurance/properties covered) by each of the provinces within its
jurisdiction. The consolidated report shall be submitted to DMO (for stocks
in warehouse and inter-island transfers) and to GSD (for fixed assets,
aircrafts, cellular phones and motor vehicles) not later than the 10th day of
the following month.

6. The Regional Office shall also be responsible for monitoring claims filed by
each of the provincial offices under its jurisdiction. It shall submit to the
concerned departments (DMO or GSD) a Monthly Report on Claims Filed
(Exhibit 5) by each provincial office indicating therein the amount of
claim/date filed, status and problems encountered, if any. If the claim is
already collected, the report shall also indicate the amount and the date it
was collected. This shall also be submitted every 10th working day of the
following month.

V. Accounting Treatment

1. Marine Insurance Premium (imported stocks) shall be accrued at the

disport office at 0.275% for grains and 0.303% for sugar of the contract
price. The disport office shall set up the payables as Due to GSIS- Marine
Insurance with Account Code 413-20. Upon payment of insurance
premium, the DAS-COAD shall prepare the corresponding advise. The
variance between the Central Office advise and set up shall be adjusted by
the provincial office to Cost of Sales or Inventory Account.

2. Marine Insurance Premium Rates for local shipment shall be based on the
declared value of merchandise (e.g. Cereal = .426%, MTS = .213%
General Merchandise = .559% and sugar = .325%).

3. Marine damaged commodities shall be physically reclassified from the good

ones for the purpose of identification only. The value of marine damaged
commodities shall remain the same as far as the books are concerned.
 4. The DTBFM-Cash Division/F.O. Finance Unit should indicate in the NFA
Official Receipt (O.R.) the NFA bill Number and the necessary details of the
particular insurance claims collected.

5. DBTFM -Cash Division/F.O.-Cashier shall inform in writing the COAD/F.O.

Finance Unit of collections made indicating the Bill Number and necessary
details of the particular claims collected for proper matching against claims
receivable previously set-up in the books.

All rulings and/or issuances inconsistent herewith are hereby superseded.

The SOP shall take effect retroactive January 1, 2007.

Date Approved: February 23, 2007