Republic of the Philippines

Department of Finance
INSURANCE COMMISSION
1071 United Nations Avenue
Wlanila

Circular Letter No. 2316-?f.

Date 36 llav ?6{6
Supersedes None

CIRCULAR LETTER

TO : AII non-life insurance companies

SUBJECT : Guidelines on the lssuance of Certifications under R.A. No. 9184,

Otherwise known as the "Government Procurement Reform Act"

SECTION 1. RATIONALE AND BASIS OF THE ISSUANCE OF

CERTIFICATIONS

1.1 These Guidelines are being issued to facilitate the submission, preparation and
issuance of the certifications to accompany surety bonds required under the
lmplementing Rules and Regulations ("lRR") of R.A. No. 9184, othenrvise known
as the "Government Procurement Reform Act."

1.2 These surety bonds are options for the securities required in the IRR of R.A No.
9184, which are the following:
a) Surety bond (Bidder's Bond) under Section 27 of the lRR.
b) Surety bond (Performance Bond) under Section 39 of the lRR.
c) Surety bond (Warranty Bond) under Section 62 of the lRR.
d) Surety bond (Advance Payment or Downpayment Bond) under Section
4 of Annex "E" of the lRR.
e) Surety bond (Retention Money Bond) under Section 6 of Annex "E" of
the IRR

1.3 The IRR of R.A No. 9184 requires that the surety bond to be filed is callable upon
demand and is issued by a surety or insurance company duly certified by the
lnsurance Commission as authorized to issue such security.

1.4 lf required by the government department or agency, a certification on

contractor's all risk insurance ("CAR|') policy may be issued by the Commission.

SECTION 2. REQUIREMENTS FOR PROCESSING OF THE REQUEST

2.1The following are to be submitted by the insurance company:

Head Office: P.O. Box 3589 Manila FAX No. 522-14-34 Tel. Nos. 523-84-61 to 70 Website: www.insurance.gov.ph
 a) Request from the insurance company to issue certification on the bond/s
listed in the letter;
b) Duplicate original or certified copy of the surety bond;
c) Proof of payment; and
d) Soft copy of the draft certification which may be given thru a USB or by
email to the Regulation, Enforcement and Prosecution Division of the
lnsurance Commission.

SECTION 3. CONTENTS OF THE SURETY BOND

3.1 The surety bond shall contain:

a) Name, address and telephone number of the insurance company

b) Name and signature of the principal
c) Name of the obligee
d) Name of the project
e) Service fee/premium of the bond
0 A statement that the bond is callable upon (on) demand
g) Signature of the authorized officer
h) Amount of the bond
i) Bond number
j) Name and signature of the authorized officer of the insurance company
k) Name and signature of the notary public

3.2 The requirement on the contents of the surety bond is without preludice to other
requirements imposed by other circulars or guidelines.

SECTION 4. FORMAT OF THE CERTIFICATION

4.1 . The certification shall contain:

a) Name of the requesting insurance company
b) Name of the principal
c) Name of the obligee
d) Name of the project
e) Amount of bond
0 Name of the requesting officer of the insurance company
g) Type of bond
h) Bond number
i) Name of the signatory of the certification and his/her title
j) Number of the official receipt of payment
k) Statement that the bond is callable upon (on) demand
l) Date of the certification

Attached as Annex "A" is the sample format of the certification for surety bonds.

4.2.The certifications on CARI policy shall have the same requirements and
information, except that the policy shall not be required to include the following: a)
that it be callable on demand; b) the signature of the principal; and c) that it be
notarized.

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 Attached is Annex "8" as the sample format of the certification for CARI policy.

4.3. ln a CARI policy, the principal becomes the insured of the policy.

4.4.The specific type of bond shall appear in the certification such as bidder's bond,
performance bond, warranty bond, advance paymenUdownpayment bond,
retention money bond, etc.

4.5. The draft certification submitted shall be in single line spacing using a font style
and size of Arial 11 or 12. Project name refers to the title of the procurement or
name of the contract whose obligation is being guaranteed, but in case the project
name is very long, it is sufficient that the contract number, if any, is stated.

SECTION 5. GENERAL CONDITIONS

5.'l No insurance company shall use a surety bond or CAR policy whose form was
not approved by the lnsurance Commissioner. The approval of form of surety
bond or policy may be verified in the Records Section, Administrative Division of
the lnsurance Commission.

5.2 It is the responsibility of the insurance company that the contents of the bond are
consistent with the previously approved form, and any deviation therefrom may
subject the insurance company to an appropriate penalty. The issuance of the
certiflcation does not warrant that the surety bond issued is consistent with what
was approved by the lnsurance Commission and therefore does not relieve the
insurance company from penalty on unapproved policy forms and wordings of the
bond.

5.3 Endorsement used to amend or add any provision to the surety bond which is
submitted as part of the surety bond or issued thereafter to the principal must have
prior approval of the endorsement form by the lnsurance Commission.

5.4 The surety bond submitted should contain complete items as enumerated under
Section 3 of these Guidelines. The Acknowledgement portion must be properly
notarized.

(4) months from the effectivity of this Circular Letter, no insurance

5.5 After four
company shall use a general surety bond (G-16) for bond to be used as
performance bond (Section 27, IRR), biddeis bond (Section 39, IRR), other
specific surety bonds mentioned in Section 1 .1, and any subsequent surety bond
that may be required in the IRR of R.A. No. 9184. Approval of the specific surety
bond forms should be discussed with the Regulation, Enforcement and
Prosecution (REP) Division.

5.6 Any expiration period of the surety bond must not be in conflict with the required
validity period of the IRR of R.A No. 9184.|n the case of the surety bond used as
bidder's bond, Section 27 of lhe IRR states that "bid securities shall be valid for a
reasonable period as determined by the Head of the Procuring Entity concerned,
which shall be indicated in the Bidding Documents, but in no case shallthe period
exceed one hundred twenty (120) calendar days from the date of the opening of
 bids." ln the case of the surety bond used as performance bond, Section 39.5 of
the IRR of R.A No. 9184 states that "The performance security shall remain valid
until issuance by the procuring entity of the final Certificate of Acceptance." For
warranty against structural defects and failures, Section 62.2.3.4 of the IRR states
that "The warranty shall be denominated in Philippine Pesos, remain effective for
one (1) year from the date of issuance of the Certificate of Final Acceptance by
the procuring entity, and returned only after the lapse of the said one (1) year
period."

SECTION 6. PROCEDURES

6.1 The request together with the requirements shall be submitted to the Regulation,
Enforcement and Prosecution Division.

6.2 Prior to submission, the request must first be paid and a separate receipt shall be
taken for each surety bond. The receipt shall be returned together with the
certification to the company's liaison officer.

6.3 The request shall be acted upon within three (3) working days.

6.4 Denial of the request may be issued by the chief of the REP Division, subject to
the right of appeal to the lnsurance Commissioner within five (5) working days
from receipt of the denial letter.

6.5 The denial of the request may be sent thru email to the president or assigned
officer of the insurance company. In this regard, the insurance company shall
provide the Commission with the proper email address which shall be used to
send the soft copy of the draft certifications, to receive the communication from
the Commission for any clarification on the request, and the officer other than
president to whom the clarification shall be addressed.

6.6 Except for the duly authorized general agent of the company, no insurance agent
is allowed to sign in behalf of the insurance company. The request must be made
only by the officer of the insurance company with the rank of vice-president or up.

6.7 The certification should be personally received by an employee of the insurance

company or authorized personnel by the general agency. No principal in the surety
bond or his/her representative shall receive the certification from the Commission.

6.8 The official receipt which was issued for payment to a certification shall be used
or applied to a particular surety bond within five (5) working days from date of its
issuance. Official receipt submitted together with the surety bond subject of a
request for certification cannot be used in case of the withdrawal or denial of the
request for the particular surety bond.

6.9 The Commission may require the officer or liaison employee submitting or
processing the request and receiving the certification to present his/her
identification card or document of authority or employment from the insurance
company to the satisfaction of the Commission. ln case a personnel of a general
agent is submitting, processing or receiving the certifications, the general agent

4
 must be authorized with a power of attorney to process and submit the requests
and to receive the certifications in behalf of the insurance company and such
authority must be provided the Commission together with their picture and copy
of identification card of the personnel assigned by the general agent.

SECTION 7. EFFECTIVITY

This Circular Letter shall take effect immediately.

EMMMANU
 Republic of the Philippines
Department of Finance
INSURANCE COMMISSION
1071 United Nations Avenue
1\4anila

E3A"
ANNEX

CERTIFICATION

This is to certify that [NAME OF INSURANCE COMPANYI is licensed to transact

non-life insurance business in the Philippines for [state lines such as FIRE, MARINE,
CASUALTY and SURETYI lines under Certificate of Authority No. effective _
[date: day/month/year] until [date: day/month/year], unless sooner revoked or
suspended for cause.

that I Name of Insurance Company] is authorized under

It is certified, moreover,
its license to issue surety bonds required by the lmplementing Rules and Regulations of
R.A. No. 9184, and thatthe insurance company had issued [state surety bond: [type of
surety bondl with [BOND NUMBER] which is callable upon demand together with the
principal INAME OF THE PRINCIPAL] in favor of the obligee INAME OF THE OBLIGEEI
in the amount of [AMOUNT lN WORDSI (Php ), for the project: [NAME OF
THE PROJECTI, certified photocopy I or duplicate copy] of said bond was submitted by
the company to the !nsurance Commission.
This Certification is issued upon the request of [Name of the Requesting
Personl, [Position] of [Name of lnsurance Company], pursuant to the Revised
Implementing Rules and Regulations of R.A. No. 9184.
/ssuec/ this fday/month/year].

City of Manila, Philippines.

For the lnsurance Commissioner:

INAME OF THE rC DTVTSTON MANAGERI

lC Division Manager
Regulation, Enforcement,
& Prosecution Division
Paid Under O.R. No.

Head Office: P.O. Box 3589 Manila FAX No. 522-14-34 Tel. Nos. 523-84-61 to 70 Website: www.insurance.gov.ph
 Republic of the Philippines
Department of Finance
INSURANCE COMMISSION
1071 United Nations Avenue
lWanila
JJB"
ANNEX

CERTIFICATION

This is to certify that [NAME OF INSURANCE COMPANYI is licensed to transact

non-life insurance business in the Philippines for ISTATE LINES SUCH AS FIRE,
MARINE, CAS[",AI-TY and SURETYI lines under Certificate of Authority No.
effective [date: day/month/year] until [date: day/month/year], unless sooner revoked or
suspended for cause.

It is certified, moreover, that I Name of lnsurance Company] is authorized under

its license to issue contractor's all risk insurance policies and that the insurance company
had issued a contractor's atl risk policy with Policy No. to the insured INAME
OF THE INSUREDI in the amount of [AMOUNT lN WORDS] (Php ), for the
project: [NAME OF THE PROJECTI, certified photocopy [or duplicate copy] of said policy
was submitted by the company to the lnsurance Commission.
This Certification is issued upon the request of [Name of the Requesting
Personl, [Position] of [Name of lnsurance Company] for whatever purpose it may serve.
/ssuec/ thi s [day/month/year].

City of Manila, Philippines.

For the lnsurance Commissioner:

INAME OF THE rC DIVISTON MANAGERI

lC Division Manager
Regulation, Enforcement,
& Prosecution Division
Paid Under O.R. No.

Head Office: P.O. Box 3589 Manila FAX No. 522-14-34 Tel. Nos. 523-84-61 to 70 Website: www.insurance.gov.ph