State-run pension fund manager Government Service Insurance System yesterday said it is allowed by law to engage in the business and operation of all kinds of insurance and reinsurance catering to both the public and private sectors.

GSIS made the clarification after non-life insurance companies represented by the Philippine Insurance and Reinsurers Association complained to the Insurance Commission that the pension fund manager was encroaching into their businesses.

Ella Valencerina, vice president for public relations and communications of GSIS, said in a statement that the property insurance or general fund insurance law being implemented by the GSIS had empowered the agency to indemnify any person or party against loss, damage or liability, including third party, arising from unknown or contingent events.

Valencerina said the mandate of GSIS to issue insurance and reinsurance coverage, excluding life insurance, was covered by pertinent rules, regulations, and policies issued by the Bangko Sentral.

?Contrary to the claim of Pira, there is no encroachment on the part of the GSIS because the law specifically allows it to engage in the insurance and reinsurance business,? she said.

Pira chairman Honorio Ramajo asked Insurance Commissioner Eduardo Malinis to look into the new non-life products, called Gcare Plans, introduced by GSIS since the products ?are outside the scope of its authority and may well be considered unfair incursions into the direct private accounts market.?

However, the GSIS official said its competitively priced insurance products would redound to the benefit of the public and the government.

?Pira stated that our products are cheaper. This is true, simply because we consider our members and their families as owners of the GSIS. We have given them?as owners?discounts of as much as 20 percent in our regular prices,? said Valencerina.

?The 20 percent pertains to standard commission rates given for the sale of insurance policies. So, the insurance cost of our retail products?fire, motor vehicle and personal accident insurance?must necessarily be lower,? she said.

Pira, which is composed of 92 non-life insurance providers, has also strongly opposed the plan of GSIS to monopolize the P3-billion compulsory third party liability insurance scheme for motor vehicles. Lawrence Agcaoili