The provincial government of Mountain Province in the Cordillera Administrative Region (CAR) has exposed to risks in case of fire or other incidents its P275.4 million worth of property, plant and equipment (PPE) due to its failure to secure insurance, the Commission on Audit (COA) said.

In its 2023 annual audit report, COA said that several of Mountain Province's PPE were not covered under the Government Service Insurance System (GSIS) General Insurance Fund, which is contrary to Republic Act No. 656, the Property Insurance Law, and COA Circular No. 2018-002.

COA said the Property Insurance Law provides that "every government, except a municipal government below first class, is hereby required to insure its properties." COA Circular No. 2018-002, on the other hand, directs heads of government agencies to "secure directly from the GSIS General Insurance Fund, all insurances or bonds covering properties, contracts, rights of action, and other insurable risks of their respective offices."

Mountain Province's PPE not covered by insurance were identified by COA as those investment properties of P65,130,000; building worth P106,454,323.46; hospitals and health centers worth P51,449,644.77; other land improvements worth P2,099,604.70; motor vehicles worth P16,121,289; and construction and heavy equipment worth P34,190,645.

COA said that only 27 buildings and other structures as well as 101 motor vehicles were insured with the GSIS.

When explanation was sought, COA said that the province's general services officer said they have they have a limited budget appropriated for the payment of insurance premiums so only the properties that were already insured in prior years were considered.

But COA said "the practice of limiting appropriation for insurance premium of insurable properties exposes the provincial government to non-indemnification of the value of the property in case of loss due to fire or other force majeure."

"The failure of the agency to cover all insurable physical assets and property with the GSIS Insurance Fund, and non-compliance with the requirement denies the province adequate and reliable protection against any damage to or loss of its properties or assets and interests due to fire, or other fortuitous events/casualty," it said.

It then reminded Mountain Province's officials to sufficiently appropriate an amount in the annual budget for insurance premium of all insurable assets and property in order to protect their properties and recover any loss due to fire or other force majeure.