in the matter of the request for re-computation of the termination

'· .. .. 1 \

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REPUBLIKA NG PILIPINAS PASEGURUHAN NG MGA NAGLILINGKOD SA PAMAHALAAN (GOVERNMENT SERVICE INSURANCE SYSTEM)

G 5 1 5 Financial Center, Roxas Boulevard, Pasay City 1308

BOARD OF TRUSTEES

In the Matter of the Request for ReComputation of the Tennination Value of Insurance Policy

MARLON R. DULNUAN, Petitioner.

x---------------------x

Board Case No. 010-13

DECISION

Before this Board is a Petition dated July 19, 2013 filed by Petitioner

Marlon R. Dulnuan questioning the Resolution dated March 13, 2013 issued

by the Committee on Claims denying his request for a re-computation of the

termination value of his Enhanced Life Policy (ELP). Petitioner also prayed

for the award of legal interests, costs of suit, moral and exemplary

damages.

Facts

On June 24, 1997, Petitioner joined the government service as an

Instructor 1 at the University of the Philippines, Diliman, Quezon City until

December 31, 20001. Petitioner's government service from june 24, 1997 to

December 31, 2000 was covered by Life Endowment Policy (LEP) under CM

No. 1101290, which was terminated upon Petitioner's separation from the

service effective january 1, 2001.

From August 1, 2005 until November 16, 2005, Petitioner served as a

Supervising Judicial Staff Officer at the Presidential Electoral Tribunal of

the Supreme Court. He also served as Executive Assistant from November

17, 2005 to june 30, 2007 and later as Attorney VI from July 1, 2007 to July

14, 2008 at the Supreme Court. He resigned from the Supreme Court

1 Temporary status.

Board Case No. 010-13 Petition of Marlon Dulnuan

effective July 15, 2008. The period of service from 2005 to 2008 was

covered by ELP.2

On July 12, 2009, Petitioner filed a claim for Cash

Surrender!fermination Value of his ELP.

On September 30, 2009, the NCR Operations Group of the GSIS

processed the claim and issued a check to the Petitioner with the following

details:

Date of Termination of CSV Claim .... . . . .. .. .... July 14, 2008 Check Number ... . . .. .. . . . ... ..... . . . ... .... 0000000527208 Date of Check . .. . .. . . .. .. . . .. . . . ... ... . .. .. . . . September 30, 2009 Gross Amount of Benefit .. . .. . . . ........ . ..... . P8,344.56 Less:

Personal Share Life PIA ..... ....... P1,221.11 Personal Share Life PIA interest . . . . . . . . 87.94 Government Share Life PIA .. ..... . . . 1,456.38 Government Share Life PIA interest . . .... 109.51

Total deductions .... . . .. ... . .. . . . ...... . . .. . . P 2.874.94 NET BENEFIT ..... . .... . . . . . .... . . .. . .... . . P 5,469.62

On July 13, 2012, Petitioner filed a petition with the Board of Trustees

questioning the computation of the termination value of his ELP. The

petition was referred to the GSIS Committee on Claims (CoC) pursuant to

Section 26, Rule V of the Revised Implementing Rules and Regulations

(RIRR) of R.A. No. 8291.3

In a Resolution dated March 13, 2013, the CoC upheld the

computation of the NCR Operations Group and resolved to dismiss the

petition.

2 LP-10000003409501 3 Section 26. Committee on Claims. -The Committee on Claims (CoC) shall evaluate and resolve issues/complaints arising from any dispute in the settlement of claims, such as, but not limited to the following: xxx

a. Interpretation of an existing policy or procedure; b. No existing program or system to process a claim; c. No existing policy as basis to process a claim; d . Appeal from an aggrieved party to a settled claim; e. Findings from either the Internal Audit services Office or the Commission on Audit that are disputable;

and f. Implementation of and Order from any Court, quasi-judicial body or duly authorized entity due to its

being in conflict or inconsistent with existing GSIS laws, policies, rules and regulations; and g. Any other matter related to any or all of the foregoing which is necessary for their determination.

' ' :' Board Case No. 010-1 3

Petition of Marlon Dulnuan

Aggrieved, Petitioner filed the instant petition alleging that the GSIS

NCR Operations Group erred in the computation of the termination value of

his policy. He claims that based on the Certification issued by the Supreme

Court dated July 11, 2012, at least Seventy Thousand Four Hundred Four

Pesos (Php70,404.00) was remitted by the Supreme Court to the GSIS

representing Petitioner's personal share for the period from August 2005 to

June 2008. Allegedly, the termination value of his ELP should have been

Seventeen Thousand Six Hundred Pesos (Php17,600.00) or twenty-five

percent (25%) of his total personal share of Php70,404.00. He cited as basis

the information reflected in the GSIS website, as follows:

How much is the termination value earned under the ELP?

The termination value earned under the policy shall be equivalent to 25% for every monthly life Insurance premiums that have been paid in full, either by direct remittance or through an automatic premium loan (APL). The accumulated termination value shall increase at such rates as may be computed by actuary.

In its sworn Answer dated August 12, 2013, the CoC explained that

the NCR Operations Group did in fact compute the termination value at

25% of the life insurance premiums paid by the Petitioner to GSIS.

However, the percentage factor of 25% was applied to life insurance

premiums only and not to the paid retirement premiums.

After the preliminary hearing conference held on September 24, 2013,

the parties were directed to submit their respective position papers.

In its Position Paper dated October 16, 2013, the CoC maintained that

the termination value of Petitioner's ELP was correctly computed by the

NCR Operations Group based on the life insurance premiums remitted and

paid to the GSIS, citing Section 19.2 of the Revised Implementing Rules and

Regulations of R.A. No. 8291 on the Compulsory Life Insurance Benefits

under the Enhanced Life Policy, as follows:

Termination Value - The policy earns a termination value during the life of the policy computed from the percentage of the life insurance premiums actually remitted and paid to the GSIS.

. . . . Board Case No. 010-13


Petitioner, on the other hand, in his Position Paper4 insists that the

termination value of his ELP should be Php17,600.00, representing twenty

five percent (25%) of his total personal share of Php70A04.00 remitted to

the GSIS.

Petitioner, in his position paper, further pointed out that his period of

service from 1997 to 2000 (outside the Supreme Court) was not considered

in the computation of the termination value of his ELP. Petitioner adduced

in evidence a copy of the Certification issued by the Accounting Office of the

University of the Philippines, Diliman, Quezon City showing his

contributions to the GSIS for the period from April 1997 to December 2000.

Petitioner also prayed for the award of legal interest in the amount of

Php4,400.00 computed at the time of his separation from the service up to

the filing of the petition; moral and exemplary damages amounting to

Php20,000.00; and costs of suit in the amount of Php50,000.00. Allegedly,

Petitioner suffered anxiety, mental anguish and sleepless nights as a result

of the erroneous computations of his benefits.

Issues

1. Whether the NCR Operations Group erred in the computation

of the termination value of Petitioner's Enhanced Life Policy.

2. Whether Petitioner is entitled to the damages sought.

Discussion

Before resolving the foregoing issues, it is noted that Petitioner's

government service was covered by two separate policies. His government

service in UP-Diliman for the period from june 24, 1997 to December 31,

2000 was covered by LEP while his government service in the Supreme

Court from August 1, 2005 to july 14, 2008 was covered by ELP. The two (2)

policies provide for different benefits depending on the circumstances of the

case. Under Section 11.5, Rule XI of the 1997 Implementing Rules and

4 Submitted on November 18, 2013.

Board Case ;:'\ u. 010-13 Petition of Marlon Dulnuan

Regulations of R.A. No. 8291, a member covered by LEP is entitled to

either: (1) maturity benefits; (2) cash surrender value; (3) death benefit; or

( 4) accidental death benefit. On the other hand, a member covered by ELP

is entitled to either: (1) death benefit; or (2) termination value.5

Petitioner's government service from 1997 - 2000 covered by LEP is

subject to a claim separate from the re-computation of the termination value

of ELP that is the subject of this present petition. Considering that

Petitioner has not yet filed a claim with the GSIS for the cash surrender

value of his LEP, he may file the same, subject to pertinent rules.

With respect to Petitioner's ELP, the NCR Operations Group

computed the termination value of his ELP based on his total life insurance

premium contributions, both personal and government share, remitted to

the GSIS while Petitioner computed the termination value of his ELP based

on his total personal contributions to the GSIS.

We uphold the computation of the NCR Operations Group.

Under Item XI of the General Policy and Procedural Guidelines of the

ELP approved on July 23, 2003 through Board Resolution No. 173, "[t]he

termination value eamed under the policy shall he the equivalent of 25% for

evelJI monthly life insurance premiums due and paid in mn either hy direct

remittance or through an automatic premium Joan (APL) facility as provided

hereunder. In addition the accumulated termination value shall increase at

such rates depending upon the earnings of the ELP fund as may he

computed hy the ActualJI."

The policy was incorporated in the 2010 RIRR of R.A. No. 8291, as

follows:

Section 19. Compulsory Life Insurance Benefits under the Enhanced Life Policy (ELP)

A member under this Policy may be entitled to any of the following benefits, depending on the circumstances:

5 Rules X and X1 of the General Policy and Procedural Guidelines of the Enhanced Life Policy approved by Board

Resolution No. 173 on July 23, 2003.

.. . .

XXX XXX XXX

Board Case No. 010-13 Pe tition of Marlon Dulnuan

19.2 Termination Value- The policy earns a Termination Value during the life of the policy computed from the percentage of monthly life insurance premiums actually remitted and paid to GSIS.

19.2.1 Termination value is equivalent to a percentage of monthly life insurance premiums as determined by the GSIS, due and paid in full, either by direct remittance or through an APL facility.

19.2.2 The accumulated termination value will grow at such rate as determined by the Actuary.

19.2.3 The termination value shall be paid to the member upon his separation from the government service less all indebtedness of the member with the GSIS in accordance with CLIP. [Emphasis supplied]

Based on the foregoing policies, the NCR Operations Group correctly

computed the termination value of Petitioner's ELP based on his life

insurance premiums remitted to the GSIS.

The Petitioner may well be informed that the premiums, both

government and personal shares, being remitted to the GSIS are

apportioned between retirement and life insurance. Under Section 5 of R.A.

No. 8291, the amount of monthly contribution payable by the member and

government agency shall be 9% and 12%, respectively, based on the

member's monthly compensation. These monthly premium contributions are

apportioned as follows:

Personal Share Government Share

Regular Member Life Retirement Life Retirement

2% 7% 2% 10%

Thus, it is clear that only four percent (4%) of the Petitioner's monthly

compensation, composed of two percent (2%) each from government share

and personal share, goes to the life insurance fund. It is from this life

insurance fund that Petitioner's claim for termination value is to be drawn.

On the other hand, any claim for separation or retirement benefits will be

drawn from the amount apportioned for the retirement fund.

The record shows that for the period from August 2005 to June 2008,

Petitioner's life insurance premium contributions (personal and government

' .. . . Board Case No. 010-13


share) to the GSIS amounted to Php32A56.44. As shown below, the

termination value of Petitioner's ELP was computed using the SAP System,6

as follows:

I Termination Date I OR Date Due Date n 8 = ll+lllUIJ"n PS GS PS+GS AV = B•IO.~!'S +GSIJ 10/2007 9/20Ch 8/2r:n:. 25 1.086753436 400.4 400.4 800.8 217.5680378 10/2007 10/20Ch 9/2r:n:. 24 1.083142959 400.4 400.4 800.8 216.8452204 10/2007 11/2005 10/2005 23 1.079544478 400.4 400.4 800.8 216.1248044 10/2007 12/2005 11/2005 22 1.075957951 374.1689 362.927 737.0959 198.2710486 10/2007 1/')fg, 12/2005 21 1.07238334 344.19 320.1 664.29 178.0933822 10/2007 2/')fg, 1/')fg, 20 1.068820605 344.19 320.1 664.29 m.so17099 10/2007 3/')fg, 2/2f'l.'b 19 1.065269706 416.46 416.46 832.92 221.8211108 10/2007 4/')fg, 3/')fg, 18 1.061730604 416.46 416.46 832.92 221.0841636 10/2007 5/')fg, 4/2f'l.'b 17 1.~3259 416.46 416.46 832.92 220.3496647 10/2007 6/')fg, 5/2C'I.'b 16 1.054687634 416.46 416.46 832.92 219 617606 10/2007 7/')fg, 6/')fg, 15 1.051183688 569.28 620.22 1189.5 312 5957493 10/2007 8/')fg, 7/2f'l.'b 14 1.047691384 569.28 620.22 1189.5 311.5572252 10/2007 9/')fg, 8/2f'l.'b 13 1.044210681 569.28 620.22 1189.5 310.5221514 10/2007 10/2006 9/2f'l.'b 12 1.040741543 569.28 620.22 1189.5 309.4905163 10/2007 11/2006 10/2006 11 1.03728393 569.28 620.22 1189.5 308 4623086 10/2007 12/2006 11/2006 10 1.033837804 569.28 620.22 1189.5 307.4375169 10/2007 1/2007 12/2006 9 1.030403127 569.28 620.22 1189.5 306.4161298 10/2007 2/2007 1/2007 8 1.026979861 613.75 679.51 1293.26 332.0379936 10/2007 3/2007 2/2007 1.023567967 468.44 468.44 936.88 239.7400893 10/2007 4/2007 3/2007 1.020167409 468.44 468.44 936.88 238.9436106 10/2007 5/2007 4/2007 1.016778149 468.44 468.44 936.88 238.149m 10/2007 6/2007 5/2007 4 1.013400148 468.44 468.44 936.88 237.3585827 10/2007 7/2007 6/2007 3 1.01003337 468.44 468.44 936.88 236.570016 10/2007 8/2007 7/2007 1.006677m 304.5 234.24 538.74 135.5843965 10/2007 9/2007 8/2007 1 1.003333333 304.5 234.24 538.74 135.13395 10/2007 10/2007 9/2007 0 0 0 0 0 7/2008 11/2007 10/2007 8 1.026979861 515.28 515.28 1030.56 264.5910913 7/2008 12/2007 11/2007 7 1.023567967 515.28 515.28 1030.56 263.7120511 7/2008 1/2008 12/2007 6 1.020167409 515.28 515.28 1030.56 262.8359313 7/2008 2/2008 1/2008 1.016778.149 515.28 515.28 1030.56 261.9627222 7/2008 3/2008 2/2008 4 1.013400148 515.28 515.28 1030.56 261.0924142 7/2008 4/2008 3/2008 3 1.01003337 515.28 515.28 1030.56 260.2249975 7/2008 5/2008 4/2008 1.006677m 515.28 515.28 1030.56 ~~~ '£0~627

7/2008 6/2008 5/2008 1 1.003333333 515.28 515.28 1030.56 258.4988 7/2008 7/2008 6/2008 0 515.28 515.28 1030.56 257.64

16,117.02 16,339.42 32,456.44 8397.195233

lcOMPUTED VAlUE 8,397.20 I

IAClUAL VALUE 8,344.56 1

To reiterate, the computation by the NCR Operations Group of the

termination value of Petitioner's ELP based on the life insurance premiums

actually remitted by the Petitioner finds basis under the Revised

Implementing Rules and Regulations of R.A. No. 8291. The CoC is therefore

correct in denying the Petitioner's request for re-computation of his benefits

under his ELP.

In light of the foregoing, the Petitioner's claim for moral and

exemplary damages and litigation costs has become moot and academic. It

6 Using Claims and Pension Application Systems formula = TV=Summation of All Accumulated Value (AV) AV=B*{0.25*{PS+GS)}, where B={[l+{l/12)"n

. . ' ' ' .

Board Case No. 010-13 Petition of Marlon Dulnuan

bears stressing that the claim for damages was premised on the alleged

erroneous computation by the NCR Operations Group of the termination

value of his ELP. Moral and exemplary damages are sums of money which

the law awards or imposes as a pecuniary compensation, a recompense or

satisfaction for an injury done or a wrong sustained as a consequence either

of a breach of a contractual obligation or a tortuous act. In this case, the

Petitioner has not been wronged as the NCR Operations Group correctly

processed the termination value of his ELP.

WHEREFORE, the petition is hereby dismissed for lack of merit. The

Resolution dated March 13, 2013 issued by the Committee on Claims

upholding the computation of the termination value of Petitioner's ELP is hereby affirmed.

ROB v·

SO ORDERED.

TG.~ARA e Chairman

ROMEO M. ALIP Trustee

~ ELISEA q .. G~ T~Jj;tee

L L. LACSON JR. Chairman

RO~FELIPE . { Trustee

FRANCISCO T. DUQUE nr Trustee

• Did not participate in the discussion

. , : . ..

Copy Furnished:

ATIY. MARLON R. DULNUAN Petitioner 64 Gomburza St., Area 1 UP Campus, Diliman, Quezon City

Prosecution and Quasi-Judicial Cases Department Legal Services Group (Counsel for CoC) 6th Level, GSIS Building, Financial Center, Pasay City

Board Case No. 010-13 Petit ion of Marlon Dulnuan

..

CERTIFICATION

I, SYLVIA HAZEL T. BISMONTE-BELTRAN, having been assigned as Hearing Officer in GSIS Case No. 010-13 entitled "In the Matter of the Request for Re-computation of the Terminal Value of his Enhanced Life Policy, Marlon R. Dulnuan, Petitioner" hereby certify that the statement of facts herein stated and being presented before this Board is accurate and true, based on the records of the case, the pleadings and other documents submitted by the parties.

This certification is issued in compliance with Board Resolution No. 198-A adopted on September 15, 2004.

July 8, 2014.

T. BISMO TE-BELTRAN ring Officer.

u

BOARD MEETING NO. 13 24 JULY 2014

Page 28

RESOLUTION NO. 105

WHEREAS, Mr. Marlon R. Dulnuan filed a Petition dated 19 July 2013 before the GSIS Board of Trustees, docketed as GSIS Board Case No. 010-13, questioning the Resolution dated 13 March 20 13 issued by the Committee on Claims, which denied his request for a re-computation of the termination value of his Enhanced Life Policy (ELP), and praying for the award of legal interests, costs of suit, moral and exemplary damages;

WHEREAS, pursuant to Section 30 of R.A. No. 8291, the GSIS has original and exclusive jurisdiction to settle any dispute arising from the application of the laws administered by the GSIS;

RESOLVED, to APPROVE and CONFIRM the Decision in GSIS Board Case No. 010-13, entitled In the Matter of the Request for Re-Computation of the Termination Value of Insurance Policy, Marlon R. Dulnuan, Petitioner, the dispositive portion of which states:

"WHEREFORE, the petition is hereby dismissed for lack of merit. The Resolution dated March 13, 2013 issued by the Committee on Claims upholding the computation of the termination value of Petitioner's ELP is hereby affirmed.

"SO ORDERED."

A copy of the Decision in GSIS Board Case No. 010-13 is attached and made an integral part of this Resolution.

~ OFFICIAL COPY

in the matter of the request for re-computation of the termination

Documents