Napocor, Heath Lambert firm up insurance deal

State-owned National Power Corp. (Napocor) has threshed out all remaining issues for a one-year insurance coverage of its assets by UK-based Heath Lambert, a ranking official said yesterday.

Finance undersecretary Antonio Bernardo, who chairs the joint bidding committee that handles the reinsurance coverage of the state-run power firm, said they have finalized the terms and conditions for Napocor’s $6.5-billion industrial all risk (IAR) policy.

Bernardo said the contract with Heath Lambert started last Dec. 21 and will expire on the same date in 2002.

According to Bernardo, Napocor will have to pay Heath Lambert a fixed broker’s fee of $330,000 for the entire one-year contract.

The brokerage firm, he said, will effectively cover at least 95 percent of Napocor’s IAR insurance policy. The five-percent balance will be handled by Government Service Insurance System (GSIS).

"Everything is now settled. What we will be discussing soon with them (Heath Lambert) is the coverage for the three minor components, namely, terrorism and sabotage, submarine cable and marine," he said.

Heath Lambert was among the four pre-qualified brokerage firms that participated in the bidding for the IAR policy of Napocor last November. Bernardo said the committee had decided to go for a negotiated contract after two failed biddings.

The finance official said they chose to negotiate with Heath Lambert because it offered competitive rates and enough elbowroom. The other bidders were Arthur J. Gallagher, Marsh & Mclennan, and AON Energy.

The committee, created through presidential Memorandum Order 30, is composed of representatives from Department of Finance, Napocor and GSIS. It was formed to end the squabble between GSIS and Napocor on the issue of reinsuring the assets of the state-owned power generation company.

GSIS has the sole authority to insure the properties and assets of all government-owned and controlled corporations. But Napocor wants an active participation in the bidding process.