NON-BANK FINANCIAL

INSTITUTIONS

Scope

Government Non-Bank Financial Institutions

Pawnshop Building and Loan Associations, Non-

Stock Savings and Loan Associations Private Insurance Companies Investment Companies Investment Houses and Securities

Brokers/Dealers

Government Non-Bank Financial Institutions

Government Service Insurance System or GSIS

Social Security System or SSS

GSIS

Objectives:

1. To promote efficiency and welfare of government employees

2. To help the Filipino government employee when he cannot or can no longer help himself or his family

3. To pay out any and all rightful insurance claims to its policy holders when these are due

GSIS

Functions

1. Primary Functions – provide social insurance in the form of:

a. Life insurance benefits

b. Retirement benefits

c. Disability benefits

d. Medicare benefits

e. Survivors’ benefits

GSIS

Functions

2. Secondary functions – to provide financial assistance to GSIS members:

a. Policy loans

b. Salary loans

c. Educational assistance loans

d. Sale of housing units

GSIS

Functions

3. Supportive functions – to engage in other businesses like:

a. Investment in loans

b. Investment in stocks, bonds, treasury, and promissory notes and more secure instruments such as government and private securities and money market placements

c. Production and sale of non-compulsory insurance policies

d. General insurance and reinsurance businesses

SSS Compulsory Coverage

All employersAll employees in the private sector who are not

yet sixty one years oldAll self-employed who are not yet sixty one

years old Voluntary coverage

Foreign government, international, governmental organization employing working in the Philippines

OFWs

SSS

BenefitsSickness benefitMaternity benefitDisability benefitsRetirement benefitsDeath benefits

LoansSalary loanEducation loan

Pawnshops

What is a pawnshop?

Refers to a person or entity engaged in the business of lending money on personal property delivered as security for loansPawner – borrower from a pawnshopPawnee – pawnshop or pawnbrokerPawn – personal property delivered by the

pawner to the pawnee as security for a loanPawn ticket – pawnbroker’s receipt for a

pawn

Lending Operations

Loanable amounts must not be less than 30% of appraised value of the security

Security can be physically delivered to the control and possession of the pawnee

Guns, knives and similar weapons are unacceptable as security

Building and Loan Associations, Non-Stock and Loans Associations

Building and Loan Associations

Refer to all corporations whose capital stock is required or is permitted to be paid in by the stockholders in regular, equal periodical payment

Building and Loan Associations

Purpose:To repay to stockholders their accumulated

savings and profits upon surrender of sharesTo encourage industry, frugality and home

buildingTo loan its funds to stockholders on the

security of unencumbered real estate and with pledge of shares of the capital stock

Non-Stock Savings and Loan Association Any corporation engaged in the

business of accumulating the savings of its members.

It is not authorized to transact business with the general public, but accepts deposits from, and grant loans to its member depositors.

Private Insurance Companies

Insurance Company

A mechanism for distributing equitably losses among a large number of persons who are subject to a particular risk.

Insurance Commission

The governmental agency that exercises supervision and regulation over the operation and formation of entities that will engage in the business of insurance in the Philippines.

Investment Companies

Investment Companies

Financial institutions that raise funds in the capital market by selling their own issues of securities mainly by common stocks to individual investors

What is a capital market?A place where long-term instruments of

finance are bought and sold

Investment Houses and Securities Brokers/Dealers

Investment Houses

Any enterprise which engages in the underwriting of securities of other corporations

Underwriting

The act or process of guaranteeing the distribution and sale of securities of any kind issued by another corporation

Securities

Written evidences of ownership, interest, or participation in an enterprise

Written evidences of indebtedness of a person or enterprisesBondsDebenturesNotesStocks

Powers of Investment House Arrange to distribute on a guaranteed

basis securities of other corporations and of the government

Act as financial consultant, investment adviser or broker

Act as portfolio manager and/or financial agent

Securities Brokers/Dealers Broker – any person engaged in the

business of effecting transactions in securities for the account of others but does not include bank

Dealer – any person engaged in the business of buying and selling securities for his own account, through a broker or otherwise