Vda. De Consuegra v. GSIS - Retirement Insurance Benefits

37 SCRA 315

Facts:

>  Jose Consuegra was employed as a shop foreman of the Office of the District Engineer in Surigao Del Norte.

>  When he was still alive, he contracted two marriages:

o    First – Rosario Diaz; 2 children = Jose Consuegra Jr. and Pedro but both predeceased him

o    2^nd – Basilia Berdin; 7 children.  (this was contracted in GF while the first marriage subsisted)

>  Being a GSIS member when he died, the proceeds of his life insurance were paid by the GSIS to Berdin and her children who were the beneficiaries named in the policy.

>  Since he was in the gov’t service for 22.5028 years, he was entitled to retirement insurance benefits, for which no beneficiary was designated.

>  Both families filed their claims with the GSIS, which ruled that the legal heirs were Diaz who is entitled to one-half or 8/16 of the retirement benefits and Berdin and her children were entitled to the remaining half, each to receive an equal share of 1/16.

>  Berdin went to CFI on appeal.  CFI affirmed GSIS decision.

Issue:

To whom should the retirement insurance benefits be paid?

Held:

Both families are entitled to half of the retirement benefits.

The beneficiary named in the life insurance does NOT automatically become the beneficiary in the retirement insurance.  When Consuegra, during the early part of 1943, or before 1943, designated his beneficiaries in his life insurance, he could NOT have intended those beneficiaries of his life insurance as also the beneficiaries of his retirement insurance because the provisions on retirement insurance under the GSIS came about only when CA 186 was amended by RA 660 on June 18, 1951.

Sec. 11(b) clearly indicates that there is need for the employee to file an application for retirement insurance benefits when he becomes a GSIS member and to state his beneficiary.  The life insurance and the retirement insurance are two separate and distinct systems of benefits paid out from 2 separate and distinct funds.

In case of failure to name a beneficiary in an insurance policy, the proceeds will accrue to the estate of the insured.  And when there exists two marriages, each family will be entitled to one-half of the estate.