Republic of the Philippines

Congress of the Philippines

Metro Manila
Fifteenth Congress
Third Regular Session
Begun and held in Metro Manila, on
Monday, the twenty-third day of July, two
thousand twelve.
[REPUBLI !" #$. 10607%
!# !" &"RE#'"(E#I#' "(E
I#&UR!#E I#)U&"R*, +UR"(ER
!ME#)I#' PRE&I)E#"I!L )EREE
#$. ,-., $"(ER/I&E 0#$/# !& 1"(E
I#&UR!#E $)E2, !& !ME#)E) B*
PRE&I)E#"I!L )EREE #$&. --3-,
-.45, -366, -3,5, -4-3 !#) -74-, !#)
B!"!& P!MB!#&! BL'. 483, !#)
+$R $"(ER PURP$&E&
Be it enacted by the Senate and House of
Representatives of the Philippines in
Congress assembled:
&E"I$# -. Presidential )e9ree #o. ,-.,
as a:ended, is here;y further a:ended to
read as follows<
1'E#ER!L PR$=I&I$#&
1&E"I$# -. "his )e9ree shall ;e >nown
as ?"he Insuran9e ode@.
1&E. .. /henever used in this ode, the
following ter:s shall have the resAe9tive
:eanings hereinafter set forth or indi9ated,
unless the 9onteBt otherwise reCuires<
1DaE ! contract of insurance is an agree:ent
where;y one underta>es for a 9onsideration
to inde:nify another against loss, da:age or
lia;ility arising fro: an un>nown or
9ontingent event.
1! 9ontra9t of suretyshiA shall ;e dee:ed to
;e an insuran9e 9ontra9t, within the :eaning
of this ode, only if :ade ;y a surety who
or whi9h, as su9h, is doing an insuran9e
;usiness as hereinafter Arovided.
1D;E "he ter: doing an insurance business
or transacting an insurance business, within
the :eaning of this ode, shall in9lude<
1D-E Ma>ing or AroAosing to :a>e, as
insurer, any insuran9e 9ontra9tF
1D.E Ma>ing or AroAosing to :a>e, as
surety, any 9ontra9t of suretyshiA as a
vo9ation and not as :erely in9idental to any
other legiti:ate ;usiness or a9tivity of the
suretyF
1DGE )oing any >ind of ;usiness, in9luding a
reinsuran9e ;usiness, sAe9ifi9ally re9ogniHed
as 9onstituting the doing of an insuran9e
;usiness within the :eaning of this odeF
1D3E )oing or AroAosing to do any ;usiness
in su;stan9e eCuivalent to any of the
foregoing in a :anner designed to evade the
Arovisions of this ode.
1In the aAAli9ation of the Arovisions of this
ode, the fa9t that no Arofit is derived fro:
the :a>ing of insuran9e 9ontra9ts,
agree:ents or transa9tions or that no
seAarate or dire9t 9onsideration is re9eived
therefor, shall not ;e dee:ed 9on9lusive to
show that the :a>ing thereof does not
9onstitute the doing or transa9ting of an
insuran9e ;usiness.
1D9E !s used in this ode, the ter:
Commissioner :eans the Insurance
Commissioner.
1(!P"ER I
1"(E $#"R!" $+ I#&UR!#E
1"I"LE -
1/(!" M!* BE I#&URE)
1&E. G. !ny 9ontingent or un>nown event,
whether Aast or future, whi9h :ay da:nify a
Aerson having an insura;le interest, or 9reate
a lia;ility against hi:, :ay ;e insured
against, su;Ie9t to the Arovisions of this
9haAter.
1"he 9onsent of the sAouse is not ne9essary
for the validity of an insuran9e Aoli9y ta>en
out ;y a :arried Aerson on his or her life or
that of his or her 9hildren.
1!ll rights, title and interest in the Aoli9y of
insuran9e ta>en out ;y an original owner on
the life or health of the Aerson insured shall
auto:ati9ally vest in the latter uAon the
death of the original owner, unless otherwise
Arovided for in the Aoli9y.
1&E. 3. "he Are9eding se9tion does not
authoriHe an insuran9e for or against the
drawing of any lottery, or for or against any
9han9e or ti9>et in a lottery drawing a AriHe.
1&E. 6. !ll >inds of insuran9e are su;Ie9t
to the Arovisions of this 9haAter so far as the
Arovisions 9an aAAly.
1"I"LE .
1P!R"IE& "$ "(E $#"R!"
1&E. ,. Every 9orAoration, AartnershiA, or
asso9iation, duly authoriHed to transa9t
insuran9e ;usiness as elsewhere Arovided in
this ode, :ay ;e an insurer.
1&E. 8. !nyone eB9eAt a Au;li9 ene:y
:ay ;e insured.
1&E. 4. Unless the Aoli9y otherwise
Arovides, where a :ortgagor of AroAerty
effe9ts insuran9e in his own na:e Aroviding
that the loss shall ;e Aaya;le to the
:ortgagee, or assigns a Aoli9y of insuran9e
to a :ortgagee, the insuran9e is dee:ed to
;e uAon the interest of the :ortgagor, who
does not 9ease to ;e a Aarty to the original
9ontra9t, and any a9t of his, Arior to the loss,
whi9h would otherwise avoid the insuran9e,
will have the sa:e effe9t, although the
AroAerty is in the hands of the :ortgagee,
;ut any a9t whi9h, under the 9ontra9t of
insuran9e, is to ;e Aerfor:ed ;y the
:ortgagor, :ay ;e Aerfor:ed ;y the
:ortgagee therein na:ed, with the sa:e
effe9t as if it had ;een Aerfor:ed ;y the
:ortgagor.
1&E. 7. If an insurer assents to the transfer
of an insuran9e fro: a :ortgagor to a
:ortgagee, and, at the ti:e of his assent,
i:Aoses further o;ligations on the assignee,
:a>ing a new 9ontra9t with hi:, the a9ts of
the :ortgagor 9annot affe9t the rights of
said assignee.
1"I"LE G
1I#&UR!BLE I#"ERE&"
1&E. -5. Every Aerson has an insura;le
interest in the life and health<
1DaE $f hi:self, of his sAouse and of his
9hildrenF
1D;E $f any Aerson on who: he deAends
wholly or in Aart for edu9ation or suAAort, or
in who: he has a Ae9uniary interestF
1D9E $f any Aerson under a legal o;ligation
to hi: for the Aay:ent of :oney, or
resAe9ting AroAerty or servi9es, of whi9h
death or illness :ight delay or Arevent the
Aerfor:an9eF and
1DdE $f any Aerson uAon whose life any
estate or interest vested in hi: deAends.
1&E. --. "he insured shall have the right to
9hange the ;enefi9iary he designated in the
Aoli9y, unless he has eBAressly waived this
right in said Aoli9y. #otwithstanding the
foregoing, in the event the insured does not
9hange the ;enefi9iary during his lifeti:e,
the designation shall ;e dee:ed irrevo9a;le.
1&E. -.. "he interest of a ;enefi9iary in a
life insuran9e Aoli9y shall ;e forfeited when
the ;enefi9iary is the Arin9iAal, a99o:Ali9e,
or a99essory in willfully ;ringing a;out the
death of the insured. In su9h a 9ase, the
share forfeited shall Aass on to the other
;enefi9iaries, unless otherwise disCualified.
In the a;sen9e of other ;enefi9iaries, the
Aro9eeds shall ;e Aaid in a99ordan9e with
the Aoli9y 9ontra9t. If the Aoli9y 9ontra9t is
silent, the Aro9eeds shall ;e Aaid to the
estate of the insured.
1&E. -G. Every interest in AroAerty,
whether real or Aersonal, or any relation
thereto, or lia;ility in resAe9t thereof, of
su9h nature that a 9onte:Alated Aeril :ight
dire9tly da:nify the insured, is an insura;le
interest.
1&E. -3. !n insura;le interest in AroAerty
:ay 9onsist in<
1DaE !n eBisting interestF
1D;E !n in9hoate interest founded on an
eBisting interestF or
1D9E !n eBAe9tan9y, 9ouAled with an
eBisting interest in that out of whi9h the
eBAe9tan9y arises.
1&E. -6. ! 9arrier or deAository of any
>ind has an insura;le interest in a thing held
;y hi: as su9h, to the eBtent of his lia;ility
;ut not to eB9eed the value thereof.
1&E. -,. ! :ere 9ontingent or eBAe9tant
interest in any thing, not founded on an
a9tual right to the thing, nor uAon any valid
9ontra9t for it, is not insura;le.
1&E. -8. "he :easure of an insura;le
interest in AroAerty is the eBtent to whi9h the
insured :ight ;e da:nified ;y loss or inIury
thereof.
1&E. -4. #o 9ontra9t or Aoli9y of insuran9e
on AroAerty shall ;e enfor9ea;le eB9eAt for
the ;enefit of so:e Aerson having an
insura;le interest in the AroAerty insured.
1&E. -7. !n interest in AroAerty insured
:ust eBist when the insuran9e ta>es effe9t,
and when the loss o99urs, ;ut need not eBist
in the :eanti:eF and interest in the life or
health of a Aerson insured :ust eBist when
the insuran9e ta>es effe9t, ;ut need not eBist
thereafter or when the loss o99urs.
1&E. .5. EB9eAt in the 9ases sAe9ified in
the neBt four se9tions, and in the 9ases of
life, a99ident, and health insuran9e, a 9hange
of interest in any Aart of a thing insured
una99o:Aanied ;y a 9orresAonding 9hange
of interest in the insuran9e, susAends the
insuran9e to an eCuivalent eBtent, until the
interest in the thing and the interest in the
insuran9e are vested in the sa:e Aerson.
1&E. .-. ! 9hange of interest in a thing
insured, after the o99urren9e of an inIury
whi9h results in a loss, does not affe9t the
right of the insured to inde:nity for the loss.
1&E. ... ! 9hange of interest in one or
:ore of several distin9t things, seAarately
insured ;y one Aoli9y, does not avoid the
insuran9e as to the others.
1&E. .G. ! 9hange of interest, ;y will or
su99ession, on the death of the insured, does
not avoid an insuran9eF and his interest in
the insuran9e Aasses to the Aerson ta>ing his
interest in the thing insured.
1&E. .3. ! transfer of interest ;y one of
several Aartners, Ioint owners, or owners in
9o::on, who are Iointly insured, to the
others, does not avoid an insuran9e even
though it has ;een agreed that the insuran9e
shall 9ease uAon an alienation of the thing
insured.
1&E. .6. Every stiAulation in a Aoli9y of
insuran9e for the Aay:ent of loss whether
the Aerson insured has or has not any interest
in the AroAerty insured, or that the Aoli9y
shall ;e re9eived as Aroof of su9h interest,
and every Aoli9y eBe9uted ;y way of ga:ing
or wagering, is void.
1"I"LE 3
1$#E!LME#"
1&E. .,. ! negle9t to 9o::uni9ate that
whi9h a Aarty >nows and ought to
9o::uni9ate, is 9alled a 9on9eal:ent.
1&E. .8. ! 9on9eal:ent whether
intentional or unintentional entitles the
inIured Aarty to res9ind a 9ontra9t of
insuran9e.
1&E. .4. Ea9h Aarty to a 9ontra9t of
insuran9e :ust 9o::uni9ate to the other, in
good faith, all fa9ts within his >nowledge
whi9h are :aterial to the 9ontra9t and as to
whi9h he :a>es no warranty, and whi9h the
other has not the :eans of as9ertaining.
1&E. .7. !n intentional and fraudulent
o:ission, on the Aart of one insured, to
9o::uni9ate infor:ation of :atters Aroving
or tending to Arove the falsity of a warranty,
entitles the insurer to res9ind.
1&E. G5. #either Aarty to a 9ontra9t of
insuran9e is ;ound to 9o::uni9ate
infor:ation of the :atters following, eB9eAt
in answer to the inCuiries of the other<
1DaE "hose whi9h the other >nowsF
1D;E "hose whi9h, in the eBer9ise of ordinary
9are, the other ought to >now, and of whi9h
the for:er has no reason to suAAose hi:
ignorantF
1D9E "hose of whi9h the other waives
9o::uni9ationF
1DdE "hose whi9h Arove or tend to Arove the
eBisten9e of a ris> eB9luded ;y a warranty,
and whi9h are not otherwise :aterialF and
1DeE "hose whi9h relate to a ris> eB9eAted
fro: the Aoli9y and whi9h are not otherwise
:aterial.
1&E. G-. Materiality is to ;e deter:ined
not ;y the event, ;ut solely ;y the Aro;a;le
and reasona;le influen9e of the fa9ts uAon
the Aarty to who: the 9o::uni9ation is
due, in for:ing his esti:ate of the
disadvantages of the AroAosed 9ontra9t, or in
:a>ing his inCuiries.
1&E. G.. Ea9h Aarty to a 9ontra9t of
insuran9e is ;ound to >now all the general
9auses whi9h are oAen to his inCuiry, eCually
with that of the other, and whi9h :ay affe9t
the Aoliti9al or :aterial Aerils 9onte:AlatedF
and all general usages of trade.
1&E. GG. "he right to infor:ation of
:aterial fa9ts :ay ;e waived, either ;y the
ter:s of insuran9e or ;y negle9t to :a>e
inCuiry as to su9h fa9ts, where they are
distin9tly i:Alied in other fa9ts of whi9h
infor:ation is 9o::uni9ated.
1&E. G3. Infor:ation of the nature or
a:ount of the interest of one insured need
not ;e 9o::uni9ated unless in answer to an
inCuiry, eB9eAt as Ares9ri;ed ;y &e9tion 6-.
1&E. G6. #either Aarty to a 9ontra9t of
insuran9e is ;ound to 9o::uni9ate, even
uAon inCuiry, infor:ation of his own
Iudg:ent uAon the :atters in Cuestion.
1"I"LE 6
1REPRE&E#"!"I$#
1&E. G,. ! reAresentation :ay ;e oral or
written.
1&E. G8. ! reAresentation :ay ;e :ade at
the ti:e of, or ;efore, issuan9e of the Aoli9y.
1&E. G4. "he language of a reAresentation
is to ;e interAreted ;y the sa:e rules as the
language of 9ontra9ts in general.
1&E. G7. ! reAresentation as to the future
is to ;e dee:ed a Aro:ise, unless it aAAears
that it was :erely a state:ent of ;elief or
eBAe9tation.
1&E. 35. ! reAresentation 9annot Cualify
an eBAress Arovision in a 9ontra9t of
insuran9e, ;ut it :ay Cualify an i:Alied
warranty.
1&E. 3-. ! reAresentation :ay ;e altered
or withdrawn ;efore the insuran9e is
effe9ted, ;ut not afterwards.
1&E. 3.. ! reAresentation :ust ;e
Aresu:ed to refer to the date on whi9h the
9ontra9t goes into effe9t.
1&E. 3G. /hen a Aerson insured has no
Aersonal >nowledge of a fa9t, he :ay
nevertheless reAeat infor:ation whi9h he
has uAon the su;Ie9t, and whi9h he ;elieves
to ;e true, with the eBAlanation that he does
so on the infor:ation of othersF or he :ay
su;:it the infor:ation, in its whole eBtent,
to the insurerF and in neither 9ase is he
resAonsi;le for its truth, unless it Aro9eeds
fro: an agent of the insured, whose duty it
is to give the infor:ation.
1&E. 33. ! reAresentation is to ;e dee:ed
false when the fa9ts fail to 9orresAond with
its assertions or stiAulations.
1&E. 36. If a reAresentation is false in a
:aterial Aoint, whether affir:ative or
Aro:issory, the inIured Aarty is entitled to
res9ind the 9ontra9t fro: the ti:e when the
reAresentation ;e9o:es false.
1&E. 3,. "he :ateriality of a
reAresentation is deter:ined ;y the sa:e
rules as the :ateriality of a 9on9eal:ent.
1&E. 38. "he Arovisions of this 9haAter
aAAly as well to a :odifi9ation of a 9ontra9t
of insuran9e as to its original for:ation.
1&E. 34. /henever a right to res9ind a
9ontra9t of insuran9e is given to the insurer
;y any Arovision of this 9haAter, su9h right
:ust ;e eBer9ised Arevious to the
9o::en9e:ent of an a9tion on the 9ontra9t.
1!fter a Aoli9y of life insuran9e :ade
Aaya;le on the death of the insured shall
have ;een in for9e during the lifeti:e of the
insured for a Aeriod of two D.E years fro:
the date of its issue or of its last
reinstate:ent, the insurer 9annot Arove that
the Aoli9y is void ab initio or is res9inda;le
;y reason of the fraudulent 9on9eal:ent or
:isreAresentation of the insured or his
agent.
1"I"LE ,
1"(E P$LI*
1&E. 37. "he written instru:ent in whi9h a
9ontra9t of insuran9e is set forth, is 9alled a
Aoli9y of insuran9e.
1&E. 65. "he Aoli9y shall ;e in Arinted
for: whi9h :ay 9ontain ;lan> sAa9esF and
any word, Ahrase, 9lause, :ar>, sign,
sy:;ol, signature, nu:;er, or word
ne9essary to 9o:Alete the 9ontra9t of
insuran9e shall ;e written on the ;lan>
sAa9es Arovided therein.
1!ny rider, 9lause, warranty or endorse:ent
AurAorting to ;e Aart of the 9ontra9t of
insuran9e and whi9h is Aasted or atta9hed to
said Aoli9y is not ;inding on the insured,
unless the des9riAtive title or na:e of the
rider, 9lause, warranty or endorse:ent is
also :entioned and written on the ;lan>
sAa9es Arovided in the Aoli9y.
1Unless aAAlied for ;y the insured or owner,
any rider, 9lause, warranty or endorse:ent
issued after the original Aoli9y shall ;e
9ountersigned ;y the insured or owner,
whi9h 9ountersignature shall ;e ta>en as his
agree:ent to the 9ontents of su9h rider,
9lause, warranty or endorse:ent.
1#otwithstanding the foregoing, the Aoli9y
:ay ;e in ele9troni9 for: su;Ie9t to the
Aertinent Arovisions of ReAu;li9 !9t #o.
487., otherwise >nown as the ?Ele9troni9
o::er9e !9t@ and to su9h rules and
regulations as :ay ;e Ares9ri;ed ;y the
o::issioner.
1&E. 6-. ! Aoli9y of insuran9e :ust
sAe9ify<
1DaE "he Aarties ;etween who: the 9ontra9t
is :adeF
1D;E "he a:ount to ;e insured eB9eAt in the
9ases of oAen or running Aoli9iesF
1D9E "he Are:iu:, or if the insuran9e is of a
9hara9ter where the eBa9t Are:iu: is only
deter:ina;le uAon the ter:ination of the
9ontra9t, a state:ent of the ;asis and rates
uAon whi9h the final Are:iu: is to ;e
deter:inedF
1DdE "he AroAerty or life insuredF
1DeE "he interest of the insured in AroAerty
insured, if he is not the a;solute owner
thereofF
1DfE "he ris>s insured againstF and
1DgE "he Aeriod during whi9h the insuran9e
is to 9ontinue.
1&E. 6.. over notes :ay ;e issued to
;ind insuran9e te:Aorarily Aending the
issuan9e of the Aoli9y. /ithin siBty D,5E
days after issue of a 9over note, a Aoli9y
shall ;e issued in lieu thereof, in9luding
within its ter:s the identi9al insuran9e
;ound under the 9over note and the Are:iu:
therefor.
1over notes :ay ;e eBtended or renewed
;eyond su9h siBty D,5E days with the written
aAAroval of the o::issioner if he
deter:ines that su9h eBtension is not
9ontrary to and is not for the AurAose of
violating any Arovisions of this ode. "he
o::issioner :ay Aro:ulgate rules and
regulations governing su9h eBtensions for
the AurAose of Areventing su9h violations
and :ay ;y su9h rules and regulations
disAense with the reCuire:ent of written
aAAroval ;y hi: in the 9ase of eBtension in
9o:Alian9e with su9h rules and regulations.
1&E. 6G. "he insuran9e Aro9eeds shall ;e
aAAlied eB9lusively to the AroAer interest of
the Aerson in whose na:e or for whose
;enefit it is :ade unless otherwise sAe9ified
in the Aoli9y.
1&E. 63. /hen an insuran9e 9ontra9t is
eBe9uted with an agent or trustee as the
insured, the fa9t that his Arin9iAal or
;enefi9iary is the real Aarty in interest :ay
;e indi9ated ;y des9ri;ing the insured as
agent or trustee, or ;y other general words in
the Aoli9y.
1&E. 66. "o render an insuran9e effe9ted
;y one Aartner or Aart-owner, aAAli9a;le to
the interest of his 9o-Aartners or other Aart-
owners, it is ne9essary that the ter:s of the
Aoli9y should ;e su9h as are aAAli9a;le to
the Ioint or 9o::on interest.
1&E. 6,. /hen the des9riAtion of the
insured in a Aoli9y is so general that it :ay
9o:Arehend any Aerson or any 9lass of
Aersons, only he who 9an show that it was
intended to in9lude hi:, 9an 9lai: the
;enefit of the Aoli9y.
1&E. 68. ! Aoli9y :ay ;e so fra:ed that it
will inure to the ;enefit of who:soever,
during the 9ontinuan9e of the ris>, :ay
;e9o:e the owner of the interest insured.
1&E. 64. "he :ere transfer of a thing
insured does not transfer the Aoli9y, ;ut
susAends it until the sa:e Aerson ;e9o:es
the owner of ;oth the Aoli9y and the thing
insured.
1&E. 67. ! Aoli9y is either oAen, valued or
running.
1&E. ,5. !n oAen Aoli9y is one in whi9h
the value of the thing insured is not agreed
uAon, and the a:ount of the insuran9e
:erely reAresents the insurer@s :aBi:u:
lia;ility. "he value of su9h thing insured
shall ;e as9ertained at the ti:e of the loss.
1&E. ,-. ! valued Aoli9y is one whi9h
eBAresses on its fa9e an agree:ent that the
thing insured shall ;e valued at a sAe9ifi9
su:.
1&E. ,.. ! running Aoli9y is one whi9h
9onte:Alates su99essive insuran9es, and
whi9h Arovides that the o;Ie9t of the Aoli9y
:ay ;e fro: ti:e to ti:e defined, esAe9ially
as to the su;Ie9ts of insuran9e, ;y additional
state:ents or indorse:ents.
1&E. ,G. ! 9ondition, stiAulation, or
agree:ent in any Aoli9y of insuran9e,
li:iting the ti:e for 9o::en9ing an a9tion
thereunder to a Aeriod of less than one D-E
year fro: the ti:e when the 9ause of a9tion
a99rues, is void.
1&E. ,3. #o Aoli9y of insuran9e other than
life shall ;e 9an9elled ;y the insurer eB9eAt
uAon Arior noti9e thereof to the insured, and
no noti9e of 9an9ellation shall ;e effe9tive
unless it is ;ased on the o99urren9e, after the
effe9tive date of the Aoli9y, of one or :ore
of the following<
1DaE #onAay:ent of Are:iu:F
1D;E onvi9tion of a 9ri:e arising out of a9ts
in9reasing the haHard insured againstF
1D9E )is9overy of fraud or :aterial
:isreAresentationF
1DdE )is9overy of willful or re9>less a9ts or
o:issions in9reasing the haHard insured
againstF
1DeE Physi9al 9hanges in the AroAerty insured
whi9h result in the AroAerty ;e9o:ing
uninsura;leF
1DfE )is9overy of other insuran9e 9overage
that :a>es the total insuran9e in eB9ess of
the value of the AroAerty insuredF or
1DgE ! deter:ination ;y the o::issioner
that the 9ontinuation of the Aoli9y would
violate or would Ala9e the insurer in
violation of this ode.
1&E. ,6. !ll noti9es of 9an9ellation
:entioned in the Are9eding se9tion shall ;e
in writing, :ailed or delivered to the na:ed
insured at the address shown in the Aoli9y,
or to his ;ro>er Arovided the ;ro>er is
authoriHed in writing ;y the Aoli9y owner to
re9eive the noti9e of 9an9ellation on his
;ehalf, and shall state<
1DaE /hi9h of the grounds set forth in
&e9tion ,3 is relied uAonF and
1D;E "hat, uAon written reCuest of the na:ed
insured, the insurer will furnish the fa9ts on
whi9h the 9an9ellation is ;ased.
1&E. ,,. In 9ase of insuran9e other than
life, unless the insurer at least forty-five D36E
days in advan9e of the end of the Aoli9y
Aeriod :ails or delivers to the na:ed
insured at the address shown in the Aoli9y
noti9e of its intention not to renew the Aoli9y
or to 9ondition its renewal uAon redu9tion of
li:its or eli:ination of 9overages, the
na:ed insured shall ;e entitled to renew the
Aoli9y uAon Aay:ent of the Are:iu: due on
the effe9tive date of the renewal. !ny Aoli9y
written for a ter: of less than one D-E year
shall ;e 9onsidered as if written for a ter: of
one D-E year. !ny Aoli9y written for a ter:
longer than one D-E year or any Aoli9y with
no fiBed eBAiration date shall ;e 9onsidered
as if written for su99essive Aoli9y Aeriods or
ter:s of one D-E year.
1"I"LE 8
1/!RR!#"IE&
1&E. ,8. ! warranty is either eBAressed or
i:Alied.
1&E. ,4. ! warranty :ay relate to the Aast,
the Aresent, the future, or to any or all of
these.
1&E. ,7. #o Aarti9ular for: of words is
ne9essary to 9reate a warranty.
1&E. 85. /ithout AreIudi9e to &e9tion 6-,
every eBAress warranty, :ade at or ;efore
the eBe9ution of a Aoli9y, :ust ;e 9ontained
in the Aoli9y itself, or in another instru:ent
signed ;y the insured and referred to in the
Aoli9y as :a>ing a Aart of it.
1&E. 8-. ! state:ent in a Aoli9y, of a
:atter relating to the Aerson or thing
insured, or to the ris>, as fa9t, is an eBAress
warranty thereof.
1&E. 8.. ! state:ent in a Aoli9y, whi9h
i:Aarts that it is intended to do or not to do
a thing whi9h :aterially affe9ts the ris>, is a
warranty that su9h a9t or o:ission shall ta>e
Ala9e.
1&E. 8G. /hen, ;efore the ti:e arrives for
the Aerfor:an9e of a warranty relating to the
future, a loss insured against haAAens, or
Aerfor:an9e ;e9o:es unlawful at the Ala9e
of the 9ontra9t, or i:Aossi;le, the o:ission
to fulfill the warranty does not avoid the
Aoli9y.
1&E. 83. "he violation of a :aterial
warranty, or other :aterial Arovision of a
Aoli9y, on the Aart of either Aarty thereto,
entitles the other to res9ind.
1&E. 86. ! Aoli9y :ay de9lare that a
violation of sAe9ified Arovisions thereof
shall avoid it, otherwise the ;rea9h of an
i::aterial Arovision does not avoid the
Aoli9y.
1&E. 8,. ! ;rea9h of warranty without
fraud :erely eBonerates an insurer fro: the
ti:e that it o99urs, or where it is ;ro>en in
its in9eAtion, Arevents the Aoli9y fro:
atta9hing to the ris>.
1"I"LE 4
1PREMIUM
1&E. 88. !n insurer is entitled to Aay:ent
of the Are:iu: as soon as the thing insured
is eBAosed to the Aeril insured against.
#otwithstanding any agree:ent to the
9ontrary, no Aoli9y or 9ontra9t of insuran9e
issued ;y an insuran9e 9o:Aany is valid and
;inding unless and until the Are:iu: thereof
has ;een Aaid, eB9eAt in the 9ase of a life or
an industrial life Aoli9y whenever the gra9e
Aeriod Arovision aAAlies, or whenever under
the ;ro>er and agen9y agree:ents with duly
li9ensed inter:ediaries, a ninety D75E-day
9redit eBtension is given. #o 9redit
eBtension to a duly li9ensed inter:ediary
should eB9eed ninety D75E days fro: date of
issuan9e of the Aoli9y.
1&E. 84. E:Aloyees of the ReAu;li9 of the
PhiliAAines, in9luding its Aoliti9al
su;divisions and instru:entalities, and
govern:ent-owned or -9ontrolled
9orAorations, :ay Aay their insuran9e
Are:iu:s and loan o;ligations through
salary dedu9tion< Provided, "hat the
treasurer, 9ashier, Aay:aster or offi9ial of
the entity e:Aloying the govern:ent
e:Aloyee is authoriHed, notwithstanding the
Arovisions of any eBisting law, rules and
regulations to the 9ontrary, to :a>e
dedu9tions fro: the salary, wage or in9o:e
of the latter Aursuant to the agree:ent
;etween the insurer and the govern:ent
e:Aloyee and to re:it su9h dedu9tions to
the insurer 9on9erned, and 9olle9t su9h
reasona;le fee for its servi9es.
1&E. 87. !n a9>nowledg:ent in a Aoli9y
or 9ontra9t of insuran9e or the re9eiAt of
Are:iu: is 9on9lusive eviden9e of its
Aay:ent, so far as to :a>e the Aoli9y
;inding, notwithstanding any stiAulation
therein that it shall not ;e ;inding until the
Are:iu: is a9tually Aaid.
1&E. 45. ! Aerson insured is entitled to a
return of Are:iu:, as follows<
1DaE "o the whole Are:iu: if no Aart of his
interest in the thing insured ;e eBAosed to
any of the Aerils insured againstF
1D;E /here the insuran9e is :ade for a
definite Aeriod of ti:e and the insured
surrenders his Aoli9y, to su9h Aortion of the
Are:iu: as 9orresAonds with the uneBAired
ti:e, at a Aro rata rate, unless a short Aeriod
rate has ;een agreed uAon and aAAears on
the fa9e of the Aoli9y, after dedu9ting fro:
the whole Are:iu: any 9lai: for loss or
da:age under the Aoli9y whi9h has
Areviously a99rued< Provided, "hat no
holder of a life insuran9e Aoli9y :ay avail
hi:self of the Arivileges of this AaragraAh
without suffi9ient 9ause as otherwise
Arovided ;y law.
1&E. 4-. If a Aeril insured against has
eBisted, and the insurer has ;een lia;le for
any Aeriod, however short, the insured is not
entitled to return of Are:iu:s, so far as that
Aarti9ular ris> is 9on9erned.
1&E. 4.. ! Aerson insured is entitled to a
return of the Are:iu: when the 9ontra9t is
voida;le, and su;seCuently annulled under
the Arovisions of the ivil odeF or on
a99ount of the fraud or :isreAresentation of
the insurer, or of his agent, or on a99ount of
fa9ts, or the eBisten9e of whi9h the insured
was ignorant of without his faultF or when
;y any default of the insured other than
a9tual fraud, the insurer never in9urred any
lia;ility under the Aoli9y.
1! Aerson insured is not entitled to a return
of Are:iu: if the Aoli9y is annulled,
res9inded or if a 9lai: is denied ;y reason of
fraud.
1&E. 4G. In 9ase of an over insuran9e ;y
several insurers other than life, the insured is
entitled to a rata;le return of the Are:iu:,
AroAortioned to the a:ount ;y whi9h the
aggregate su: insured in all the Aoli9ies
eB9eeds the insura;le value of the thing at
ris>.
1&E. 43. !n insurer :ay 9ontra9t and
a99eAt Aay:ents, in addition to regular
Are:iu:, for the AurAose of Aaying future
Are:iu:s on the Aoli9y or to in9rease the
;enefits thereof.
1"I"LE 7
1L$&&
1&E. 46. !n agree:ent not to transfer the
9lai: of the insured against the insurer after
the loss has haAAened, is void if :ade ;efore
the loss eB9eAt as otherwise Arovided in the
9ase of life insuran9e.
1&E. 4,. Unless otherwise Arovided ;y the
Aoli9y, an insurer is lia;le for a loss of
whi9h a Aeril insured against was the
AroBi:ate 9ause, although a Aeril not
9onte:Alated ;y the 9ontra9t :ay have ;een
a re:ote 9ause of the lossF ;ut he is not
lia;le for a loss of whi9h the Aeril insured
against was only a re:ote 9ause.
1&E. 48. !n insurer is lia;le where the
thing insured is res9ued fro: a Aeril insured
against that would otherwise have 9aused a
loss, if, in the 9ourse of su9h res9ue, the
thing is eBAosed to a Aeril not insured
against, whi9h Aer:anently deArives the
insured of its Aossession, in whole or in AartF
or where a loss is 9aused ;y efforts to res9ue
the thing insured fro: a Aeril insured
against.
1&E. 44. /here a Aeril is esAe9ially
eB9eAted in a 9ontra9t of insuran9e, a loss,
whi9h would not have o99urred ;ut for su9h
Aeril, is there;y eB9eAted although the
i::ediate 9ause of the loss was a Aeril
whi9h was not eB9eAted.
1&E. 47. !n insurer is not lia;le for a loss
9aused ;y the willful a9t or through the
9onnivan9e of the insuredF ;ut he is not
eBonerated ;y the negligen9e of the insured,
or of the insuran9e agents or others.
1"I"LE -5
1#$"IE $+ L$&&
1&E. 75. In 9ase of loss uAon an insuran9e
against fire, an insurer is eBonerated, if
written noti9e thereof ;e not given to hi: ;y
an insured, or so:e Aerson entitled to the
;enefit of the insuran9e, without
unne9essary delay. +or other non-life
insuran9e, the o::issioner :ay sAe9ify
the Aeriod for the su;:ission of the noti9e of
loss.
1&E. 7-. /hen a Areli:inary Aroof of loss
is reCuired ;y a Aoli9y, the insured is not
;ound to give su9h Aroof as would ;e
ne9essary in a 9ourt of Iusti9eF ;ut it is
suffi9ient for hi: to give the ;est eviden9e
whi9h he has in his Aower at the ti:e.
1&E. 7.. !ll defe9ts in a noti9e of loss, or
in Areli:inary Aroof thereof, whi9h the
insured :ight re:edy, and whi9h the insurer
o:its to sAe9ify to hi:, without unne9essary
delay, as grounds of o;Ie9tion, are waived.
1&E. 7G. )elay in the Aresentation to an
insurer of noti9e or Aroof of loss is waived if
9aused ;y any a9t of hi:, or if he o:its to
ta>e o;Ie9tion Aro:Atly and sAe9ifi9ally
uAon that ground.
1&E. 73. If the Aoli9y reCuires, ;y way of
Areli:inary Aroof of loss, the 9ertifi9ate or
testi:ony of a Aerson other than the insured,
it is suffi9ient for the insured to use
reasona;le diligen9e to Aro9ure it, and in
9ase of the refusal of su9h Aerson to give it,
then to furnish reasona;le eviden9e to the
insurer that su9h refusal was not indu9ed ;y
any Iust grounds of dis;elief in the fa9ts
ne9essary to ;e 9ertified or testified.
1"I"LE --
1)$UBLE I#&UR!#E
1&E. 76. ! dou;le insuran9e eBists where
the sa:e Aerson is insured ;y several
insurers seAarately in resAe9t to the sa:e
su;Ie9t and interest.
1&E. 7,. /here the insured in a Aoli9y
other than life is over insured ;y dou;le
insuran9e<
1DaE "he insured, unless the Aoli9y otherwise
Arovides, :ay 9lai: Aay:ent fro: the
insurers in su9h order as he :ay sele9t, uA to
the a:ount for whi9h the insurers are
severally lia;le under their resAe9tive
9ontra9tsF
1D;E /here the Aoli9y under whi9h the
insured 9lai:s is a valued Aoli9y, any su:
re9eived ;y hi: under any other Aoli9y shall
;e dedu9ted fro: the value of the Aoli9y
without regard to the a9tual value of the
su;Ie9t :atter insuredF
1D9E /here the Aoli9y under whi9h the
insured 9lai:s is an unvalued Aoli9y, any
su: re9eived ;y hi: under any Aoli9y shall
;e dedu9ted against the full insura;le value,
for any su: re9eived ;y hi: under any
Aoli9yF
1DdE /here the insured re9eives any su: in
eB9ess of the valuation in the 9ase of valued
Aoli9ies, or of the insura;le value in the 9ase
of unvalued Aoli9ies, he :ust hold su9h su:
in trust for the insurers, a99ording to their
right of 9ontri;ution a:ong the:selvesF
1DeE Ea9h insurer is ;ound, as ;etween
hi:self and the other insurers, to 9ontri;ute
rata;ly to the loss in AroAortion to the
a:ount for whi9h he is lia;le under his
9ontra9t.
1"I"LE -.
1REI#&UR!#E
1&E. 78. ! 9ontra9t of reinsuran9e is one
;y whi9h an insurer Aro9ures a third Aerson
to insure hi: against loss or lia;ility ;y
reason of su9h original insuran9e.
1&E. 74. /here an insurer o;tains
reinsuran9e, eB9eAt under auto:ati9
reinsuran9e treaties, he :ust 9o::uni9ate
all the reAresentations of the original
insured, and also all the >nowledge and
infor:ation he Aossesses, whether
Areviously or su;seCuently a9Cuired, whi9h
are :aterial to the ris>.
1&E. 77. ! reinsuran9e is Aresu:ed to ;e a
9ontra9t of inde:nity against lia;ility, and
not :erely against da:age.
1&E. -55. "he original insured has no
interest in a 9ontra9t of reinsuran9e.
1(!P"ER II
1L!&&E& $+ I#&UR!#E
1"I"LE I
1M!RI#E I#&UR!#E
1&UB-"I"LE --!
1)E+I#I"I$#
1&E. -5-. Marine Insuran9e in9ludes<
1DaE Insuran9e against loss of or da:age to<
1D-E =essels, 9raft, air9raft, vehi9les, goods,
freights, 9argoes, :er9handise, effe9ts,
dis;urse:ents, Arofits, :oneys, se9urities,
9hoses in a9tion, instru:ents of de;ts,
valua;le AaAers, ;otto:ry, and resAondentia
interests and all other >inds of AroAerty and
interests therein, in resAe9t to, aAAertaining
to or in 9onne9tion with any and all ris>s or
Aerils of navigation, transit or transAortation,
or while ;eing asse:;led, Aa9>ed, 9rated,
;aled, 9o:Aressed or si:ilarly AreAared for
shiA:ent or while awaiting shiA:ent, or
during any delays, storage, transhiA:ent, or
reshiA:ent in9ident thereto, in9luding war
ris>s, :arine ;uilder@s ris>s, and all Aersonal
AroAerty floater ris>sF
1D.E Person or AroAerty in 9onne9tion with
or aAAertaining to a :arine, inland :arine,
transit or transAortation insuran9e, in9luding
lia;ility for loss of or da:age arising out of
or in 9onne9tion with the 9onstru9tion,
reAair, oAeration, :aintenan9e or use of the
su;Ie9t :atter of su9h insuran9e D;ut not
in9luding life insuran9e or surety ;onds nor
insuran9e against loss ;y reason of ;odily
inIury to any Aerson arising out of
ownershiA, :aintenan9e, or use of
auto:o;ilesEF
1DGE Pre9ious stones, Iewels, Iewelry,
Are9ious :etals, whether in 9ourse of
transAortation or otherwiseF and
1D3E Bridges, tunnels and other
instru:entalities of transAortation and
9o::uni9ation DeB9luding ;uildings, their
furniture and furnishings, fiBed 9ontents and
suAAlies held in storageEF Aiers, wharves,
do9>s and sliAs, and other aids to navigation
and transAortation, in9luding dry do9>s and
:arine railways, da:s and aAAurtenant
fa9ilities for the 9ontrol of waterways.
1D;E Marine protection and indemnity
insurance, :eaning insuran9e against, or
against legal lia;ility of the insured for loss,
da:age, or eBAense in9ident to ownershiA,
oAeration, 9hartering, :aintenan9e, use,
reAair, or 9onstru9tion of any vessel, 9raft or
instru:entality in use of o9ean or inland
waterways, in9luding lia;ility of the insured
for Aersonal inIury, illness or death or for
loss of or da:age to the AroAerty of another
Aerson.
1&UB-"I"LE --B
1I#&UR!BLE I#"ERE&"
1&E. -5.. "he owner of a shiA has in all
9ases an insura;le interest in it, even when it
has ;een 9hartered ;y one who 9ovenants to
Aay hi: its value in 9ase of loss< Provided,
"hat in this 9ase the insurer shall ;e lia;le
for only that Aart of the loss whi9h the
insured 9annot re9over fro: the 9harterer.
1&E. -5G. "he insura;le interest of the
owner of the shiA hyAothe9ated ;y ;otto:ry
is only the eB9ess of its value over the
a:ount se9ured ;y ;otto:ry.
1&E. -53. +reightage, in the sense of a
Aoli9y of :arine insuran9e, signifies all the
;enefits derived ;y the owner, either fro:
the 9hartering of the shiA or its e:Aloy:ent
for the 9arriage of his own goods or those of
others.
1&E. -56. "he owner of a shiA has an
insura;le interest in eBAe9ted freightage
whi9h a99ording to the ordinary and
Aro;a;le 9ourse of things he would have
earned ;ut for the intervention of a Aeril
insured against or other Aeril in9ident to the
voyage.
1&E. -5,. "he interest :entioned in the
last se9tion eBists, in 9ase of a 9harter Aarty,
when the shiA has ;ro>en ground on the
9hartered voyage. If a Ari9e is to ;e Aaid for
the 9arriage of goods it eBists when they are
a9tually on ;oard, or there is so:e 9ontra9t
for Autting the: on ;oard, and ;oth shiA and
goods are ready for the sAe9ified voyage.
1&E. -58. $ne who has an interest in the
thing fro: whi9h Arofits are eBAe9ted to
Aro9eed has an insura;le interest in the
Arofits.
1&E. -54. "he 9harterer of a shiA has an
insura;le interest in it, to the eBtent that he is
lia;le to ;e da:nified ;y its loss.
1&UB-"I"LE --
1$#E!LME#"
1&E. -57. In :arine insuran9e, ea9h Aarty
is ;ound to 9o::uni9ate, in addition to
what is reCuired ;y &e9tion .4, all the
infor:ation whi9h he Aossesses, :aterial to
the ris>, eB9eAt su9h as is :entioned in
&e9tion G5, and to state the eBa9t and whole
truth in relation to all :atters that he
reAresents, or uAon inCuiry dis9loses or
assu:es to dis9lose.
1&E. --5. In :arine insuran9e, infor:ation
of the ;elief or eBAe9tation of a third Aerson,
in referen9e to a :aterial fa9t, is :aterial.
1&E. ---. ! Aerson insured ;y a 9ontra9t
of :arine insuran9e is Aresu:ed to have
>nowledge, at the ti:e of insuring, of a Arior
loss, if the infor:ation :ight Aossi;ly have
rea9hed hi: in the usual :ode of
trans:ission and at the usual rate of
9o::uni9ation.
1&E. --.. ! 9on9eal:ent in a :arine
insuran9e, in resAe9t to any of the following
:atters, does not vitiate the entire 9ontra9t,
;ut :erely eBonerates the insurer fro: a
loss resulting fro: the ris> 9on9ealed<
1DaE "he national 9hara9ter of the insuredF
1D;E "he lia;ility of the thing insured to
9aAture and detentionF
1D9E "he lia;ility to seiHure fro: ;rea9h of
foreign laws of tradeF
1DdE "he want of ne9essary do9u:entsF and
1DeE "he use of false and si:ulated AaAers.
1&UB-"I"LE --)
1REPRE&E#"!"I$#
1&E. --G. If a reAresentation ;y a Aerson
insured ;y a 9ontra9t of :arine insuran9e, is
intentionally false in any :aterial resAe9t, or
in resAe9t of any fa9t on whi9h the 9hara9ter
and nature of the ris> deAends, the insurer
:ay res9ind the entire 9ontra9t.
1&E. --3. "he eventual falsity of a
reAresentation as to eBAe9tation does not, in
the a;sen9e of fraud, avoid a 9ontra9t of
:arine insuran9e.
1&UB-"I"LE --E
1IMPLIE) /!RR!#"IE&
1&E. --6. In every :arine insuran9e uAon
a shiA or freight, or freightage, or uAon any
thing whi9h is the su;Ie9t of :arine
insuran9e, a warranty is i:Alied that the shiA
is seaworthy.
1&E. --,. ! shiA is seaworthy when
reasona;ly fit to Aerfor: the servi9e and to
en9ounter the ordinary Aerils of the voyage
9onte:Alated ;y the Aarties to the Aoli9y.
1&E. --8. !n i:Alied warranty of
seaworthiness is 9o:Alied with if the shiA ;e
seaworthy at the ti:e of the 9o::en9e:ent
of the ris>, eB9eAt in the following 9ases<
1DaE /hen the insuran9e is :ade for a
sAe9ified length of ti:e, the i:Alied
warranty is not 9o:Alied with unless the
shiA ;e seaworthy at the 9o::en9e:ent of
every voyage it underta>es during that ti:eF
1D;E /hen the insuran9e is uAon the 9argo
whi9h, ;y the ter:s of the Aoli9y,
des9riAtion of the voyage, or esta;lished
9usto: of the trade, is to ;e transhiAAed at
an inter:ediate Aort, the i:Alied warranty is
not 9o:Alied with unless ea9h vessel uAon
whi9h the 9argo is shiAAed, or transhiAAed,
;e seaworthy at the 9o::en9e:ent of ea9h
Aarti9ular voyage.
1&E. --4. ! warranty of seaworthiness
eBtends not only to the 9ondition of the
stru9ture of the shiA itself, ;ut reCuires that
it ;e AroAerly laden, and Arovided with a
9o:Aetent :aster, a suffi9ient nu:;er of
9o:Aetent offi9ers and sea:en, and the
reCuisite aAAurtenan9es and eCuiA:ent, su9h
as ;allasts, 9a;les and an9hors, 9ordage and
sails, food, water, fuel and lights, and other
ne9essary or AroAer stores and i:Ale:ents
for the voyage.
1&E. --7. /here different Aortions of the
voyage 9onte:Alated ;y a Aoli9y differ in
resAe9t to the things reCuisite to :a>e the
shiA seaworthy therefor, a warranty of
seaworthiness is 9o:Alied with if, at the
9o::en9e:ent of ea9h Aortion, the shiA is
seaworthy with referen9e to that Aortion.
1&E. -.5. /hen the shiA ;e9o:es
unseaworthy during the voyage to whi9h an
insuran9e relates, an unreasona;le delay in
reAairing the defe9t eBonerates the insurer
on shiA or shiAowner@s interest fro: lia;ility
fro: any loss arising therefro:.
1&E. -.-. ! shiA whi9h is seaworthy for
the AurAose of an insuran9e uAon the shiA
:ay, nevertheless, ;y reason of ;eing
unfitted to re9eive the 9argo, ;e
unseaworthy for the AurAose of insuran9e
uAon the 9argo.
1&E. -... /here the nationality or
neutrality of a shiA or 9argo is eBAressly
warranted, it is i:Alied that the shiA will
9arry the reCuisite do9u:ents to show su9h
nationality or neutrality and that it will not
9arry any do9u:ents whi9h 9ast reasona;le
susAi9ion thereon.
1&UB-"I"LE --+
1"(E =$*!'E !#) )E=I!"I$#
1&E. -.G. /hen the voyage 9onte:Alated
;y a :arine insuran9e Aoli9y is des9ri;ed ;y
the Ala9es of ;eginning and ending, the
voyage insured is one whi9h 9onfor:s to the
9ourse of sailing fiBed ;y :er9antile usage
;etween those Ala9es.
1&E. -.3. If the 9ourse of sailing is not
fiBed ;y :er9antile usage, the voyage
insured ;y a :arine insuran9e Aoli9y is that
way ;etween the Ala9es sAe9ified, whi9h to a
:aster of ordinary s>ill and dis9retion,
would :ean the :ost natural, dire9t and
advantageous.
1&E. -.6. )eviation is a deAarture fro:
the 9ourse of the voyage insured, :entioned
in the last two D.E se9tions, or an
unreasona;le delay in Aursuing the voyage
or the 9o::en9e:ent of an entirely
different voyage.
1&E. -.,. ! deviation is AroAer<
1DaE /hen 9aused ;y 9ir9u:stan9es over
whi9h neither the :aster nor the owner of
the shiA has any 9ontrolF
1D;E /hen ne9essary to 9o:Aly with a
warranty, or to avoid a Aeril, whether or not
the Aeril is insured againstF
1D9E /hen :ade in good faith, and uAon
reasona;le grounds of ;elief in its ne9essity
to avoid a AerilF or
1DdE /hen :ade in good faith, for the
AurAose of saving hu:an life or relieving
another vessel in distress.
1&E. -.8. Every deviation not sAe9ified in
the last se9tion is i:AroAer.
1&E. -.4. !n insurer is not lia;le for any
loss haAAening to the thing insured
su;seCuent to an i:AroAer deviation.
1&UB-"I"LE --'
1L$&&
1&E. -.7. ! loss :ay ;e either total or
Aartial.
1&E. -G5. Every loss whi9h is not total is
Aartial.
1&E. -G-. ! total loss :ay ;e either a9tual
or 9onstru9tive.
1&E. -G.. !n a9tual total loss is 9aused ;y<
1DaE ! total destru9tion of the thing insuredF
1D;E "he irretrieva;le loss of the thing ;y
sin>ing, or ;y ;eing ;ro>en uAF
1D9E !ny da:age to the thing whi9h renders
it valueless to the owner for the AurAose for
whi9h he held itF or
1DdE !ny other event whi9h effe9tively
deArives the owner of the Aossession, at the
Aort of destination, of the thing insured.
1&E. -GG. ! 9onstru9tive total loss is one
whi9h gives to a Aerson insured a right to
a;andon, under &e9tion -3-.
1&E. -G3. !n a9tual loss :ay ;e Aresu:ed
fro: the 9ontinued a;sen9e of a shiA
without ;eing heard of. "he length of ti:e
whi9h is suffi9ient to raise this Aresu:Ation
deAends on the 9ir9u:stan9es of the 9ase.
1&E. -G6. /hen a shiA is Arevented, at an
inter:ediate Aort, fro: 9o:Aleting the
voyage, ;y the Aerils insured against, the
lia;ility of a :arine insurer on the 9argo
9ontinues after they are thus reshiAAed.
1#othing in this se9tion shall Arevent an
insurer fro: reCuiring an additional
Are:iu: if the haHard ;e in9reased ;y this
eBtension of lia;ility.
1&E. -G,. In addition to the lia;ility
:entioned in the last se9tion, a :arine
insurer is ;ound for da:ages, eBAenses of
dis9harging, storage, reshiA:ent, eBtra
freightage, and all other eBAenses in9urred
in saving 9argo reshiAAed Aursuant to the
last se9tion, uA to the a:ount insured.
1#othing in this or in the Are9eding se9tion
shall render a :arine insurer lia;le for any
a:ount in eB9ess of the insured value or, if
there ;e none, of the insura;le value.
1&E. -G8. UAon an a9tual total loss, a
Aerson insured is entitled to Aay:ent
without noti9e of a;andon:ent.
1&E. -G4. /here it has ;een agreed that an
insuran9e uAon a Aarti9ular thing, or 9lass of
things, shall ;e free fro: Aarti9ular average,
a :arine insurer is not lia;le for any
Aarti9ular average loss not deAriving the
insured of the Aossession, at the Aort of
destination, of the whole of su9h thing, or
9lass of things, even though it ;e9o:es
entirely worthlessF ;ut su9h insurer is lia;le
for his AroAortion of all general average loss
assessed uAon the thing insured.
1&E. -G7. !n insuran9e 9onfined in ter:s
to an a9tual loss does not 9over a
9onstru9tive total loss, ;ut 9overs any loss,
whi9h ne9essarily results in deAriving the
insured of the Aossession, at the Aort of
destination, of the entire thing insured.
1&UB-"I"LE --(
1!B!#)$#ME#"
1&E. -35. !;andon:ent, in :arine
insuran9e, is the a9t of the insured ;y whi9h,
after a 9onstru9tive total loss, he de9lares the
relinCuish:ent to the insurer of his interest
in the thing insured.
1&E. -3-. ! Aerson insured ;y a 9ontra9t
of :arine insuran9e :ay a;andon the thing
insured, or any Aarti9ular Aortion thereof
seAarately valued ;y the Aoli9y, or otherwise
seAarately insured, and re9over for a total
loss thereof, when the 9ause of the loss is a
Aeril insured against<
1DaE If :ore than three-fourths DJE thereof in
value is a9tually lost, or would have to ;e
eBAended to re9over it fro: the AerilF
1D;E If it is inIured to su9h an eBtent as to
redu9e its value :ore than three-fourths DJEF
1D9E If the thing insured is a shiA, and the
9onte:Alated voyage 9annot ;e lawfully
Aerfor:ed without in9urring either an
eBAense to the insured of :ore than three-
fourths DJE the value of the thing a;andoned
or a ris> whi9h a Arudent :an would not
ta>e under the 9ir9u:stan9esF or
1DdE If the thing insured, ;eing 9argo or
freightage, and the voyage 9annot ;e
Aerfor:ed, nor another shiA Aro9ured ;y the
:aster, within a reasona;le ti:e and with
reasona;le diligen9e, to forward the 9argo,
without in9urring the li>e eBAense or ris>
:entioned in the Are9eding su;AaragraAh.
But freightage 9annot in any 9ase ;e
a;andoned unless the shiA is also
a;andoned.
1&E. -3.. !n a;andon:ent :ust ;e
neither Aartial nor 9onditional.
1&E. -3G. !n a;andon:ent :ust ;e :ade
within a reasona;le ti:e after re9eiAt of
relia;le infor:ation of the loss, ;ut where
the infor:ation is of a dou;tful 9hara9ter,
the insured is entitled to a reasona;le ti:e to
:a>e inCuiry.
1&E. -33. /here the infor:ation uAon
whi9h an a;andon:ent has ;een :ade
Aroves in9orre9t, or the thing insured was so
far restored when the a;andon:ent was
:ade that there was then in fa9t no total
loss, the a;andon:ent ;e9o:es ineffe9tual.
1&E. -36. !;andon:ent is :ade ;y giving
noti9e thereof to the insurer, whi9h :ay ;e
done orally, or in writing< Provided, "hat if
the noti9e ;e done orally, a written noti9e of
su9h a;andon:ent shall ;e su;:itted within
seven D8E days fro: su9h oral noti9e.
1&E. -3,. ! noti9e of a;andon:ent :ust
;e eBAli9it, and :ust sAe9ify the Aarti9ular
9ause of the a;andon:ent, ;ut need state
only enough to show that there is Aro;a;le
9ause therefor, and need not ;e a99o:Aanied
with Aroof of interest or of loss.
1&E. -38. !n a;andon:ent 9an ;e
sustained only uAon the 9ause sAe9ified in
the noti9e thereof.
1&E. -34. !n a;andon:ent is eCuivalent to
a transfer ;y the insured of his interest to the
insurer, with all the 9han9es of re9overy and
inde:nity.
1&E. -37. If a :arine insurer Aays for a
loss as if it were an a9tual total loss, he is
entitled to whatever :ay re:ain of the thing
insured, or its Aro9eeds or salvage, as if
there had ;een a for:al a;andon:ent.
1&E. -65. UAon an a;andon:ent, a9ts
done in good faith ;y those who were agents
of the insured in resAe9t to the thing insured,
su;seCuent to the loss, are at the ris> of the
insurer, and for his ;enefit.
1&E. -6-. /here noti9e of a;andon:ent is
AroAerly given, the rights of the insured are
not AreIudi9ed ;y the fa9t that the insurer
refuses to a99eAt the a;andon:ent.
1&E. -6.. "he a99eAtan9e of an
a;andon:ent :ay ;e either eBAress or
i:Alied fro: the 9ondu9t of the insurer. "he
:ere silen9e of the insurer for an
unreasona;le length of ti:e after noti9e
shall ;e 9onstrued as an a99eAtan9e.
1&E. -6G. "he a99eAtan9e of an
a;andon:ent, whether eBAress or i:Alied, is
9on9lusive uAon the Aarties, and ad:its the
loss and the suffi9ien9y of the a;andon:ent.
1&E. -63. !n a;andon:ent on9e :ade and
a99eAted is irrevo9a;le, unless the ground
uAon whi9h it was :ade Aroves to ;e
unfounded.
1&E. -66. $n an a99eAted a;andon:ent of
a shiA, freightage earned Arevious to the loss
;elongs to the insurer of said freightageF ;ut
freightage su;seCuently earned ;elongs to
the insurer of the shiA.
1&E. -6,. If an insurer refuses to a99eAt a
valid a;andon:ent, he is lia;le as uAon an
a9tual total loss, dedu9ting fro: the a:ount
any Aro9eeds of the thing insured whi9h :ay
have 9o:e to the hands of the insured.
1&E. -68. If a Aerson insured o:its to
a;andon, he :ay nevertheless re9over his
a9tual loss.
1&UB-"I"LE --I
1ME!&URE $+ I#)EM#I"*
1&E. -64. ! valuation in a Aoli9y of
:arine insuran9e is 9on9lusive ;etween the
Aarties thereto in the adIust:ent of either a
Aartial or total loss, if the insured has so:e
interest at ris>, and there is no fraud on his
AartF eB9eAt that when a thing has ;een
hyAothe9ated ;y ;otto:ry or resAondentia,
;efore its insuran9e, and without the
>nowledge of the Aerson a9tually Aro9uring
the insuran9e, he :ay show the real value.
But a valuation fraudulent in fa9t, entitles
the insurer to res9ind the 9ontra9t.
1&E. -67. ! :arine insurer is lia;le uAon a
Aartial loss, only for su9h AroAortion of the
a:ount insured ;y hi: as the loss ;ears to
the value of the whole interest of the insured
in the AroAerty insured.
1&E. -,5. /here Arofits are seAarately
insured in a 9ontra9t of :arine insuran9e,
the insured is entitled to re9over, in 9ase of
loss, a AroAortion of su9h Arofits eCuivalent
to the AroAortion whi9h the value of the
AroAerty lost ;ears to the value of the whole.
1&E. -,-. In 9ase of a valued Aoli9y of
:arine insuran9e on freightage or 9argo, if a
Aart only of the su;Ie9t is eBAosed to ris>,
the valuation aAAlies only in AroAortion to
su9h Aart.
1&E. -,.. /hen Arofits are valued and
insured ;y a 9ontra9t of :arine insuran9e, a
loss of the: is 9on9lusively Aresu:ed fro:
a loss of the AroAerty out of whi9h they are
eBAe9ted to arise, and the valuation fiBes
their a:ount.
1&E. -,G. In esti:ating a loss under an
oAen Aoli9y of :arine insuran9e the
following rules are to ;e o;served<
1DaE "he value of a shiA is its value at the
;eginning of the ris>, in9luding all arti9les
or 9harges whi9h add to its Aer:anent value
or whi9h are ne9essary to AreAare it for the
voyage insuredF
1D;E "he value of the 9argo is its a9tual 9ost
to the insured, when laden on ;oard, or
where the 9ost 9annot ;e as9ertained, its
:ar>et value at the ti:e and Ala9e of lading,
adding the 9harges in9urred in Aur9hasing
and Ala9ing it on ;oard, ;ut without
referen9e to any loss in9urred in raising
:oney for its Aur9hase, or to any draw;a9>
on its eBAortation, or to the flu9tuation of the
:ar>et at the Aort of destination, or to
eBAenses in9urred on the way or on arrivalF
1D9E "he value of freightage is the gross
freightage, eB9lusive of Ari:age, without
referen9e to the 9ost of earning itF and
1DdE "he 9ost of insuran9e is in ea9h 9ase to
;e added to the value thus esti:ated.
1&E. -,3. If 9argo insured against Aartial
loss arrives at the Aort of destination in a
da:aged 9ondition, the loss of the insured is
dee:ed to ;e the sa:e AroAortion of the
value whi9h the :ar>et Ari9e at that Aort, of
the thing so da:aged, ;ears to the :ar>et
Ari9e it would have ;rought if sound.
1&E. -,6. ! :arine insurer is lia;le for all
the eBAenses attendant uAon a loss whi9h
for9es the shiA into Aort to ;e reAairedF and
where it is stiAulated in the Aoli9y that the
insured shall la;or for the re9overy of the
AroAerty, the insurer is lia;le for the eBAense
in9urred there;y, su9h eBAense, in either
9ase, ;eing in addition to a total loss, if that
afterwards o99urs.
1&E. -,,. ! :arine insurer is lia;le for a
loss falling uAon the insured, through a
9ontri;ution in resAe9t to the thing insured,
reCuired to ;e :ade ;y hi: towards a
general average loss 9alled for ;y a Aeril
insured against< Provided, "hat the lia;ility
of the insurer shall ;e li:ited to the
AroAortion of 9ontri;ution atta9hing to his
Aoli9y value where this is less than the
9ontri;uting value of the thing insured.
1&E. -,8. /hen a Aerson insured ;y a
9ontra9t of :arine insuran9e has a de:and
against others for 9ontri;ution, he :ay 9lai:
the whole loss fro: the insurer, su;rogating
hi: to his own right to 9ontri;ution. But no
su9h 9lai: 9an ;e :ade uAon the insurer
after the seAaration of the interests lia;le to
9ontri;ution, nor when the insured, having
the right and oAAortunity to enfor9e
9ontri;ution fro: others, has negle9ted or
waived the eBer9ise of that right.
1&E. -,4. In the 9ase of a Aartial loss of
shiA or its eCuiA:ent, the old :aterials are
to ;e aAAlied towards Aay:ent for the new.
Unless otherwise stiAulated in the Aoli9y, a
:arine insurer is lia;le for only two-thirds
D.KGE of the re:aining 9ost of reAairs after
su9h dedu9tion, eB9eAt that an9hors :ust ;e
Aaid in full.
1"I"LE .
1+IRE I#&UR!#E
1&E. -,7. !s used in this ode, the ter:
fire insurance shall in9lude insuran9e
against loss ;y fire, lightning, windstor:,
tornado or earthCua>e and other allied ris>s,
when su9h ris>s are 9overed ;y eBtension to
fire insuran9e Aoli9ies or under seAarate
Aoli9ies.
1&E. -85. !n alteration in the use or
9ondition of a thing insured fro: that to
whi9h it is li:ited ;y the Aoli9y :ade
without the 9onsent of the insurer, ;y :eans
within the 9ontrol of the insured, and
in9reasing the ris>s, entitles an insurer to
res9ind a 9ontra9t of fire insuran9e.
1&E. -8-. !n alteration in the use or
9ondition of a thing insured fro: that to
whi9h it is li:ited ;y the Aoli9y, whi9h does
not in9rease the ris>, does not affe9t a
9ontra9t of fire insuran9e.
1&E. -8.. ! 9ontra9t of fire insuran9e is
not affe9ted ;y any a9t of the insured
su;seCuent to the eBe9ution of the Aoli9y,
whi9h does not violate its Arovisions, even
though it in9reases the ris> and is the 9ause
of the loss.
1&E. -8G. If there is no valuation in the
Aoli9y, the :easure of inde:nity in an
insuran9e against fire is the eBAense it would
;e to the insured at the ti:e of the
9o::en9e:ent of the fire to reAla9e the
thing lost or inIured in the 9ondition in
whi9h it was at the ti:e of the inIuryF ;ut if
there is a valuation in a Aoli9y of fire
insuran9e, the effe9t shall ;e the sa:e as in a
Aoli9y of :arine insuran9e.
1&E. -83. /henever the insured desires to
have a valuation na:ed in his Aoli9y,
insuring any ;uilding or stru9ture against
fire, he :ay reCuire su9h ;uilding or
stru9ture to ;e eBa:ined ;y an indeAendent
aAAraiser and the value of the insured@s
interest therein :ay then ;e fiBed as
;etween the insurer and the insured. "he
9ost of su9h eBa:ination shall ;e Aaid for ;y
the insured. ! 9lause shall ;e inserted in
su9h Aoli9y stating su;stantially that the
value of the insured@s interest in su9h
;uilding or stru9ture has ;een thus fiBed. In
the a;sen9e of any 9hange in9reasing the
ris> without the 9onsent of the insurer or of
fraud on the Aart of the insured, then in 9ase
of a total loss under su9h Aoli9y, the whole
a:ount so insured uAon the insured@s
interest in su9h ;uilding or stru9ture, as
stated in the Aoli9y uAon whi9h the insurers
have re9eived a Are:iu:, shall ;e Aaid, and
in 9ase of a Aartial loss the full a:ount of
the Aartial loss shall ;e so Aaid, and in 9ase
there are two D.E or :ore Aoli9ies 9overing
the insured@s interest therein, ea9h Aoli9y
shall 9ontri;ute pro rata to the Aay:ent of
su9h whole or Aartial loss. But in no 9ase
shall the insurer ;e reCuired to Aay :ore
than the a:ount thus stated in su9h Aoli9y.
"his se9tion shall not Arevent the Aarties
fro: stiAulating in su9h Aoli9ies 9on9erning
the reAairing, re;uilding or reAla9ing of
;uildings or stru9tures wholly or Aartially
da:aged or destroyed.
1&E. -86. #o Aoli9y of fire insuran9e shall
;e Aledged, hyAothe9ated, or transferred to
any Aerson, fir: or 9o:Aany who a9ts as
agent for or otherwise reAresents the issuing
9o:Aany, and any su9h Aledge,
hyAothe9ation, or transfer hereafter :ade
shall ;e void and of no effe9t insofar as it
:ay affe9t other 9reditors of the insured.
1"I"LE G
1!&U!L"* I#&UR!#E
1&E. -8,. asualty insuran9e is insuran9e
9overing loss or lia;ility arising fro:
a99ident or :ishaA, eB9luding 9ertain tyAes
of loss whi9h ;y law or 9usto: are
9onsidered as falling eB9lusively within the
s9oAe of other tyAes of insuran9e su9h as fire
or :arine. It in9ludes, ;ut is not li:ited to,
e:Aloyer@s lia;ility insuran9e, :otor vehi9le
lia;ility insuran9e, Alate glass insuran9e,
;urglary and theft insuran9e, Aersonal
a99ident and health insuran9e as written ;y
non-life insuran9e 9o:Aanies, and other
su;stantially si:ilar >inds of insuran9e.
1"I"LE 3
1&URE"*&(IP
1&E. -88. ! 9ontra9t of suretyshiA is an
agree:ent where;y a Aarty 9alled the surety
guarantees the Aerfor:an9e ;y another Aarty
9alled the Arin9iAal or o;ligor of an
o;ligation or underta>ing in favor of a third
Aarty 9alled the o;ligee. It in9ludes offi9ial
re9ogniHan9es, stiAulations, ;onds or
underta>ings issued ;y any 9o:Aany ;y
virtue of and under the Arovisions of !9t
#o. 6G,, as a:ended ;y !9t #o. ..5,.
1&E. -84. "he lia;ility of the surety or
sureties shall ;e Ioint and several with the
o;ligor and shall ;e li:ited to the a:ount of
the ;ond. It is deter:ined stri9tly ;y the
ter:s of the 9ontra9t of suretyshiA in
relation to the Arin9iAal 9ontra9t ;etween the
o;ligor and the o;ligee.
1&E. -87. "he surety is entitled to Aay:ent
of the Are:iu: as soon as the 9ontra9t of
suretyshiA or ;ond is Aerfe9ted and delivered
to the o;ligor. #o 9ontra9t of suretyshiA or
;onding shall ;e valid and ;inding unless
and until the Are:iu: therefor has ;een
Aaid, eB9eAt where the o;ligee has a99eAted
the ;ond, in whi9h 9ase the ;ond ;e9o:es
valid and enfor9ea;le irresAe9tive of
whether or not the Are:iu: has ;een Aaid
;y the o;ligor to the surety< Provided, "hat
if the 9ontra9t of suretyshiA or ;ond is not
a99eAted ;y, or filed with the o;ligee, the
surety shall 9olle9t only a reasona;le
a:ount, not eB9eeding fifty Aer9ent D65LE
of the Are:iu: due thereon as servi9e fee
Alus the 9ost of sta:As or other taBes
i:Aosed for the issuan9e of the 9ontra9t or
;ond< Provided, hoever, "hat if the
nona99eAtan9e of the ;ond ;e due to the
fault or negligen9e of the surety, no su9h
servi9e fee, sta:As or taBes shall ;e
9olle9ted.
1In the 9ase of a 9ontinuing ;ond, the
o;ligor shall Aay the su;seCuent annual
Are:iu: as it falls due until the 9ontra9t of
suretyshiA is 9an9elled ;y the o;ligee or ;y
the o::issioner or ;y a 9ourt of
9o:Aetent Iurisdi9tion, as the 9ase :ay ;e.
1&E. -45. Pertinent Arovisions of the ivil
ode of the PhiliAAines shall ;e aAAlied in a
suAAletory 9hara9ter whenever ne9essary in
interAreting the Arovisions of a 9ontra9t of
suretyshiA.
1"I"LE 6
1LI+E I#&UR!#E
1&E. -4-. Life insuran9e is insuran9e on
hu:an lives and insuran9e aAAertaining
thereto or 9onne9ted therewith.
1Every 9ontra9t or underta>ing for the
Aay:ent of annuities in9luding 9ontra9ts for
the Aay:ent of lu:A su:s under a
retire:ent Arogra: where a life insuran9e
9o:Aany :anages or a9ts as a trustee for
su9h retire:ent Arogra: shall ;e 9onsidered
a life insuran9e 9ontra9t for AurAoses of this
ode.
1&E. -4.. !n insuran9e uAon life :ay ;e
:ade Aaya;le on the death of the Aerson, or
on his surviving a sAe9ified Aeriod, or
otherwise 9ontingently on the 9ontinuan9e
or 9essation of life.
1Every 9ontra9t or Aledge for the Aay:ent of
endow:ents or annuities shall ;e 9onsidered
a life insuran9e 9ontra9t for AurAoses of this
ode.
1In the a;sen9e of a Iudi9ial guardian, the
father, or in the latter@s a;sen9e or
in9aAa9ity, the :other, of any :inor, who is
an insured or a ;enefi9iary under a 9ontra9t
of life, health, or a99ident insuran9e, :ay
eBer9ise, in ;ehalf of said :inor, any right
under the Aoli9y, without ne9essity of 9ourt
authority or the giving of a ;ond, where the
interest of the :inor in the Aarti9ular a9t
involved does not eB9eed +ive hundred
thousand Aesos DP655,555.55E or in su9h
reasona;le a:ount as :ay ;e deter:ined ;y
the o::issioner. &u9h right :ay in9lude,
;ut shall not ;e li:ited to, o;taining a Aoli9y
loan, surrendering the Aoli9y, re9eiving the
Aro9eeds of the Poli9y, and giving the
:inor@s 9onsent to any transa9tion on the
Aoli9y.
1In the a;sen9e or in 9ase of the in9aAa9ity
of the father or :other, the grandAarent, the
eldest ;rother or sister at least eighteen D-4E
years of age, or any relative who has a9tual
9ustody of the :inor insured or ;enefi9iary,
shall a9t as a guardian without need of a
9ourt order or Iudi9ial aAAoint:ent as su9h
guardian, as long as su9h Aerson is not
otherwise disCualified or in9aAa9itated.
Pay:ent :ade ;y the insurer Aursuant to
this se9tion shall relieve su9h insurer of any
lia;ility under the 9ontra9t.
1&E. -4G. "he insurer in a life insuran9e
9ontra9t shall ;e lia;le in 9ase of sui9ide
only when it is 9o::itted after the Aoli9y
has ;een in for9e for a Aeriod of two D.E
years fro: the date of its issue or of its last
reinstate:ent, unless the Aoli9y Arovides a
shorter Aeriod< Provided, hoever, "hat
sui9ide 9o::itted in the state of insanity
shall ;e 9o:Aensa;le regardless of the date
of 9o::ission.
1&E. -43. ! Aoli9y of insuran9e uAon life
or health :ay Aass ;y transfer, will or
su99ession to any Aerson, whether he has an
insura;le interest or not, and su9h Aerson
:ay re9over uAon it whatever the insured
:ight have re9overed.
1&E. -46. #oti9e to an insurer of a transfer
or ;eCuest thereof is not ne9essary to
Areserve the validity of a Aoli9y of insuran9e
uAon life or health, unless there;y eBAressly
reCuired.
1&E. -4,. Unless the interest of a Aerson
insured is sus9eAti;le of eBa9t Ae9uniary
:easure:ent, the :easure of inde:nity
under a Aoli9y of insuran9e uAon life or
health is the su: fiBed in the Aoli9y.
1"I"LE ,
1MIR$I#&UR!#E
1&E. -48. Mi9roinsuran9e is a finan9ial
Arodu9t or servi9e that :eets the ris>
Arote9tion needs of the Aoor where<
1DaE "he a:ount of 9ontri;utions, Are:iu:s,
fees or 9harges, 9o:Auted on a daily ;asis,
does not eB9eed seven and a half Aer9ent
D8.6LE of the 9urrent daily :ini:u: wage
rate for nonagri9ultural wor>ers in Metro
ManilaF and
1D;E "he :aBi:u: su: of guaranteed
;enefits is not :ore than one thousand
D-,555E ti:es of the 9urrent daily :ini:u:
wage rate for nonagri9ultural wor>ers in
Metro Manila.
1&E. -44. #o insuran9e 9o:Aany or
:utual ;enefit asso9iation shall engage in
the ;usiness of :i9roinsuran9e unless it
Aossesses all the reCuire:ents as :ay ;e
Ares9ri;ed ;y the o::issioner. "he
o::issioner shall issue su9h rules and
regulations governing :i9roinsuran9e.
1(!P"ER II-!
1+I#!#I!L REP$R"I#'
+R!ME/$R0
1&E. -47. !ll 9o:Aanies regulated ;y the
o::ission, unless otherwise reCuired ;y
law, should 9o:Aly with the finan9ial
reAorting fra:ewor>s adoAted ;y the
o::ission for AurAoses of 9reating the
statutory finan9ial reAorts and the annual
state:ents to ;e su;:itted to the
o::ission. +inan9ial reAorting fra:ewor>
:eans a set of a99ounting and reAorting
Arin9iAles, standards, interAretations and
Aronoun9e:ents that :ust ;e adoAted in the
AreAaration and su;:ission of the statutory
finan9ial state:ents and reAorts reCuired ;y
the o::ission. "his finan9ial reAorting
fra:ewor> is not the sa:e as the finan9ial
reAorting fra:ewor> used to AreAare the
finan9ial state:ents that the &e9urities and
EB9hange o::ission :ay reCuire. "he
:ain AurAose of the statutory state:ents is
to Aresent i:Aortant infor:ation a;out the
level of ris> and solven9y situation of
insurers. In Ares9ri;ing the aAAli9a;le
statutory finan9ial reAorting fra:ewor>, the
o::issioner shall ta>e into a99ount
international standards 9on9erning solven9y
and insuran9e 9o:Aany reAorting as well as
generally a99eAted a9tuarial Arin9iAles
9on9erning finan9ial reAorting Aro:ulgated
;y the !9tuarial &o9iety of the PhiliAAines.
1"he assets and invest:ents dis9ussed in
&e9tions .53 to .-6 shall ;e a99ounted for in
a99ordan9e with this se9tion.
1"he valuation of reserves shall ;e
a99ounted for in a99ordan9e with "itle 6 of
this ode.
1(!P"ER III
1"(E BU&I#E&& $+ I#&UR!#E
1"I"LE -
1I#&UR!#E $MP!#IE&,
$R'!#IM!"I$#,
!PI"!LIM!"I$# !#)
!U"($RIM!"I$#
1&E. -75. +or AurAoses of this ode, the
ter: insurer or insurance company shall
in9lude all AartnershiAs, asso9iations,
9ooAeratives or 9orAorations, in9luding
govern:ent-owned or -9ontrolled
9orAorations or entities, engaged as
Arin9iAals in the insuran9e ;usiness,
eB9eAting :utual ;enefit asso9iations.
Unless the 9onteBt otherwise reCuires, the
ter: shall also in9lude Arofessional
reinsurers defined in &e9tion .44. !omestic
company shall in9lude 9o:Aanies for:ed,
organiHed or eBisting under the laws of the
PhiliAAines. "oreign company when used
without li:itation shall in9lude 9o:Aanies
for:ed, organiHed, or eBisting under any
laws other than those of the PhiliAAines.
1&E. -7-. "he Arovisions of the
orAoration ode, as a:ended, shall aAAly
to all insuran9e 9orAorations now or
hereafter engaged in ;usiness in the
PhiliAAines insofar as they do not 9onfli9t
with the Arovisions of this 9haAter.
1&E. -7.. #o 9orAoration, AartnershiA, or
asso9iation of Aersons shall transa9t any
insuran9e ;usiness in the PhiliAAines eB9eAt
as agent of a 9orAoration, AartnershiA or
asso9iation authoriHed to do the ;usiness of
insuran9e in the PhiliAAines, unless
Aossessed of the 9aAital and assets reCuired
of an insuran9e 9orAoration doing the sa:e
>ind of ;usiness in the PhiliAAines and
invested in the sa:e :annerF unless the
o::issioner shall have granted it a
9ertifi9ate to the effe9t that it has 9o:Alied
with all the Arovisions of this ode.
1Every entity re9eiving any su9h 9ertifi9ate
of authority shall ;e su;Ie9t to the insuran9e
and other aAAli9a;le laws of the PhiliAAines
and to the Iurisdi9tion and suAervision of the
o::issioner.
1&E. -7G. #o insuran9e 9o:Aany shall
transa9t any insuran9e ;usiness in the
PhiliAAines until after it shall have o;tained
a 9ertifi9ate of authority for that AurAose
fro: the o::issioner uAon aAAli9ation
therefor and Aay:ent ;y the 9o:Aany
9on9erned of the fees hereinafter Ares9ri;ed.
1"he o::issioner :ay refuse to issue a
9ertifi9ate of authority to any insuran9e
9o:Aany if, in his Iudg:ent, su9h refusal
will ;est Aro:ote the interest of the AeoAle
of this 9ountry. #o su9h 9ertifi9ate of
authority shall ;e granted to any su9h
9o:Aany until the o::issioner shall have
satisfied hi:self ;y su9h eBa:ination as he
:ay :a>e and su9h eviden9e as he :ay
reCuire that su9h 9o:Aany is Cualified ;y
the laws of the PhiliAAines to transa9t
;usiness therein, that the grant of su9h
authority aAAears to ;e Iustified in the light
of lo9al e9ono:i9 reCuire:ents, and that the
dire9tion and ad:inistration, as well as the
integrity and resAonsi;ility of the organiHers
and ad:inistrators, the finan9ial
organiHation and the a:ount of 9aAital,
reasona;ly assure the safety of the interests
of the Aoli9yholders and the Au;li9.
1In order to :aintain the Cuality of the
:anage:ent of the insuran9e 9o:Aanies and
afford ;etter Arote9tion to Aoli9yholders and
the Au;li9 in general, any Aerson of good
:oral 9hara9ter, unCuestioned integrity and
re9ogniHed 9o:Aeten9e :ay ;e ele9ted or
aAAointed dire9tor or offi9er of insuran9e
9o:Aanies in a99ordan9e with the Aertinent
Arovisions 9ontained in the 9orAorate
governan9e 9ir9ulars Ares9ri;ed ;y the
o::issioner. In addition hereto, the
o::issioner shall Ares9ri;e the
Cualifi9ations of dire9tors, eBe9utive offi9ers
and other >ey offi9ials of insuran9e
9o:Aanies for AurAoses of this se9tion.
1#o Aerson shall 9on9urrently ;e a )ire9tor
andKor $ffi9er of an insuran9e 9o:Aany and
an adIust:ent 9o:Aany.
1Before issuing su9h 9ertifi9ate of authority,
the o::issioner :ust ;e satisfied that the
na:e of the 9o:Aany is not that of any other
>nown 9o:Aany transa9ting a si:ilar
;usiness in the PhiliAAines, or a na:e so
si:ilar as to ;e 9al9ulated to :islead the
Au;li9. "he o::issioner :ay issue rules
and regulations on the use of na:es of
insuran9e 9o:Aanies and other suAervised
Aersons or entities.
1"he 9ertifi9ate of authority issued ;y the
o::issioner shall eBAire on the last day of
)e9e:;er, three DGE years following its date
of issuan9e, and shall ;e renewa;le every
three DGE years thereafter, su;Ie9t to the
9o:Aany@s 9ontinuing 9o:Alian9e with the
Arovisions of this ode, 9ir9ulars,
instru9tions, rulings or de9isions of the
o::ission.
1Every 9o:Aany re9eiving any su9h
9ertifi9ates of authority shall ;e su;Ie9t to
the Arovisions of this ode and other related
laws and to the Iurisdi9tion and suAervision
of the o::issioner.
1#o insuran9e 9o:Aany :ay ;e authoriHed
to transa9t in the PhiliAAines the ;usiness of
life and non-life insuran9e 9on9urrently,
unless sAe9ifi9ally authoriHed to do so ;y the
o::issioner< Provided, "hat the ter:s life
and non-life insuran9e shall ;e dee:ed to
in9lude health, a99ident and disa;ility
insuran9e.
1#o insuran9e 9o:Aany shall have eCuity in
an adIust:ent 9o:Aany and neither shall an
adIust:ent 9o:Aany have eCuity in an
insuran9e 9o:Aany.
1#o insuran9e 9o:Aany issued with a valid
9ertifi9ate of authority to transa9t insuran9e
;usiness anywhere in the PhiliAAines ;y the
Insuran9e o::issioner, shall ;e ;arred,
Arevented, or disenfran9hised fro: issuing
any insuran9e Aoli9y or fro: transa9ting any
insuran9e ;usiness within the s9oAe or
9overage of its 9ertifi9ate of authority,
anywhere in the PhiliAAines, ;y any lo9al
govern:ent unit or authority, for whatever
guise or reason whatsoever, in9luding under
any >ind of ordinan9e, a99reditation syste:,
or s9he:e. !ny lo9al ordinan9e or lo9al
govern:ent unit regulatory issuan9e
i:Aosing su9h restri9tion or
disenfran9hise:ent on any insuran9e
9o:Aany shall ;e dee:ed null and void ab
initio.
1&E. -73. EB9eAt as Arovided in &e9tion
.47, no new do:esti9 life or non-life
insuran9e 9o:Aany shall, in a sto9>
9orAoration, engage in ;usiness in the
PhiliAAines unless Aossessed of a Aaid-uA
9aAital eCual to at least $ne ;illion Aesos
DP-,555,555,555.55E< Provided, "hat a
do:esti9 insuran9e 9o:Aany already doing
;usiness in the PhiliAAines shall have a net
worth ;y June G5, .5-G of "wo hundred
fifty :illion Aesos DP.65,555,555.55E.
+urther:ore, said 9o:Aany :ust have ;y
)e9e:;er G-, .5-,, an additional "hree
hundred :illion Aesos DPG55,555,555.55E in
net worthF ;y )e9e:;er G-, .5-7, an
additional "hree hundred fifty :illion Aesos
DPG65,555,555.55E in net worthF and ;y
)e9e:;er G-, .5.., an additional +our
hundred :illion Aesos DP355,555,555.55E in
net worth.
1"he o::issioner :ay, as a Are-li9ensing
reCuire:ent of a new insuran9e 9o:Aany, in
addition to the Aaid-uA 9aAital sto9>, reCuire
the sto9>holders to Aay in 9ash to the
9o:Aany in AroAortion to their su;s9riAtion
interests a 9ontri;uted surAlus fund of not
less than $ne hundred :illion Aesos
DP-55,555,555.55E. (e :ay also reCuire
su9h 9o:Aany to su;:it to hi: a ;usiness
Alan showing the 9o:Aany@s esti:ated
re9eiAts and dis;urse:ents, as well as the
;asis therefor, for the neBt su99eeding three
DGE years.
1If organiHed as a :utual 9o:Aany, in lieu
of su9h net worth, it :ust have availa;le
total :e:;ers eCuity in an a:ount to ;e
deter:ined ;y the Insuran9e o::ission
a;ove all lia;ilities for losses reAortedF
eBAenses, taBes, legal reserve, and
reinsuran9e of all outstanding ris>s, and the
9ontri;uted surAlus fund eCual to the
a:ounts reCuired of sto9> 9orAorations. !
sto9> insuran9e 9o:Aany doing ;usiness in
the PhiliAAines :ay, su;Ie9t to the Aertinent
law and regulation whi9h now or hereafter
:ay ;e in for9e, alter its organiHation and
transfor: itself into a :utual insuran9e
9o:Aany.
1"he &e9retary of +inan9e :ay, uAon
re9o::endation of the o::issioner,
in9rease su9h :ini:u: Aaid-uA 9aAital
sto9> or 9ash assets reCuire:ent under su9h
ter:s and 9onditions as he :ay i:Aose, to
an a:ount whi9h, in his oAinion, would
reasona;ly assure the safety of the interests
of the Aoli9yholders and the Au;li9. "he
:ini:u: Aaid-uA 9aAital and net worth
reCuire:ent :ust re:ain uni:Aaired for the
9ontinuan9e of the li9ense. "he
o::issioner :ay reCuire the adoAtion of
the ris>-;ased 9aAital aAAroa9h and other
internationally a99eAted for:s of 9aAital
fra:ewor>.
1+or the AurAose of this se9tion, net worth
shall 9onsist of<
1DaE Paid-uA 9aAitalF
1D;E Retained earningsF
1D9E Uni:Aaired surAlusF and
1DdE Revaluation of assets as :ay ;e
aAAroved ;y the o::issioner.
1"he o::ission :ay adoAt for AurAoses
of 9o:Alian9e with 9aAital ;uild uA
reCuire:ent under this ode the re9ognition
as Aart of the 9aAital a99ount, 9aAital notes
or de;entures whi9h are su;ordinate to all
9redits and senior only to 9o::on 9aAital
sto9>s.
1"he President of the PhiliAAines :ay order
a Aeriodi9 review every two D.E years the
9aAital stru9ture set out a;ove to deter:ine
the 9aAital adeCua9y of the lo9al insuran9e
industry fro: and after the integration and
li;eraliHation of the finan9ial servi9es,
in9luding insuran9e, in the !&E!# Region.
+or this AurAose, a review 9o::ittee
9onsisting of reAresentatives fro: the
)eAart:ent of +inan9e D)$+E, the Insuran9e
o::ission DIE, the #ational E9ono:i9
and )eveloA:ent !uthority D#E)!E, the
&e9urities and EB9hange o::ission D&EE
and other agen9ies whi9h the President :ay
designate shall 9ondu9t the review and :ay
re9o::end to the President to adoAt for
i:Ale:entation the ne9essary 9aAital
adIust:ent.
1&E. -76. Every 9o:Aany :ust, ;efore
engaging in the ;usiness of insuran9e in the
PhiliAAines, file with the o::issioner the
following<
1DaE ! 9ertified 9oAy of the last annual
state:ent or a verified finan9ial state:ent
eBhi;iting the 9ondition and affairs of su9h
9o:AanyF
1D;E If in9orAorated under the laws of the
PhiliAAines, a 9oAy of the arti9les of
in9orAoration and ;ylaws, and any
a:end:ents to either, 9ertified ;y the
&e9urities and EB9hange o::ission to ;e
a 9oAy of that whi9h is filed in its $ffi9eF
1D9E If in9orAorated under any laws other
than those of the PhiliAAines, a 9ertifi9ate
fro: the &e9urities and EB9hange
o::ission showing that it is duly
registered in the :er9antile registry of that
o::ission in a99ordan9e with the
orAoration ode. ! 9oAy of the arti9les of
in9orAoration and ;ylaws, and any
a:end:ents to either, if organiHed or
for:ed under any law reCuiring su9h to ;e
filed, duly 9ertified ;y the offi9er having the
9ustody of sa:e, or if not so organiHed, a
9oAy of the law, 9harter or deed of
settle:ent under whi9h the deed of
organiHation is :ade, duly 9ertified ;y the
AroAer 9ustodian thereof, or Aroved ;y
affidavit to ;e a 9oAyF also, a 9ertifi9ate
under the hand and seal of the AroAer offi9er
of su9h state or 9ountry having suAervision
of insuran9e ;usiness therein, if any there
;e, that su9h 9orAoration or 9o:Aany is
organiHed under the laws of su9h state or
9ountry, with the a:ount of 9aAital sto9> or
assets and legal reserve reCuired ;y this
odeF
1DdE If not in9orAorated and of foreign
do:i9ile, aside fro: the 9ertifi9ate
:entioned in AaragraAh D9E of this se9tion, a
9ertifi9ate setting forth the nature and
9hara9ter of the ;usiness, the lo9ation of the
Arin9iAal offi9e, the na:e of the individual
or na:es of the Aersons 9o:Aosing the
AartnershiA or asso9iation, the a:ount of
a9tual 9aAital e:Aloyed or to ;e e:Aloyed
therein, and the na:es of all offi9ers and
Aersons ;y who: the ;usiness is or :ay ;e
:anaged.
1"he 9ertifi9ate :ust ;e verified ;y the
affidavit of the 9hief offi9er, se9retary,
agent, or :anager of the 9o:AanyF and if
there are any written arti9les of agree:ent of
the 9o:Aany, a 9oAy thereof :ust
a99o:Aany su9h 9ertifi9ate.
1&E. -7,. "he o::issioner :ust reCuire
as a 9ondition Are9edent to the transa9tion of
insuran9e ;usiness in the PhiliAAines ;y any
foreign insuran9e 9o:Aany, that su9h
9o:Aany file in his offi9e a written Aower of
attorney designating so:e Aerson who shall
;e a resident of the PhiliAAines as its general
agent, on who: any noti9e Arovided ;y law
or ;y any insuran9e Aoli9y, Aroof of loss,
su::ons and other legal Aro9esses :ay ;e
served in all a9tions or other legal
Aro9eedings against su9h 9o:Aany, and
9onsenting that servi9e uAon su9h general
agent shall ;e ad:itted and held as valid as
if served uAon the foreign 9o:Aany at its
ho:e offi9e. !ny su9h foreign 9o:Aany
shall, as further 9ondition Are9edent to the
transa9tion of insuran9e ;usiness in the
PhiliAAines, :a>e and file with the
o::issioner an agree:ent or stiAulation,
eBe9uted ;y the AroAer authorities of said
9o:Aany in for: and su;stan9e as follows<
1"he Dna:e of 9o:AanyE does here;y
stiAulate and agree in 9onsideration of the
Aer:ission granted ;y the Insuran9e
o::issioner to transa9t ;usiness in the
PhiliAAines, that if at any ti:e said 9o:Aany
shall leave the PhiliAAines, or 9ease to
transa9t ;usiness therein, or shall ;e without
any agent in the PhiliAAines on who: any
noti9e, Aroof of loss, su::ons, or legal
Aro9ess :ay ;e served, then in any a9tion or
Aro9eeding arising out of any ;usiness or
transa9tion whi9h o99urred in the
PhiliAAines, servi9e of any noti9e Arovided
;y law, or insuran9e Aoli9y, Aroof of loss,
su::ons, or other legal Aro9ess :ay ;e
:ade uAon the Insuran9e o::issioner,
and that su9h servi9e uAon the Insuran9e
o::issioner shall have the sa:e for9e and
effe9t as if :ade uAon the 9o:Aany.
1/henever su9h servi9e of noti9e, Aroof of
loss, su::ons, or other legal Aro9ess shall
;e :ade uAon the o::issioner, he :ust,
within ten D-5E days thereafter, trans:it ;y
:ail, Aostage Aaid, a 9oAy of su9h noti9e,
Aroof of loss, su::ons, or other legal
Aro9ess to the 9o:Aany at its ho:e or
Arin9iAal offi9e. "he sending of su9h 9oAy
;y the o::issioner shall ;e a ne9essary
Aart of the servi9e of the noti9e, Aroof of
loss, or other legal Aro9ess.
1&E. -78. #o insuran9e 9o:Aany
organiHed or eBisting under the govern:ent
or laws other than those of the PhiliAAines
shall engage in ;usiness in the PhiliAAines
unless Aossessed of uni:Aaired 9aAital or
assets and reserve of not less than $ne
;illion Aesos DP-,555,555,555.55E, nor until
it shall have deAosited with the
o::issioner for the ;enefit and se9urity of
the Aoli9yholders and 9reditors of su9h
9o:Aany in the PhiliAAines, se9urities
satisfa9tory to the o::issioner 9onsisting
of good se9urities of the PhiliAAines,
in9luding new issues of sto9> of registered
enterArises, as this ter: is defined in
EBe9utive $rder #o. .., of -748, as
a:ended, to the a9tual :ar>et value of not
less than the a:ount herein reCuired<
Provided, "hat at least fifty Aer9ent D65LE
of su9h se9urities shall 9onsist of ;onds or
other instru:ents of de;t of the 'overn:ent
of the PhiliAAines, its Aoliti9al su;divisions
and instru:entalities, or of govern:ent-
owned or -9ontrolled 9orAorations and
entities, in9luding the Bang>o &entral ng
PiliAinas< Provided, further, "hat the total
invest:ent of a foreign insuran9e 9o:Aany
in any registered enterArise shall not eB9eed
twenty Aer9ent D.5LE of the net worth of
said foreign insuran9e 9o:Aany nor twenty
Aer9ent D.5LE of the 9aAital of the registered
enterArise, unless Areviously authoriHed in
writing ;y the o::issioner.
1"he o::issioner :ay, as a Are-li9ensing
reCuire:ent of a new ;ran9h offi9e of a
foreign insuran9e 9o:Aany, in addition to
the reCuired asset or net worth, reCuire the
9o:Aany to have an additional surAlus fund
in an a:ount to ;e deter:ined ;y the
Insuran9e o::ission.
1+or AurAoses of this ode, the net worth of
a foreign insuran9e 9o:Aany shall refer only
to its net worth in the PhiliAAines.
1&E. -74. "he o::issioner shall hold
the se9urities, deAosited as reCuired in the
i::ediately Are9eding se9tion, for the
;enefit and se9urity of all the Aoli9yholders
and 9reditors of the 9o:Aany deAositing the
sa:e< Provided, "hat the o::issioner
:ay as long as the 9o:Aany is solvent,
Aer:it the 9o:Aany to 9olle9t the interest or
dividends on the se9urities so deAosited,
and, fro: ti:e to ti:e, with his assent, to
withdraw any of su9h se9urities, uAon
deAositing with said o::issioner other
li>e se9urities, the :ar>et value of whi9h
shall ;e eCual to the :ar>et value of su9h as
:ay ;e withdrawn. In the event of any
9o:Aany 9easing to do ;usiness in the
PhiliAAines, the se9urities deAosited as
aforesaid shall ;e returned to the 9o:Aany
uAon the o::issioner@s written aAAroval
and only after the 9o:Aany has duly Aroven
in its aAAli9ation therefor that it has no
further lia;ility whatsoever under any of its
Aoli9ies nor to any of its 9reditors in the
PhiliAAines.
1&E. -77. Every foreign 9o:Aany doing
;usiness in the PhiliAAines shall set aside an
a:ount 9orresAonding to the legal reserves
of the Aoli9ies written in the PhiliAAines and
invest and >eeA the sa:e therein in
a99ordan9e with the Arovisions of this
se9tion. "he legal reserve therein reCuired to
;e set aside shall ;e invested only in the
9lasses of PhiliAAine se9urities des9ri;ed in
&e9tion .5,< Provided, hoever, "hat no
invest:ent in sto9>s or ;onds of any single
entity shall, in the aggregate eB9eed twenty
Aer9ent D.5LE of the net worth of the
investing 9o:Aany or twenty Aer9ent D.5LE
of the 9aAital of the issuing 9o:Aany,
whi9hever is the lesser, unless otherwise
aAAroved in writing ;y the o::issioner.
"he se9urities Aur9hased and >eAt in the
PhiliAAines under this se9tion, shall not ;e
sent out of the territorial Iurisdi9tion of the
PhiliAAines without the written 9onsent of
the o::issioner.
1"I"LE .
1&$L=E#*
1&E. .55. !n insuran9e 9o:Aany doing
;usiness in the PhiliAAines shall at all ti:es
:aintain the :ini:u: Aaid-uA 9aAital, and
net worth reCuire:ents as Ares9ri;ed ;y the
o::issioner. &u9h solven9y reCuire:ents
shall ;e ;ased on internationally a99eAted
solven9y fra:ewor>s and adoAted only after
due 9onsultation with the insuran9e industry
asso9iations.
1/henever the afore:entioned reCuire:ent
;e found to ;e less than that herein reCuired
to ;e :aintained, the o::issioner shall
forthwith dire9t the 9o:Aany to :a>e good
any su9h defi9ien9y ;y 9ash, to ;e
9ontri;uted ;y all sto9>holders of re9ord in
AroAortion to their resAe9tive interests, and
Aaid to the treasurer of the 9o:Aany, within
fifteen D-6E days fro: re9eiAt of the order<
Provided, "hat the 9o:Aany in the interi:
shall not ;e Aer:itted to ta>e any new ris>
of any >ind or 9hara9ter unless and until it
:a>e good any su9h defi9ien9y< Provided#
further, "hat a sto9>holder who aside fro:
Aaying the 9ontri;ution due fro: hi:, Aays
the 9ontri;ution due fro: another
sto9>holder ;y reason of the failure or
refusal of the latter to do so, shall have a lien
on the 9ertifi9ates of sto9> of the insuran9e
9o:Aany 9on9erned aAAearing in its ;oo>s
in the na:e of the defaulting sto9>holder on
the date of default, as well as on any
interests or dividends that have a99rued or
will a99rue to the said 9ertifi9ates of sto9>,
until the 9orresAonding Aay:ent or
rei:;urse:ent is :ade ;y the defaulting
sto9>holder.
1&E. .5-. #o do:esti9 insuran9e
9orAoration shall de9lare or distri;ute any
dividend on its outstanding sto9>s unless it
has :et the :ini:u: Aaid-uA 9aAital and
net worth reCuire:ents under &e9tion -73
and eB9eAt fro: Arofits attested in a sworn
state:ent to the o::issioner ;y the
Aresident or treasurer of the 9orAoration to
;e re:aining on hand after retaining
uni:Aaired<
1DaE "he entire Aaid-uA 9aAital sto9>F
1D;E "he solven9y reCuire:ents defined ;y
&e9tion .55F
1D9E In the 9ase of life insuran9e
9orAorations, the legal reserve fund reCuired
;y &e9tion .-8F
1DdE In the 9ase of 9orAorations other than
life, the legal reserve fund reCuired ;y
&e9tion .-7F and
1DeE ! su: suffi9ient to Aay all net losses
reAorted, or in the 9ourse of settle:ent, and
all lia;ilities for eBAenses and taBes.
1!ny dividend de9lared or distri;uted under
the Are9eding AaragraAh shall ;e reAorted to
the o::issioner within thirty DG5E days
after su9h de9laration or distri;ution.
1If the o::issioner finds that any su9h
9orAoration has de9lared or distri;uted any
su9h dividend in violation of this se9tion, he
:ay order su9h 9orAoration to 9ease and
desist fro: doing ;usiness until the a:ount
of su9h dividend or the Aortion thereof in
eB9ess of the a:ount allowed under this
se9tion has ;een restored to said
9orAoration.
1"he o::issioner shall Ares9ri;e solven9y
reCuire:ents for ;ran9hes of foreign
insuran9e 9o:Aanies oAerating in the
PhiliAAines.
1"I"LE G
1!&&E"&
1&E. .5.. In any deter:ination of the
finan9ial 9ondition of any insuran9e
9o:Aany doing ;usiness in the PhiliAAines,
there shall ;e allowed and ad:itted as assets
only su9h assets legally or ;enefi9ially
owned ;y the insuran9e 9o:Aany 9on9erned
as deter:ined ;y the o::issioner whi9h
9onsist of<
1DaE ash in the Aossession of the insuran9e
9o:Aany or in transit under its 9ontrol, and
the true and duly verified ;alan9e of any
deAosit of su9h 9o:Aany in a finan9ially
sound ;an> or trust 9o:Aany duly
authoriHed ;y the Bang>o &entral ng
PiliAinas.
1D;E Invest:ents in se9urities, in9luding
:oney :ar>et instru:ents, and in real
AroAerty a9Cuired or held in a99ordan9e with
and su;Ie9t to the aAAli9a;le Arovisions of
this ode and the in9o:e realiHed therefro:
or a99rued thereon.
1D9E Loans granted ;y the insuran9e
9o:Aany 9on9erned to the eBtent of that
Aortion thereof adeCuately se9ured ;y non-
sAe9ulative assets with readily realiHa;le
values in a99ordan9e with and su;Ie9t to the
li:itations i:Aosed ;y aAAli9a;le Arovisions
of this ode.
1DdE Poli9y loans and other Aoli9y assets and
liens on Aoli9ies, 9ontra9ts or 9ertifi9ates of
a life insuran9e 9o:Aany, in an a:ount not
eB9eeding legal reserves and other Aoli9y
lia;ilities 9arried on ea9h individual life
insuran9e Aoli9y, 9ontra9t or 9ertifi9ate.
1DeE "he net a:ount of un9olle9ted and
deferred Are:iu:s and annuity
9onsiderations in the 9ase of a life insuran9e
9o:Aany whi9h 9arries the full :ean ta;ular
reserve lia;ility.
1DfE Reinsuran9e re9overa;le ;y the 9eding
insurer<
1D-E +ro: an insurer authoriHed to transa9t
;usiness in this 9ountry, the full a:ount
thereofF or
1D.E +ro: an insurer not authoriHed in this
9ountry, in an a:ount not eB9eeding the
lia;ilities 9arried ;y the 9eding insurer for
a:ounts withheld under a reinsuran9e treaty
with su9h unauthoriHed insurer as se9urity
for the Aay:ent of o;ligations thereunder if
su9h funds are held su;Ie9t to withdrawal
;y, and under the 9ontrol of, the 9eding
insurer. "he o::issioner :ay Ares9ri;e
the 9onditions under whi9h a 9eding insurer
:ay ;e allowed 9redit, as an asset or as a
dedu9tion fro: loss and unearned Are:iu:
reserves, for reinsuran9e re9overa;le fro:
an insurer not authoriHed in this 9ountry ;ut
whi9h Aresents satisfa9tory eviden9e that it
:eets the aAAli9a;le standards of solven9y
reCuired in this 9ountry.
1DgE +unds withheld ;y a 9eding insurer
under a reinsuran9e treaty, Arovided reserves
for unAaid losses and unearned Are:iu:s
are adeCuately Arovided.
1DhE )eAosits or a:ounts re9overa;le fro:
underwriting asso9iations, syndi9ates and
reinsuran9e funds, or fro: any susAended
;an>ing institution, to the eBtent dee:ed ;y
the o::issioner to ;e availa;le for the
Aay:ent of losses and 9lai:s and values to
;e deter:ined ;y hi:.
1DiE Ele9troni9 data Aro9essing :a9hines, as
:ay ;e authoriHed ;y the o::issioner to
;e a9Cuired ;y the insuran9e 9o:Aany
9on9erned, the a9Cuisition 9ost of whi9h to
;e a:ortiHed in eCual annual a:ounts within
a Aeriod of five D6E years fro: the date of
a9Cuisition thereof.
1DIE Invest:ents in :utual funds, real estate
invest:ent trusts, salary loans, unit
invest:ent trust funds and sAe9ial deAosit
a99ounts, su;Ie9t to the 9onditions as :ay ;e
Arovided for ;y the o::issioner.
1D>E $ther assets, not in9onsistent with the
Arovisions of AaragraAhs DaE to DIE hereof,
whi9h are dee:ed ;y the o::issioner to
;e readily realiHa;le and availa;le for the
Aay:ent of losses and 9lai:s at values to ;e
deter:ined ;y hi: in a 9ir9ular, rule or
regulation.
1&E. .5G. In addition to su9h assets as the
o::issioner :ay fro: ti:e to ti:e
deter:ine to ;e non-ad:itted assets of
insuran9e 9o:Aanies doing ;usiness in the
PhiliAAines, the following assets shall in no
9ase ;e allowed as ad:itted assets of an
insuran9e 9o:Aany doing ;usiness in the
PhiliAAines, in any deter:ination of its
finan9ial 9ondition<
1DaE 'oodwill, trade na:es, and other li>e
intangi;le assets.
1D;E PreAaid or deferred 9harges for
eBAenses and 9o::issions Aaid ;y su9h
insuran9e 9o:Aany.
1D9E !dvan9es to offi9ers Dother than Aoli9y
loansE, whi9h are not adeCuately se9ured and
whi9h are not Areviously authoriHed ;y the
o::issioner, as well as advan9es to
e:Aloyees, agents, and other Aersons on
:ere Aersonal se9urity.
1DdE &hares of sto9> of su9h insuran9e
9o:Aany, owned ;y it, or any eCuity therein
as well as loans se9ured there;y, or any
AroAortionate interest in su9h shares of sto9>
through the ownershiA ;y su9h insuran9e
9o:Aany of an interest in another
9orAoration or ;usiness unit.
1DeE +urniture, furnishing, fiBtures, safes,
eCuiA:ent, li;rary, stationery, literature, and
suAAlies.
1DfE Ite:s of ;an> 9redits reAresenting
9he9>s, drafts or notes returned unAaid after
the date of state:ent.
1DgE "he a:ount, if any, ;y whi9h the
aggregate value of invest:ents as 9arried in
the ledger assets of su9h insuran9e 9o:Aany
eB9eeds the aggregate value thereof as
deter:ined in a99ordan9e with the
Arovisions of this ode andKor the rules of
the o::issioner.
1!ll non-ad:itted assets and all other assets
of dou;tful value or 9hara9ter in9luded as
ledger or non-ledger assets in any state:ent
su;:itted ;y an insuran9e 9o:Aany to the
o::issioner, or in any insuran9e
eBa:iner@s reAort to hi:, shall also ;e
reAorted, to the eBtent of the value
disallowed as dedu9tions fro: the gross
assets of su9h insuran9e 9o:Aany, eB9eAt
where the o::issioner Aer:its a reserve
to ;e 9arried a:ong the lia;ilities of su9h
insuran9e 9o:Aany in lieu of any su9h
dedu9tion.
1"I"LE 3
1I#=E&"ME#"&
1&E. .53. ! life insuran9e 9o:Aany :ay
lend to any of its Aoli9yholders uAon the
se9urity of the value of its Aoli9y su9h su:
as :ay ;e deter:ined Aursuant to the
Arovisions of the Aoli9y.
1#o insuran9e 9o:Aany shall loan any of its
:oney or deAosits to any Aerson,
9orAoration or asso9iation, eB9eAt uAon the
se9urity of any of the following<
1DaE +irst :ortgage or deeds of trust of
registered, unen9u:;ered, i:Aroved or
uni:Aroved real estate, in9luding
9ondo:iniu:sF
1D;E +irst :ortgages or deeds of trust of
a9tually 9ultivated, i:Aroved and
unen9u:;ered agri9ultural lands in the
PhiliAAinesF
1D9E Pur9hase :oney :ortgages, lease
Aur9hase agree:ents or si:ilar se9urities
eBe9uted or re9eived ;y it on a99ount of the
sale or eB9hange of real AroAerty a9Cuired
Aursuant to &e9tions .5, and .54F
1DdE Bonds or other instru:ents of
inde;tedness issued or guaranteed ;y the
'overn:ent of the PhiliAAines or its
Aoliti9al su;divisions authoriHed ;y law to
in9ur su9h o;ligations or issue su9h
guarantees or of govern:ent-owned or
-9ontrolled 9orAorations and
instru:entalities in9luding the Bang>o
&entral ng PiliAinasF or
1DeE $;ligations issued or guaranteed ;y
universal ;an>s, 9o::er9ial ;an>s, offshore
;an>ing units, invest:ent houses or other
finan9ial inter:ediaries duly registered with
the Bang>o &entral ng PiliAinasF or
1DfE $;ligations issued or guaranteed ;y
foreign ;an>s or 9orAorations, ea9h of whi9h
shall have total net worth of at least $ne
hundred fifty :illion U& dollars
DNU&-65,555,555.55E or su9h other higher
net worth as :ay ;e Ares9ri;ed ;y the
Insuran9e o::ission, as shown in their
finan9ial state:ents as of the i::ediately
Are9eding fis9al yearF or
1DgE !ssign:ents of :onetary instru:ents
su9h as 9ash deAosits, deAosit 9ertifi9ates or
other si:ilar instru:ents of universal ;an>s,
9o::er9ial ;an>s, invest:ent houses or
other finan9ial inter:ediaries duly registered
with the Bang>o &entral ng PiliAinasF or
1DhE Pledges of shares of sto9>, ;onds or
other instru:ents of inde;tedness sAe9ified
in &e9tion .57F or
1DiE hattel :ortgages over eCuiA:ent not
:ore than three DGE years oldF and
1DIE &u9h other se9urity as :ay ;e aAAroved
;y the o::issioner.
1"he loans Arovided in the Are9eding
su;se9tion shall ;e su;Ie9t to the following
9onditions<
1D-E "he a:ount of loan se9ured ;y real
estate :ortgage over a non-agri9ultural land
shall not eB9eed seventy Aer9ent D85LE of its
aAAraised value, and in the 9ase of a loan
se9ured ;y a real estate :ortgage over an
agri9ultural land, the a:ount of loan shall
not eB9eed forty Aer9ent D35LE of its :ar>et
value< Provided, "hat, in no 9ase shall su9h
loan have a :aturity Aeriod in eB9ess of
twenty-five D.6E yearsF
1D.E Unless aAAroved ;y the o::issioner,
no loan :ay ;e granted uAon the se9urity of
a :ortgage on i:Aroved real estate if the
i:Arove:ents thereon do not ;elong to the
owner of the land, and the owner of the
i:Arove:ents does not sign the deed of
:ortgage. (owever, if the owner of the land
is the 'overn:ent of the PhiliAAines or any
of its Aoliti9al su;divisions and a long-ter:
lease has ;een eBe9uted in favor of the
owner of the i:Arove:ents, the owner of
the land need not ;e a Aarty to the deed of
:ortgage. "he eBAiration date of the lease
shall not, however, Are9ede the :aturity of
the loan. "he Ahrase ?i:Aroved real estate@
as used herein shall :ean land with
Aer:anent ;uilding or ;uildings ere9ted
thereonF
1DGE Lease-agree:ents or si:ilar se9urities
re9eived on the sale of real estate AroAerty
shall not eB9eed one hundred Aer9ent
D-55LE of the selling Ari9e of said AroAerty,
or one hundred Aer9ent D-55LE of its :ar>et
value at the ti:e of its disAosition,
whi9hever a:ount is lower. (owever, in no
9ase shall su9h agree:ent have a :aturity
Aeriod not eB9eeding thirty DG5E yearsF
1D3E Loans se9ured ;y shares of sto9> of
solvent 9orAorations or institutions shall not
eB9eed fifty Aer9ent D65LE of<
1DiE "he weighted average :ar>et Ari9e for
the one hundred eighty D-45E days Are9eding
the aAAroval of the loan for shares listed in
the sto9> eB9hangeF and
1DiiE +or unlisted shares, the adIusted ;oo>
value of su9h shares.
1D6E Loans se9ured ;y the 9hattel :ortgages
over eCuiA:ent shall not eB9eed seventy
Aer9ent D85LE of the :ar>et value of said
eCuiA:ent.
1&E. .56. #o loan ;y any insuran9e
9o:Aany on the se9urity of real estate shall
;e :ade unless the title to su9h real estate
shall have first ;een registered in a99ordan9e
with the eBisting Land Registration !9t, or
shall have ;een Areviously registered under
the Arovisions of the eBisting Mortgage Law
and the lien or interest of the insuran9e
9o:Aany as :ortgagee has ;een registered.
1&E. .5,. DaE !n insuran9e 9o:Aany :ay
Aur9hase, hold, own and 9onvey su9h
AroAerty, real and Aersonal, as :ay have
;een :ortgaged, Aledged, or 9onveyed to it
in good faith in trust for its ;enefit ;y reason
of :oney loaned ;y it in Aursuan9e of the
regular ;usiness of the 9o:Aany, and su9h
real or Aersonal AroAerty as :ay have ;een
Aur9hased ;y it at sales under Aledges,
:ortgages or deeds of trust for its ;enefit on
a99ount of :oney loaned ;y itF and su9h real
and Aersonal AroAerty as :ay have ;een
9onveyed to it ;y ;orrowers in satisfa9tion
and dis9harge of loans :ade ;y the
9o:Aany in Aay:ent or ;y reason of any
loan :ade ;y the 9o:Aany in Aay:ent or ;y
reason of any loan :ade ;y it shall ;e sold
;y the 9o:Aany within twenty D.5E years
after the title thereto has ;een vested in it.
1D;E !n insuran9e 9o:Aany :ay Aur9hase,
hold, and own the following<
1D-E Real AroAerties whi9h serve as its :ain
Ala9e of ;usiness andKor ;ran9h offi9es<
Provided, "hat su9h invest:ent shall not in
the overall eB9eed twenty Aer9ent D.5LE of
its net worth as shown ;y its latest finan9ial
state:ent aAAroved ;y the o::issioner.
1D.E Bonds or other instru:ents of
inde;tedness of the 'overn:ent of the
PhiliAAines or its Aoliti9al su;divisions
authoriHed ;y law to issue ;onds at the
reasona;le :ar>et value thereof.
1DGE Bonds or other instru:ents of de;t of
govern:ent-owned or -9ontrolled
9orAorations and entities, in9luding the
Bang>o &entral ng PiliAinas.
1D3E Bonds, de;entures or other instru:ents
of inde;tedness of any solvent 9orAoration
or institution 9reated or eBisting under the
laws of the PhiliAAines< Provided, hoever,
"hat the issuing, assu:ing or guaranteeing
entity or its Arede9essors shall not have
defaulted in the Aay:ent of interest on any
of its se9urities and that during ea9h of any
three DGE in9luding the last two D.E of the
five D6E fis9al years neBt Are9eding the date
of a9Cuisition ;y su9h insuran9e 9o:Aany of
su9h ;onds, de;entures, or other instru:ents
of inde;tedness, the net earnings of the
issuing, assu:ing or guaranteeing institution
availa;le for its fiBed 9harges, as hereinafter
defined, shall have ;een not less than one
and one-Cuarter D-OE ti:es the total of its
fiBed 9harges for su9h year< Provided,
further, "hat no life insuran9e 9o:Aany
shall invest in or loan uAon the o;ligations
of any one institution in the >inds Aer:itted
under this su;se9tion an a:ount in eB9ess of
twenty-five Aer9ent D.6LE of the total
ad:itted assets of su9h insurer as of
)e9e:;er thirty-first neBt Are9eding the
date of su9h invest:ent.
1!s used in this su;se9tion the ter: net
earnings available for fi$ed charges shall
:ean net in9o:e after dedu9ting oAerating
and :aintenan9e eBAenses, taBes other than
in9o:e taBes, deAre9iation and deAletionF
;ut eB9luding eBtraordinary nonre9urring
ite:s of in9o:e or eBAense aAAearing in the
regular finan9ial state:ent of the issuing,
assu:ing or guaranteeing institution. "he
ter: fi$ed charges shall in9lude interest on
funded and unfunded de;t, a:ortiHation of
de;t dis9ount, and rentals for leased
AroAerties.
1D6E Preferred or guaranteed sto9>s of any
solvent 9orAoration or institution 9reated or
eBisting under the laws of the PhiliAAines<
Provided, "hat if the sto9>s are guaranteed,
the a:ount of sto9>s so guaranteed is not in
eB9ess of fifty Aer9ent D65LE of the a:ount
of the Areferred or 9o::on sto9>s, as the
9ase :ay ;e, of the guaranteeing
9orAoration< Provided, finally, "hat no life
insuran9e 9o:Aany shall invest in or loan
uAon o;ligations of any one institution in the
>inds Aer:itted under this su;se9tion an
a:ount in eB9ess of ten Aer9ent D-5LE of the
total ad:itted assets of su9h insurer as of
)e9e:;er thirty-first neBt Are9eding the
date of su9h invest:ent.
1D,E o::on sto9>s of any solvent
9orAoration or institution 9reated or eBisting
under the laws of the PhiliAAines< Provided,
hoever, "hat no life insuran9e 9o:Aany
shall invest in or loan uAon the o;ligations
of any one 9orAoration or institution in the
>inds Aer:itted under this su;se9tion an
a:ount in eB9ess of ten Aer9ent D-5LE of the
total ad:itted assets of su9h insurer as of
)e9e:;er thirty-first neBt Are9eding the
date of su9h invest:ent.
1D8E &e9urities issued ;y a registered
enterArise, as this ter: is defined in
EBe9utive $rder #o. ..,, otherwise >nown
as the $:ni;us Invest:ents ode of -748,
as a:ended< Provided, "hat the total
invest:ent of a do:esti9 non-life insuran9e
9o:Aany in any registered enterArise shall
not eB9eed twenty Aer9ent D.5LE of the net
worth of said insuran9e 9o:Aany as shown
;y its aforesaid finan9ial state:ent unless
Areviously authoriHed ;y the o::issioner.
1D4E ertifi9ates, notes and other o;ligations
issued ;y the trustees or re9eivers of any
institution 9reated or eBisting under the laws
of the PhiliAAines whi9h, or the assets of
whi9h, are ;eing ad:inistered under the
dire9tion of any 9ourt having Iurisdi9tion<
Provided, hoever, "hat su9h 9ertifi9ates,
notes or other o;ligations are adeCuately
se9ured as to Arin9iAal and interests.
1D7E ECuiA:ent trust o;ligations or
9ertifi9ates whi9h are adeCuately se9ured or
other adeCuately se9ured instru:ents
eviden9ing an interest in eCuiA:ent wholly
or in Aart within the PhiliAAines< Provided,
hoever, "hat there is a right to re9eive
deter:ined Aortions of rental, Aur9hase or
other fiBed o;ligatory Aay:ents for the use
or Aur9hase of su9h eCuiA:ent.
1D-5E !ny o;ligation of any 9orAoration or
institution 9reated or eBisting under the laws
of the PhiliAAines whi9h is, on the date of
a9Cuisition ;y the insurer, adeCuately
se9ured and has Cualities and 9hara9teristi9s
wherein the sAe9ulative ele:ents are not
Aredo:inant.
1D--E &u9h other se9urities as :ay ;e
aAAroved ;y the o::issioner.
1D9E !ny do:esti9 insurer whi9h has
outstanding insuran9e, annuity or
reinsuran9e 9ontra9ts in 9urren9ies other
than the national 9urren9y of the PhiliAAines
:ay invest in, or otherwise a9Cuire or loan
uAon se9urities and invest:ents in su9h
9urren9y whi9h are su;stantially of the sa:e
>inds, 9lasses and invest:ent grades as
those eligi;le for invest:ent under the
foregoing su;divisions of this se9tionF ;ut
the aggregate a:ount of su9h invest:ents
and of su9h 9ash in su9h 9urren9y whi9h is
at any ti:e held ;y su9h insurer shall not
eB9eed one and one-half D-PE ti:es the
a:ount of its reserves and other o;ligations
under su9h 9ontra9ts or the a:ount whi9h
su9h insurer is reCuired ;y the law of any
9ountry or Aossession outside the ReAu;li9
of the PhiliAAines to ;e invested in su9h
9ountry or Aossession, whi9hever shall ;e
greater.
1&E. .58. !n insuran9e 9o:Aany :ay<
1D-E Invest in eCuities of other finan9ial
institutionsF and
1D.E Engage in the ;uying and selling of
long-ter: de;t instru:ents< Provided, "hat
any or all of su9h invest:ents shall ;e with
the Arior aAAroval of the o::issioner.
Insuran9e 9o:Aanies :ay, however, invest
in listed eCuities of other finan9ial
institutions without need of Arior aAAroval
;y the o::issioner.
1&E. .54. !ny life insuran9e 9o:Aany
:ay<
1DaE !9Cuire or 9onstru9t housing AroIe9ts
and, in 9onne9tion with any su9h AroIe9t,
:ay a9Cuire land or any interest therein ;y
Aur9hase, lease or otherwise, or use land
a9Cuired Aursuant to any other Arovision of
this ode. &u9h 9o:Aany :ay thereafter
own, :aintain, :anage, 9olle9t or re9eive
in9o:e fro:, or sell and 9onvey, any land or
interest therein so a9Cuired and any
i:Arove:ents thereon. "he aggregate ;oo>
value of the invest:ents of any su9h
9o:Aany in all su9h AroIe9ts shall not
eB9eed at the ti:e of su9h invest:ents
twenty-five Aer9ent D.6LE of the total
ad:itted assets of su9h 9o:Aany on the
thirty-first day of )e9e:;er neBt Are9eding<
Provided, "hat the funds of the 9o:Aany for
the Aay:ent of Aending 9lai:s and
o;ligations shall not ;e used for su9h
invest:ents.
1D;E !9Cuire real AroAerty, other than
AroAerty to ;e used Ari:arily for Aroviding
housing and AroAerty for a99o::odation of
its own ;usiness, as an invest:ent for the
Arodu9tion of in9o:e, or :ay a9Cuire real
AroAerty to ;e i:Aroved or develoAed for
su9h invest:ent AurAose Aursuant to a
Arogra: therefor, su;Ie9t to the 9ondition
that the 9ost of ea9h Aar9el of real AroAerty
so a9Cuired under the authority of this
AaragraAh D;E, in9luding the esti:ated 9ost
to the 9o:Aany of the i:Arove:ent or
develoA:ent thereof, when added to the
;oo> value of all other real AroAerty held ;y
it Aursuant to this AaragraAh D;E, shall not
eB9eed twenty-five Aer9ent D.6LE of its
ad:itted assets as of the thirty-first day of
)e9e:;er neBt Are9eding.
1&E. .57. Every do:esti9 insuran9e
9o:Aany shall, to the eBtent of an a:ount
eCual in value to twenty-five Aer9ent D.6LE
of the :ini:u: net worth reCuired under
&e9tion -73, invest its funds only in
se9urities, satisfa9tory to the o::issioner,
9onsisting of ;onds or other instru:ents of
de;t of the 'overn:ent of the PhiliAAines or
its Aoliti9al su;divisions or instru:entalities,
or of govern:ent-owned or -9ontrolled
9orAorations and entities, in9luding the
Bang>o &entral ng PiliAinas< Provided, "hat
su9h invest:ents shall at all ti:es ;e
:aintained free fro: any lien or
en9u:;ran9e< Provided, further, "hat su9h
se9urities shall ;e deAosited with and held
;y the o::issioner for the faithful
Aerfor:an9e ;y the deAositing insurer of all
its o;ligations under its insuran9e 9ontra9ts.
"he Arovisions of &e9tion -74 shall, so far
as Ara9ti9a;le, aAAly to the se9urities
deAosited under this se9tion.
1EB9eAt as otherwise Arovided in this ode,
no Iudg:ent 9reditor or other 9lai:ant shall
have the right to levy uAon any of the
se9urities of the insurer held on deAosit
under this se9tion or held on deAosit
Aursuant to the reCuire:ent of the
o::issioner.
1&E. .-5. !fter satisfying the reCuire:ents
9ontained in the Are9eding se9tion, any
do:esti9 non-life insuran9e 9o:Aany, shall
invest, to an a:ount Ares9ri;ed ;elow, its
funds in, or otherwise, a9Cuire or loan uAon,
only the 9lasses of invest:ents des9ri;ed in
&e9tion .5,, in9luding se9urities issued ;y
any registered enterArise, as this ter: is
defined in EBe9utive $rder #o. ..,,
otherwise >nown as ?"he $:ni;us
Invest:ents ode of -748Q and su9h other
9lasses of invest:ents as :ay ;e authoriHed
;y the o::issioner for AurAoses of this
se9tion< Provided, "hat<
1DaE #o :ore than twenty Aer9ent D.5LE of
the net worth of su9h 9o:Aany as shown ;y
its latest finan9ial state:ent aAAroved ;y the
o::issioner shall ;e invested in the lot
and ;uilding in whi9h the insuran9e
9o:Aany 9ondu9ts its ;usinessF and
1D;E "he total invest:ent of an insuran9e
9o:Aany in any registered enterArise shall
not eB9eed twenty Aer9ent D.5LE of the net
worth of said insuran9e 9o:Aany as shown
;y its aforesaid finan9ial state:ent nor
twenty Aer9ent D.5LE of the Aaid-uA 9aAital
of the registered enterArise eB9luding the
intended invest:ent, unless Areviously
authoriHed ;y the o::issioner< Provided,
further, "hat su9h invest:ents, free fro:
any lien or en9u:;ran9e, shall ;e at least
eCual in a:ount to the aggregate a:ount of<
D-E its legal reserve, as Arovided in &e9tion
.-7, and D.E its reserve fund held for
reinsuran9e as Arovided for in the Aertinent
treaty Arovision in the 9ase of reinsuran9e
9eded to authoriHed insurers.
1&E. .--. !fter satisfying the reCuire:ents
9ontained in &e9tions -78, -77, .57 and .-5,
any non-life insuran9e 9o:Aany :ay invest
any Aortion of its funds reAresenting earned
surAlus in any of the invest:ents des9ri;ed
in &e9tions .53, .5, and .58, or in any
se9urities issued ;y a registered enterArise
:entioned in the Are9eding se9tions<
Provided, "hat no invest:ent in sto9>s or
;onds of any single entity shall in the
aggregate, eB9eed twenty Aer9ent D.5LE of
the net worth of the insuran9e 9o:Aany as
shown in its latest finan9ial state:ent
aAAroved ;y the o::issioner or twenty
Aer9ent D.5LE of the Aaid-uA 9aAital of the
issuing 9o:Aany, whi9hever is lesser, unless
otherwise aAAroved ;y the o::issioner.
1&E. .-.. !fter satisfying the :ini:u:
9aAital invest:ent reCuired in &e9tion .57,
any life insuran9e 9o:Aany :ay invest its
legal Aoli9y reserve, as Arovided in &e9tion
.-8 or in &e9tion .-4, in any of the 9lasses
of se9urities or tyAes of invest:ents
des9ri;ed in &e9tions .53, .5,, .58 and .54,
su;Ie9t to the li:itations therein 9ontained,
and in any se9urities issued ;y any
registered enterArise :entioned in &e9tion
.-5, free fro: any lien or en9u:;ran9e, in
su9h a:ounts as :ay ;e aAAroved ;y the
o::issioner. &u9h 9o:Aany :ay li>ewise
invest any Aortion of its earned surAlus in
the aforesaid se9urities or invest:ents
su;Ie9t to the aforesaid li:itations.
1&E. .-G. !ny invest:ent :ade in
violation of the aAAli9a;le Arovisions of this
title shall ;e 9onsidered non-ad:itted assets.
1&E. .-3. DaE !ll ;onds or other
instru:ents of inde;tedness having a fiBed
ter: and rate of interest and held ;y any life
insuran9e 9o:Aany authoriHed to do
;usiness in this 9ountry, if a:Aly se9ured
and if not in default as to Arin9iAal or
interest, shall ;e valued ;ased on their
a:ortiHed 9ost using effe9tive interest
:ethod less i:Aair:ent and unre9overa;le
a:ount ;ased on aAAroAriate :easure:ent
:ethods whi9h are generally a99eAted in the
industry and a99eAted ;y the o::issioner.
"he o::issioner shall have the Aower to
deter:ine the eligi;ility of any su9h
invest:ents for valuation on the ;asis of
a:ortiHation, and :ay ;y regulation
Ares9ri;e or li:it the 9lasses of se9urities so
eligi;le for a:ortiHation. !ll ;onds or other
instru:ents of inde;tedness whi9h in the
Iudg:ent of the o::issioner are not
a:Aly se9ured shall not ;e eligi;le for
a:ortiHation and shall ;e valued in
a99ordan9e with AaragraAh two. "he
o::issioner :ay, if he finds that the
interest of Aoli9yholders so Aer:it or
reCuire, ;y offi9ial regulation Aer:it or
reCuire any 9lass or 9lasses of insurers, other
than life insuran9e 9o:Aanies authoriHed to
do ;usiness in this 9ountry, to value their
;onds or other instru:ents of inde;tedness
in a99ordan9e with the foregoing rule.
1D;E "he invest:ents of all insurers
authoriHed to do ;usiness in this 9ountry,
eB9eAt se9urities su;Ie9t to a:ortiHation and
eB9eAt as otherwise Arovided in this 9haAter,
shall ;e valued, in the dis9retion of the
o::issioner, at their a:ortiHed 9ost using
effe9tive interest :ethod less i:Aair:ent
and unre9overa;le a:ount or at valuation
reAresenting their fair :ar>et value. If the
o::issioner finds that in view of the
9hara9ter of invest:ents of any insurer
authoriHed to do ;usiness in this 9ountry it
would ;e Arudent for su9h insurer to
esta;lish a sAe9ial reserve for Aossi;le losses
or flu9tuations in the values of its
invest:ents, he :ay reCuire su9h insurer to
esta;lish su9h reserve, reasona;le in
a:ount, and in9lude a reAort thereon in any
state:ent or reAort of the finan9ial 9ondition
of su9h insurer. "he o::issioner :ay, in
9onne9tion with any eBa:ination or reCuired
finan9ial state:ent of an authoriHed insurer,
reCuire su9h insurer to furnish hi: 9o:Alete
finan9ial state:ents and audited reAort of
the finan9ial 9ondition of any 9orAoration of
whi9h the se9urities are owned wholly or
Aartly ;y su9h insurer and :ay 9ause an
eBa:ination to ;e :ade of any su;sidiary or
affiliate of su9h insurer as aAAroAriate to
sAe9ifi9 invest:ents as Arovided in
aAAroAriate 9ir9ulars issued ;y the
o::issioner.
1D9E Invest:ents in eCuity of an insuran9e
9o:Aany shall ;e valued as follows<
1D-E Listed sto9>s shall ;e valued at :ar>et
value and Aeriodi9ally adIusted to refle9t
:ar>et 9hanges through a sAe9ial valuation
a99ount to refle9t their realiHa;le value when
soldF
1D.E Unlisted sto9>s shall ;e valued at
adIusted ;oo> value ;ased on the latest
unCualified audited finan9ial state:ents of
the 9o:Aany whi9h issued su9h sto9>sF and
1DGE &to9>s of a 9orAoration under the
9ontrol of the insurer shall ;e valued using
the eCuity :ethod whi9h is the 9ost Alus or
:inus the share of the 9ontrolling 9o:Aany
in the earnings or losses of the 9ontrolled
9o:Aany after a9Cuisition of su9h sto9>s.
1DdE "he sto9> of an insuran9e 9o:Aany
shall ;e valued at the lesser of its :ar>et
value or its ;oo> value as shown ;y its last
aAAroved audited finan9ial state:ent or the
last reAort on eBa:ination, whi9hever is
:ore re9ent. "he ;oo> value of a share of
9o::on sto9> of an insuran9e 9o:Aany
shall ;e as9ertained ;y dividing D-E the
a:ount of its 9aAital and surAlus less the
value of all of its Areferred sto9>, if any,
outstanding, ;y D.E the nu:;er of shares of
its 9o::on sto9> issued and outstanding.
1#otwithstanding the foregoing Arovisions,
an insurer :ay, at its oAtion, value its
holdings of sto9> in a su;sidiary insuran9e
9o:Aany in an a:ount not less than
a9Cuisition 9ost if su9h a9Cuisition 9ost is
less than the value deter:ined as
herein;efore Arovided.
1DeE Real estate a9Cuired ;y fore9losure or
;y deed in lieu thereof, in the a;sen9e of a
re9ent aAAraisal dee:ed ;y the
o::issioner to ;e relia;le, shall not ;e
valued at an a:ount greater than the unAaid
Arin9iAal of the defaulted loan at the date of
su9h fore9losure or deed, together with any
taBes and eBAenses Aaid or in9urred ;y su9h
insurer at su9h ti:e in 9onne9tion with su9h
a9Cuisition, and the 9ost of additions or
i:Arove:ents thereafter Aaid ;y su9h
insurer and any a:ount or a:ounts
thereafter Aaid ;y su9h insurer or any
assess:ents levied for i:Arove:ents in
9onne9tion with the AroAerty.
1DfE Pur9hase :oney :ortgages re9eived on
disAositions of real AroAerty held Aursuant to
&e9tion .54 shall ;e valued in an a:ount
eCuivalent to ninety Aer9ent D75LE of the
value of su9h real AroAerty. Pur9hase :oney
:ortgages re9eived on disAosition of real
AroAerty otherwise held shall ;e valued in an
a:ount not eB9eeding ninety Aer9ent D75LE
of the value of su9h real AroAerty as
deter:ined ;y an aAAraisal :ade ;y an
aAAraiser at or a;out the ti:e of disAosition
of su9h real AroAerty.
1DgE "he sto9> of a su;sidiary of an insurer
shall ;e valued on the ;asis of the greater of<
1D-E "he value of only su9h of the assets of
su9h su;sidiary as would 9onstitute lawful
invest:ents for the insurer if a9Cuired or
held dire9tly ;y the insurerF or
1D.E &u9h other value deter:ined Aursuant
to standards and 9u:ulative li:itations,
9ontained in a regulation to ;e Aro:ulgated
;y the o::issioner.
1DhE #otwithstanding any Arovision
9ontained in this se9tion or elsewhere in this
9haAter, if the o::issioner finds that the
interests of Aoli9yholders so Aer:it or
reCuire, he :ay Aer:it or reCuire any 9lass
or 9lasses of insurers authoriHed to do
;usiness in this 9ountry to value their
invest:ents or any 9lass or 9lasses thereof
as of any date heretofore or hereafter in
a99ordan9e with any aAAli9a;le valuation or
:ethod.
1&E. .-6. It shall ;e the duty of the
offi9ers of the insuran9e 9o:Aany to reAort
within the first fifteen D-6E days of every
:onth all su9h invest:ents as :ay ;e :ade
;y the: during the Are9eding :onth, and the
o::issioner :ay, if su9h invest:ents or
any of the: see: inIudi9ious to hi:, reCuire
the sale or disAosal of the sa:e. "he reAort
shall also in9lude a list of invest:ents sold
or disAosed of ;y the 9o:Aany during the
sa:e Aeriod.
1"I"LE 6
1RE&ER=E&
1&E. .-,. Every life insuran9e 9o:Aany,
doing ;usiness in the PhiliAAines, shall
annually :a>e a valuation of all Aoli9ies,
additions thereto, unAaid dividends, and all
other o;ligations outstanding on the thirty-
first day of )e9e:;er of the Are9eding year.
!ll su9h valuations shall ;e :ade a99ording
to the standard adoAted ;y the 9o:Aany, as
Ares9ri;ed ;y the o::issioner in
a99ordan9e with internationally a99eAted
a9tuarial standards, whi9h standard shall ;e
stated in its annual reAort.
1&u9h standard of valuations shall ;e
a99ording to a standard ta;le of :ortality
with interest to ;e deter:ined ;y the
Insuran9e o::issioner. /hen the
Areli:inary ter: ;asis is used, the ter:
insuran9e shall ;e li:ited to the first Aoli9y
year.
1"he results of su9h valuations shall ;e
reAorted to the o::issioner on or ;efore
the thirtieth day of !Aril of ea9h year
a99o:Aanied ;y a sworn state:ent of a
designated 9o:Aany offi9er and stating the
:ethods and assu:Ations used in arriving at
the values reAorted.
1&E. .-8. "he aggregate net value so
as9ertained of the Aoli9ies of su9h 9o:Aany
shall ;e dee:ed its reserve lia;ility, to
Arovide for whi9h it shall hold funds in
se9ure invest:ents eCual to su9h net value,
a;ove all its other lia;ilitiesF and it shall ;e
the duty of the o::issioner, after having
verified, to su9h an eBtent as he :ay dee:
ne9essary, the valuation of all Aoli9ies in
for9e, to satisfy hi:self that the 9o:Aany
has su9h a:ount in safe legal se9urities after
all other de;ts and 9lai:s against it have
;een Arovided for.
1"he reserve lia;ility for varia;le 9ontra9ts
defined in &e9tion .G4 shall ;e esta;lished
in a99ordan9e with a9tuarial Aro9edures that
re9ogniHe the varia;le nature of the ;enefits
Arovided, and shall ;e aAAroved ;y the
o::issioner.
1&E. .-4. Every life insuran9e 9o:Aany,
9ondu9ted on the :utual Alan or a Alan in
whi9h Aoli9yholders are ;y the ter:s of their
Aoli9ies entitled to share in the Arofits or
surAlus shall, on all Aoli9ies of life insuran9e
heretofore or hereafter issued, under the
9onditions of whi9h the distri;ution of
surAlus is deferred to a fiBed or sAe9ified
ti:e and 9ontingent uAon the Aoli9y ;eing in
for9e and the insured living at that ti:e,
annually as9ertain the a:ount of the surAlus
to whi9h all su9h Aoli9ies as a seAarate 9lass
are entitled, and shall annually aAAortion to
su9h Aoli9ies as a 9lass the a:ount of the
surAlus so as9ertained, and 9arry the a:ount
of su9h aAAortioned surAlus, Alus the a9tual
interest earnings and a99retions to su9h
fund, as a distin9t and seAarate lia;ility to
su9h 9lass of Aoli9ies on and for whi9h the
sa:e was a99u:ulated, and no 9o:Aany or
any of its offi9ers shall ;e Aer:itted to use
any Aart of su9h aAAortioned surAlus fund
for any AurAose whatsoever other than for
the eBAress AurAose for whi9h the sa:e was
a99u:ulated.
1&E. .-7. Every insuran9e 9o:Aany, other
than life, shall :aintain a reserve for
unearned Are:iu:s on its Aoli9ies in for9e,
whi9h shall ;e 9harged as a lia;ility in any
deter:ination of its finan9ial 9ondition.
&u9h reserve shall ;e 9al9ulated ;ased on
the twenty-fourth D.3
th
E :ethod.
1&E. ..5. In addition to its lia;ilities and
reserves on 9ontra9ts of insuran9e issued ;y
it, every insuran9e 9o:Aany shall ;e
9harged with the esti:ated a:ount of all of
its other lia;ilities, in9luding taBes, eBAenses
and other o;ligations due or a99rued at the
date of state:ent, and in9luding any sAe9ial
reserves reCuired ;y the o::issioner
Aursuant to the Arovisions of this ode.
"I"LE ,
1LIMI" $+ &I#'LE RI&0
1&E. ..-. #o insuran9e 9o:Aany other
than life, whether foreign or do:esti9, shall
retain any ris> on any one su;Ie9t of
insuran9e in an a:ount eB9eeding twenty
Aer9ent D.5LE of its net worth. +or AurAoses
of this se9tion, the ter: sub%ect of insurance
shall in9lude all AroAerties or ris>s insured
;y the sa:e insurer that 9usto:arily are
9onsidered ;y non-life 9o:Aany
underwriters to ;e su;Ie9t to loss or da:age
fro: the sa:e o99urren9e of any haHard
insured against.
1"he o::issioner :ay issue regulations
Aroviding for a :aBi:u: li:it on the
overall retained ris>s of insurers to serve as
a 9atastroAhe 9over reCuire:ent for the
sa:e.
1Reinsuran9e 9eded as authoriHed under the
su99eeding title shall ;e dedu9ted in
deter:ining the ris> retained. !s to surety
ris>, dedu9tion shall also ;e :ade of the
a:ount assu:ed ;y any other 9o:Aany
authoriHed to transa9t surety ;usiness and
the value of any se9urity :ortgaged,
Aledged, or held su;Ie9t to the surety@s
9ontrol and for the surety@s Arote9tion.
1"I"LE 8
1REI#&UR!#E "R!#&!"I$#&
1&E. .... !n insuran9e 9o:Aany doing
;usiness in the PhiliAAines :ay a99eAt
reinsuran9es only of su9h ris>s, and retain
ris> thereon within su9h li:its, as it is
otherwise authoriHed to insure.
1&E. ..G. #o insuran9e 9o:Aany doing
;usiness in the PhiliAAines shall 9ede all or
Aart of any ris>s situated in the PhiliAAines
;y way of reinsuran9e dire9tly to any
foreign insurer not authoriHed to do ;usiness
in the PhiliAAines unless su9h foreign insurer
or, if the servi9es of a nonresident ;ro>er are
utiliHed, su9h nonresident ;ro>er is
reAresented in the PhiliAAines ;y a resident
agent duly registered with the o::issioner
as reCuired in this ode.
1"he resident agent of su9h unauthoriHed
foreign insurer or nonresident ;ro>er shall
i::ediately uAon registration furnish the
o::issioner with the annual state:ent of
su9h insurer, or of su9h 9o:Aany or
9o:Aanies where su9h ;ro>er :ay Ala9e
PhiliAAine ;usiness as of the year Are9eding
su9h registration, and annually thereafter as
soon as availa;le.
1&E. ..3. !ll insuran9e 9o:Aanies, ;oth
life and non-life, authoriHed to do ;usiness
in the PhiliAAines shall 9ede their eB9ess
ris>s to other 9o:Aanies si:ilarly
authoriHed to do ;usiness in the PhiliAAines
in su9h a:ounts and under su9h
arrange:ents as would ;e 9onsistent with
sound underwriting Ara9ti9es ;efore they
enter into reinsuran9e arrange:ents with
unauthoriHed foreign insurers.
1&E. ..6. !ny insuran9e 9o:Aany doing
;usiness in the PhiliAAines desiring to 9ede
their eB9ess ris>s to foreign insuran9e or
reinsuran9e 9o:Aanies not authoriHed to
transa9t ;usiness in the PhiliAAines :ay do
so under su9h ter:s and 9onditions whi9h
the o::issioner :ay Ares9ri;e.
1&hould any reinsuran9e agree:ent ;e for
any reason 9an9elled or ter:inated, the
9eding 9o:Aany 9on9erned shall infor: the
o::issioner in writing of su9h
9an9ellation or ter:ination within thirty DG5E
days fro: the date of su9h 9an9ellation or
ter:ination or fro: the date noti9e or
infor:ation of su9h 9an9ellation or
ter:ination is re9eived ;y su9h 9o:Aany as
the 9ase :ay ;e.
1&E. ..,. Every insuran9e 9o:Aany
authoriHed to do ;usiness in the PhiliAAines
shall reAort to the o::issioner on for:s
Ares9ri;ed ;y hi: the Aarti9ulars of
reinsuran9e treaties or any new treaties or
9hanges in eBisting treaties within three DGE
:onths fro: their effe9tivity.
1&E. ..8. #o 9redit shall ;e allowed as an
ad:itted asset or as a dedu9tion fro:
lia;ility, to any 9eding insurer for
reinsuran9e :ade, 9eded, renewed, or
otherwise ;e9o:ing effe9tive after January
-, -786, unless the reinsuran9e shall ;e
Aaya;le ;y the assu:ing insurer on the ;asis
of the lia;ility of the 9eding insurer under
the 9ontra9t or 9ontra9ts reinsured without
di:inution ;e9ause of the insolven9y of the
9eding insurer nor unless under the 9ontra9t
or 9ontra9ts of reinsuran9e the lia;ility for
su9h reinsuran9e is assu:ed ;y the
assu:ing insurer or insurers as of the sa:e
effe9tive dateF nor unless the reinsuran9e
agree:ent Arovides that Aay:ents ;y the
assu:ing insurer shall ;e :ade dire9tly to
the 9eding insurer or to its liCuidator,
re9eiver, or statutory su99essor eB9eAt<
1DaE /here the 9ontra9t sAe9ifi9ally Arovides
another Aayee of su9h reinsuran9e in the
event of the insolven9y of the 9eding
insurerF and
1D;E /here the assu:ing insurer with the
9onsent of the dire9t insured or insureds has
assu:ed su9h Aoli9y o;ligations of the
9eding insurer as dire9t o;ligations of the
assu:ing insurer to the Aayees under su9h
Aoli9ies and in su;stitution for the
o;ligations of the 9eding insurer to su9h
Aayees.
1&E. ..4. #o life insuran9e 9o:Aany
doing ;usiness in the PhiliAAines shall
reinsure its whole ris> on any individual life
or Ioint lives, or su;stantially all of its
insuran9e in for9e, without having first
o;tained the written Aer:ission of the
o::issioner.
1"I"LE 4
1!##U!L &"!"EME#"
1&E. ..7. Every insuran9e 9o:Aany doing
;usiness in the PhiliAAines shall ter:inate its
fis9al Aeriod on the thirty-first day of
)e9e:;er every year, and shall annually on
or ;efore the thirtieth day of !Aril of ea9h
year render to the o::issioner a state:ent
signed and sworn to ;y the 9hief offi9er of
su9h 9o:Aany showing, in su9h for: and
details as :ay ;e Ares9ri;ed ;y the
o::issioner, the eBa9t 9ondition of its
affairs on the Are9eding thirty-first day of
)e9e:;er.
1"he annual state:ent shall ;e AreAared in
a99ordan9e with the finan9ial reAorting
fra:ewor> as deter:ined ;y the
o::issioner. In addition, the
o::issioner :ay reCuire other relevant
infor:ation. "he for: and details of su9h
other relevant infor:ation shall ;e
Ares9ri;ed ;y the o::issioner and shall
for: Aart of the suAAle:entary s9hedules to
the annual state:ent.
1!ny entry in the state:ent whi9h is found
to ;e false shall 9onstitute a :isde:eanor
and the offi9er signing su9h state:ent shall
;e su;Ie9t to the Aenalty Arovided for under
&e9tion 33..
1&E. .G5. Every insuran9e 9o:Aany
authoriHed under "itle -5 of this 9haAter to
issue, deliver or use varia;le 9ontra9ts shall
annually file with the o::issioner
seAarate annual state:ent of its seAarate
varia;le a99ounts. &u9h state:ent shall ;e
on a for: Ares9ri;ed or aAAroved ;y the
o::issioner and shall in9lude details as to
all of the in9o:e, dis;urse:ents, assets and
lia;ility ite:s of and asso9iated with the
said seAarate varia;le a99ounts. &aid
state:ent shall ;e under oath of two D.E
offi9ers of the 9o:Aany and shall ;e filed
si:ultaneously with the annual state:ent
reCuired ;y the Are9eding se9tion.
1&E. .G-. /ithin thirty DG5E days after
re9eiAt of the annual state:ent aAAroved ;y
the o::issioner, every insuran9e
9o:Aany doing ;usiness in the PhiliAAines
shall Au;lish in a newsAaAer of general
9ir9ulation, a full synoAsis of its annual
finan9ial state:ent showing fully the
9onditions of its ;usiness, and setting forth
its resour9es and lia;ilities in a99ordan9e
with su9h for: Ares9ri;ed ;y the
o::issioner.
1"he o::issioner shall have the authority
to :a>e, a:end, and res9ind su9h
a99ounting rules and regulations as :ay ;e
ne9essary to 9arry out the Arovisions of this
ode, and define a99ounting, te9hni9al and
trade ter:s used in this ode< Provided,
"hat su9h shall ;e in a99ordan9e with
internationally a99eAted a99ounting
standards. !:ong other things, the
o::issioner :ay Ares9ri;e the for: or
for:s in whi9h reCuired infor:ation shall ;e
set forth, the ite:s or details to ;e shown in
the ;alan9e sheet and in9o:e state:ent, and
the :ethods to ;e followed in the
AreAaration of a99ounts, aAAraisal or
valuation of assets and lia;ilities,
deter:ination of re9urring and nonre9urring
in9o:e, differentiation of invest:ent and
oAerating in9o:e, and in the AreAaration,
where the o::issioner dee:s it ne9essary
or desira;le, of 9onsolidated ;alan9e sheets
or in9o:e a99ounts of any Aerson dire9tly or
indire9tly 9ontrolling or 9ontrolled ;y the
insuran9e 9o:Aany.
1"I"LE 7
1P$LI* +$RM&
1&E. .G.. #o Aoli9y, 9ertifi9ate or 9ontra9t
of insuran9e shall ;e issued or delivered
within the PhiliAAines unless in the for:
Areviously aAAroved ;y the o::issioner,
and no aAAli9ation for: shall ;e used with,
and no rider, 9lause, warranty or
endorse:ent shall ;e atta9hed to, Arinted or
sta:Aed uAon su9h Aoli9y, 9ertifi9ate or
9ontra9t unless the for: of su9h aAAli9ation,
rider, 9lause, warranty or endorse:ent has
;een aAAroved ;y the o::issioner.
1&E. .GG. In the 9ase of individual life or
endow:ent insuran9e, the Aoli9y shall
9ontain in su;stan9e the following
9onditions<
1DaE ! Arovision that the Aoli9yholder is
entitled to a gra9e Aeriod either of thirty DG5E
days or of one D-E :onth within whi9h the
Aay:ent of any Are:iu: after the first :ay
;e :ade, su;Ie9t at the oAtion of the insurer
to an interest 9harge not in eB9ess of siB
Aer9ent D,LE Aer annu: for the nu:;er of
days of gra9e elaAsing ;efore the Aay:ent of
the Are:iu:, during whi9h Aeriod of gra9e
the Aoli9y shall 9ontinue in full for9e, ;ut in
9ase the Aoli9y ;e9o:es a 9lai: during the
said Aeriod of gra9e ;efore the overdue
Are:iu: is Aaid, the a:ount of su9h
Are:iu: with interest :ay ;e dedu9ted
fro: the a:ount Aaya;le under the Aoli9y in
settle:entF
1D;E ! Arovision that the Aoli9y shall ;e
in9ontesta;le after it shall have ;een in for9e
during the lifeti:e of the insured for a
Aeriod of two D.E years fro: its date of issue
as shown in the Aoli9y, or date of aAAroval
of last reinstate:ent, eB9eAt for nonAay:ent
of Are:iu: and eB9eAt for violation of the
9onditions of the Aoli9y relating to :ilitary
or naval servi9e in ti:e of warF
1D9E ! Arovision that the Aoli9y shall
9onstitute the entire 9ontra9t ;etween the
Aarties, ;ut if the 9o:Aany desires to :a>e
the aAAli9ation a Aart of the 9ontra9t it :ay
do so Arovided a 9oAy of su9h aAAli9ation
shall ;e indorsed uAon or atta9hed to the
Aoli9y when issued, and in su9h 9ase the
Aoli9y shall 9ontain a Arovision that the
Aoli9y and the aAAli9ation therefor shall
9onstitute the entire 9ontra9t ;etween the
AartiesF
1DdE ! Arovision that if the age of the
insured is 9onsidered in deter:ining the
Are:iu: and the ;enefits a99ruing under the
Aoli9y, and the age of the insured has ;een
:isstated, the a:ount Aaya;le under the
Aoli9y shall ;e su9h as the Are:iu: would
have Aur9hased at the 9orre9t ageF
1DeE If the Aoli9y is Aarti9iAating, a Arovision
that the 9o:Aany shall Aeriodi9ally as9ertain
and aAAortion any divisi;le surAlus a99ruing
on the Aoli9y under 9onditions sAe9ified
thereinF
1DfE ! Arovision sAe9ifying the oAtions to
whi9h the Aoli9yholder is entitled to in the
event of default in a Are:iu: Aay:ent after
three DGE full annual Are:iu:s shall have
;een Aaid. &u9h oAtion shall 9onsist of<
1D-E ! 9ash surrender value Aaya;le uAon
surrender of the Aoli9y whi9h shall not ;e
less than the reserve on the Aoli9y, the ;asis
of whi9h shall ;e indi9ated, for the then
9urrent Aoli9y year and any dividend
additions thereto, redu9ed ;y a surrender
9harge whi9h shall not ;e :ore than one-
fifth D-K6E of the entire reserve or two and
one-half Aer9ent D.PLE of the a:ount
insured and any dividend additions theretoF
and
1D.E $ne or :ore Aaid-uA ;enefits on a Alan
or Alans sAe9ified in the Aoli9y of su9h value
as :ay ;e Aur9hased ;y the 9ash surrender
value.
1DgE ! Arovision that at any ti:e after a 9ash
surrender value is availa;le under the Aoli9y
and while the Aoli9y is in for9e, the
9o:Aany will advan9e, on AroAer
assign:ent or Aledge of the Aoli9y and on
sole se9urity thereof, a su: eCual to, or at
the oAtion of the owner of the Aoli9y, less
than the 9ash surrender value on the Aoli9y,
at a sAe9ified rate of interest, not :ore than
the :aBi:u: allowed ;y law, to ;e
deter:ined ;y the 9o:Aany fro: ti:e to
ti:e, ;ut not :ore often than on9e a year,
su;Ie9t to the aAAroval of the o::issionerF
and that the 9o:Aany will dedu9t fro: su9h
loan value any eBisting inde;tedness on the
Aoli9y and any unAaid ;alan9e of the
Are:iu: for the 9urrent Aoli9y year, and
:ay 9olle9t interest in advan9e on the loan
to the end of the 9urrent Aoli9y year, whi9h
Arovision :ay further Arovide that su9h loan
:ay ;e deferred for not eB9eeding siB D,E
:onths after the aAAli9ation therefor is
:adeF
1DhE ! ta;le showing in figures 9ash
surrender values and Aaid-uA oAtions
availa;le under the Aoli9y ea9h year uAon
default in Are:iu: Aay:ents, during at least
twenty D.5E years of the Aoli9y ;eginning
with the year in whi9h the values and
oAtions first ;e9o:e availa;le, together with
a Arovision that in the event of the failure of
the Aoli9yholder to ele9t one of the said
oAtions within the ti:e sAe9ified in the
Aoli9y, one of said oAtions shall
auto:ati9ally ta>e effe9t and no
Aoli9yholder shall ever forfeit his right to
sa:e ;y reason of his failure to so ele9tF
1DiE In 9ase the Aro9eeds of a Aoli9y are
Aaya;le in install:ents or as an annuity, a
ta;le showing the :ini:u: a:ounts of the
install:ents or annuity Aay:entsF
1DIE ! Arovision that the Aoli9yholder shall
;e entitled to have the Aoli9y reinstated at
any ti:e within three DGE years fro: the date
of default of Are:iu: Aay:ent unless the
9ash surrender value has ;een duly Aaid, or
the eBtension Aeriod has eBAired, uAon
Arodu9tion of eviden9e of insura;ility
satisfa9tory to the 9o:Aany and uAon
Aay:ent of all overdue Are:iu:s and any
inde;tedness to the 9o:Aany uAon said
Aoli9y, with interest rate not eB9eeding that
whi9h would have ;een aAAli9a;le to said
Are:iu:s and inde;tedness in the Aoli9y
years Arior to reinstate:ent.
1!ny of the foregoing Arovisions or Aortions
thereof not aAAli9a;le to single Are:iu: or
ter: Aoli9ies shall to that eBtent not ;e
in9orAorated thereinF and any su9h Aoli9y
:ay ;e issued and delivered in the
PhiliAAines whi9h in the oAinion of the
o::issioner 9ontains Arovisions on any
one or :ore of the foregoing reCuire:ents
:ore favora;le to the Aoli9yholder than
herein;efore reCuired.
1"his se9tion shall not aAAly to Aoli9ies of
grouA life or industrial life insuran9e.
1&E. .G3. #o Aoli9y of grouA life
insuran9e shall ;e issued and delivered in
the PhiliAAines unless it 9ontains in
su;stan9e the following Arovisions, or
Arovisions whi9h in the oAinion of the
o::issioner are :ore favora;le to the
Aersons insured, or at least as favora;le to
the Aersons insured and :ore favora;le to
the Aoli9yholders<
1DaE ! Arovision that the Aoli9yholder is
entitled to a gra9e Aeriod of either thirty DG5E
days or of one D-E :onth for the Aay:ent of
any Are:iu: due after the first, during
whi9h gra9e Aeriod the death ;enefit
9overage shall 9ontinue in for9e, unless the
Aoli9yholder shall have given the insurer
written noti9e of dis9ontinuan9e in advan9e
of the date of dis9ontinuan9e and in
a99ordan9e with the ter:s of the Aoli9y. "he
Aoli9y :ay Arovide that the Aoli9yholder
shall ;e lia;le for the Aay:ent of a pro rata
Are:iu: for the ti:e the Aoli9y is in for9e
during su9h gra9e AeriodF
1D;E ! Arovision that the validity of the
Aoli9y shall not ;e 9ontested, eB9eAt for
nonAay:ent of Are:iu:s after it has ;een in
for9e for two D.E years fro: its date of issueF
and that no state:ent :ade ;y any insured
under the Aoli9y relating to his insura;ility
shall ;e used in 9ontesting the validity of the
insuran9e with resAe9t to whi9h su9h
state:ent was :ade after su9h insuran9e has
;een in for9e Arior to the 9ontest for a Aeriod
of two D.E years during su9h Aerson@s
lifeti:e nor unless 9ontained in a written
instru:ent signed ;y hi:F
1D9E ! Arovision that a 9oAy of the
aAAli9ation, if any, of the Aoli9yholder shall
;e atta9hed to the Aoli9y when issued, that
all state:ents :ade ;y the Aoli9yholder or
;y Aersons insured shall ;e dee:ed
reAresentations and not warranties, and that
no state:ent :ade ;y any insured shall ;e
used in any 9ontest unless a 9oAy of the
instru:ent 9ontaining the state:ent is or has
;een furnished to su9h Aerson or to his
;enefi9iaryF
1DdE ! Arovision setting forth the 9onditions,
if any, under whi9h the insurer reserves the
right to reCuire a Aerson eligi;le for
insuran9e to furnish eviden9e of individual
insura;ility satisfa9tory to the insurer as a
9ondition to Aart or all of his 9overageF
1DeE ! Arovision sAe9ifying an eCuita;le
adIust:ent of Are:iu:s or of ;enefits or of
;oth to ;e :ade in the event that the age of a
Aerson insured has ;een :isstated, su9h
Arovision to 9ontain a 9lear state:ent of the
:ethod of adIust:ent to ;e usedF
1DfE ! Arovision that any su: ;e9o:ing due
;y reason of death of the Aerson insured
shall ;e Aaya;le to the ;enefi9iary
designated ;y the insured, su;Ie9t to the
Arovisions of the Aoli9y in the event that
there is no designated ;enefi9iary, as to all
or any Aart of su9h su:, living at the death
of the insured, and su;Ie9t to any right
reserved ;y the insurer in the Aoli9y and set
forth in the 9ertifi9ate to Aay at its oAtion a
Aart of su9h su: not eB9eeding +ive
hundred Aesos DP655.55E to any Aerson
aAAearing to the insurer to ;e eCuita;ly
entitled thereto ;y reason of having in9urred
funeral or other eBAenses in9ident to the last
illness or, death of the Aerson insuredF
1DgE ! Arovision that the insurer will issue to
the Aoli9yholder for delivery to ea9h Aerson
insured a state:ent as to the insuran9e
Arote9tion to whi9h he is entitled, to who:
the insuran9e ;enefits are Aaya;le, and the
rights set forth in AaragraAhs DhE, DiE and DIE
followingF
1DhE ! Arovision that if the insuran9e, or any
Aortion of it, on a Aerson 9overed under the
Aoli9y 9eases ;e9ause of ter:ination of
e:Aloy:ent or of :e:;ershiA in the 9lass
or 9lasses eligi;le for 9overage under the
Aoli9y, su9h Aerson shall ;e entitled to have
issued to hi: ;y the insurer, without
eviden9e of insura;ility, an individual Aoli9y
of life insuran9e without disa;ility or other
suAAle:entary ;enefits, Arovided
aAAli9ation for the individual Aoli9y and
Aay:ent of the first Are:iu: to the insurer
shall ;e :ade within thirty DG5E days after
su9h ter:ination, and Arovided further that<
1D-E "he individual Aoli9y shall ;e on any
one of the for:s, eB9eAt ter: insuran9e,
then 9usto:arily issued ;y the insurer at the
age and for an a:ount not in eB9ess of the
9overage under the grouA Aoli9yF and
1D.E "he Are:iu: on the individual Aoli9y
shall ;e at the insurer@s then 9usto:ary rate
aAAli9a;le to the for: and a:ount of the
individual Aoli9y, to the 9lass of ris> to
whi9h su9h Aerson then ;elongs, and to his
age attained on the effe9tive date of the
individual Aoli9y.
1DiE ! Arovision that if the grouA Aoli9y
ter:inates or is a:ended so as to ter:inate
the insuran9e of any 9lass of insured
Aersons, every Aerson insured thereunder at
the date of su9h ter:ination whose
insuran9e ter:inates and who has ;een so
insured for five D6E years Arior to su9h
ter:ination date shall ;e entitled to have
issued to hi: ;y the insurer an individual
Aoli9y of life insuran9e su;Ie9t to the sa:e
li:itations as set forth in AaragraAh DhE,
eB9eAt that the grouA Aoli9y :ay Arovide
that the a:ount of su9h individual Aoli9y
shall not eB9eed the a:ount of the Aerson@s
life insuran9e Arote9tion 9easingF
1DIE ! Arovision that if a Aerson insured
under the grouA Aoli9y dies during the thirty
DG5E-day Aeriod within whi9h he would have
;een entitled to an individual Aoli9y issued
to hi: in a99ordan9e with AaragraAhs DhE
and DiE a;ove and ;efore su9h individual
Aoli9y shall have ;e9o:e effe9tive, the
a:ount of life insuran9e whi9h he would
have ;een entitled to have issued to hi: as
an individual Aoli9y shall ;e Aaya;le as a
9lai: under the grouA Aoli9y whether or not
aAAli9ation for the individual Aoli9y or the
Aay:ent of the first Are:iu: has ;een
:adeF
1D>E In the 9ase of a Aoli9y issued to a
9reditor to insure de;tors of su9h 9reditor, a
Arovision that the insurer will furnish to the
Aoli9yholder for delivery to ea9h de;tor
insured under the Aoli9y a for: whi9h will
9ontain a state:ent that the life of the de;tor
is insured under the Aoli9y and that any
death ;enefit Aaid thereunder ;y reason of
his death shall ;e aAAlied to redu9e or
eBtinguish inde;tedness.
1"he Arovisions of AaragraAhs DfE to DIE shall
not aAAly to Aoli9ies issued to a 9reditor to
insure his de;tors. If a grouA life Aoli9y is on
a Alan of insuran9e other than ter:, it shall
9ontain a non-forfeiture Arovision or
Arovisions whi9h in the oAinion of the
o::issioner is or are eCuita;le to the
insured or the Aoli9yholder< Provided, "hat
nothing herein 9ontained shall ;e so
9onstrued as to reCuire grouA life Aoli9ies to
9ontain the sa:e non-forfeiture Arovisions
as are reCuired of individual life Aoli9ies.
1&E. .G6. "he ter: industrial life
insurance as used in this ode shall :ean
that for: of life insuran9e under whi9h the
Are:iu:s are Aaya;le either :onthly or
oftener, if the fa9e a:ount of insuran9e
Arovided in any Aoli9y is not :ore than five
hundred ti:es that of the 9urrent statutory
:ini:u: daily wage in the ity of Manila,
and if the words industrial policy are Arinted
uAon the Aoli9y as Aart of the des9riAtive
:atter.
1!n industrial life Aoli9y shall not laAse for
nonAay:ent of Are:iu: if su9h
nonAay:ent was due to the failure of the
9o:Aany to send its reAresentative or agent
to the insured at the residen9e of the insured
or at so:e other Ala9e indi9ated ;y hi: for
the AurAose of 9olle9ting su9h Are:iu:<
Provided, "hat the Arovisions of this
AaragraAh shall not aAAly when the Are:iu:
on the Aoli9y re:ains unAaid for a Aeriod of
three DGE :onths or twelve D-.E wee>s after
the gra9e Aeriod has eBAired.
1&E. .G,. In the 9ase of industrial life
insuran9e, the Aoli9y shall 9ontain in
su;stan9e the following Arovisions<
1DaE ! Arovision that the insured is entitled
to a gra9e Aeriod of four D3E wee>s within
whi9h the Aay:ent of any Are:iu: after the
first :ay ;e :ade, eB9eAt that where
Are:iu:s are Aaya;le :onthly, the Aeriod
of gra9e shall ;e either one D-E :onth or
thirty DG5E daysF and that during the Aeriod
of gra9e, the Aoli9y shall 9ontinue in full
for9e, ;ut if during su9h gra9e Aeriod the
Aoli9y ;e9o:es a 9lai:, then any overdue
and unAaid Are:iu:s :ay ;e dedu9ted fro:
any a:ount Aaya;le under the Aoli9y in
settle:entF
1D;E ! Arovision that the Aoli9y shall ;e
in9ontesta;le after it has ;een in for9e
during the lifeti:e of the insured for a
sAe9ified Aeriod, not :ore than two D.E years
fro: its date of issue, eB9eAt for
nonAay:ent of Are:iu:s and eB9eAt for
violation of the 9onditions of the Aoli9y
relating to naval or :ilitary servi9e, or
servi9es auBiliary thereto, and eB9eAt as to
Arovisions relating to ;enefits in the event of
disa;ility as defined in the Aoli9y, and those
granting additional insuran9e sAe9ifi9ally
against death ;y a99ident or ;y a99idental
:eans, or to additional insuran9e against
loss of, or loss of use of, sAe9ifi9 :e:;ers
of the ;odyF
1D9E ! Arovision that the Aoli9y shall
9onstitute the entire 9ontra9t ;etween the
Aarties, or if a 9oAy of the aAAli9ation is
endorsed uAon and atta9hed to the Aoli9y
when issued, a Arovision that the Aoli9y and
the aAAli9ation therefor shall 9onstitute the
entire 9ontra9t ;etween the Aarties, and in
the latter 9ase, a Arovision that all state:ents
:ade ;y the insured shall, in the a;sen9e of
fraud, ;e dee:ed reAresentations and not
warrantiesF
1DdE ! Arovision that if the age of the Aerson
insured, or the age of any Aerson, 9onsidered
in deter:ining the Are:iu:, or the ;enefits
a99ruing under the Aoli9y, has ;een
:isstated, any a:ount Aaya;le or ;enefit
a99ruing under the Aoli9y shall ;e su9h as
the Are:iu: Aaid would have Aur9hased at
the 9orre9t ageF
1DeE ! Arovision that if the Aoli9y is a
Aarti9iAating Aoli9y, the 9o:Aany shall
Aeriodi9ally as9ertain and aAAortion any
divisi;le surAlus a99ruing on the Aoli9y
under the 9onditions sAe9ified thereinF
1DfE ! Arovision that in the event of default
in Are:iu: Aay:ents after three DGE full
years@ Are:iu:s have ;een Aaid, the Aoli9y
shall ;e 9onverted into a stiAulated for: of
insuran9e, and that in the event of default in
Are:iu: Aay:ents after five D6E full years@
Are:iu:s have ;een Aaid, a sAe9ified 9ash
surrender value shall ;e availa;le, in lieu of
the stiAulated for: of insuran9e, at the
oAtion of the Aoli9yholder. "he net value of
su9h stiAulated for: of insuran9e and the
a:ount of su9h 9ash value shall not ;e less
than the reserve on the Aoli9y and dividend
additions thereto, if any, at the end of the
last 9o:Aleted Aoli9y year for whi9h
Are:iu:s shall have ;een Aaid Dthe Aoli9y to
sAe9ify the :ortality ta;le, rate of interest
and :ethod of valuation adoAted to 9o:Aute
su9h reserveE, eB9lusive of any reserve on
disa;ility ;enefits and a99idental death
;enefits, less an a:ount not to eB9eed two
and one-half Aer9ent D.PLE of the
:aBi:u: a:ount insured ;y the Aoli9y and
dividend additions thereto, if any, when the
issue age is under ten D-5E years, and less an
a:ount not to eB9eed two and one-half
Aer9ent D.PLE of the 9urrent a:ount
insured ;y the Aoli9y and dividend additions
thereto, if any, if the issue age is ten D-5E
years or older, and less any eBisting
inde;tedness to the 9o:Aany on or se9ured
;y the Aoli9yF
1DgE ! Arovision that the Aoli9y :ay ;e
surrendered to the 9o:Aany at its ho:e
offi9e within a Aeriod of not less than siBty
D,5E days after the due date of a Are:iu: in
default for the sAe9ified 9ash value<
Provided, "hat the insurer :ay defer
Aay:ent for not :ore than siB D,E :onths
after the aAAli9ation therefor is :adeF
1DhE ! ta;le that shows in figures the
nonforfeiture ;enefits availa;le under the
Aoli9y every year uAon default in Aay:ent
of Are:iu:s during at least the first twenty
D.5E years of the Aoli9y, su9h ta;le to ;egin
with the year in whi9h su9h values ;e9o:e
availa;le, and a Arovision that the 9o:Aany
will furnish uAon reCuest an eBtension of
su9h ta;le ;eyond the year shown in the
Aoli9yF
1DiE ! Arovision that sAe9ifies whi9h one of
the stiAulated for:s of insuran9e Arovided
for under the Arovision of AaragraAh DfE of
this se9tion shall ta>e effe9t in the event of
the insured@s failure, within siBty D,5E days
fro: the due date of the Are:iu: in default,
to notify the insurer in writing as to whi9h
one of su9h for:s he has sele9tedF
1DIE ! Arovision that the Aoli9y :ay ;e
reinstated at any ti:e within two D.E years
fro: the due date of the Are:iu: in default
unless the 9ash surrender value has ;een
Aaid or the Aeriod of eBtended ter:
insuran9e eBAired, uAon Arodu9tion of
eviden9e of insura;ility satisfa9tory to the
9o:Aany and Aay:ent of arrears of
Are:iu:s with interest at a rate not
eB9eeding siB Aer9ent D,LE Aer annu:
Aaya;le annuallyF
1D>E ! Arovision that when a Aoli9y shall
;e9o:e a 9lai: ;y death of the insured,
settle:ent shall ;e :ade uAon re9eiAt of due
Aroof of death, or not later than two D.E
:onths after re9eiAt of su9h AroofF
1DlE ! title on the fa9e and on the ;a9> of the
Aoli9y 9orre9tly des9ri;ing its for:F
1D:E ! sAa9e on the front or the ;a9> of the
Aoli9y for the na:e of the ;enefi9iary
designated ;y the insured with a reservation
of the insured@s right to designate or 9hange
the ;enefi9iary after the issuan9e of the
Aoli9y. "he Aoli9y :ay also Arovide that no
designation or 9hange of ;enefi9iary shall ;e
;inding on the insurer until endorsed on the
Aoli9y ;y the insurer, and that the insurer
:ay refuse to endorse the na:e of any
AroAosed ;enefi9iary who does not aAAear to
the insurer to have an insura;le interest in
the life of the insured. &u9h Aoli9y :ay also
9ontain a Arovision that if the ;enefi9iary
designated in the Aoli9y does not surrender
the Aoli9y with due Aroof of death within the
Aeriod stated in the Aoli9y, whi9h shall not
;e less than thirty DG5E days after the death
of the insured, or if the ;enefi9iary is the
estate of the insured, or is a :inor, or dies
;efore the insured, or is not legally
9o:Aetent to give valid release, then the
insurer :ay :a>e any Aay:ent thereunder
to the eBe9utor or ad:inistrator of the
insured, or to any of the insured@s relatives
;y ;lood or legal adoAtion or 9onne9tions ;y
:arriage or to any Aerson aAAearing to the
insurer to ;e eCuita;ly entitled thereto ;y
reason of having in9urred eBAense for the
:aintenan9e, :edi9al attention or ;urial of
the insuredF and
1DnE ! Arovision that when an industrial life
insuran9e Aoli9y is issued Aroviding for
a99idental or health ;enefits, or ;oth, in
addition to life insuran9e, the foregoing
Arovisions shall aAAly only to the life
insuran9e Aortion of the Aoli9y.
1!ny of the foregoing Arovisions or Aortions
thereof not aAAli9a;le to nonAarti9iAating or
ter: Aoli9ies shall to that eBtent not ;e
in9orAorated therein. "he foregoing
Arovisions shall not aAAly to Aoli9ies issued
or granted Aursuant to the nonforfeiture
Arovisions Ares9ri;ed in Arovisions of
AaragraAhs DfE and DiE of this se9tion, nor
shall Arovisions of AaragraAhs DfE, DgE, DhE,
and DiE hereof ;e reCuired in ter: insuran9e
of twenty D.5E years or less ;ut su9h ter:
Aoli9ies shall sAe9ify the :ortality ta;le, rate
of interest, and :ethod of 9o:Auting
reserves.
1&E. .G8. #o Aoli9y of industrial life
insuran9e shall ;e issued or delivered in the
PhiliAAines if it 9ontains any of the
following Arovisions<
1DaE ! Arovision that gives the insurer the
right to de9lare the Aoli9y void ;e9ause the
insured has had any disease or ail:ent,
whether sAe9ified or not, or ;e9ause the
insured has re9eived institutional, hosAital,
:edi9al or surgi9al treat:ent or attention,
eB9eAt a Arovision whi9h gives the insurer
the right to de9lare the Aoli9y void if the
insured has, within two D.E years Arior to the
issuan9e of the Aoli9y, re9eived institutional,
hosAital, :edi9al or surgi9al treat:ent or
attention and if the insured or the 9lai:ant
under the Aoli9y fails to show that the
9ondition o99asioning su9h treat:ent or
attention was not of a serious nature or was
not :aterial to the ris>F
1D;E ! Arovision that gives the insurer the
right to de9lare the Aoli9y void ;e9ause the
insured has ;een reIe9ted for insuran9e,
unless su9h right ;e 9onditioned uAon a
showing ;y the insurer that >nowledge of
su9h reIe9tion would have led to a refusal ;y
the insurer to :a>e su9h 9ontra9tF
1D9E ! Arovision that allows the 9o:Aany to
Aay the Aro9eeds of the Aoli9y at the death of
the insured to any Aerson other than the
na:ed ;enefi9iary, eB9eAt in a99ordan9e
with a standard Arovision as sAe9ified under
the Arovisions of AaragraAh D:E of the
Are9eding se9tionF
1DdE ! Arovision that li:its the ti:e within
whi9h any a9tion at law or in eCuity :ay ;e
9o::en9ed to less than siB D,E years after
the 9ause of a9tion shall a99rueF and
1DeE ! Arovision that sAe9ifies any :ode of
settle:ent at :aturity of less value than the
a:ount insured ;y the Aoli9y Alus dividend
additions, if any, less any inde;tedness to
the 9o:Aany on the Aoli9y and less any
Are:iu: that :ay ;y the ter:s of the Aoli9y
;e dedu9ted, Aay:ents to ;e :ade in
a99ordan9e with the ter:s of the Aoli9y.
1#othing 9ontained in this se9tion nor in the
Arovision of AaragraAh D;E of the Are9eding
se9tion, relating to in9ontesta;ility, shall ;e
9onstrued as Arohi;iting the life insuran9e
9o:Aany fro: Ala9ing in its industrial life
Aoli9ies Arovisions li:iting its lia;ility with
resAe9t to<
1D-E )eath resulting fro: aviation other than
as a fare-Aaying Aassenger on a regularly
s9heduled route ;etween definitely
esta;lished airAortsF and
1D.E Military or naval servi9e< Provided,
"hat if the lia;ility of the 9o:Aany is li:ited
as herein Arovided, su9h lia;ility shall in no
event ;e fiBed at an a:ount less than the
reserve on the Aoli9y DeB9luding the reserve
for any additional ;enefits in the event of
death ;y a99ident or a99idental :eans or for
;enefits in the event of any tyAe of
disa;ilityE, less any inde;tedness on or
se9ured ;y su9h Aoli9yF nor shall any
Arovision of this se9tion aAAly to any
Arovision in an industrial life insuran9e
Aoli9y for additional ;enefits in the event of
death ;y a99ident or a99idental :eans.
1"I"LE -5
1=!RI!BLE $#"R!"&
1&E. .G4. DaE #o insuran9e 9o:Aany
authoriHed to transa9t ;usiness in the
PhiliAAines shall issue, deliver, sell or use
any varia;le 9ontra9t in the PhiliAAines,
unless and until su9h 9o:Aany shall have
satisfied the o::issioner that its finan9ial
and general 9ondition and its :ethods of
oAerations, in9luding the issue and sale of
varia;le 9ontra9ts, are not and will not ;e
haHardous to the Au;li9 or to its Aoli9y and
9ontra9t owners. #o foreign insuran9e
9o:Aany shall ;e authoriHed to issue,
deliver or sell any varia;le 9ontra9t in the
PhiliAAines, unless it is li>ewise authoriHed
to do so ;y the laws of its do:i9ile.
1D;E "he ter: variable contract shall :ean
any Aoli9y or 9ontra9t on either a grouA or
on an individual ;asis issued ;y an
insuran9e 9o:Aany Aroviding for ;enefits or
other 9ontra9tual Aay:ents or values
thereunder to vary so as to refle9t
invest:ent results of any segregated
Aortfolio of invest:ents or of a designated
seAarate a99ount in whi9h a:ounts re9eived
in 9onne9tion with su9h 9ontra9ts shall have
;een Ala9ed and a99ounted for seAarately
and aAart fro: other invest:ents and
a99ounts. "his 9ontra9t :ay also Arovide
;enefits or values in9idental thereto Aaya;le
in fiBed or varia;le a:ounts, or ;oth. It shall
not ;e dee:ed to ;e a se9urity or se9urities
as defined in "he &e9urities !9t, as
a:ended, or in the Invest:ent o:Aany
!9t, as a:ended, nor su;Ie9t to regulations
under said !9ts.
1D9E In deter:ining the Cualifi9ations of a
9o:Aany reCuesting authority to issue,
deliver, sell or use varia;le 9ontra9ts, the
o::issioner shall always 9onsider the
following<
1D-E "he history, finan9ial and general
9ondition of the 9o:Aany< Provided, "hat
su9h 9o:Aany, if a foreign 9o:Aany, :ust
have deAosited with the o::issioner for
the ;enefit and se9urity of its varia;le
9ontra9t owners in the PhiliAAines, se9urities
satisfa9tory to the o::issioner 9onsisting
of ;onds of the 'overn:ent of the
PhiliAAines or its instru:entalities with an
a9tual :ar>et value of "wo :illion Aesos
DP.,555,555.55EF
1D.E "he 9hara9ter, resAonsi;ility and fitness
of the offi9ers and dire9tors of the 9o:AanyF
and
1DGE "he law and regulation under whi9h the
9o:Aany is authoriHed in the state of
do:i9ile to issue su9h 9ontra9ts.
1DdE If after noti9e and hearing, the
o::issioner shall find that the 9o:Aany is
Cualified to issue, deliver, sell or use
varia;le 9ontra9ts in a99ordan9e with this
ode and the regulations and rules issued
thereunder, the 9orresAonding order of
authoriHation shall ;e issued. !ny de9ision
or order denying authority to issue, deliver,
sell or use varia;le 9ontra9ts shall 9learly
and distin9tly state the reasons and grounds
on whi9h it is ;ased.
1&E. .G7. !ny insuran9e 9o:Aany issuing
varia;le 9ontra9ts Aursuant to this ode :ay
in its dis9retion issue 9ontra9ts Aroviding a
9o:;ination of fiBed a:ount and varia;le
a:ount of ;enefits and for oAtion lu:A-su:
Aay:ent of ;enefits.
1&E. .35. Every varia;le 9ontra9t for:
delivered or issued for delivery in the
PhiliAAines, and every 9ertified for:
eviden9ing varia;le ;enefits issued Aursuant
to any su9h 9ontra9t on a grouA ;asis, and
the aAAli9ation, rider and endorse:ent for:s
aAAli9a;le thereto and used in 9onne9tion
therewith, shall ;e su;Ie9t to the Arior
aAAroval of the o::issioner.
1&E. .3-. Illustration of ;enefits Aaya;le
under any varia;le 9ontra9t shall not in9lude
or involve AroIe9tions of Aast invest:ent
eBAerien9e into the future and shall 9onfor:
with the rules and regulations Aro:ulgated
;y the o::issioner.
1&E. .3.. =aria;le 9ontra9ts :ay ;e issued
on the industrial life ;asis, Arovided that the
Aertinent Arovisions of this ode and of the
rules and regulations of the o::issioner
governing varia;le 9ontra9ts are 9o:Alied
with in 9onne9tion with su9h 9ontra9ts.
1&E. .3G. Every life insuran9e 9o:Aany
authoriHed under the Arovisions of this ode
to issue, deliver, sell or use varia;le
9ontra9ts shall, in 9onne9tion with the sa:e,
esta;lish one or :ore seAarate a99ounts to
;e >nown as seAarate varia;le a99ounts. !ll
a:ounts re9eived ;y the 9o:Aany in
9onne9tion with any su9h 9ontra9ts whi9h
are reCuired ;y the ter:s thereof, to ;e
allo9ated or aAAlied to one or :ore
designated seAarate varia;le a99ounts shall
;e Ala9ed in su9h designated a99ount or
a99ounts. "he assets and lia;ilities of ea9h
su9h seAarate varia;le a99ount shall at all
ti:es ;e 9learly identifia;le and
distinguisha;le fro: the assets and lia;ilities
in all other a99ounts of the 9o:Aany.
#otwithstanding any Arovision of law to the
9ontrary, the assets held in any su9h seAarate
varia;le a99ount shall not ;e 9hargea;le
with lia;ilities arising out of any other
;usiness the 9o:Aany :ay 9ondu9t ;ut shall
;e held and aAAlied eB9lusively for the
;enefit of the owners or ;enefi9iaries of the
varia;le 9ontra9ts aAAli9a;le thereto. In the
event of the insolven9y of the 9o:Aany, the
assets of ea9h su9h seAarate varia;le a99ount
shall ;e aAAlied to the 9ontra9tual 9lai:s of
the owners or ;enefi9iaries of the varia;le
9ontra9ts aAAli9a;le thereto. EB9eAt as
otherwise sAe9ifi9ally Arovided ;y the
9ontra9t, no sale, eB9hange or other transfer
of assets :ay ;e :ade ;y a 9o:Aany,
;etween any of its seAarate a99ounts or
;etween any other invest:ent a99ount and
one or :ore of its seAarate a99ounts, unless
in the 9ase of a transfer into a seAarate
a99ount, su9h transfer is :ade solely to
esta;lish the a99ount or to suAAort the
oAeration of the 9ontra9ts with resAe9t to the
seAarate a99ount to whi9h the transfer is
:ade, or in 9ase of a transfer fro: a seAarate
a99ount, su9h transfer would not 9ause the
re:aining assets of the a99ount to ;e9o:e
less than the reserves and other 9ontra9t
lia;ilities with resAe9t to su9h seAarate
a99ount. &u9h transfer, whether into or fro:
a seAarate a99ount, shall ;e :ade ;y a
transfer of 9ash, or ;y a transfer of se9urities
having a valuation whi9h 9ould ;e readily
deter:ined in the :ar>et Ala9e< Provided,
"hat su9h transfer of se9urities is aAAroved
;y the o::issioner. "he o::issioner
:ay authoriHe other transfers a:ong su9h
a99ounts, if, in his oAinion, su9h transfers
would not ;e ineCuita;le. !ll a:ounts and
assets allo9ated to any su9h seAarate varia;le
a99ount shall ;e owned ;y the 9o:Aany and
with resAe9t to the sa:e the 9o:Aany shall
not ;e nor hold itself out to ;e a trustee.
1&E. .33. !ny insuran9e 9o:Aany whi9h
has esta;lished one or :ore seAarate
varia;le a99ounts Aursuant to the Are9eding
se9tion :ay invest and reinvest all or any
Aart of the assets allo9ated to any su9h
a99ount in the se9urities and invest:ents
authoriHed ;y &e9tions .53, .5,, .58 and
.54 for any of the funds of an insuran9e
9o:Aany in su9h a:ount or a:ounts as :ay
;e aAAroved ;y the o::issioner. In
addition thereto, su9h 9o:Aany :ay also
invest in 9o::on sto9>s or other eCuities
whi9h are listed on or ad:itted to trading in
a se9urities eB9hange lo9ated in the
PhiliAAines, or whi9h are Au;li9ly held and
traded in the over-the-9ounter :ar>et as
defined ;y the o::issioner and as to
whi9h :ar>et Cuotations have ;een
availa;le< Provided, hoever, "hat no su9h
9o:Aany shall invest in eB9ess of ten
Aer9ent D-5LE of the assets of any su9h
seAarate varia;le a99ounts in any one
9orAoration issuing su9h 9o::on sto9>. "he
assets and invest:ents of su9h seAarate
varia;le a99ounts shall not ;e ta>en into
a99ount in aAAlying the Cuantitative
invest:ent li:itations aAAli9a;le to other
invest:ents of the 9o:Aany. In the Aur9hase
of 9o::on 9aAital sto9> or other eCuities,
the insurer shall designate to the ;ro>er, or
to the seller if the Aur9hase is not :ade
through a ;ro>er, the sAe9ifi9 varia;le
a99ount for whi9h the invest:ent is :ade.
1&E. .36. !ssets allo9ated to any seAarate
varia;le a99ount shall ;e valued at their
:ar>et value on the date of any valuation, or
if there is no readily availa;le :ar>et value
then in a99ordan9e with the ter:s of the
varia;le 9ontra9t aAAli9a;le to su9h assets,
or if there are no su9h 9ontra9t ter:s then in
su9h :anner as :ay ;e Ares9ri;ed ;y the
rules and regulations of the o::issioner.
1&E. .3,. "he reserve lia;ility for varia;le
9ontra9ts shall ;e esta;lished in a99ordan9e
with a9tuarial Aro9edures that re9ogniHe the
varia;le nature of the ;enefits Arovided, and
shall ;e aAAroved ;y the o::issioner.
1"I"LE --
1L!IM& &E""LEME#"
1&E. .38. DaE #o insuran9e 9o:Aany doing
;usiness in the PhiliAAines shall refuse,
without Iust 9ause, to Aay or settle 9lai:s
arising under 9overages Arovided ;y its
Aoli9ies, nor shall any su9h 9o:Aany engage
in unfair 9lai: settle:ent Ara9ti9es. !ny of
the following a9ts ;y an insuran9e 9o:Aany,
if 9o::itted without Iust 9ause and
Aerfor:ed with su9h freCuen9y as to
indi9ate a general ;usiness Ara9ti9e, shall
9onstitute unfair 9lai: settle:ent Ara9ti9es<
1D-E 0nowingly :isreAresenting to
9lai:ants Aertinent fa9ts or Aoli9y
Arovisions relating to 9overage at issueF
1D.E +ailing to a9>nowledge with reasona;le
Aro:Atness Aertinent 9o::uni9ations with
resAe9t to 9lai:s arising under its Aoli9iesF
1DGE +ailing to adoAt and i:Ale:ent
reasona;le standards for the Aro:At
investigation of 9lai:s arising under its
Aoli9iesF
1D3E #ot atte:Ating in good faith to
effe9tuate Aro:At, fair and eCuita;le
settle:ent of 9lai:s su;:itted in whi9h
lia;ility has ;e9o:e reasona;ly 9learF or
1D6E o:Aelling Aoli9yholders to institute
suits to re9over a:ounts due under its
Aoli9ies ;y offering without Iustifia;le
reason su;stantially less than the a:ounts
ulti:ately re9overed in suits ;rought ;y
the:.
1D;E Eviden9e as to nu:;ers and tyAes of
valid and Iustifia;le 9o:Alaints to the
o::issioner against an insuran9e
9o:Aany, and the o::issioner@s
9o:Alaint eBAerien9e with other insuran9e
9o:Aanies writing si:ilar lines of insuran9e
shall ;e ad:issi;le in eviden9e in an
ad:inistrative or Iudi9ial Aro9eeding
;rought under this se9tion.
1D9E If it is found, after noti9e and an
oAAortunity to ;e heard, that an insuran9e
9o:Aany has violated this se9tion, ea9h
instan9e of non9o:Alian9e with AaragraAh
DaE :ay ;e treated as a seAarate violation of
this se9tion and shall ;e 9onsidered
suffi9ient 9ause for the susAension or
revo9ation of the 9o:Aany@s 9ertifi9ate of
authority.
1&E. .34. "he Aro9eeds of a life insuran9e
Aoli9y shall ;e Aaid i::ediately uAon
:aturity of the Aoli9y, unless su9h Aro9eeds
are :ade Aaya;le in install:ents or as an
annuity, in whi9h 9ase the install:ents, or
annuities shall ;e Aaid as they ;e9o:e due<
Provided, hoever, "hat in the 9ase of a
Aoli9y :aturing ;y the death of the insured,
the Aro9eeds thereof shall ;e Aaid within
siBty D,5E days after Aresentation of the
9lai: and filing of the Aroof of death of the
insured. Refusal or failure to Aay the 9lai:
within the ti:e Ares9ri;ed herein will entitle
the ;enefi9iary to 9olle9t interest on the
Aro9eeds of the Aoli9y for the duration of the
delay at the rate of twi9e the 9eiling
Ares9ri;ed ;y the Monetary Board, unless
su9h failure or refusal to Aay is ;ased on the
ground that the 9lai: is fraudulent.
1"he Aro9eeds of the Aoli9y :aturing ;y the
death of the insured Aaya;le to the
;enefi9iary shall in9lude the dis9ounted
value of all Are:iu:s Aaid in advan9e of
their due dates, ;ut are not due and Aaya;le
at :aturity.
1&E. .37. "he a:ount of any loss or
da:age for whi9h an insurer :ay ;e lia;le,
under any Aoli9y other than life insuran9e
Aoli9y, shall ;e Aaid within thirty DG5E days
after Aroof of loss is re9eived ;y the insurer
and as9ertain:ent of the loss or da:age is
:ade either ;y agree:ent ;etween the
insured and the insurer or ;y ar;itrationF ;ut
if su9h as9ertain:ent is not had or :ade
within siBty D,5E days after su9h re9eiAt ;y
the insurer of the Aroof of loss, then the loss
or da:age shall ;e Aaid within ninety D75E
days after su9h re9eiAt. Refusal or failure to
Aay the loss or da:age within the ti:e
Ares9ri;ed herein will entitle the assured to
9olle9t interest on the Aro9eeds of the Aoli9y
for the duration of the delay at the rate of
twi9e the 9eiling Ares9ri;ed ;y the Monetary
Board, unless su9h failure or refusal to Aay
is ;ased on the ground that the 9lai: is
fraudulent.
1&E. .65. In 9ase of any litigation for the
enfor9e:ent of any Aoli9y or 9ontra9t of
insuran9e, it shall ;e the duty of the
o::issioner or the ourt, as the 9ase :ay
;e, to :a>e a finding as to whether the
Aay:ent of the 9lai: of the insured has ;een
unreasona;ly denied or withheldF and in the
affir:ative 9ase, the insuran9e 9o:Aany
shall ;e adIudged to Aay da:ages whi9h
shall 9onsist of attorney@s fees and other
eBAenses in9urred ;y the insured Aerson ;y
reason of su9h unreasona;le denial or
withholding of Aay:ent Alus interest of
twi9e the 9eiling Ares9ri;ed ;y the Monetary
Board of the a:ount of the 9lai: due the
insured, fro: the date following the ti:e
Ares9ri;ed in &e9tion .34 or in &e9tion .37,
as the 9ase :ay ;e, until the 9lai: is fully
satisfied< Provided, "hat failure to Aay any
su9h 9lai: within the ti:e Ares9ri;ed in said
se9tions shall ;e 9onsidered prima facie
eviden9e of unreasona;le delay in Aay:ent.
1&E. .6-. It is unlawful to<
1DaE Present or 9ause to ;e Aresented any
fraudulent 9lai: for the Aay:ent of a loss
under a 9ontra9t of insuran9eF and
1D;E +raudulently AreAare, :a>e or su;s9ri;e
any writing with intent to Aresent or use the
sa:e, or to allow it to ;e Aresented in
suAAort of any su9h 9lai:. !ny Aerson who
violates this se9tion shall ;e Aunished ;y a
fine not eB9eeding twi9e the a:ount 9lai:ed
or i:Arison:ent of two D.E years, or ;oth, at
the dis9retion of the 9ourt.
1"I"LE -.
1ER!MI#!"I$# $+ $MP!#IE&
1&E. .6.. "he o::issioner shall reCuire
every insuran9e 9o:Aany doing ;usiness in
the PhiliAAines to >eeA its ;oo>s, re9ords,
a99ounts and vou9hers in su9h :anner that
he or his authoriHed reAresentatives :ay
readily verify its annual state:ents and
as9ertain whether the 9o:Aany is solvent
and has 9o:Alied with the Arovisions of this
ode or the 9ir9ulars, instru9tions, rulings or
de9isions of the o::issioner.
1&E. .6G. "he o::issioner shall at least
on9e a year and whenever he 9onsiders the
Au;li9 interest so de:ands, 9ause an
eBa:ination to ;e :ade into the affairs,
finan9ial 9ondition and :ethod of ;usiness
of every insuran9e 9o:Aany authoriHed to
transa9t ;usiness in the PhiliAAines and of
any other Aerson, fir: or 9orAoration
:anaging the affairs andKor AroAerty of su9h
insuran9e 9o:Aany. &u9h 9o:Aany, as well
as su9h :anaging Aerson, fir: or
9orAoration, shall su;:it to the eBa:iner all
su9h ;oo>s, AaAers and se9urities as he :ay
reCuire and su9h eBa:iner shall also have
the Aower to eBa:ine the offi9ers of su9h
9o:Aany under oath tou9hing its ;usiness
and finan9ial 9ondition, and the authority to
transa9t ;usiness in the PhiliAAines of any
su9h 9o:Aany shall ;e susAended ;y the
o::issioner if su9h eBa:ination is
refused and su9h 9o:Aany shall not
thereafter ;e allowed to transa9t further
;usiness in the PhiliAAines until it has fully
9o:Alied with the Arovisions of this se9tion.
1'overn:ent-owned or -9ontrolled
9orAorations or entities engaged in so9ial or
Arivate insuran9e shall si:ilarly ;e su;Ie9t
to su9h eBa:ination ;y the o::issioner
unless their resAe9tive 9harters otherwise
Arovide.
1"I"LE -G
1&U&PE#&I$# $R RE=$!"I$# $+
!U"($RI"*
1&E. .63. If the o::issioner is of the
oAinion uAon eBa:ination of other eviden9e
that any do:esti9 or foreign insuran9e
9o:Aany is in an unsound 9ondition, or that
it has failed to 9o:Aly with the Arovisions of
law or regulations o;ligatory uAon it, or that
its 9ondition or :ethod of ;usiness is su9h
as to render its Aro9eedings haHardous to the
Au;li9 or to its Aoli9yholders, or that its net
worth reCuire:ent, in the 9ase of a do:esti9
sto9> 9o:Aany, or its availa;le 9ash assets,
in the 9ase of a do:esti9 :utual 9o:Aany,
or its se9urity deAosits, in the 9ase of a
foreign 9o:Aany, is i:Aaired or defi9ient, or
that the :argin of solven9y reCuired of su9h
9o:Aany is defi9ient, the o::issioner is
authoriHed to susAend or revo>e all
9ertifi9ates of authority granted to su9h
insuran9e 9o:Aany, its offi9ers and agents,
and no new ;usiness shall thereafter ;e done
;y su9h 9o:Aany or for su9h 9o:Aany ;y its
agent in the PhiliAAines while su9h
susAension, revo9ation or disa;ility
9ontinues or until its authority to do ;usiness
is restored ;y the o::issioner. Before
restoring su9h authority, the o::issioner
shall reCuire the 9o:Aany 9on9erned to
su;:it to hi: a ;usiness Alan showing the
9o:Aany@s esti:ated re9eiAts and
dis;urse:ents, as well as the ;asis therefor,
for the neBt su99eeding three DGE years.
1"I"LE -3
1!PP$I#"ME#" $+ $#&ER=!"$R
1&E. .66. If at any ti:e ;efore, or after,
the susAension or revo9ation of the
9ertifi9ate of authority of an insuran9e
9o:Aany as Arovided in the Are9eding title,
the o::issioner finds that su9h 9o:Aany
is in a state of 9ontinuing ina;ility or
unwillingness to :aintain a 9ondition of
solven9y or liCuidity dee:ed adeCuate to
Arote9t the interest of Aoli9yholders and
9reditors, he :ay aAAoint a 9onservator to
ta>e 9harge of the assets, lia;ilities, and the
:anage:ent of su9h 9o:Aany, 9olle9t all
:oneys and de;ts due to said 9o:Aany and
eBer9ise all Aowers ne9essary to Areserve the
assets of said 9o:Aany, reorganiHe the
:anage:ent thereof, and restore its
via;ility. "he said 9onservator shall have the
Aower to overrule or revo>e the a9tions of
the Arevious :anage:ent and ;oard of
dire9tors of the said 9o:Aany, any Arovision
of law, or of the arti9les of in9orAoration or
;ylaws of the 9o:Aany, to the 9ontrary
notwithstanding, and su9h other Aowers as
the o::issioner shall dee: ne9essary.
1"he 9onservator :ay ;e another insuran9e
9o:Aany doing ;usiness in the PhiliAAines,
any offi9er or offi9ers of su9h 9o:Aany, or
any other 9o:Aetent and Cualified Aerson,
fir: or 9orAoration. "he re:uneration of the
9onservator and other eBAenses attendant to
the 9onservation shall ;e ;orne ;y the
insuran9e 9o:Aany 9on9erned.
1"he 9onservator shall not ;e su;Ie9t to any
a9tion, 9lai: or de:and ;y, or lia;ility to,
any Aerson in resAe9t of anything done or
o:itted to ;e done in good faith in the
eBer9ise, or in 9onne9tion with the eBer9ise,
of the Aowers 9onferred on the 9onservator.
1"he 9onservator aAAointed shall reAort and
;e resAonsi;le to the o::issioner until
su9h ti:e as the o::issioner is satisfied
that the insuran9e 9o:Aany 9an 9ontinue to
oAerate on its own and the 9onservatorshiA
shall li>ewise ;e ter:inated should the
o::issioner, on the ;asis of the reAort of
the 9onservator or of his own findings,
deter:ine that the 9ontinuan9e in ;usiness
of the insuran9e 9o:Aany would ;e
haHardous to Aoli9yholders and 9reditors, in
whi9h 9ase the Arovisions of "itle -6 shall
aAAly.
1#o insuran9e 9o:Aany, life or non-life, or
any Arofessional reinsurer, ordered to ;e
liCuidated ;y the o::issioner under the
Arovisions hereunder :ay ;e reha;ilitated or
authoriHed to transa9t anew, insuran9e or
reinsuran9e ;usiness, as the 9ase :ay ;e.
1"I"LE -6
1PR$EE)I#'& UP$# I#&$L=E#*
1&E. .6,. /henever, uAon eBa:ination or
other eviden9e, it shall ;e dis9losed that the
9ondition of any insuran9e 9o:Aany doing
;usiness in the PhiliAAines is one of
insolven9y, or that its 9ontinuan9e in
;usiness would ;e haHardous to its
Aoli9yholders and 9reditors, the
o::issioner shall forthwith order the
9o:Aany to 9ease and desist fro:
transa9ting ;usiness in the PhiliAAines and
shall designate a re9eiver to i::ediately
ta>e 9harge of its assets and lia;ilities, as
eBAeditiously as Aossi;le 9olle9t and gather
all the assets and ad:inister the sa:e for the
;enefit of its Aoli9yholders and 9reditors,
and eBer9ise all the Aowers ne9essary for
these AurAoses in9luding, ;ut not li:ited to,
;ringing suits and fore9losing :ortgages in
the na:e of the insuran9e 9o:Aany.
1"he o::issioner shall thereuAon
deter:ine within ninety D75E days whether
the insuran9e 9o:Aany :ay ;e reorganiHed
or otherwise Ala9ed in su9h 9ondition so that
it :ay ;e Aer:itted to resu:e ;usiness with
safety to its Aoli9yholders and 9reditors and
shall Ares9ri;e the 9onditions under whi9h
su9h resu:Ation of ;usiness shall ta>e Ala9e
as well as the ti:e for fulfill:ent of su9h
9onditions. In su9h 9ase, the eBAenses and
fees in the 9olle9tion and ad:inistration of
the insuran9e 9o:Aany shall ;e deter:ined
;y the o::issioner and shall ;e Aaid out
of the assets of su9h 9o:Aany.
1If the o::issioner shall deter:ine and
9onfir: within the said Aeriod that the
insuran9e 9o:Aany is insolvent, as defined
hereunder, or 9annot resu:e ;usiness with
safety to its Aoli9yholders and 9reditors, he
shall, if the Au;li9 interest reCuires, order its
liCuidation, indi9ate the :anner of its
liCuidation and aAArove a liCuidation Alan
and i:Ale:ent it i::ediately. "he
o::issioner shall designate a 9o:Aetent
and Cualified Aerson as liCuidator who shall
ta>e over the fun9tions of the re9eiver
Areviously designated and, with all
9onvenient sAeed, reinsure all its outstanding
Aoli9ies, 9onvert the assets of the insuran9e
9o:Aany to 9ash, or sell, assign or otherwise
disAose of the sa:e to the Aoli9yholders,
9reditors and other Aarties for the AurAose of
settling the lia;ilities or Aaying the de;ts of
su9h 9o:Aany and he :ay, in the na:e of
the 9o:Aany, institute su9h a9tions as :ay
;e ne9essary in the aAAroAriate 9ourt to
9olle9t and re9over a99ounts and assets of
the insuran9e 9o:Aany, and to do su9h other
a9ts as :ay ;e ne9essary to 9o:Alete the
liCuidation as ordered ;y the o::issioner.
1"he Arovisions of any law to the 9ontrary
notwithstanding, the a9tions of the
o::issioner under this se9tion shall ;e
final and eBe9utory, and 9an ;e set aside ;y
the 9ourt uAon Aetition ;y the 9o:Aany and
only if there is 9onvin9ing Aroof that the
a9tion is Alainly ar;itrary and :ade in ;ad
faith. "he o::issioner, through the
&oli9itor 'eneral, shall then file the
9orresAonding answer re9iting the
Aro9eeding ta>en and Araying the assistan9e
of the 9ourt in the liCuidation of the
9o:Aany. #o restraining order or inIun9tion
shall ;e issued ;y the 9ourt enIoining the
o::issioner fro: i:Ale:enting his
a9tions under this se9tion, unless there is
9onvin9ing Aroof that the a9tion of the
o::issioner is Alainly ar;itrary and :ade
in ;ad faith and the Aetitioner or Alaintiff
files with the ler> or Judge of the ourt in
whi9h the a9tion is Aending a ;ond eBe9uted
in favor of the o::issioner in an a:ount
to ;e fiBed ;y the 9ourt. "he restraining
order or inIun9tion shall ;e refused or, if
granted, shall ;e dissolved uAon filing ;y the
o::issioner, if he so desires, of a ;ond in
an a:ount twi9e the a:ount of the ;ond of
the Aetitioner or Alaintiff 9onditioned that it
will Aay the da:ages whi9h the Aetition or
Alaintiff :ay suffer ;y the refusal or the
dissolution of the inIun9tion. "he Arovisions
of Rule 64 of the #ew Rules of ourt
insofar as they are aAAli9a;le shall govern
the issuan9e and dissolution of the
restraining order or inIun9tion 9onte:Alated
in this se9tion.
1!ll Aro9eedings under this title shall ;e
given Areferen9e in the 9ourts. "he
o::issioner shall not ;e reCuired to Aay
any fee to any Au;li9 offi9er for filing,
re9ording, or in any :anner authenti9ating
any AaAer or instru:ent relating to the
Aro9eedings.
1!s used in this title, the ter: Insolvency
shall :ean the ina;ility of an insuran9e
9o:Aany to Aay its lawful o;ligations as
they fall due in the usual and ordinary
9ourse of ;usiness as :ay ;e shown ;y its
failure to :aintain the solven9y
reCuire:ents under &e9tion .55 of this
ode.
1&E. .68. "he re9eiver or the liCuidator, as
the 9ase :ay ;e, designated under the
Arovisions of this title, shall not ;e su;Ie9t to
any a9tion, 9lai: or de:and ;y, or lia;ility
to, any Aerson in resAe9t of anything done or
o:itted to ;e done in good faith in the
eBer9ise, or in 9onne9tion with the eBer9ise,
of the Aowers 9onferred on su9h re9eiver or
liCuidator.
1"I"LE -,
1$#&$LI)!"I$# !#) MER'ER $+
I#&UR!#E $MP!#IE&
1&E. .64. UAon Arior noti9e to the
o::issioner, two D.E or :ore do:esti9
insuran9e 9o:Aanies, a9ting through their
resAe9tive ;oards of dire9tors, :ay negotiate
to :erge into a single 9orAoration whi9h
shall ;e one of the 9onstituent 9orAorations,
or 9onsolidate into a single 9orAoration
whi9h shall ;e a new 9orAoration to ;e
for:ed ;y the 9onsolidation. ! 9o::on
agree:ent of the AroAosed :erger or
9onsolidation shall ;e drawn uA for
su;:ission to the sto9>holders or :e:;ers
of the 9onstituent 9o:Aanies for adoAtion
and aAAroval in a99ordan9e with the
Arovisions of the resAe9tive ;ylaws of the
9onstituent 9o:Aanies and all eBisting laws
that :ay ;e Aertinent.
1&E. .67. &u9h agree:ent shall in9lude,
aside fro: the AroAosed :erger or
9onsolidation, Arovisions relative to the
:anner of transfer of assets to and
assu:Ation of lia;ilities ;y the a;sor;ing or
a9Cuiring 9o:Aany fro: the a;sor;ed or
dissolved 9o:Aany or 9o:AaniesF the
AroAosed arti9les of :erger or 9onsolidation
and ;ylaws of the surviving or a9Cuiring
9o:AanyF the 9orAorate na:e to ;e adoAted
whi9h should not ;e that of any other
eBisting 9o:Aany transa9ting si:ilar
;usiness or one so si:ilar as to ;e 9al9ulated
to :islead the Au;li9F the rights of the
sto9>holders or :e:;ers of the a;sor;ed or
dissolved 9o:AaniesF date of effe9tivity of
the :erger or 9onsolidationF and su9h
Aarti9ulars as :ay ;e ne9essary to eBAlain
and :a>e :anifest the o;Ie9ts and AurAoses
of the a;sor;ing or a9Cuiring 9o:Aany.
1&E. .,5. UAon eBe9ution of su9h
agree:ent to :erge or 9onsolidate ;y and
;etween or a:ong the ;oards of dire9tors of
the 9onstituent 9o:Aanies, noti9e thereof
shall ;e :ailed i::ediately to their
Aoli9yholders and 9reditors. "he 9o:Aany or
9o:Aanies to ;e a;sor;ed or dissolved shall
dis9harge all its a99rued lia;ilitiesF
otherwise, su9h lia;ilities shall, with the
9onsent of its 9reditors, ;e transferred to and
assu:ed ;y the a;sor;ing or a9Cuiring
9o:Aany, or su9h lia;ilities ;e reinsured ;y
the latter. In the 9ase of su9h Aoli9ies as are
su;Ie9t to 9an9ellation ;y the 9o:Aany or
9o:Aanies to ;e a;sor;ed or dissolved,
sa:e :ay ;e 9an9elled Aursuant to the ter:s
thereof in lieu of su9h transfer, assu:Ation,
or reinsuran9e.
1&E. .,-. UAon aAAroval or adoAtion in
the :eetings of the sto9>holders or :e:;ers
9alled for the AurAose in ea9h of the
9onstituent 9o:Aanies of the agree:ent to
:erge or 9onsolidate, all sto9>holders or
:e:;ers dissenting or o;Ie9ting to the
:erger or 9onsolidation shall ;e Aaid the
value of their shares ;y the 9o:Aany
9on9erned in a99ordan9e with the ;ylaws
thereof.
1&E. .,.. UAon aAAroval or adoAtion of
the agree:ent to :erge or 9onsolidate ;y
the sto9>holders or :e:;ers of the
9onstituent 9o:Aanies, the 9orresAonding
arti9les of :erger or of 9onsolidation shall
;e duly eBe9uted ;y the Aresidents and
attested ;y the 9orAorate se9retaries and
shall ;ear the 9orAorate seals of the :erging
or 9onsolidating 9o:Aanies setting forth<
1DaE "he Alan of :erger or the Alan of
9onsolidationF
1D;E !s to ea9h 9orAoration, the nu:;er of
shares outstanding, or in 9ase of :utual
9orAorations, the nu:;er of :e:;ersF and
1D9E !s to ea9h 9orAoration, the nu:;er of
shares or :e:;ers voted for and against
su9h Alan, resAe9tively. "hereafter, a
9ertified 9oAy of su9h arti9les of :erger or
9onsolidation, together with a 9ertifi9ate of
aAAroval or adoAtion ;y the sto9>holders or
:e:;ers of su9h arti9les of :erger or
9onsolidation, verified ;y affidavits of su9h
offi9ers and under the seal of the 9onstituent
9o:Aanies, shall ;e su;:itted to the
o::issioner, together with su9h other
AaAers or do9u:ents whi9h the
o::issioner :ay reCuire, for his
9onsideration.
1&E. .,G. "he arti9les of :erger or of
9onsolidation, signed and verified as
hereina;ove reCuired, shall ;e filed with the
&e9urities and EB9hange o::ission for its
eBa:ination and aAAroval.
1&E. .,3. UAon re9eiAt fro: the &e9urities
and EB9hange o::ission of the 9ertifi9ate
of :erger or of 9onsolidation, the
9onstituent 9o:Aanies shall surrender to the
o::issioner their resAe9tive 9ertifi9ates of
authority to transa9t insuran9e ;usiness. "he
a;sor;ing or surviving 9o:Aany in 9ase of
:erger, or the newly for:ed 9o:Aany in
9ase of 9onsolidation, shall i::ediately file
with the o::issioner the 9orresAonding
aAAli9ation for issuan9e of a new 9ertifi9ate
of authority to transa9t insuran9e ;usiness,
together with a 9ertified 9oAy of the
9ertifi9ate of :erger or of 9onsolidation, and
of the 9ertifi9ate of in9rease of sto9>s, if
there is any, issued ;y the &e9urities and
EB9hange o::ission.
1&E. .,6. #othing in this title shall ;e
9onstrued to enlarge the Aowers of the
a;sor;ing or surviving 9o:Aany in 9ase of
:erger, or the newly for:ed 9o:Aany in
9ase of 9onsolidation, eB9eAt those 9onferred
;y the 9ertifi9ate of :erger or of
9onsolidation and the arti9les of :erger or
of 9onsolidation, or the a:ended arti9les of
in9orAoration, as registered with the
&e9urities and EB9hange o::ission.
1&E. .,,. #o dire9tor, offi9er, or
sto9>holder of any su9h 9onstituent
9o:Aanies shall re9eive any fee,
9o::ission, 9o:Aensation, or other
valua;le 9onsideration whatsoever, dire9tly
or indire9tly, or in any :anner aiding,
Aro:oting or assisting in su9h :erger or
9onsolidation.
1&E. .,8. "he :erger or 9onsolidation of
9o:Aanies under this ode shall ;e su;Ie9t
to the Arovisions of the orAoration ode,
and, in those 9ases sAe9ified in ReAu;li9 !9t
#o. 6366, as a:ended, ;e further su;Ie9t to
the Arovisions of said law.
1"I"LE -8
1MU"U!LIM!"I$# $+ &"$0 LI+E
I#&UR!#E $MP!#IE&
1&E. .,4. !ny do:esti9 sto9> life
insuran9e 9o:Aany doing ;usiness in the
PhiliAAines :ay 9onvert itself into an
in9orAorated :utual life insurer. "o that end
it :ay Arovide and 9arry out a Alan for the
a9Cuisition of the outstanding shares of its
9aAital sto9> for the ;enefit of its
Aoli9yholders, or any 9lass or 9lasses of its
Aoli9yholders, ;y 9o:Alying with the
reCuire:ents of this 9haAter.
1&E .,7. &u9h Alan shall in9lude
aAAroAriate Aro9eedings for a:ending the
insurer@s arti9les of in9orAoration to give
effe9t to the a9Cuisition, ;y said insurer, for
the ;enefit of its Aoli9yholders or any 9lass
or 9lasses thereof, of the outstanding shares
of its 9aAital sto9> and the 9onversion of the
insurer fro: a sto9> 9orAoration into a
nonsto9> 9orAoration for the ;enefit of its
:e:;ers. "he :e:;ers of su9h nonsto9>
9orAoration shall ;e the Aoli9yholders fro:
ti:e to ti:e of the 9lass or 9lasses for whose
;enefit the sto9> of the insurer was a9Cuired,
and the Aoli9yholders of su9h other 9lass or
9lasses as :ay ;e sAe9ified in su9h
9orAoration@s arti9les of in9orAoration as
they :ay ;e a:ended fro: ti:e to ti:e.
&u9h Alan shall ;e<
1DaE !doAted ;y a vote of a :aIority of the
dire9torsF
1D;E !AAroved ;y the vote of the holders of
at least a :aIority of the outstanding shares
at a sAe9ial :eeting of shareholders 9alled
for that AurAose, or ;y the written 9onsent of
su9h shareholdersF
1D9E &u;:itted to the o::issioner and
aAAroved ;y hi: in writingF
1DdE !AAroved ;y a :aIority vote of all the
Aoli9yholders of the 9lass or 9lasses for
whose ;enefit the sto9> is to ;e a9Cuired
voting at an ele9tion ;y the Aoli9yholders
9alled for that AurAose, su;Ie9t to the
Arovisions of &e9tion .8-. "he ter:s
policyholder or policyholders as used in this
9haAter shall ;e dee:ed to :ean the Aerson
or Aersons insured under an individual
Aoli9y of life insuran9e, or of health and
a99ident insuran9e, or of any 9o:;ination of
life, health and a99ident insuran9e. "hey
shall also in9lude the Aerson or Aersons to
who: any annuity or Aure endow:ent is
Aresently or ArosAe9tively Aaya;le ;y the
ter:s of an individual annuity or Aure
endow:ent 9ontra9t, eB9eAt where the
Aoli9y or 9ontra9t de9lares so:e other
Aerson to ;e the owner or holder thereof, in
whi9h 9ase su9h other Aerson shall ;e
dee:ed Aoli9yholder. In any 9ase where a
Aoli9y or 9ontra9t na:es two or :ore
Aersons as Ioint insured, Aayees, owners or
holders thereof, the Aersons so na:ed shall
;e dee:ed 9olle9tively to ;e one D-E
Aoli9yholder for the AurAose of this 9haAter.
In any 9ase where a Aoli9y or 9ontra9t shall
have ;een assigned ;y assign:ent a;solute
on its fa9e to an assignee other than the
insurer, and su9h assign:ent shall have ;een
filed at the Arin9iAal offi9e of the insurer at
least thirty DG5E days Arior to the date of any
ele9tion or :eeting referred to in this
9haAter, then su9h assignee shall ;e dee:ed
at su9h ele9tion or :eeting to ;e the
Aoli9yholder. +or the AurAose of this 9haAter
the ter:s policyholder and policyholders
in9lude the e:Aloyer to who:, or a
Aresident, se9retary or other eBe9utive
offi9er of any 9orAoration or asso9iation to
whi9h a :aster grouA Aoli9y has ;een
issued, ;ut eB9lude the holders of
9ertifi9ates or Aoli9ies issued under or in
9onne9tion with a :aster grouA Aoli9y.
Benefi9iaries under un:atured 9ontra9ts
shall not as su9h ;e dee:ed to ;e
Aoli9yholdersF and
1DeE +iled with the o::issioner after
having ;een aAAroved as Arovided in this
se9tion.
1&E. .85. "he o::issioner shall
eBa:ine the Alan su;:itted to hi: under the
Arovisions of su;AaragraAh D9E of &e9tion
.,7. (e shall not aAArove su9h Alan unless
in his oAinion the rights and interests of the
insurer, its Aoli9yholders and shareholders
are Arote9ted nor unless he is satisfied that
the Alan will ;e fair and eCuita;le in its
oAeration.
1&E. .8-. "he ele9tion Ares9ri;ed ;y
su;AaragraAh DdE of &e9tion .,7 shall ;e
9alled ;y the ;oard of dire9tors or the
Aresident, and every Aoli9yholder of the
9lass or 9lasses for whose ;enefit the sto9>
is to ;e a9Cuired, whose insuran9e shall have
;een in for9e for at least one D-E year Arior to
su9h ele9tion shall have one vote, regardless
of the nu:;er of Aoli9ies or a:ount of
insuran9e he holds, and regardless of
whether su9h Aoli9ies are Aoli9ies of life
insuran9e or Aoli9ies of health and a99ident
insuran9e or annuity 9ontra9ts. #oti9e of
su9h ele9tion shall ;e given to Aoli9yholders
entitled to vote ;y :ail fro: the Arin9iAal
offi9e of su9h insurer at least thirty DG5E days
Arior to the date set for su9h ele9tion, in a
sealed enveloAe, Aostage AreAaid, addressed
to ea9h su9h Aoli9yholder at his last >nown
address.
1=oting shall ;e ;y one of the following
:ethods<
1DaE !t a :eeting of su9h Aoli9yholders,
held Aursuant to su9h noti9e, ;y ;allot in
Aerson or ;y AroBy.
1D;E If not ;y the :ethod des9ri;ed in the
Are9eding su;AaragraAh, then ;y :ail
Aursuant to a Aro9edure and on for:s to ;e
Ares9ri;ed ;y su9h Alan.
1&u9h ele9tion shall ;e 9ondu9ted under the
dire9tion and suAervision of three DGE
i:Aartial and disinterested insAe9tors
aAAointed ;y the insurer and aAAroved ;y
the o::issioner. In 9ase any Aerson
aAAointed as insAe9tor fails to aAAear at su9h
:eeting or fails or refuses to a9t at su9h
ele9tion, the va9an9y, if o99urring in
advan9e of the 9onvening of the :eeting or
in advan9e of the oAening of the :ail vote,
:ay ;e filled in the :anner Ares9ri;ed for
the aAAoint:ent of insAe9tors and, if
o99urring at the :eeting or during the
9anvass of the :ail vote, :ay ;e filled ;y
the Aerson a9ting as 9hair:an of said
:eeting or designated for that AurAose in
su9h Alan. "he de9ision, a9t or 9ertifi9ate of
a :aIority of the insAe9tors shall ;e
effe9tive in all resAe9ts as the de9ision, a9t
or 9ertifi9ate of all. "he insAe9tors of
ele9tion shall deter:ine the nu:;er of
Aoli9yholders, the voting Aower of ea9h, the
Aoli9yholders reAresented at the :eeting or
voting ;y :ail, the eBisten9e of a Cuoru:
and the authenti9ity, validity and effe9t of
AroBies. "hey shall re9eive votes, hear and
deter:ine all 9hallenges and Cuestions in
any way arising in 9onne9tion with the right
to vote, 9ount and ta;ulate all votes,
deter:ine the result, and do su9h other a9ts
as are AroAer to 9ondu9t the vote with
fairness to all Aoli9yholders. "he insAe9tors
of ele9tion shall, ;efore 9o::en9ing
Aerfor:an9e of their duties, su;s9ri;e to and
file with the insurer and with the
o::issioner an oath that they, and ea9h of
the:, will Aerfor: their duties i:Aartially,
in good faith, to the ;est of their a;ility and
as eBAeditiously as is Ara9ti9a;le. $n the
reCuest of the insurer, the o::issioner, a
Aoli9yholder or his AroBy, the insAe9tors
shall :a>e a reAort in writing of any
9hallenge or Cuestion or :atter deter:ined
;y the: and eBe9ute a 9ertifi9ate of any fa9t
found ;y the:. "hey shall also 9ertify the
result of su9h vote to the insurer and to the
o::issioner. !ny reAort or 9ertifi9ate
:ade ;y the: shall ;e prima facie eviden9e
of fa9ts stated therein. !ll ne9essary
eBAenses in9urred in 9onne9tion with su9h
ele9tion shall ;e Aaid ;y the insurer. +or the
AurAose of this se9tion, a Cuoru: shall
9onsist of five Aer9ent D6LE of the
Aoli9yholders of su9h insurer entitled to vote
at su9h ele9tion.
1&E. .8.. In 9arrying out any su9h Alan,
the insurer :ay a9Cuire any shares of its
own sto9> ;y gift, ;eCuest or Aur9hase. !ny
shares so a9Cuired shall, unless as a result of
su9h a9Cuisition all of the shares of the
insurer shall have ;een a9Cuired, ;e
a9Cuired in trust for the Aoli9yholders of the
9lass or 9lasses for whose ;enefit the Alan
Arovides that the sto9> of the insurer shall ;e
a9Cuired as hereinafter Arovided. &u9h
shares shall ;e assigned and transferred on
the ;oo>s of su9h insurer and aAAroved ;y
the o::issioner. &u9h trustees shall hold
su9h sto9> in trust until all of the
outstanding shares of 9aAital sto9> of su9h
insurer have ;een a9Cuired, ;ut for not
longer than thirty DG5E years with su9h
eBtensions of not :ore than five D6E years
ea9h as :ay ;e granted ;y the
o::issioner. &u9h eBtensions :ay ;e
granted ;y the o::issioner if the Alan so
Arovides and if in his oAinion the Alan of
a9Cuisition of all of su9h sto9> 9an ;e
9o:Aleted within a reasona;le Aeriod. &u9h
trustees shall vote su9h sto9> at all 9orAorate
:eetings at whi9h sto9>holders have the
right to vote. /hen all the outstanding
shares of 9aAital sto9> of su9h insurer have
;een a9Cuired, all said shares shall ;e
9an9elled, the 9ertifi9ate of a:end:ent of
the insurer@s arti9les of in9orAoration giving
effe9t thereto shall ;e filed in a99ordan9e
with the Arovisions of the orAoration ode,
and the insurer shall ;e9o:e a nonsto9>
9orAoration for the Arofit of its :e:;ers and
su9h trust shall thereuAon ter:inate.
"hereafter su9h 9orAoration shall ;e
9ondu9ted for the :utual ;enefit, rata;ly, of
its Aoli9yholders of the 9lass or 9lasses for
whose ;enefit the sto9> was a9Cuired and
shall have Aower to issue non-assessa;le
Aoli9ies on a reserve ;asis su;Ie9t to all
Arovisions of law aAAli9a;le to in9orAorated
life insurers issuing non-assessa;le Aoli9ies
on a reserve ;asis. Poli9ies so issued :ay ;e
uAon the ;asis of full or Aartial Aarti9iAation
therein as agreed ;etween the insurer and
the insured.
1UAon the ter:ination of any su9h voting
trust, either in a99ordan9e with its ter:s or
as hereina;ove Arovided, su9h Alan of
:utualiHation shall ter:inate, unless
theretofore 9o:Aleted. UAon su9h
ter:ination, unless the Alan of :utualiHation
Arovides for the disAosition of the shares
a9Cuired ;y the insurer under su9h Alan or
for the disAosition of the Aro9eeds thereof,
the shares held ;y su9h trustees shall ;e
disAosed of in a99ordan9e with an order of
the 9ourt of 9o:Aetent Iurisdi9tion in the
Iudi9ial distri9t in whi9h is lo9ated the
Arin9iAal offi9e of su9h insurer, :ade uAon a
verified Aetition of the o::issioner.
1&E. .8G. !ny su9h Alan of :utualiHation
:ay Arovide for the 9reation of a voting trust
under a trust agree:ent for the holding and
voting ;y three DGE or :ore trustees of any
Aortion or all of the shares of the insurer not
reCuired uAon the adoAtion of su9h Alan. "he
voting trustees shall ;e na:ed in a99ordan9e
with su9h Alan or, if no Arovision is :ade
therein for the na:ing of su9h trustees, then
;y the insurer. "he voting trust agree:ent
and voting trustees shall ;e su;Ie9t to the
aAAroval of the o::issioner. !ny or all of
the trustees under su9h voting trust
agree:ent :ay ;e the sa:e Aerson or
Aersons as any or all of the trustees referred
to in &e9tion .8.. &u9h voting trust
agree:ent shall Arovide that in the event of
a9Cuisition ;y the insurer of any of the
shares of sto9> held thereunder in
a99ordan9e with the Arovisions of the Alan,
su9h shares so a9Cuired together with the
voting rights thereof shall ;e transferred ;y
the trustees na:ed under the Arovisions of
this se9tion to the trustees na:ed under the
Arovisions of &e9tion .8.. !ny voting trust
agree:ent 9reated Aursuant to the Arovisions
of this se9tion :ay ;e :ade irrevo9a;le for
not longer than thirty DG5E years and
thereafter until the ter:ination of the trust
Arovided for in &e9tion .8.. "he trust
9reated Aursuant to the Arovisions of this
se9tion shall ter:inate in any event uAon
ter:ination of the trust Arovided for in
&e9tion .8.. UAon the ter:ination of the
trust 9reated Aursuant to the Arovisions of
this se9tion, any shares held in su9h trust
shall revert to the Aersons entitled thereto ;y
law.
1&E. .83. Every Aay:ent for the
a9Cuisition of any shares of the 9aAital sto9>
of su9h insurer, the Aur9hase Ari9e of whi9h
is not fiBed ;y su9h Alan, shall ;e su;Ie9t to
the Arior aAAroval of the o::issioner.
#either su9h Alan, nor any su9h Aay:ent,
:ay ;e aAAroved ;y the o::issioner
unless he finds that the rights and interests
of the insurer, its Aoli9yholders, and
shareholders are Arote9ted.
1&E. .86. "he trustees referred to in
&e9tion .8. shall file with su9h insurer and
with the o::issioner a verified
a99eAtan9e of their aAAoint:ents and
verified de9larations that they will faithfully
dis9harge their duties as su9h trustees. !ll
dividends and other su:s re9eived ;y said
trustees on the shares held ;y the:, after
Aaying the ne9essary eBAenses of eBe9uting
their trust, shall ;e i::ediately reAaid to
su9h insurer for the ;enefit of all who are, or
:ay ;e9o:e, Aoli9yholders of su9h
insuran9e of the 9lass or 9lasses for whose
;enefit the sto9> of su9h insurer was
a9Cuired and entitled to Aarti9iAate in the
Arofits thereof and shall ;e added to and
;e9o:e Aart of the assets of su9h insurer.
1&E. .8,. If, at any ti:e within the Aeriod
Arovided in the Alan for the a9Cuisition of
the outstanding shares of sto9> of the
insurer, ninety Aer9ent D75LE thereof has
already ;een a9Cuired and transferred to the
trustees under the Alan, the insurer ;y a vote
of a :aIority of the dire9tors :ay deter:ine
to :a>e an offer, with the Aer:ission of the
o::issioner and su;Ie9t to su9h
reCuire:ent as he :ay sAe9ify, to a9Cuire ;y
Aur9hase all of the shares not theretofore
a9Cuired under the Alan, at a sAe9ified Ari9e
whi9h the insurer 9onsiders to ;e their fair
value as of the date of :a>ing su9h offer.
1If the offer to a9Cuire is Aer:itted ;y the
o::issioner, the insurer shall :a>e a
written offer ;y registered :ail to ea9h
shareholder whose shares have not
theretofore ;een a9Cuired under the Alan or
otherwise, offering to a9Cuire all his shares
at su9h Ari9e if a99eAted in writing within
thirty DG5E days after the :ailing of su9h
offer. !ny shareholder a99eAting su9h offer
within the ti:e therefor shall, within siBty
D,5E days after his a99eAtan9e, transfer to the
insurer the 9ertifi9ates reAresenting su9h
shares and, uAon doing so, shall ;e Aaid ;y
the insurer the a:ount of su9h offer for his
shares. !ny share so a9Cuired shall ;e
assigned and transferred to the trustees
under the Alan and held ;y the: as shares
a9Cuired Aursuant to the Alan.
1Ea9h shareholder who does not a99eAt su9h
offer to a9Cuire his shares within the ti:e
stated in su9h offer for a99eAtan9e thereof
shall within fifteen D-6E days after the
eBAiration of su9h offer aAAly to the
&e9retary of +inan9e for a deter:ination of
the fair value of his shares as of the date of
:a>ing su9h offer. "he &e9retary of +inan9e
:ay hi:self, after due noti9e and hearing,
deter:ine uAon the eviden9e re9eived the
fair value of the shares as of the date of
:a>ing su9h offer, or aAAoint three DGE
i:Aartial and disinterested Aersons to
aAAraise the fair value of su9h shares with
su9h dire9tion as he shall dee: AroAer and
ne9essary to eBAedite the Aro9eedings. UAon
9o:Aletion of the aAAraisal Aro9eedings, the
aAAraisers shall file with the &e9retary of
+inan9e their reAort in writing stating the
fair value of su9h shares as of the date of the
:a>ing of su9h offer and setting forth their
findings in suAAort of su9h state:ent. "he
aAAraisers shall furnish ea9h Aarty to the
Aro9eedings a 9oAy of their aAAraisal reAort,
and within ten D-5E days after re9eiAt
thereof, any su9h Aarty :ay signify his
o;Ie9tion, if any, to the reAort or :ove for
the aAAroval thereof. UAon the eBAiration of
the Aeriod of ten D-5E days referred to a;ove,
the reAort shall ;e set for hearing, after
whi9h the &e9retary of +inan9e shall issue
an order adoAting, :odifying or reIe9ting
the reAort, in whole or in Aart, or he :ay
re9eive further eviden9e or :ay re9o::it it
with instru9tions. /henever the &e9retary of
+inan9e shall deter:ine in any :anner, as
aforesaid, the fair value of su9h shares, he
:ay also deter:ine the ter:s of Aay:ent
thereof ;y the insurer. "he eBAenses
in9idental to the Aro9eedings in9luding
9harges of the aAAraisers, if any, shall ;e
Aaid eCually ;y the insurer and the
shareholder.
1"he findings of the &e9retary of +inan9e on
all Cuestions of fa9t raised at the hearing of
the aAAli9ation for deter:ination of the fair
value of su9h shares shall ;e 9on9lusive
uAon all Aarties to the Aro9eedings. "he
order of the &e9retary of +inan9e
deter:ining the fair value of the shares and
the ter:s of Aay:ent thereof shall have the
for9e and effe9t of a Iudg:ent whi9h shall
;e aAAeala;le on any Cuestion of law. &u9h
order shall ;e9o:e final and eBe9utory
fifteen D-6E days after re9eiAt thereof ;y the
Aarties to the Aro9eedings.
1UAon any su9h order ;e9o:ing final and
fro: whi9h no aAAeal is Aending, or when
the ti:e to aAAeal therefro: has eBAired,
ea9h shareholder Aarty to the Aro9eedings
shall transfer his shares to the insurer and
surrender to the said insurer the 9ertifi9ates
reAresenting su9h shares and the insurer
shall :a>e Aay:ent therefor as Arovided in
su9h order. !ny shares so a9Cuired ;y the
insurer shall ;e assigned and transferred to
the trustees and held ;y the: as shares
a9Cuired Aursuant to the Alan.
1!ny shareholder who does not aAAly to the
&e9retary of +inan9e in the :anner and
within the ti:e herein;efore Ares9ri;ed shall
;e dee:ed to have a99eAted the offer
referred to a;ove, effe9tive, however, uAon
the eBAiration of the ti:e hereina;ove
Ares9ri;ed for :a>ing su9h aAAli9ation, and
su9h shareholder@s ti:e for a99eAting su9h
offer shall, for that AurAose only, ;e dee:ed
to have ;een eBtended a99ordingly.
1!ny offer to a9Cuire shares :ade Aursuant
to this se9tion shall, eB9eAt as otherwise
Arovided herein, ;e irrevo9a;le until all
Aro9eedings uAon su9h offer have ;een
9o:Aleted or all shares have otherwise ;een
earlier a9Cuired ;y the insurer.
1!ny shareholder who has eBAressly or
i:Aliedly a99eAted the Alan or the offer to
a9Cuire his shares not theretofore a9Cuired
under the Alan, and any shareholder who has
reIe9ted su9h Alan or su9h offer and has
aAAlied, as aforesaid, to the &e9retary of
+inan9e for a deter:ination of the fair value
of his shares su;seCuent to whi9h an
agree:ent has ;een rea9hed or a final order
issued fiBing su9h fair value ;ut who fails to
surrender his 9ertifi9ates for 9an9ellation
uAon Aay:ent of the a:ount to whi9h he is
entitled, :ay ;e 9o:Aelled to do so ;y an
order of the &e9retary of +inan9e for that
AurAose and su9h order :ay Arovide that
uAon failure of su9h shareholder to surrender
su9h 9ertifi9ates for 9an9ellation, su9h order
shall stand in lieu of su9h surrender and
9an9ellation.
1&E. .88. &u9h insurer, after
:utualiHation, shall ;e a 9ontinuation of the
original insurer, and su9h :utualiHation
shall not affe9t su9h insurer@s 9ertifi9ate of
authority nor eBisting suits, rights or
9ontra9ts eB9eAt as Arovided in said Alan for
the a9Cuisition of the outstanding shares of
the 9aAital sto9> of su9h insurer, aAAroved as
Arovided in this 9haAter. &u9h insurer, after
:utualiHation, shall eBer9ise all the rights
and Aowers and shall Aerfor: all the duties
9onferred or i:Aosed ;y law uAon insurers
writing the 9lasses of insuran9e written ;y it,
and to Arote9t rights and 9ontra9ts eBisting
Arior to :utualiHation, su;Ie9t to the effe9t
of said Alan. "he ;oard of dire9tors of su9h
insurer, Arior to :utualiHation, :ay adoAt
a:end:ents to its ;ylaws to ta>e effe9t
uAon :utualiHation.
1&E. .84. DaE !n annual :eeting of
:e:;ers shall ;e held at ten o@9lo9> in the
:orning of the fourth "uesday of Mar9h of
ea9h year at the Arin9iAal offi9e of the
insurer, unless a different ti:e or Ala9e is
Arovided in the ;ylaws.
1D;E &Ae9ial :eetings of the :e:;ers, for
any AurAose or AurAoses whatsoever, :ay ;e
9alled at any ti:e ;y the Aresident, or ;y the
;oard of dire9tors, or ;y one or :ore
:e:;ers holding not less than one-fifth
D-K6E of the voting Aower of su9h insurer, or
;y su9h other offi9ers or Aersons as the
;ylaws authoriHe.
D9E #oti9e of all :eetings of :e:;ers
whether annual or sAe9ial shall ;e given in
writing to the :e:;ers entitled to vote ;y
the se9retary, or an assistant se9retary, or
other Aerson 9harged with that duty, or if
there ;e no su9h offi9er, or in 9ase of his
negle9t or refusal, ;y any dire9tor or
:e:;er. !t the oAtion of the insurer su9h
noti9e :ay ;e i:Arinted on Are:iu: noti9es
or re9eiAts or on ;oth.
1! noti9e :ay ;e given ;y su9h insurer to
any :e:;er either Aersonally, or ;y :ail, or
other :eans of written 9o::uni9ation,
9harges AreAaid, addressed to su9h :e:;er
at his address aAAearing on the ;oo>s of the
insurer, or given ;y hi: to the insurer for
the AurAose of noti9e. If a :e:;er gives no
address, noti9e shall ;e dee:ed to have ;een
given hi: if sent ;y :ail or other :eans of
written 9o::uni9ation addressed to the
Ala9e where the Arin9iAal offi9e of the
insurer is situated, or if Au;lished at least
on9e in so:e newsAaAer of general
9ir9ulation in the Ala9e in whi9h said offi9e
is lo9ated.
1#oti9e of any :eeting of :e:;ers shall ;e
sent to ea9h :e:;er entitled thereto not less
than seven D8E days ;efore su9h :eeting,
unless the ;ylaws Arovide otherwise.
1#oti9e of any :eeting of :e:;ers shall
sAe9ify the Ala9e, the day and the hour of the
:eeting and the general nature of the
;usiness to ;e transa9ted.
1#oti9e of an annual :eeting to ;e held at
the ti:e and Ala9e sAe9ified in su;AaragraAh
DaE of this se9tion shall ;e suffi9iently given
if Au;lished at least on9e in ea9h of four D3E
su99essive wee>s in a newsAaAer of general
9ir9ulation in the Ala9e in whi9h the
Arin9iAal offi9e of su9h insurer is lo9ated,
and if so Au;lished no other noti9e of su9h
:eeting shall ;e reCuired.
1DdE "he Aresen9e in Aerson or ;y AroBy of
five Aer9ent D6LE of the :e:;ers entitled to
vote at any :eeting shall 9onstitute a
Cuoru: for the transa9tion of ;usiness,
in9luding the a:end:ent of the arti9les of
in9orAoration andKor the ;ylaws unless
otherwise Arovided ;y the ;ylaws.
1DeE Ea9h su9h :e:;er shall have one D-E
vote at any :eeting of :e:;ers regardless
of the nu:;er of Aoli9ies or the a:ount of
insuran9e that su9h :e:;er holds and
regardless of whether su9h Aoli9ies are
Aoli9ies of life insuran9e, or of health and
a99ident insuran9e, or ;oth. !ny :e:;er
entitled to vote shall have the right to do so
either in Aerson or ;y an agent or agents
authoriHed ;y a written AroBy eBe9uted ;y
su9h Aerson or his duly authoriHed agent and
filed with the se9retary of su9h insurer.
1DfE "he dire9tors of the insurer in offi9e at
the ti:e the insurer is :utualiHed as
Arovided in this 9haAter shall 9ontinue in
offi9e until the first annual :eeting of
:e:;ers. !t the first annual :eeting of
:e:;ers and at ea9h annual :eeting
thereafter, dire9tors shall ;e ele9ted ;y the
:e:;ers for the ter: or ter:s authoriHed ;y
this 9haAter.
1DgE "he arti9les of in9orAoration or the
;ylaws :ay Arovide that the dire9tors :ay
;e divided into two D.E or :ore 9lasses
whose ter:s of offi9e shall eBAire at
different ti:es, ;ut no ter:s shall 9ontinue
longer than siB D,E years. In the a;sen9e of
su9h Arovisions, ea9h dire9tor, eB9eAt
:e:;ers of the ;oard of dire9tors at the
ti:e the insurer is :utualiHed, shall ;e
ele9ted for a ter: of one D-E year. !ll
dire9tors shall hold offi9e for a ter: for
whi9h they are ele9ted and until their
su99essors are ele9ted and Cualified. !
dire9tor :ay, ;ut need not ;e a :e:;er or
Aoli9yholder of the insurer of whi9h he is
a9ting as dire9tor. =a9an9ies in the ;oard of
dire9tors :ay ;e filled ;y a :aIority of the
re:aining dire9tors, though less than a
Cuoru:, and ea9h dire9tor so ele9ted shall
hold offi9e until the neBt annual :eeting.
1DhE !ll insurers :utualiHed under the
Arovisions of this 9haAter shall ;e su;Ie9t to
all other aAAli9a;le Arovisions of this ode.
"he Arovisions of the orAoration ode
shall aAAly in a suAAletory :anner.
1&E. .87. "he Arovisions of
o::onwealth !9t #o. 4G, otherwise
>nown as the &e9urities !9t, as a:ended,
shall not aAAly to any of the following<
1DaE &hares of the 9aAital sto9> of su9h
insurer a9Cuired as Arovided in &e9tion .8.
and assigned and transferred to the trustees
as is Arovided in said se9tion, and the
assign:ent and transfer of said shares as so
ArovidedF
1D;E !ny 9ertifi9ate or other instru:ent
issued to a Aoli9yholder of su9h :utualiHed
insurer 9onferring or eviden9ing
:e:;ershiA in su9h :utualiHed insurer or
9onferring or eviden9ing su9h :e:;er@s
right to Aarti9iAate in the Arofits or share in
the assets of su9h :utualiHed insurer ;y
virtue of his :e:;ershiA therein, and the
issuan9e of su9h 9ertifi9ate or other
instru:entF
1D9E "he Alan for the a9Cuisition of the
outstanding shares of the 9aAital sto9> of
su9h insurer authoriHed ;y the Arovisions of
this 9haAter, the su;:ission of said Alan to
the o::issioner and to the Aoli9yholders
of su9h insurer as Arovided in this 9haAter,
and the aAAroval and 9arrying out of said
Alan or any Aart thereof in a99ordan9e with
the Arovisions of this 9haAter.
1&E. .45. ! do:esti9 :utual life
insuran9e 9o:Aany doing ;usiness in the
PhiliAAines :ay 9onvert itself into an
in9orAorated sto9> life insuran9e 9o:Aany
;y de:utualiHation. "o that end, it :ay
Arovide and 9arry out a Alan for the
9onversion ;y 9o:Alying with the
reCuire:ents of this title.
1"he 9onversion of a do:esti9 :utual life
insuran9e 9o:Aany to an in9orAorated sto9>
life insuran9e 9o:Aany shall ;e 9arried out
Aursuant to a 9onversion Alan duly aAAroved
;y the o::issioner.
1"he o::issioner shall Aro:ulgate su9h
rules and regulations as he or she :ay dee:
ne9essary to 9arry out the Arovisions of this
title, after due 9onsultation with
reAresentatives of the insuran9e industry.
1!ll 9onverted insurers under the Arovisions
of this title shall ;e su;Ie9t to all other
aAAli9a;le Arovisions of this ode. "he
Arovisions of the orAoration ode shall
aAAly in a suAAletory :anner.
1"I"LE -4
1/I"()R!/!L $+ +$REI'#
I#&UR!#E $MP!#IE&
1&E. .4-. ! foreign insuran9e 9o:Aany
doing ;usiness in the PhiliAAines, uAon
Aay:ent of the fee hereinafter Ares9ri;ed
and surrender to the o::issioner of its
9ertifi9ate of authority, :ay aAAly to
withdraw fro: the PhiliAAines. &u9h
aAAli9ation shall ;e duly eBe9uted in
writing, a99o:Aanied ;y eviden9e of due
authority for su9h eBe9ution, AroAerly
a9>nowledged.
1&E. .4.. "he o::issioner shall Au;lish
the aAAli9ation for withdrawal on9e a wee>
for three DGE 9onse9utive wee>s in a
newsAaAer of general 9ir9ulation in the
PhiliAAines. "he eBAenses of su9h
Au;li9ation shall ;e Aaid ;y the insuran9e
9o:Aany filing su9h aAAli9ation.
1&E. .4G. Every foreign insuran9e
9o:Aany desiring to withdraw fro: the
PhiliAAines shall, Arior to su9h withdrawal,
dis9harge its lia;ilities to Aoli9yholders and
9reditors in this 9ountry. In 9ase of its
Aoli9ies insuring residents of the PhiliAAines,
it shall 9ause the Ari:ary lia;ilities under
su9h Aoli9ies to ;e reinsured and assu:ed
;y another insuran9e 9o:Aany authoriHed to
transa9t ;usiness in the PhiliAAines. In the
9ase of su9h Aoli9ies as are su;Ie9t to
9an9ellation ;y the withdrawing 9o:Aany, it
:ay 9an9el su9h Aoli9ies Aursuant to the
ter:s thereof in lieu of su9h reinsuran9e and
assu:Ation of lia;ilities.
1&E. .43. "he o::issioner shall 9ause
an eBa:ination of the ;oo>s and re9ords of
the withdrawing 9o:Aany, and if, uAon su9h
eBa:ination, the o::issioner finds that
the insurer has no outstanding lia;ilities to
Aoli9yholders and 9reditors in the
PhiliAAines, and no Aoli9ies un9an9elledF or
its Ari:ary lia;ilities have ;een reinsured or
assu:ed ;y another insuran9e 9o:Aany
authoriHed to transa9t ;usiness in the
PhiliAAines, as reCuired in the Are9eding
se9tion, it shall 9an9el the withdrawing
9o:Aany@s 9ertifi9ate of authority, if
uneBAired, and shall Aer:it the insurer to
withdraw. "he 9ost and eBAenses of all su9h
eBa:ination shall ;e Aaid as Ares9ri;ed in
&e9tion 335.
1&E. .46. UAon the failure of su9h
withdrawing insuran9e 9o:Aany or its
agents in the PhiliAAines to Aay the eBAenses
of su9h Au;li9ation within thirty DG5E days
after the Aresentation of the ;ill therefor, the
o::issioner shall 9olle9t su9h fee fro:
the deAosit furnished in a99ordan9e with the
Arovisions of &e9tion -78.
1&E. .4,. ! foreign life insuran9e
9o:Aany that withdraws fro: the
PhiliAAines shall ;e 9onsidered a servi9ing
insuran9e 9o:Aany if its ;usiness
transa9tions are 9onfined to a99eAting
Aeriodi9 Are:iu: Aay:ents fro:, or
granting Aoli9y loans and Aaying 9ash
surrender values of outstanding Aoli9ies to,
or reviving laAsed Aoli9ies of, PhiliAAine
Aoli9yholders, and su9h other related
servi9es.
1&E. .48. #o 9o:Aany shall a9t as a
servi9ing insuran9e 9o:Aany until after it
shall have o;tained a sAe9ial 9ertifi9ate of
authority to a9t as su9h fro: the
o::issioner uAon aAAli9ation therefor and
Aay:ent ;y the 9o:Aany of the fees
hereinafter Ares9ri;ed. &u9h 9ertifi9ate shall
eBAire on the last day of )e9e:;er of the
third year and shall ;e renewed, while the
9o:Aany 9ontinues to servi9e its
Aoli9yholders, and to 9o:Aly with all the
aAAli9a;le Arovisions of law and regulations.
1"I"LE -7
1PR$+E&&I$#!L REI#&URER&
1&E. .44. EB9eAt as otherwise Arovided in
this ode, no AartnershiA, asso9iation or
9orAoration shall transa9t any ;usiness in the
PhiliAAines as a Arofessional reinsurer until
it shall have o;tained a 9ertifi9ate of
authority for that AurAose fro: the
o::issioner uAon aAAli9ation therefor and
Aay:ent ;y su9h entity of the fees
hereinafter Ares9ri;ed. !s used in this ode,
the ter: ?Arofessional reinsurer@ shall :ean
any entity that transa9ts solely and
eB9lusively reinsuran9e ;usiness in the
PhiliAAines.
1"he o::issioner :ay refuse to issue a
9ertifi9ate of authority to any su9h entity
when su9h refusal will ;est Aro:ote Au;li9
interest. #o su9h 9ertifi9ate of authority
shall ;e granted to any su9h entity unless
and until the o::issioner is satisfied ;y
su9h eBa:ination and su9h eviden9e as :ay
;e reCuired that su9h entity is Cualified ;y
the laws of the PhiliAAines to transa9t
;usiness therein as a Arofessional reinsurer.
1Before issuing su9h 9ertifi9ate of authority,
the o::issioner :ust ;e satisfied that the
na:e of the aAAli9ant is not that of any other
>nown 9o:Aany transa9ting insuran9e or
reinsuran9e ;usiness in the PhiliAAines, or a
na:e so si:ilar as to ;e 9al9ulated to
:islead the Au;li9.
1&u9h 9ertifi9ate of authority shall eBAire on
the last day of )e9e:;er the third year
following its issuan9e unless it is renewed.
1Every su9h AartnershiA, asso9iation, or
9orAoration re9eiving su9h 9ertifi9ate of
authority shall ;e su;Ie9t to the Arovisions
of this ode and other related laws, and to
the Iurisdi9tion and suAervision of the
o::issioner.
1&E. .47. !ny AartnershiA, asso9iation, or
9orAoration authoriHed to transa9t solely
reinsuran9e ;usiness :ust have a
9aAitaliHation of at least "hree ;illion Aesos
DPG,555,555,555.55E Aaid in 9ash of whi9h at
least fifty Aer9ent D65LE is Aaid-uA and the
re:aining Aortion thereof is 9ontri;uted
surAlus, whi9h in no 9ase shall ;e less than
+our hundred :illion Aesos
DP355,555,555.55E or su9h 9aAitaliHation as
:ay ;e deter:ined ;y the &e9retary of
+inan9e, uAon the re9o::endation of the
o::issioner< Provided, "hat twenty-five
Aer9ent D.6LE of the Aaid-uA 9aAital :ust ;e
invested in se9urities satisfa9tory to the
o::issioner 9onsisting of ;onds or other
instru:ents of de;t of the 'overn:ent of
the PhiliAAines or its Aoliti9al su;divisions
or instru:entalities, or of govern:ent-
owned or -9ontrolled 9orAorations and
entities, in9luding the Bang>o &entral ng
PiliAinas, and deAosited with the
o::issioner, and the re:aining seventy-
five Aer9ent D86LE in su9h other se9urities
as :ay ;e allowed and Aer:itted ;y the
o::issioner, whi9h se9urities shall at all
ti:es ;e :aintained free fro: any lien or
en9u:;ran9e< Provided, further, "hat the
aforesaid 9aAital reCuire:ent is without
AreIudi9e to other reCuire:ents to ;e
i:Aosed under any ris>-;ased 9aAital
:ethod that :ay ;e adoAted ;y the
o::issioner< Provided, finally, "hat the
Arovisions of this 9haAter aAAli9a;le to
insuran9e 9o:Aanies shall as far as
Ara9ti9a;le ;e li>ewise aAAli9a;le to
Arofessional reinsurers.
1"I"LE .5
1($L)I#' $MP!#IE&
1&E. .75. !s used in this title, the
following ter:s shall have the resAe9tive
:eanings hereinafter set forth unless the
9onteBt shall otherwise reCuire<
1DaE Person :eans an individual,
AartnershiA, fir:, asso9iation, 9orAoration,
trust, any si:ilar entity or any 9o:;ination
of the foregoing a9ting in 9on9ert.
1D;E Control, in9luding the ter:s
controlling, controlled by and under
common control ith, :eans the Aossession
dire9tly or indire9tly of the Aower to dire9t
or 9ause the dire9tion of the :anage:ent
and Aoli9ies of a Aerson, whether through
the ownershiA of voting se9urities ;y a
9ontra9t other than a 9o::er9ial 9ontra9t
for goods or non-:anage:ent servi9es or
otherwise. &u;Ie9t to &e9tion .7., 9ontrol
shall ;e Aresu:ed to eBist if any Aerson
dire9tly or indire9tly owns, 9ontrols or holds
with the Aower to vote forty Aer9ent D35LE
or :ore of the voting se9urities of any other
Aerson< Provided, "hat no Aerson shall ;e
dee:ed to 9ontrol another Aerson solely ;y
reason of his ;eing an offi9er or dire9tor of
su9h other Aerson.
1D9E Holding company :eans any Aerson
who dire9tly or indire9tly 9ontrols any
authoriHed insurer.
1DdE Controlled insurer :eans an authoriHed
insurer 9ontrolled dire9tly or indire9tly ;y a
holding 9o:Aany.
1DeE Controlled person :eans any Aerson,
other than a 9ontrolled insurer, who is
9ontrolled dire9tly or indire9tly ;y a holding
9o:Aany.
1DfE Holding company system :eans a
holding 9o:Aany together with its
9ontrolled insurers and 9ontrolled Aersons.
1&E. .7-. #otwithstanding AaragraAh D;E
of &e9tion .75, the o::issioner :ay
deter:ine after noti9e and oAAortunity to ;e
heard, that a Aerson eBer9ises dire9tly or
indire9tly either alone or Aursuant to an
agree:ent with one or :ore other Aersons
su9h a 9ontrolling influen9e over the
:anage:ent or Aoli9ies of an authoriHed
insurer as to :a>e it ne9essary or
aAAroAriate in the Au;li9 interest or for the
Arote9tion of Aoli9yholders or sto9>holders
of the insurer that the Aerson ;e dee:ed to
9ontrol the insurer.
1&E. .7.. "he o::issioner :ay
deter:ine uAon aAAli9ation that any Aerson,
either alone or Aursuant to agree:ent with
one or :ore other Aersons, does not or will
not uAon the ta>ing of so:e AroAosed a9tion
9ontrol another Aerson. "he filing of an
aAAli9ation hereunder in good faith ;y any
Aerson shall relieve the aAAli9ant fro: any
o;ligation or lia;ility i:Aosed ;y this title
with resAe9t to the su;Ie9t of the aAAli9ation,
eB9eAt as 9ontained in &e9tion G5., until the
o::issioner has a9ted uAon the
aAAli9ation. /ithin thirty DG5E days or su9h
further Aeriod as he :ay Ares9ri;e, the
o::issioner :ay ArosAe9tively revo>e or
:odify his deter:ination, after noti9e and
oAAortunity to ;e heard, whenever in his
Iudg:ent, revo9ation or :odifi9ation is
9onsistent with this title.
1&E. .7G. #otwithstanding any other
Arovisions of this title, the following shall
not ;e dee:ed holding 9o:Aanies<
1DaE !uthoriHed insurers or reinsurers or
their su;sidiariesF and
1D;E "he 'overn:ent of the PhiliAAines, or
any Aoliti9al su;division, agen9y or
instru:entality thereof, or any 9orAoration
whi9h is wholly owned dire9tly or indire9tly
;y one or :ore of the foregoing.
1"he o::issioner :ay 9onditionally or
un9onditionally eBe:At any sAe9ified Aerson
or 9lass of Aersons fro: any of the
o;ligations or lia;ilities i:Aosed under this
title, if and to the eBtent he finds the
eBe:Ation ne9essary or aAAroAriate in the
Au;li9 interest or not adverse to the interests
of Aoli9yholders or sto9>holders and
9onsistent with the AurAoses of this title.
1&E. .73. DaE Every Aerson who on the
date this ode ta>es effe9t is a 9ontrolled
insurer and every Aerson who thereafter
;e9o:es a 9ontrolled insurer, shall, within
siBty D,5E days thereafter, or within thirty
DG5E days after ;e9o:ing a 9ontrolled
insurer, whi9hever is later, register with the
o::issioner. &u9h registration shall ;e
a:ended within thirty DG5E days following
any 9hange in the identity of its holding
9o:Aany. "he o::issioner :ay grant one
or :ore reasona;le eBtensions of the ti:e to
register.
1D;E Every registrant shall furnish the
o::issioner with the following
infor:ation 9on9erning its holding
9o:Aany<
1D-E ! 9oAy of its 9harter or arti9les of
in9orAoration and its ;ylawsF
1D.E "he identities of its Arin9iAal
shareholders, offi9ers, dire9tors and
9ontrolled AersonsF and
1DGE Infor:ation as to its 9aAital stru9ture
and finan9ial 9ondition, and a des9riAtion of
its Arin9iAal ;usiness a9tivities.
1&E. .76. Every 9ontrolled insurer shall
file with the o::issioner su9h reAorts or
:aterial as he :ay dire9t for the AurAose of
dis9losing infor:ation 9on9erning the
oAerations of Aersons within the holding
9o:Aany syste: whi9h :ay :aterially
affe9t the oAerations, :anage:ent or
finan9ial 9ondition of the insurer.
1&E. .7,. Every holding 9o:Aany and
every 9ontrolled Aerson within a holding
9o:Aany syste: shall ;e su;Ie9t to
eBa:ination ;y order of the o::issioner
if he has 9ause to ;elieve that the oAerations
of su9h Aersons :ay :aterially affe9t the
oAerations, :anage:ent or finan9ial
9ondition of any 9ontrolled insurer with the
syste: and that he is una;le to o;tain
relevant infor:ation fro: su9h 9ontrolled
insurer. "he grounds relied uAon ;y the
o::issioner for su9h eBa:ination shall ;e
stated in his order, whi9h order shall ;e
su;Ie9t to Iudi9ial review only at the
instan9e of the Aerson sought to ;e
eBa:ined. &u9h eBa:ination shall ;e
9onfined to :atters sAe9ified in the order.
"he 9ost of su9h eBa:ination shall ;e
assessed against the Aerson eBa:ined and no
Aortion thereof shall thereafter ;e
rei:;ursed to it dire9tly or indire9tly ;y the
9ontrolled insurer.
1&E. .78. "he o::issioner shall >eeA
the 9ontents of ea9h reAort :ade Aursuant to
this title and any infor:ation o;tained ;y
hi: in 9onne9tion therewith 9onfidential and
shall not :a>e the sa:e Au;li9 without the
Arior written 9onsent of the 9ontrolled
insurer to whi9h it Aertains unless the
o::issioner after noti9e and an
oAAortunity to ;e heard shall deter:ine that
the interests of Aoli9yholders, sto9>holders
or the Au;li9 will ;e served ;y the
Au;li9ation thereof. In any a9tion or
Aro9eeding ;y the o::issioner against the
Aerson eBa:ined or any other Aerson within
the sa:e holding 9o:Aany syste: a reAort
of su9h eBa:ination Au;lished ;y hi: shall
;e ad:issi;le as eviden9e of the fa9ts stated
therein.
1&E. .74. "ransa9tions within a holding
9o:Aany syste: to whi9h a 9ontrolled
insurer is a Aarty shall ;e su;Ie9t to the
following<
1DaE "he ter:s shall ;e fair and eCuita;leF
1D;E harges or fees for servi9es Aerfor:ed
shall ;e reasona;leF
1D9E EBAenses in9urred and Aay:ents
re9eived shall ;e allo9ated to the insurer on
an eCuita;le ;asis in 9onfor:ity with
9usto:ary insuran9e a99ounting Ara9ti9es
9onsistently aAAlied.
1"he ;oo>s, a99ounts and re9ords of ea9h
Aarty to all su9h transa9tions shall ;e
:aintained as to 9learly and a99urately
dis9lose the nature and details of the
transa9tions in9luding su9h a99ounting
infor:ation as is ne9essary to suAAort the
reasona;leness of the 9harges or fees to the
resAe9tive Aarties.
1&E. .77. "he Arior written aAAroval of the
o::issioner shall ;e reCuired for the
following transa9tions ;etween a 9ontrolled
insurer and any Aerson in its holding
9o:Aany syste:< sales, Aur9hases,
eB9hanges, loans or eBtensions of 9redit, or
invest:ents, involving five Aer9ent D6LE or
:ore of the insurer@s ad:itted assets as of
the thirty-first day of )e9e:;er neBt
Are9eding.
1&E. G55. "he following transa9tions
;etween a 9ontrolled insurer and any Aerson
in its holding 9o:Aany syste: :ay not ;e
entered into unless the insurer has notified
the o::issioner in writing of its intention
to enter into any su9h transa9tion at least
thirty DG5E days Arior thereto, or su9h shorter
Aeriod as he :ay Aer:it, and he has not
disaAAroved it within su9h Aeriod<
1DaE &ales, Aur9hases, eB9hanges, loans or
eBtensions of 9redit, or invest:ents,
involving :ore than one-half of one Aer9ent
DPLE ;ut less than five Aer9ent D6LE of the
insurer@s ad:itted assets as of the thirty-first
day of )e9e:;er neBt Are9edingF
1D;E Reinsuran9e treaties or agree:entsF
1D9E Rendering of servi9es on a regular or
syste:ati9 ;asisF or
1DdE !ny :aterial transa9tion, sAe9ified ;y
regulation, whi9h the o::issioner
deter:ines :ay adversely affe9t the interest
of the insurer@s Aoli9yholders or
sto9>holders or of the Au;li9.
1#othing herein 9ontained shall ;e dee:ed
to authoriHe or Aer:it any transa9tion whi9h,
in the 9ase of a non-9ontrolled insurer,
would ;e otherwise 9ontrary to law.
1&E. G5-. "he o::issioner, in reviewing
transa9tions Aursuant to &e9tions .77 and
G55, shall 9onsider whether the transa9tions
9o:Aly with the standard set forth in &e9tion
.74 and whether they :ay adversely affe9t
the interests of Aoli9yholders. "his se9tion
shall not aAAly to transa9tions su;Ie9t to
other se9tions of this ode whi9h i:Aose
noti9e or aAAroval reCuire:ents greater than
those Ares9ri;ed ;y this title.
1&E. G5.. DaE #o Aerson, other than an
authoriHed insurer, shall a9Cuire 9ontrol of
any do:esti9 insurer, whether ;y Aur9hase
of its se9urities or otherwise, eB9eAt<
1D-E !fter twenty D.5E days written noti9e to
its insurer or su9h shorter Aeriod as the
o::issioner :ay Aer:it, of its intention
to a9Cuire 9ontrolF and
1D.E /ith the Arior written aAAroval of the
o::issioner.
1D;E "he o::issioner shall disaAArove the
a9Cuisition of 9ontrol of a do:esti9 insurer
if he deter:ines, after noti9e and an
oAAortunity to ;e heard, that su9h a9tion is
reasona;ly ne9essary to Arote9t the interest
of the AeoAle of this 9ountry. "he following
shall ;e the only fa9tors to ;e 9onsidered ;y
hi: in rea9hing the foregoing deter:ination<
1D-E "he finan9ial 9ondition of the a9Cuiring
Aerson and the insurerF
1D.E "he trustworthiness of the a9Cuiring
Aerson or any of its offi9ers or dire9torsF
1DGE ! Alan for the AroAer and effe9tive
9ondu9t of the insurer@s oAerationsF
1D3E "he sour9e of the funds or assets for the
a9CuisitionF
1D6E "he fairness of any eB9hange of sto9>,
assets, 9ash or other 9onsideration for the
sto9> or assets to ;e re9eivedF
1D,E /hether the effe9t of the a9Cuisition
:ay ;e su;stantially to lessen 9o:Aetition in
any line of 9o::er9e in insuran9e or to tend
to 9reate a :onoAoly thereinF and
1D8E /hether the a9Cuisition is li>ely to ;e
haHardous or AreIudi9ial to the insurer@s
Aoli9yholders or sto9>holders.
1D9E "he following 9onditions affe9ting any
9ontrolled insurer, regardless of when su9h
9ontrol has ;een a9Cuired, are violations of
this title<
1D-E "he 9ontrolling Aerson or any of its
offi9ers or dire9tors have de:onstrated
untrustworthinessF and
1D.E "he effe9t of retention of 9ontrol :ay
;e su;stantially to lessen 9o:Aetition in any
line of 9o::er9e in insuran9e in this
9ountry or to tend to 9reate a :onoAoly
therein. If, after noti9e and an oAAortunity to
;e heard, the o::issioner deter:ines that
any of the foregoing violations eBists, he
shall redu9e his findings to writing and shall
issue an order ;ased thereon and 9ause the
sa:e to ;e served uAon the insurer and uAon
all Aersons affe9ted there;y dire9ting any
Aerson found to ;e in violation thereof to
ta>e aAAroAriate a9tion to 9ure su9h
violation. UAon the failure of any su9h
Aerson to 9o:Aly with su9h order, &e9tion
G5, shall ;e9o:e aAAli9a;le.
1DdE "he o::issioner :ay reCuire the
su;:ission of su9h infor:ation as he dee:s
ne9essary to deter:ine whether any
a9Cuisition or retention of 9ontrol 9o:Alies
with this title and :ay reCuire, as a
9ondition of aAAroval of su9h a9Cuisition or
retention of 9ontrol, that all or any Aortion of
su9h infor:ation ;e dis9losed to the
insurer@s sto9>holders.
1DeE Unless su;Ie9t to registration under
&e9tion .73 or unless a9Cuisition of its
9ontrol is su;Ie9t to AaragraAhs DaE and D;E
hereof, every authoriHed insurer shall notify
the o::issioner in writing of the identity
of any Aerson who: the insurer then >nows
or has reason to ;elieve 9ontrols or has ta>en
any a9tion, other than Areli:inary
negotiations or dis9ussion, to a9Cuire 9ontrol
of the insurer.
1&E. G5G. DaE #otwithstanding the 9ontrol
of an authoriHed insurer ;y any Aerson, the
offi9ers and dire9tors of the insurer shall not
there;y ;e relieved of any o;ligation or
lia;ility to whi9h they would otherwise ;e
su;Ie9t ;y law, and the insurer shall ;e
:anaged so as to assure its seAarate
oAerating identity 9onsistent with this title.
1D;E #othing herein shall Are9lude an
authoriHed insurer fro: having or sharing a
9o::on :anage:ent or 9ooAerative or
Ioint use of Aersonnel, AroAerty or servi9es
with one or :ore other Aersons under
arrange:ents :eeting the standards of
&e9tion .74.
1&E. G53. "o the eBtent that any
infor:ation or :aterial is set forth in for:s
or other :atter on file with any govern:ent
agen9y or in a registration for: filed with
the o::issioner ;y another Aerson within
the sa:e holding 9o:Aany syste:, the
9ontrolled insurer :ay 9o:Aly with the
registration or reAorting reCuire:ents of this
title ;y referring in its registration for: or
reAort to su9h other filed :atter and
atta9hing a 9oAy thereof 9ertified ;y the
insurer as a true and 9o:Alete 9oAy, to su9h
registration for: or reAort or, if su9h other
filed :atter is on file with the
o::issioner, in9orAorating su9h :atter ;y
referen9e.
1&E. G56. #o holding 9o:Aany or
9ontrolled Aerson shall dire9tly or indire9tly
or through another Aerson do or 9ause to ;e
done for or in ;ehalf of the 9ontrolled
insurer any a9t intended to affe9t the
insuran9e oAerations of the insurer whi9h, if
done ;y the insurer, would violate any
Arovision of this ode.
1&E. G5,. In addition to any other Aenalty
Arovided ;y law, the o::issioner :ay,
uAon the willful failure of any Aerson within
a holding 9o:Aany syste: to 9o:Aly with
this title or any regulation or order
Aro:ulgated hereunder<
1DaE Pro9eed under "itle -3 or "itle -6,
haAter III of this ode with resAe9t to
insurer within the holding 9o:Aany syste:F
or
1D;E Revo>e or refuse to renew the authority
to do ;usiness in this 9ountry of an insurer
within the holding 9o:Aany syste: or
refuse to issue su9h authority to any other
insurer in the syste:F or
1D9E )ire9t that, in addition to any other
Aenalty Arovided ;y law, su9h Aerson forfeit
to the AeoAle of this 9ountry a su: not less
than +ive thousand Aesos DP6,555.55E for a
first violation and "wenty-five thousand
Aesos DP.6,555.55E for any su;seCuent
violation. !n additional su: not less than
"wenty-five thousand Aesos DP.6,555.55E
shall ;e i:Aosed for ea9h :onth during
whi9h any su9h violation shall 9ontinue.
1(!P"ER I=
1&!LE& !'E#IE& !#) "E(#I!L
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1"I"LE l
1I#&UR!#E !'E#"& !#)
I#&UR!#E BR$0ER&
1&E. G58. #o insuran9e 9o:Aany doing
;usiness in the PhiliAAines, nor any agent
thereof, shall Aay any 9o::ission or other
9o:Aensation to any Aerson for servi9es in
o;taining insuran9e, unless su9h Aerson shall
have first Aro9ured fro: the o::issioner a
li9ense to a9t as an insuran9e agent of su9h
9o:Aany or as an insuran9e ;ro>er as
hereinafter Arovided.
1#o Aerson shall a9t as an insuran9e agent or
as an insuran9e ;ro>er in the soli9itation or
Aro9ure:ent of aAAli9ations for insuran9e,
or re9eive for servi9es in o;taining
insuran9e, any 9o::ission or other
9o:Aensation fro: any insuran9e 9o:Aany
doing ;usiness in the PhiliAAines, or any
agent thereof, without first Aro9uring a
li9ense so to a9t fro: the o::issioner,
whi9h :ust ;e renewed every three DGE years
thereafter. &u9h li9ense shall ;e issued ;y
the o::issioner only uAon the written
aAAli9ation of the Aerson desiring it, su9h
aAAli9ation if for a li9ense to a9t as
insuran9e agent, ;eing aAAroved or endorsed
;y the 9o:Aany su9h Aerson desires to
reAresent, and shall ;e uAon a for:
Ares9ri;ed ;y the o::issioner giving su9h
infor:ation as he :ay reCuire, and uAon
Aay:ent of the 9orresAonding fee
hereinafter Ares9ri;ed. "he o::issioner
shall satisfy hi:self as to the 9o:Aeten9e
and trustworthiness of the aAAli9ant and
shall have the right to refuse to issue or
renew and to susAend or revo>e any su9h
li9ense in his dis9retion. "he li9ense shall
eBAire after the thirty-first day of )e9e:;er
of the third year following the date of
issuan9e unless it is renewed.
1Li9enses :ay ;e renewed in the 9ase of the
9o:Aany reAresented ;y su9h agents, and in
the 9ase of insuran9e ;ro>ers, uAon the
aAAli9ation of the said ;ro>ers, the:selves.
1&E. G54. "he Arovisions of &e9tions G58
and G57 shall aAAly to an e:Aloyee who
shall ;e engaged to sell insuran9e Arodu9ts
;y an insuran9e 9o:Aany.
1&E. G57. !ny Aerson who for
9o:Aensation soli9its or o;tains insuran9e
on ;ehalf of any insuran9e 9o:Aany or
trans:its for a Aerson other than hi:self an
aAAli9ation for a Aoli9y or 9ontra9t of
insuran9e to or fro: su9h 9o:Aany or offers
or assu:es to a9t in the negotiating of su9h
insuran9e shall ;e an insuran9e agent within
the intent of this se9tion and shall there;y
;e9o:e lia;le to all the duties, reCuire:ents,
lia;ilities and Aenalties to whi9h an
insuran9e agent is su;Ie9t.
1!n insuran9e agent is an indeAendent
9ontra9tor and not an e:Aloyee of the
9o:Aany reAresented. ?Insuran9e agent@
in9ludes an agen9y leader, agen9y :anager,
or their eCuivalent.
1&in9e the insuran9e industry is i:;ued with
Au;li9 interest, the insuran9e 9o:Aanies
uAon aAAroval of the o::issioner :ay
eBer9ise wide latitude in suAervising the
a9tivities of their insuran9e agents to ensure
the Arote9tion of the insuring Au;li9.
1&E. G-5. !ny Aerson who for any
9o:Aensation, 9o::ission or other thing of
value a9ts or aids in any :anner in
soli9iting, negotiating or Aro9uring the
:a>ing of any insuran9e 9ontra9t or in
Ala9ing ris> or ta>ing out insuran9e, on
;ehalf of an insured other than hi:self, shall
;e an insuran9e ;ro>er within the intent of
this ode, and shall there;y ;e9o:e lia;le to
all the duties, reCuire:ents, lia;ilities and
Aenalties to whi9h an insuran9e ;ro>er is
su;Ie9t.
1&E. G--. Every aAAli9ant for an insuran9e
;ro>er@s li9ense shall file with the
aAAli9ation and shall thereafter :aintain in
for9e while so li9ensed, a ;ond in favor of
the AeoAle of the ReAu;li9 of the PhiliAAines
eBe9uted ;y a 9o:Aany authoriHed to
;e9o:e surety uAon offi9ial re9ogniHan9es,
stiAulations, ;onds and underta>ings. "he
;ond shall ;e in su9h a:ount as :ay ;e
fiBed ;y the o::issioner, ;ut in no 9ase
less than +ive hundred thousand Aesos
DP655,555.55E, and shall ;e 9onditioned
uAon full a99ounting and due Aay:ent to the
Aerson entitled thereto of funds 9o:ing into
the ;ro>er@s Aossession through insuran9e
transa9tions under li9ense. "he ;ond shall
re:ain in for9e until released ;y the
o::issioner, or until 9an9elled ;y the
surety. /ithout AreIudi9e to any lia;ility
Areviously in9urred thereunder, the surety
:ay 9an9el the ;ond on thirty DG5E days
advan9e written noti9e to ;oth the ;ro>er
and the o::issioner.
1UAon aAAroval of the aAAli9ation, the
aAAli9ant :ust also file two D.E errors and
o:issions DArofessional lia;ility or
Arofessional inde:nityE Aoli9ies issued
seAarately ;y two D.E insuran9e 9o:Aanies
authoriHed to do ;usiness in the PhiliAAines,
satisfa9tory to the o::issioner to
inde:nify the aAAli9ant against any 9lai: or
9lai:s for ;rea9h of duty as insuran9e
;ro>er whi9h :ay ;e :ade against hi: ;y
reason of any negligent a9t, error or
o:ission, whenever or wherever 9o::itted
or alleged to have ;een 9o::itted, on the
Aart of the aAAli9ant or any Aerson who has
;een, is now, or :ay hereafter during the
su;sisten9e of the Aoli9ies ;e e:Aloyed ;y
the said aAAli9ant in his 9aAa9ity as
insuran9e ;ro>er< Provided, "hat the filing
of any 9lai: or 9lai:s under one of su9h
Aoli9ies shall Are9lude the filing of the said
9lai: or 9lai:s under the other Aoli9y. "he
said Aoli9ies shall ;e in su9h a:ounts as
:ay ;e Ares9ri;ed ;y the o::issioner,
deAending uAon the siHe or a:ount of the
;ro>ing ;usiness of the aAAli9ant, ;ut in no
9ase shall the a:ount of ea9h of su9h
Aoli9ies ;e less than +ive hundred thousand
Aesos DP655,555.55E.
1&E. G-.. "he o::issioner shall, in
order to deter:ine the 9o:Aeten9e of every
aAAli9ant to have the >ind of li9ense aAAlied
for, reCuire su9h aAAli9ant to su;:it to a
written eBa:ination and to Aass the sa:e to
the satisfa9tion of the o::issioner. "he
o::issioner :ay delegate or authoriHe the
ad:inistration of the eBa:ination to an
indeAendent organiHation, su;Ie9t to su9h
9onditions that the o::issioner :ay
Arovide.
1&E. G-G. !n aAAli9ant for the written
eBa:ination :entioned in the Are9eding
se9tion :ust ;e of good :oral 9hara9ter and
:ust not have ;een 9onvi9ted of any 9ri:e
involving :oral turAitude. (e :ust
satisfa9torily show to the o::issioner that
he has ;een trained in the >ind of insuran9e
9onte:Alated in the li9ense aAAlied for.
&u9h eBa:ination :ay ;e waived if it is
shown to the satisfa9tion of the
o::issioner that the aAAli9ant has
undergone eBtensive edu9ation andKor
training in insuran9e.
1&E. G-3. !n aAAli9ation for the issuan9e
or renewal of a li9ense to a9t as an insuran9e
agent or insuran9e ;ro>er :ay ;e refused, or
su9h li9ense, if already issued or renewed,
shall ;e susAended or revo>ed if the
o::issioner finds that the aAAli9ant for, or
holder of, su9h li9ense<
1DaE (as willfully violated any Arovision of
this odeF or
1D;E (as intentionally :ade a :aterial
:isstate:ent in the aAAli9ation to Cualify for
su9h li9enseF or
1D9E (as o;tained or atte:Ated to o;tain a
li9ense ;y fraud or :isreAresentationF or
1DdE (as ;een guilty of fraudulent or
dishonest Ara9ti9esF or
1DeE (as :isaAAroAriated or 9onverted to his
own use or illegally withheld :oneys
reCuired to ;e held in a fidu9iary 9aAa9ityF
or
1DfE (as not de:onstrated trustworthiness
and 9o:Aeten9e to transa9t ;usiness as an
insuran9e agent or insuran9e ;ro>er in su9h
:anner as to safeguard the Au;li9F or
1DgE (as :aterially :isreAresented the ter:s
and 9onditions of Aoli9ies or 9ontra9ts of
insuran9e whi9h he see>s to sell or has soldF
or
1DhE (as failed to Aass the written
eBa:ination Ares9ri;ed, if not otherwise
eBe:At fro: ta>ing the sa:e.
1In addition to the foregoing 9auses, no
li9ense to a9t as insuran9e agent or insuran9e
;ro>er shall ;e renewed if the holder thereof
has not ;een a9tively engaged as su9h agent
or ;ro>er in a99ordan9e with su9h rules as
the o::issioner :ay Ares9ri;e.
1&E. G-6. "he Are:iu:, or any Aortion
thereof, whi9h an insuran9e agent or
insuran9e ;ro>er 9olle9ts fro: an insured
and whi9h is to ;e Aaid to an insuran9e
9o:Aany ;e9ause of the assu:Ation of
lia;ility through the issuan9e of Aoli9ies or
9ontra9ts of insuran9e, shall ;e held ;y the
agent or ;ro>er in a fidu9iary 9aAa9ity and
shall not ;e :isaAAroAriated or 9onverted to
his own use or illegally withheld ;y the
agent or ;ro>er.
1!ny insuran9e 9o:Aany whi9h delivers to
an insuran9e agent or insuran9e ;ro>er a
Aoli9y or 9ontra9t of insuran9e shall ;e
dee:ed to have authoriHed su9h agent or
;ro>er to re9eive on its ;ehalf Aay:ent of
any Are:iu: whi9h is due on su9h Aoli9y or
9ontra9t of insuran9e at the ti:e of its
issuan9e or delivery or whi9h ;e9o:es due
thereon.
1In order to ensure faithful Aerfor:an9e ;y
the insuran9e agent or insuran9e ;ro>er of
these fidu9iary resAonsi;ilities, the
Insuran9e o::issioner shall Ares9ri;e the
:ini:u: ter:s and 9onditions on su9h
:atters in the standard agen9y or ;ro>ers
agree:ent ;etween the agents andKor the
;ro>er with the insuran9e 9o:Aanies.
1&E. G-,. !ny Arovision of eBisting laws
to the 9ontrary notwithstanding, no Aerson
shall, within the PhiliAAines, sell or offer for
sale a varia;le 9ontra9t or do or Aerfor: any
a9t or thing in the sale, negotiation, :a>ing
or 9onsu::ating of any varia;le 9ontra9t
other than for hi:self unless su9h Aerson
shall have a valid and 9urrent li9ense fro:
the o::issioner authoriHing su9h Aerson
to a9t as a varia;le 9ontra9t agent. #o su9h
li9ense shall ;e issued unless and until the
o::issioner is satisfied, after eBa:ination
that su9h Aerson is ;y training, >nowledge,
a;ility and 9hara9ter Cualified to a9t as su9h
agent. !ny su9h li9ense :ay ;e withdrawn
and 9an9elled ;y the o::issioner after
noti9e and hearing, if he shall find that the
holder thereof does not then have the
Cualifi9ations reCuired for the issuan9e of
su9h li9ense.
1&E. G-8. It shall ;e unlawful for any
Aerson, 9o:Aany or 9orAoration in the
PhiliAAines to a9t as general agent of any
insuran9e 9o:Aany unless he is e:Aowered
;y a written Aower of attorney duly eBe9uted
;y su9h insuran9e 9o:Aany, and registered
with the o::issioner to re9eive noti9es,
su::ons and legal Aro9esses for and in
;ehalf of the insuran9e 9o:Aany 9on9erned
in 9onne9tion with a9tions or other legal
Aro9eedings against said insuran9e
9o:Aany. It shall ;e the duty of said general
agent to notify the o::issioner of his Aost
offi9e address in the PhiliAAines, or any
9hange thereof. #oti9es, su::ons, or
Aro9esses of any >ind sent ;y registered :ail
to the last registered address of su9h general
agent of the 9o:Aany 9on9erned or to the
o::issioner shall ;e suffi9ient servi9e and
dee:ed as if served on the insuran9e
9o:Aany itself.
1&E. G-4. EB9eAt as otherwise Arovided ;y
law or treaty, it shall ;e unlawful for any
Aerson, AartnershiA, asso9iation or
9orAoration in the PhiliAAines, for hi:self or
itself, or for so:e other Aerson, AartnershiA,
asso9iation or 9orAoration, either to Aro9ure,
re9eive or forward aAAli9ations of insuran9e
in, or to issue or to deliver or a99eAt Aoli9ies
or 9ontra9ts of insuran9e of or for, any
insuran9e 9o:Aany or 9o:Aanies not
authoriHed to transa9t ;usiness in the
PhiliAAines, 9overing ris>s, life or non-life,
situated in the PhiliAAinesF and any su9h
Aerson, AartnershiA, asso9iation or
9orAoration violating the Arovisions of this
se9tion shall ;e dee:ed guilty of a Aenal
offense, and uAon 9onvi9tion thereof, shall
for ea9h su9h offense ;e Aunished ;y a fine
of "wo hundred fifty thousand Aesos
DP.65,555.55E, or i:Arison:ent of siB D,E
:onths, or ;oth, at the dis9retion of the
9ourt< Provided, "hat the Arovisions of this
se9tion shall not aAAly to reinsuran9e.
1"I"LE .
1REI#&UR!#E BR$0ER&
1&E. G-7. EB9eAt as Arovided in the neBt
su99eeding title, no Aerson shall a9t as
reinsuran9e ;ro>er in the PhiliAAines unless
he is authoriHed as su9h ;y the
o::issioner.
1! reinsuran9e ;ro>er is one who, for
9o:Aensation, not ;eing a duly authoriHed
agent, e:Aloyee or offi9er of an insurer in
whi9h any reinsuran9e is effe9ted, a9ts or
aids in any :anner in negotiating 9ontra9ts
of reinsuran9e, or Ala9ing ris>s of effe9ting
reinsuran9e, for any insuran9e 9o:Aany
authoriHed to do ;usiness in the PhiliAAines.
1&E. G.5. UAon aAAli9ation and Aay:ent
of the 9orresAonding fee hereinafter
Ares9ri;ed, and the filing of two D.E errors
and o:issions DArofessional lia;ility or
Arofessional inde:nityE Aoli9ies hereinafter
des9ri;ed, a Aerson :ay, if found Cualified,
;e issued a li9ense to a9t as reinsuran9e
;ro>er ;y the o::issioner. #o su9h
li9ense shall ;e valid after )e9e:;er G- of
the third year following its issuan9e unless it
is renewed.
1"he errors and o:issions DArofessional
lia;ility or Arofessional inde:nityE Aoli9ies
:entioned a;ove shall inde:nify the
aAAli9ant against any 9lai: or 9lai:s for
;rea9h of duty as reinsuran9e ;ro>er whi9h
:ay ;e :ade against hi: ;y reason of any
negligent a9t, error or o:ission, whenever or
wherever 9o::itted or alleged to have ;een
9o::itted, on the Aart of the aAAli9ant or
any Aerson who has ;een, is now, or :ay
hereafter during the su;sisten9e of the
Aoli9ies ;e e:Aloyed ;y the said aAAli9ant
in his 9aAa9ity as reinsuran9e ;ro>er<
Provided, "hat the filing of any 9lai: or
9lai:s under one of su9h Aoli9ies shall
Are9lude the filing of the said 9lai: or
9lai:s under the other Aoli9y. "he said
Aoli9ies shall ;e issued seAarately ;y two D.E
insuran9e 9o:Aanies authoriHed to do
;usiness in the PhiliAAines and shall ;e in
su9h a:ounts as :ay ;e Ares9ri;ed ;y the
Insuran9e o::issioner, deAending uAon
the siHe or a:ount of the ;ro>ing ;usiness of
the aAAli9ant, ;ut in no 9ase shall the
a:ount of ea9h of su9h Aoli9ies ;e less than
+ive hundred thousand Aesos DP655,555.55E.
1&E. G.-. "he o::issioner :ay re9all,
susAend or revo>e the li9ense granted to a
reinsuran9e ;ro>er for violation of any
eBisting law, rule and regulation, or any
Arovision of this ode after due noti9e and
hearing.
1"I"LE G
1RE&I)E#" !'E#"&
1&E. G... #o Aerson shall a9t as resident
agent, as hereinafter defined, unless he is
registered as su9h with the o::issioner.
1&E. G.G. "he ter: resident agent, as used
in this title, is one duly aAAointed ;y a
foreign insurer or ;ro>er not authoriHed to
do ;usiness in the PhiliAAines to re9eive in
its ;ehalf noti9es, su::ons and legal
Aro9esses in 9onne9tion with a9tions or other
legal Aro9eedings against su9h foreign
insurer or ;ro>er.
1&E. G.3. "he aAAli9ation for a 9ertifi9ate
of registration as resident agent filed with
the o::issioner :ust ;e a99o:Aanied
with a 9oAy of the Aower of attorney, duly
notariHed and authenti9ated ;y the
PhiliAAine onsul in the Ala9e where su9h
foreign insurer or ;ro>er is do:i9iled,
e:Aowering the aAAli9ant to a9t as resident
agent and to re9eive noti9es, su::ons and
legal Aro9esses for and in ;ehalf of su9h
foreign insurer or ;ro>er in 9onne9tion with
any a9tion or legal Aro9eeding against su9h
foreign insurer or ;ro>er.
1&E. G.6. It shall ;e the duty of su9h
resident agent to notify i::ediately the
o::issioner of any 9hange of his offi9e
address.
1&E. G.,. ! 9ertifi9ate of registration
issued to a resident agent shall eBAire on the
thirty-first day of )e9e:;er of the third year
following its issuan9e unless it is renewed.
1"he o::issioner :ay, after due noti9e
and hearing, re9all or 9an9el the 9ertifi9ate
of registration issued to a resident agent for
violation of any eBisting law, rule or
regulation, or any Arovision of this ode.
1"I"LE 3
1#$#-LI+E $MP!#* U#)ER/RI"ER
1&E. G.8. #o Aerson shall a9t, and no
9o:Aany shall e:Aloy any Aerson, as non-
life 9o:Aany underwriter, whose duty and
resAonsi;ility it shall ;e to sele9t, evaluate
and a99eAt ris>s for, and to deter:ine the
ter:s and 9onditions, in9luding those
Aertaining to a:ounts of retentions, under
whi9h su9h ris>s are to ;e a99eAted ;y the
9o:Aany, unless su9h underwriter is
registered as su9h with the o::issioner.
1&E. G.4. Every non-life insuran9e
9o:Aany doing ;usiness in the PhiliAAines
:ust :aintain at all ti:es a register of ris>s
a99eAted and a 9lai:s register for ea9h line
of ris>s engaged in ;y su9h non-life
insuran9e 9o:Aany with su9h entries therein
as are now or as :ay hereafter ;e reCuired
;y the o::issioner, and it shall ;e the
resAonsi;ility of the underwriter on the
Aarti9ular line of ris> involved to see to it
that the said registers are well :aintained
and >eAt, and that all entries therein are
AroAerly and 9orre9tly re9orded. &u9h
registers shall ;e oAen to insAe9tion and
eBa:ination of duly authoriHed
reAresentatives of the o::issioner at all
ti:es during ;usiness hours.
1&E. G.7. #o Aerson shall ;e registered
with the o::issioner, unless su9h Aerson
shall ;e at least twenty-one D.-E years of age
on the date of su9h registrationF a resident of
the PhiliAAinesF of good :oral 9hara9ter and
with no 9onvi9tion of any 9ri:e involving
:oral turAitudeF has had at the ti:e su9h
registration is :ade at least two D.E years of
underwriting wor> in the Aarti9ular line of
ris> involvedF and has Aassed su9h
Cualifying written eBa:ination that the
o::issioner shall 9ondu9t at su9h ti:e
and in su9h Ala9e as he :ay de9ide to hold
for aAAli9ants desiring to a9t as
underwriters.
1&u9h eBa:ination shall not ;e reCuired of
any Aerson who has served as non-life
9o:Aany underwriter for a Aeriod of at least
five D6E years, if the o::issioner is
satisfied of the aAAli9ant@s 9o:Aeten9e as
shown ;y the results of his underwriting
wor> in the non-life insuran9e 9o:Aany or
9o:Aanies that e:Aloyed hi: in that
9aAa9ity. "he :ini:u: underwriting
eBAerien9e herein reCuired :ay ;e redu9ed
or waived if it is shown to the satisfa9tion of
the o::issioner that the non-life 9o:Aany
underwriter has undergone eBtensive
edu9ation andKor training in insuran9e.
1&E. GG5. !ny aAAli9ant who
:isreAresents or o:its any :aterial fa9t in
his aAAli9ation for registration as a non-life
9o:Aany underwriter, or 9o::its any
dishonest a9t in ta>ing or in 9onne9tion with
the Cualifying written eBa:ination for
underwriters, shall ;e ;arred fro: ;eing
registered as su9h non-life 9o:Aany
underwriter and, if already registered, his
registration shall ;e 9an9elled and the
9ertifi9ate of registration issued in his favor
shall ;e re9alled i::ediately ;y the
o::issioner.
1In the event that the 9ertifi9ate of authority
of a non-life insuran9e 9o:Aany to transa9t
;usiness is susAended or revo>ed due to
;usiness failure arising largely fro: the
i:Arudent and inIudi9ious a99eAtan9e of
ris>s ;y the underwriter 9on9erned, the
registration of su9h underwriter shall
li>ewise ;e 9an9elled and his 9ertifi9ate of
registration shall ;e re9alled ;y the
o::issioner, and no si:ilar 9ertifi9ate
shall thereafter ;e issued in his favor.
1&E. GG-. #o 9ertifi9ate of registration
issued to an underwriter shall ;e valid after
)e9e:;er G- of the third year following its
issuan9e unless it is renewed.
1"he o::issioner :ay, after due noti9e
and hearing, also susAend or 9an9el su9h
9ertifi9ate for violation of eBisting laws,
rules and regulations or of any Arovisions of
this ode.
1"I"LE 6
1!)JU&"ER&
1&E. GG.. #o Aerson, AartnershiA,
asso9iation, or 9orAoration shall a9t as an
adIuster, as hereinafter defined, unless
authoriHed so to a9t ;y virtue of a li9ense
issued or renewed ;y the o::issioner
Aursuant to the Arovisions of this ode<
Provided, "hat in the 9ase of a natural
Aerson, he :ust ;e a +iliAino 9itiHen and in
the 9ase of a AartnershiA, asso9iation or
9orAoration, at least siBty Aer9ent D,5LE of
its 9aAital :ust ;e owned ;y 9itiHens of the
PhiliAAines.
1&E. GGG. !n adIuster :ay ;e an
indeAendent adIuster or a Au;li9 adIuster.
1"he ter: independent ad%uster :eans any
Aerson, AartnershiA, asso9iation or
9orAoration whi9h, for :oney, 9o::ission
or any other thing of value, a9ts for or on
;ehalf of an insurer in the adIusting of
9lai:s arising under insuran9e 9ontra9ts or
Aoli9ies issued ;y su9h insurer.
1"he ter: public ad%uster :eans any
Aerson, AartnershiA, asso9iation or
9orAoration whi9h, for :oney, 9o::ission
or any other thing of value, a9ts on ;ehalf of
an insured in negotiating for, or effe9ting,
the settle:ent of a 9lai: or 9lai:s of the
said insured arising under insuran9e
9ontra9ts or Aoli9ies, or whi9h advertises for
or soli9its e:Aloy:ent as an adIuster of
su9h 9lai:s.
1&E. GG3. +or every line of insuran9e
9lai: adIust:ent, adIusters shall ;e li9ensed
either as indeAendent adIusters or as Au;li9
adIusters. #o adIuster shall a9t on ;ehalf of
an insurer unless said adIuster is li9ensed as
an indeAendent adIusterF and no adIuster
shall a9t on ;ehalf of an insured unless said
adIuster is li9ensed as a Au;li9 adIuster<
Provided, hoever, "hat when a fir: or
Aerson has ;een li9ensed as a Au;li9
adIuster, he shall not ;e granted another
li9ense as indeAendent adIuster and vice
versa.
1#o li9ense, however, shall ;e reCuired of
any 9o:Aany adIuster who is a salaried
e:Aloyee of an insuran9e 9o:Aany for the
adIust:ent of 9lai:s filed under Aoli9ies
issued ;y su9h insuran9e 9o:Aany.
1&E. GG6. &u9h li9ense or any renewal
thereof :ay ;e issued ;y the o::issioner
uAon written aAAli9ation filed ;y the Aerson
interested on the for: or for:s Ares9ri;ed
;y the o::issioner, whi9h shall 9ontain
su9h infor:ation as he :ay reCuire, and
uAon Aay:ent of the 9orresAonding fee
hereinafter Ares9ri;ed.
1&E. GG,. "he o::issioner shall
9ondu9t, at su9h ti:es, and in su9h Ala9es as
he :ay de9ide to hold, written eBa:inations
to deter:ine the 9o:Aeten9e and a;ility of
aAAli9ants desiring to a9t as adIuster of
insuran9e 9lai:s.
1&E. GG8. #o adIuster@s li9ense issued
hereunder shall ;e valid after )e9e:;er G-
of the third year following the issuan9e of
su9h li9ense unless it is renewed.
1&E. GG4. #othing 9ontained in this title
shall aAAly to any duly li9ensed attorney-at-
law who a9ts or aids in adIusting insuran9e
9lai:s as an in9ident to the Ara9ti9e of his
Arofession and who does not advertise
hi:self as an adIuster.
1&E. GG7. "he o::issioner :ay susAend
or revo>e any adIuster@s li9ense if, after
giving noti9e and hearing to the adIuster
9on9erned, the o::issioner finds that the
said adIuster<
1DaE (as violated any Arovision of this ode
and of the 9ir9ulars, rulings and instru9tions
of the o::issioner or has violated any law
in the 9ourse of his dealings as an adIusterF
or
1D;E (as :ade a :aterial :isstate:ent in
the aAAli9ation for su9h li9enseF or
1D9E (as ;een guilty of fraudulent or
dishonest Ara9ti9esF or
1DdE (as de:onstrated his in9o:Aeten9e or
untrustworthiness to a9t as adIusterF or
1DeE (as :ade Aatently unIust valuation of
lossF or
1DfE (as failed to :a>e a reAort of the
adIust:ent he AroAosed within siBty D,5E
days fro: the date of the filing of the 9lai:
;y the insured with the insurer, unless
Arevented so to do ;y reasons ;eyond his
9ontrolF or
1DgE (as refused to allow an eBa:ination
into his affairs or :ethod of doing ;usiness
as hereinafter Arovided.
1&E. G35. Every adIuster shall su;:it to
the o::issioner a Cuarterly reAort of all
losses whi9h are the su;Ie9t of adIust:ent
effe9ted ;y hi: during ea9h :onth in the
for: Ares9ri;ed ;y the o::issioner. "he
reAort shall ;e filed within one D-E :onth
after the end of ea9h Cuarter.
1&E. G3-. Every adIuster shall >eeA his or
its ;oo>s, re9ords, reAorts, a99ounts, and
vou9hers in su9h :anner that the
o::issioner or his duly authoriHed
reAresentatives :ay readily verify the
Cuarterly reAorts of the said adIuster and
as9ertain whether the said adIuster has
9o:Alied with the Arovisions of law or
regulations o;ligatory uAon hi: or whether
the :ethod of doing ;usiness of the said
adIuster has ;een fair, Iust and honest.
1&E. G3.. "he o::issioner shall, at least
on9e a year and whenever he 9onsiders the
Au;li9 interest so de:ands, 9ause an
eBa:ination to ;e :ade into the affairs and
:ethod of doing ;usiness of every adIuster.
1&E. G3G. !ny violation of any Arovision
of this title shall ;e Aunished ;y a fine of not
less than "en thousand Aesos DP-5,555.55E,
or ;y i:Arison:ent at the dis9retion of the
9ourt< Provided, "hat, in 9ase of a
AartnershiA, asso9iation or 9orAoration, the
said Aenalty shall ;e i:Aosed uAon the
Aartner, Aresident, :anager, :anaging
dire9tor, dire9tor or Aerson in 9harge of its
;usiness or resAonsi;le for the violation.
1"I"LE ,
1!"U!RIE&
1&E. G33. #o life insuran9e 9o:Aany shall
;e li9ensed to do ;usiness in the PhiliAAines
nor shall any life insuran9e 9o:Aany doing
;usiness in the PhiliAAines ;e allowed to
9ontinue doing su9h ;usiness unless they
shall engage the servi9es of an a9tuary duly
a99redited with the o::issioner who
shall, during his tenure of offi9e, ;e dire9tly
resAonsi;le for the dire9tion and suAervision
of all a9tuarial wor> 9onne9ted with or that
:ay ;e involved in the ;usiness of the
insuran9e 9o:Aany. "he o::issioner :ay
also reCuire non-life insuran9e 9o:Aanies to
engage the servi9es of an a99redited a9tuary,
in a99ordan9e with the rules and regulations
that the o::issioner will for:ulate.
1&E. G36. !ny Aerson :ay ;e offi9ially
a99redited ;y the o::issioner to a9t as an
a9tuary in any life insuran9e 9o:Aany or in
any :utual ;enefit asso9iation authoriHed to
do ;usiness in the PhiliAAines uAon
aAAli9ation therefor and the Aay:ent of the
9orresAonding fee hereinafter Ares9ri;ed<
Provided, "hat<
1DaE (e is a fellow of good standing of the
!9tuarial &o9iety of the PhiliAAines at the
ti:e of his aAAoint:ent and re:ains in su9h
good standing during the tenure of his
engage:entF or
1D;E In the 9ase of one who is not a fellow of
the !9tuarial &o9iety of the PhiliAAines, he
:eets all the reCuire:ents of the said
&o9iety for a99reditation as a fellow of the
&o9iety, and has ;een given Aer:ission ;y
the Aertinent govern:ent authorities in the
PhiliAAines to render servi9es in the
PhiliAAines, in the event that he is not a
9itiHen of the PhiliAAines.
1"he registration of the a9tuary shall ;e
susAended or revo>ed ;y the o::issioner
on the following grounds<
1D-E +ailure to adeCuately Aerfor: reCuired
fun9tions and duties under this odeF
1D.E +ailure to dis9lose 9onfli9t of interestF
1DGE +ailure to 9o:Aly with the ode of
ondu9t of the !9tuarial &o9iety of the
PhiliAAinesF or
1D3E &u9h other grounds that :ay ;e
deter:ined ;y the o::issioner.
1#o a9tuary engaged ;y a life insuran9e
9o:Aany shall ;e at the sa:e ti:e a
sto9>holder or a dire9tor of the ;oard, 9hief
eBe9utive offi9er or 9hief finan9ial offi9er of
the 9o:Aany or hold any Aosition that the
o::issioner :ay deter:ine to have an
inherent 9onfli9t of interest to the Aosition of
an a9tuary.
1#o 9ertifi9ate of registration issued under
this title shall ;e valid after )e9e:;er G- of
the third year following its issuan9e unless it
is renewed.
1&E. G3,. "he following do9u:ents, whi9h
are fro: ti:e to ti:e su;:itted to the
o::issioner ;y a life insuran9e 9o:Aany
authoriHed to do ;usiness in the PhiliAAines,
shall ;e duly 9ertified ;y an a99redited
a9tuary e:Aloyed ;y su9h 9o:Aany<
1DaE Poli9y reserves, 9lai:s or loss reserves
and net due and deferred Are:iu:s.
1D;E &tate:ents of ;ases and net Are:iu:s,
loading for gross Are:iu:s, and on non-
forfeiture values and reserves, when
aAAlying for aAAroval of gross Are:iu:s,
reserves and non-forfeiture values.
1D9E Poli9ies of insuran9e under any Alan
su;:itted to the o::issioner as reCuired
;y law.
1DdE !nnual state:ents and valuation reAorts
su;:itted to the o::issioner as reCuired
;y law.
1DeE +inan9ial AroIe9tion showing the
Aro;a;le in9o:e and outgo and reserve
reCuire:ents, enu:erating the a9tuarial
assu:Ations and ;ases of AroIe9tions.
1DfE =aluation of annuity funds or retire:ent
Alans.
1"he o::issioner :ay also reCuire non-
life insuran9e 9o:Aanies to su;:it, fro:
ti:e to ti:e, si:ilar do9u:ents whi9h shall
;e duly 9ertified ;y an a99redited a9tuary
e:Aloyed ;y su9h 9o:Aany.
1!ny life insuran9e 9o:Aany authoriHed to
do ;usiness in the PhiliAAines :ay e:Aloy
any Aerson who is not offi9ially a99redited
under either of the Cualifi9ations for any
>ind of a9tuarial wor>< Provided, "hat he
shall not, at any ti:e, have the authority to
9ertify to the 9orre9tness of the foregoing
do9u:ents.
1&E. G38. #o a99redited a9tuary shall
serve :ore than one 9lient or e:Aloyer at
the sa:e ti:e. (owever, one already in the
e:Aloy of an insuran9e 9o:Aany :ay ;e
allowed ;y the o::issioner to serve a
:utual ;enefit asso9iation or any other
insuran9e 9o:Aany, Arovided the following
9onditions are first 9o:Alied with<
1DaE "hat the reCuest to engage his servi9es
;y the other e:Aloyer is in writingF
1D;E "hat his Aresent e:Aloyer a9Cuies9ed to
it in writingF and
1D9E "hat he furnishes the o::issioner
with 9oAies of said reCuest and
a9Cuies9en9e.
1#o eBternal auditor shall ;e engaged ;y
suAervised Aersons or entities unless it has
;een issued an a99reditation 9ertifi9ate ;y
the o::issioner. "he a99reditation
9ertifi9ate shall ;e valid until )e9e:;er G-
of the third year fro: issuan9e unless it is
revo>ed or susAended. "he o::issioner
shall issue rules and regulations to govern
the a99reditation of the eBternal auditor and
the revo9ation or susAension of the
a99reditation.
1"I"LE 8
1R!"I#' $R'!#IM!"I$# !#) R!"E
M!0I#'
1&E. G34. Every organiHation whi9h now
eBists or whi9h :ay hereafter ;e for:ed for
the AurAose of :a>ing rates to ;e used ;y
:ore than one insuran9e 9o:Aany
authoriHed to do ;usiness in the PhiliAAines
shall ;e >nown as a rating organiHation. "he
ter: rate as used in this title shall generally
:ean the ratio of the Are:iu: to the a:ount
insured and shall in9lude, as the 9onteBt :ay
reCuire, either the 9onsideration to ;e Aaid or
9harged for insuran9e 9ontra9ts, in9luding
surety ;onds, or the ele:ents and fa9tors
for:ing the ;asis for the deter:ination or
aAAli9ation of the sa:e, or ;oth.
1&E. G37. Every rating organiHation whi9h
now eBists or whi9h :ay hereafter ;e
for:ed shall ;e su;Ie9t to the Arovisions of
this title.
1&E. G65. #o rating organiHation hereafter
for:ed shall 9o::en9e rate-:a>ing
oAerations until it shall have o;tained a
li9ense fro: the o::issioner. Before
o;taining su9h li9ense, su9h rating
organiHation shall file with the
o::issioner a noti9e of its intention to
9o::en9e rate-:a>ing oAerations, a 9oAy
of its 9onstitution, arti9les of agree:ent or
asso9iation, or of in9orAoration, and its
;ylaws, a list of insuran9e 9o:Aanies that
have agreed to ;e9o:e :e:;ers or
su;s9ri;ers, and su9h other infor:ation
9on9erning su9h rating organiHation and its
oAerations as :ay ;e reCuired ;y the
o::issioner. If the o::issioner finds
that the organiHation has 9o:Alied with the
Arovisions of law and that it has a suffi9ient
nu:;er of :e:;ers or su;s9ri;ers and is
otherwise Cualified to fun9tion as a rating
organiHation, the o::issioner :ay issue a
li9ense to su9h rating organiHation
authoriHing it to :a>e rates for the >inds of
insuran9e or su;divisions thereof as :ay ;e
sAe9ified in su9h li9ense. #o li9ense issued
to a rating organiHation shall ;e valid after
)e9e:;er G- of the third year following its
issuan9e unless it is renewed. #o rating
organiHation whi9h now eBists and is not
li9ensed Aursuant to this se9tion shall
9ontinue rate-:a>ing oAerations until it shall
have o;tained fro: the o::issioner a
li9ense whi9h he :ay issue if satisfied that
su9h organiHation is 9o:Alying with the
Arovisions of this title. Every rating
organiHation shall notify the o::issioner
Aro:Atly of every 9hange in<
1DaE Its 9onstitution, its arti9les of agree:ent
or asso9iation or its 9ertifi9ate of
in9orAoration, and its ;ylaws, rules and
regulations governing the 9ondu9t of its
;usinessF and
1D;E Its list of :e:;ers and su;s9ri;ers.
1! member :eans an insurer who
Aarti9iAates in or is entitled to Aarti9iAate in
the :anage:ent of a rating organiHation.
1! subscriber :eans an insurer whi9h is
furnished at its reCuest with rates and rating
:anuals ;y a rating organiHation of whi9h it
is not a :e:;er.
1&E. G6-. Ea9h rating organiHation shall
furnish its rating servi9e without
dis9ri:ination to all of its :e:;ers and
su;s9ri;ers, and shall, su;Ie9t to reasona;le
rules and regulations, Aer:it any insuran9e
9o:Aany doing ;usiness in the PhiliAAines,
not ad:itted to :e:;ershiA, to ;e9o:e a
su;s9ri;er to its rating servi9es for any >ind
of insuran9e or su;divisions thereof. #oti9e
of AroAosed 9hanges in su9h rules and
regulations shall ;e given to su;s9ri;ers.
"he reasona;leness of any rule or regulation
in its aAAli9ation to su;s9ri;ers, or the
refusal of any rating organiHation to ad:it
an insuran9e 9o:Aany as a su;s9ri;er, shall,
at the reCuest of any su;s9ri;er or any su9h
insuran9e 9o:Aany, ;e reviewed ;y the
o::issioner at a hearing held uAon at
least ten D-5E days@ written noti9e to su9h
rating organiHation and to su9h su;s9ri;er or
insuran9e 9o:Aany. "he o::issioner
:ay, after su9h hearing, issue an aAAroAriate
order.
1&E. G6.. #o rating organiHation or any
other asso9iation shall refuse to do ;usiness
with, or Arohi;it or Arevent the Aay:ent of
9o::issions to, any Aerson li9ensed as an
insuran9e ;ro>er Aursuant to the Arovisions
of "itle - of this 9haAter.
1&E. G6G. Rating organiHations shall ;e
su;Ie9t to eBa:ination ;y the
o::issioner, as often as he :ay dee:
su9h eBa:ination eBAedient, Aursuant to the
Arovisions of this ode aAAli9a;le to the
eBa:ination of insuran9e 9o:Aanies. (e
shall 9ause su9h an eBa:ination of ea9h
rating organiHation to ;e :ade at least on9e
in every five D6E years.
1&E. G63. "he o::issioner :ay susAend
or revo>e the li9ense of any rating
organiHation whi9h fails to 9o:Aly with his
order within the ti:e li:ited ;y su9h order,
or any eBtension thereof whi9h he :ay
grant. "he o::issioner :ay deter:ine
when a susAension of li9ense shall ;e9o:e
effe9tive and it shall re:ain in effe9t for the
Aeriod fiBed ;y hi:, unless he :odifies or
res9inds su9h susAension.
1&E. G66. !ny rating organiHation :ay
su;s9ri;e for or Aur9hase a9tuarial, te9hni9al
or other servi9es, and su9h servi9es shall ;e
availa;le to all :e:;ers and su;s9ri;ers
without dis9ri:ination.
1&E. G6,. !ny rating organiHation :ay
Arovide for the eBa:ination of Aoli9ies,
daily reAorts, ;inders, renewal 9ertifi9ates,
endorse:ents or other instru:ents of
insuran9e, or the 9an9ellation thereof, and
:ay :a>e reasona;le rules governing their
su;:ission. &u9h rules shall 9ontain a
Arovision that in the event an insuran9e
9o:Aany does not within siBty D,5E days
furnish satisfa9tory eviden9e to the rating
organiHation of the 9orre9tion of any error or
o:ission Areviously 9alled to its attention ;y
the rating organiHation, it shall ;e the duty
of the rating organiHation to notify the
o::issioner thereof. !ll infor:ation so
su;:itted for eBa:ination shall ;e
9onfidential.
1&E. G68. ooAeration a:ong rating
organiHations or a:ong rating organiHations
and insurers in rate :a>ing or in other
:atters within the s9oAe of this title is
here;y authoriHed, Arovided the filings
resulting fro: su9h 9ooAeration are su;Ie9t
to all Arovisions of this title whi9h are
aAAli9a;le to filings generally. "he
o::issioner :ay review su9h 9ooAerative
a9tivities and Ara9ti9es and if he finds that
any su9h a9tivity or Ara9ti9e is unfair or
unreasona;le or otherwise in9onsistent with
the Arovisions of this title, he :ay issue a
written order sAe9ifying in what resAe9ts
su9h a9tivity or Ara9ti9e is unfair or
unreasona;le or otherwise in9onsistent with
the Arovisions of this title, and reCuiring the
dis9ontinuan9e of su9h a9tivity or Ara9ti9e.
1&E. G64. Every rating organiHation and
every insuran9e 9o:Aany whi9h :a>es and
files its own rates, shall :a>e rates for all
ris>s rated ;y su9h organiHation or insuran9e
9o:Aany in a99ordan9e with the following
Arovisions<
1DaE Basi9 9lassifi9ation, :anual, :ini:u:,
9lass, or s9hedule rates or rating Alans, shall
;e :ade and adoAted for all su9h ris>s. !ny
deAarture fro: su9h rates shall ;e in
a99ordan9e with s9hedules, rating Alans and
rules filed with the o::issionerF
1D;E Rates shall ;e reasona;le and adeCuate
for the 9lass of ris>s to whi9h they aAAlyF
1D9E #o rate shall dis9ri:inate unfairly
;etween ris>s involving essentially the sa:e
haHards and eBAense ele:ents or ;etween
ris>s in the aAAli9ation of li>e 9harges and
9reditsF
1DdE onsideration shall ;e given to the Aast
and ArosAe9tive loss eBAerien9e, in9luding
the 9onflagration and 9atastroAhe haHards, if
any, to all fa9tors reasona;ly attri;uta;le to
the 9lass of ris>s, to a reasona;le Arofit, to
9o::issions Aaid during the :ost re9ent
annual Aeriod and to Aast and ArosAe9tive
other eBAenses. In 9ase of fire insuran9e
rates, 9onsideration shall ;e given to the
eBAerien9e of the fire insuran9e ;usiness
during a Aeriod of not less than five D6E
years neBt Are9eding the year in whi9h the
review is :adeF
1DeE Ris> :ay ;e grouAed ;y 9lassifi9ations
for the esta;lish:ent of rates and :ini:u:
Are:iu:s. lassifi9ation rates :ay ;e
:odified to Arodu9e rates for individual
ris>s in a99ordan9e with rating Alans whi9h
esta;lish standards for :easuring variations
in haHards or eBAense Arovisions, or ;oth.
&u9h standards :ay :easure any differen9e
a:ong ris>s that 9an ;e de:onstrated to
have a Aro;a;le effe9t uAon losses or
eBAenses.
1&E. G67. #o rating organiHation and no
insuran9e 9o:Aany whi9h :a>es and files
its own rates shall :a>e or Aro:ulgate any
rate or s9hedule of rates whi9h is to ;e
aAAlied to any fire ris> on the 9ondition that
the whole a:ount of insuran9e on any ris>
or any sAe9ified Aart thereof shall ;e Ala9ed
with the :e:;ers of or su;s9ri;ers to su9h
rating organiHation or with su9h insurer.
1&E. G,5. Every insuran9e 9o:Aany doing
;usiness in the PhiliAAines shall annually
file with the rating organiHation of whi9h it
is a :e:;er or su;s9ri;er, or with su9h
other agen9y as the o::issioner :ay
designate, a statisti9al reAort showing a
9lassifi9ation s9hedule of its Are:iu:s and
losses on all >inds or tyAes of insuran9e
;usiness to whi9h &e9tion G64 is aAAli9a;le,
and su9h other infor:ation as the
o::issioner :ay dee: ne9essary or
eBAedient for the ad:inistration of the
Arovisions of this title.
1&E. G,-. Every non-life rating
organiHation and every non-life insuran9e
9o:Aany doing ;usiness in the PhiliAAines
shall file with the o::issioner, eB9eAt as
to ris>s whi9h ;y general 9usto: of the
;usiness are not written a99ording to :anual
rates or rating Alans, every rate :anual,
s9hedule of rates, 9lassifi9ation of ris>s,
rating Alan, and every other rating rule and
every :odifi9ation of any of the foregoing
whi9h it AroAoses to use. !n insuran9e
9o:Aany :ay satisfy its o;ligation to :a>e
su9h filings for any >ind or tyAe of insuran9e
;y ;e9o:ing a :e:;er of or su;s9ri;er to a
rating organiHation whi9h :a>es su9h filings
for su9h >ind or tyAe of insuran9e, and ;y
authoriHing the o::issioner to a99eAt
su9h filings of the rating organiHation on
;ehalf of su9h insuran9e 9o:Aany.
1&E. G,.. Every :anual or s9hedule of
rates and every rating Alan filed as Arovided
in the Are9eding se9tion shall state or 9learly
indi9ate the 9hara9ter and eBtent of the
9overage to whi9h any su9h rate or any
:odifi9ation thereof will ;e aAAlied.
1&E. G,G. "he o::issioner shall review
filings as soon as reasona;ly Aossi;le after
they have ;een :ade in order to deter:ine
whether they :eet the reCuire:ents of this
title. /hen a filing is not a99o:Aanied ;y
the infor:ation uAon whi9h the insuran9e
9o:Aany suAAorts su9h filing, and the
o::issioner does not have suffi9ient
infor:ation to deter:ine whether su9h filing
:eets the reCuire:ents of this title, he shall
reCuire su9h insuran9e 9o:Aany to furnish
the infor:ation uAon whi9h it suAAorts su9h
filing. "he infor:ation furnished in suAAort
of a filing :ay in9lude<
1DaE "he eBAerien9e or Iudg:ent of the
insuran9e 9o:Aany or rating organiHation
:a>ing the filingF
1D;E Its interAretation of any statisti9al data
it relies uAonF
1D9E "he eBAerien9e of other insuran9e
9o:Aanies or rating organiHationF or
1DdE !ny other relevant fa9tors.
1&E. G,3. If the o::issioner finds that
any rate filings theretofore filed with hi: do
not 9o:Aly with the Arovisions of this title
or that they Arovide rates or rules whi9h are
inadeCuate, eB9essive, unfairly
dis9ri:inatory or otherwise unreasona;le,
he :ay order the sa:e withdrawn and at the
eBAiration of siBty D,5E days thereafter the
sa:e shall ;e dee:ed no longer on file.
Before :a>ing any su9h finding and order,
the o::issioner shall give noti9e, not less
than ten D-5E days in advan9e, and a hearing,
to the rating organiHation, or to the insurer,
whi9h filed the sa:e. &u9h order shall not
affe9t any 9ontra9t or Aoli9y :ade or issued
Arior to the eBAiration of su9h siBty D,5E-day
Aeriod.
1&E. G,6. #o :e:;er or su;s9ri;er of a
rating organiHation, and no insuran9e
9o:Aany doing ;usiness in the PhiliAAines,
or agent, e:Aloyee or other reAresentative of
su9h 9o:Aany, and no insuran9e ;ro>er
shall 9harge or de:and a rate or re9eive a
Are:iu: whi9h deviates fro: the rates,
rating Alans, 9lassifi9ations, s9hedules, rules
and standards, :ade and last filed ;y a
rating organiHation or ;y or on ;ehalf of the
insuran9e 9o:Aany, or shall issue or :a>e
any Aoli9y or 9ontra9t involving a violation
of su9h rate filings.
1&E. G,,. #otwithstanding any other
Arovisions of this title, uAon the written
aAAli9ation of the insurer, stating his reasons
therefor, filed with and aAAroved ;y the
o::issioner, a rate in eB9ess of that
Arovided ;y a filing otherwise aAAli9a;le
:ay ;e used on any sAe9ifi9 ris>.
1&E. G,8. /henever the o::issioner
shall deter:ine, after noti9e and a hearing,
that the rates 9harged or filed on any 9lass of
ris>s are eB9essive, dis9ri:inatory,
inadeCuate or unreasona;le, he shall order
that su9h rates ;e aAAroAriately adIusted. +or
the AurAose of aAAlying the Arovisions of
this se9tion, the o::issioner :ay fro:
ti:e to ti:e aAArove reasona;le
9lassifi9ations of ris>s for any or all su9h
9lasses, having due regard to the Aast and
ArosAe9tive loss eBAerien9e, in9luding
9onflagration or 9atastroAhe haHards, if any,
to all other relevant fa9tors and to a
reasona;le Arofit.
1&E. G,4. #othing 9ontained in this title
shall ;e 9onstrued as reCuiring any insurer to
;e9o:e a :e:;er of or su;s9ri;er to any
rating organiHation.
1&E. G,7. !gree:ents :ay ;e :ade
a:ong insuran9e 9o:Aanies with resAe9t to
the eCuita;le aAAortion:ent a:ong the: of
insuran9e whi9h :ay ;e afforded aAAli9ants
who are in good faith entitled to ;ut are
una;le to Aro9ure su9h insuran9e through
ordinary :ethods and su9h insuran9e
9o:Aanies :ay agree a:ong the:selves on
the use of reasona;le rates and :odifi9ations
for su9h insuran9e, su9h agree:ents and rate
:odifi9ations to ;e su;Ie9t to the aAAroval
of the o::issioner< Provided, hoever,
"hat the Arovisions of this se9tion shall not
;e dee:ed to aAAly to wor>:en@s
9o:Aensation insuran9e.
1&E. G85. #o insuran9e 9o:Aany doing
;usiness in the PhiliAAines or any agent
thereof, no insuran9e ;ro>er, and no
e:Aloyee or other reAresentative of any su9h
insuran9e 9o:Aany, agent, or ;ro>er, shall
:a>e, Aro9ure or negotiate any 9ontra9t of
insuran9e or agree:ent as to Aoli9y 9ontra9t,
other than is Alainly eBAressed in the Aoli9y
or other written 9ontra9t issued or to ;e
issued as eviden9e thereof, or shall dire9tly
or indire9tly, ;y giving or sharing a
9o::ission or in any :anner whatsoever,
Aay or allow or offer to Aay or allow to the
insured or to any e:Aloyee of su9h insured,
either as an indu9e:ent to the :a>ing of
su9h insuran9e or after su9h insuran9e has
;een effe9ted, any re;ate fro: the Are:iu:
whi9h is sAe9ified in the Aoli9y, or any
sAe9ial favor or advantage in the dividends
or other ;enefits to a99rue thereon, or shall
give or offer to give any valua;le
9onsideration or indu9e:ent of any >ind,
dire9tly or indire9tly, whi9h is not sAe9ified
in su9h Aoli9y or 9ontra9t of insuran9eF nor
shall any su9h 9o:Aany, or any agent
thereof, as to any Aoli9y or 9ontra9t of
insuran9e issued, :a>e any dis9ri:ination
against any +iliAino in the sense that he is
given less advantageous rates, dividends or
other Aoli9y 9onditions or Arivileges than are
a99orded to other nationals ;e9ause of his
ra9e.
1&E. G8-. #o insuran9e 9o:Aany doing
;usiness in the PhiliAAines, and no offi9er,
dire9tor, or agent thereof, and no insuran9e
;ro>er or any other Aerson, AartnershiA or
9orAoration shall issue or 9ir9ulate or 9ause
or Aer:it to ;e issued or 9ir9ulated any
literature, illustration, 9ir9ular or state:ent
of any sort :isreAresenting the ter:s of any
Aoli9y issued ;y any insuran9e 9o:Aany of
the ;enefits or advantages Aro:ised there;y,
or any :isleading esti:ate of the dividends
or share of surAlus to ;e re9eived thereon, or
shall use any na:e or title of any Aoli9y or
9lass of Aoli9ies :isreAresenting the true
nature thereofF nor shall any su9h 9o:Aany
or agent thereof, or any other Aerson,
AartnershiA or 9orAoration :a>e any
:isleading reAresentation or in9o:Alete
9o:Aarison of Aoli9ies to any Aerson insured
in su9h 9o:Aany for the AurAose of indu9ing
or tending to indu9e su9h Aerson to laAse,
forfeit, or surrender his said insuran9e.
1&E. G8.. If the o::issioner, after
noti9e and hearing, finds that any insuran9e
9o:Aany, rating organiHation, agent, ;ro>er
or other Aerson has violated any of the
Arovisions of this title, it shall order the
Aay:ent of a fine not to eB9eed "wenty-five
thousand Aesos DP.6,555.55E for ea9h su9h
offense, and shall i::ediately susAend or
revo>e the li9ense issued to su9h insuran9e
9o:Aany, rating organiHation, agent, or
;ro>er. "he issuan9e, Aro9ure:ent or
negotiation of a single Aoli9y or 9ontra9t of
insuran9e shall ;e dee:ed a seAarate
offense.
1"I"LE 4
1PR$=I&I$# $MM$# "$ !'E#"&,
BR$0ER& !#) !)JU&"ER&
1&E. G8G. ! li9ense issued to a AartnershiA,
asso9iation or 9orAoration to a9t as an
insuran9e agent, general agent, insuran9e
;ro>er, reinsuran9e ;ro>er, or adIuster shall
authoriHe only the individual na:ed in the
li9ense who shall Cualify therefor as though
an individual li9ensee. "he o::issioner
shall 9harge, and the li9ensee shall Aay, a
full additional li9ense fee as to ea9h
resAe9tive individual so na:ed in su9h
li9ense in eB9ess of one.
1Li9enses and 9ertifi9ates of registration
issued under the Arovisions of this 9haAter
:ay ;e renewed ;y the filing of noti9es of
intention on for:s to ;e Ares9ri;ed ;y the
o::issioner and Aay:ent of the fees
therefor.
1&E. G83. "he o::issioner, in
9onsultation with the duly a99redited
asso9iations reAresenting the insuran9e
industry, shall adoAt and Aro:ulgate a 9ode
of 9ondu9t to Aro:ote integrity, honesty and
ethi9al ;usiness Ara9ti9es a:ong insuran9e
agents, distri;utors and other inter:ediaries.
1"I"LE 7
1B!#!&&UR!#E
1&E. G86. "he ter: bancassurance shall
:ean the Aresentation and sale to ;an>
9usto:ers ;y an insuran9e 9o:Aany of its
insuran9e Arodu9ts within the Are:ises of
the head offi9e of su9h ;an> duly li9ensed
;y the Bang>o &entral ng PiliAinas or any of
its ;ran9hes under su9h rules and regulations
whi9h the o::issioner and the Bang>o
&entral ng PiliAinas :ay Aro:ulgate. "o
engage in ;an9assuran9e arrange:ent, a
;an> is not reCuired to have eCuity
ownershiA of the insuran9e 9o:Aany. #o
insuran9e 9o:Aany shall enter into a
;an9assuran9e arrange:ent unless it
Aossesses all the reCuire:ents as :ay ;e
Ares9ri;ed ;y the o::issioner and the
Bang>o &entral ng PiliAinas.
1#o insuran9e Arodu9t under this se9tion,
whether life or non-life, shall ;e issued or
delivered unless in the for: Areviously
aAAroved ;y the o::issioner.
1&E. G8,. Personnel tas>ed to Aresent and
sell insuran9e Arodu9ts within the ;an>
Are:ises shall ;e duly li9ensed ;y the
o::issioner and shall ;e su;Ie9t to the
rules and regulations of this !9t.
1&E. G88. "he o::issioner and the
Bang>o &entral ng PiliAinas shall
Aro:ulgate rules and regulations to
effe9tively suAervise the ;usiness of
;an9assuran9e.
1(!P"ER =
1&EURI"* +U#)
1&E. G84. "here is here;y 9reated a fund to
;e >nown as the &e9urity +und whi9h shall
;e used in the Aay:ent of allowed 9lai:s
against an insuran9e 9o:Aany authoriHed to
transa9t ;usiness in the PhiliAAines
re:aining unAaid ;y reason of the
insolven9y of su9h 9o:Aany. "he said +und
:ay also ;e used to reinsure the Aoli9y of
the insolvent insurer in any solvent insurer
authoriHed to do ;usiness in the PhiliAAines
as Arovided in &e9tion .6,. "he +und :ay
li>ewise ;e used to Aay insured 9lai:s
whi9h otherwise would not ;e 9o:Aensa;le
under the Arovisions of the Aoli9y. #o
Aay:ent fro: the &e9urity +und shall,
however, ;e :ade to any Aerson who owns
or 9ontrols ten Aer9ent D-5LE or :ore of the
voting shares of sto9> of the insolvent
insurer and no Aay:ent on any one 9lai:
shall eB9eed "wenty thousand Aesos
DP.5,555.55E.
1&E. G87. &u9h +und shall 9onsist of all
Aay:ents :ade to the +und ;y insuran9e
9o:Aanies authoriHed to do ;usiness in the
PhiliAAines. Pay:ents :ade ;y life
insuran9e 9o:Aanies shall ;e treated
seAarately fro: those :ade ;y non-life
insuran9e 9o:Aanies and the 9orresAonding
fund shall ;e 9alled Life !99ount and #on-
Life !99ount, resAe9tively, and shall ;e held
and ad:inistered as su9h ;y the
o::issioner in a99ordan9e with the
Arovisions of this title. "he Life !99ount
shall ;e utiliHed eB9lusively for
dis;urse:ents that refer to life insuran9e
9o:Aanies, while the #on-Life !99ount
shall ;e utiliHed eB9lusively for
dis;urse:ents that refer to non-life
insuran9e 9o:Aanies.
1&E. G45. !ll insuran9e 9o:Aanies doing
;usiness in the PhiliAAines shall 9ontri;ute
to the &e9urity +und, Life or #on-Life
!99ount, as the 9ase :ay ;e, the aggregate
a:ount of +ive :illion Aesos
DP6,555,555.55E for ea9h !99ount. "he
9ontri;utions of the life insuran9e
9o:Aanies and of the non-life insuran9e
9o:Aanies shall ;e in dire9t AroAortion to
the ratio ;etween a Aarti9ular life insuran9e
9o:Aany or a Aarti9ular non-life insuran9e
9o:Aany@s net worth and the aggregate net
worth of all life insuran9e 9o:Aanies or all
non-life insuran9e 9o:Aanies, as the 9ase
:ay ;e, as shown in their latest finan9ial
state:ents aAAroved ;y the o::issioner.
"his AroAortion aAAlied to the +ive :illion
Aesos DP6,555,555.55E shall ;e the
9ontri;ution of a Aarti9ular 9o:Aany to the
9orresAonding !99ount of the &e9urity
+und.
1"he a:ount of +ive :illion Aesos
DP6,555,555.55E in ea9h !99ount shall ;e in
the for: of a revolving trust fund. "he
resAe9tive 9ontri;utions of the 9o:Aanies
shall re:ain as ad:itted assets in their
;oo>s and any dis;urse:ent therefro: shall
;e dedu9ted AroAortionately fro: the
9ontri;utions of ea9h 9o:Aany whi9h will
;e allowed as dedu9tions for in9o:e taB
AurAoses. !ny earnings of the +und shall ;e
turned over to the 9ontri;uting 9o:Aanies in
AroAortion to their 9ontri;utions.
1In the 9ase of dis;urse:ents of funds fro:
the +und as Arovided in the foregoing
AaragraAh, the life and non-life 9o:Aanies,
as the 9ase :ay ;e, shall reAlenish the
a:ount dis;ursed in dire9t AroAortion to the
individual 9o:Aany@s net worth and the
aggregate net worth of the life or non-life
9o:Aanies, as the 9ase :ay ;e. (owever, in
no 9ase shall the +und eB9eed the aggregate
a:ount of "en :illion Aesos
DP-5,555,555.55E, or +ive :illion Aesos
DP6,555,555.55E for ea9h !99ount.
1&hould the +und, Life or #on-Life
!99ount, as the 9ase :ay ;e, ;e inadeCuate
for a dis;urse:ent as Arovided for, then the
Life or #on-Life 9o:Aanies, as the 9ase :ay
;e, shall 9ontri;ute to the +und their
resAe9tive shares in the AroAortion
Areviously :entioned.
1&E. G4-. "he o::issioner :ay adoAt,
a:end, and enfor9e all reasona;le rules and
regulations ne9essary for the AroAer
ad:inistration of the +und and of the
!99ounts. In the event any insurer shall fail
to :a>e any Aay:ent reCuired ;y this title,
or that any Aay:ent :ade is in9orre9t, he
shall have full authority to eBa:ine all the
;oo>s and re9ords of the insurer for the
AurAose of as9ertaining the fa9ts and shall
deter:ine the 9orre9t a:ount to ;e Aaid and
:ay Aro9eed in any 9ourt of 9o:Aetent
Iurisdi9tion to re9over for the ;enefit of the
+und or of the !99ount 9on9erned any su:
shown to ;e due uAon su9h eBa:ination and
deter:ination. !ny insurer whi9h fails to
:a>e any Aay:ent to the +und or to the
!99ount 9on9erned when due, shall there;y
forfeit to said +und or !99ount 9on9erned a
Aenalty of five Aer9ent D6LE of the a:ount
deter:ined to ;e due as Arovided ;y this
title, Alus one Aer9ent D-LE of su9h a:ount
for ea9h :onth of delay or fra9tion thereof,
after the eBAiration of the first :onth of su9h
delay, ;ut the o::issioner, if satisfied that
the delay was eB9usa;le, :ay re:it all or
any Aart of su9h Aenalty. "he o::issioner,
in his dis9retion, :ay susAend or revo>e the
9ertifi9ate of authority to do ;usiness in the
PhiliAAines of any insuran9e 9o:Aany whi9h
shall fail to 9o:Aly with this title or to Aay
any Aenalty i:Aosed in a99ordan9e
therewith.
1&E. G4.. "he !99ounts 9reated ;y this
title shall ;e seAarate and aAart fro: ea9h
other and fro: any other fund. "he
"reasurer of the PhiliAAines shall ;e the
9ustodian of the Life !99ount and #on-Life
!99ount of the &e9urity +undF and all
dis;urse:ents fro: any !99ount shall ;e
:ade ;y the "reasurer of the PhiliAAines
uAon vou9hers signed ;y the o::issioner
or his deAuty, as hereinafter Arovided. "he
:oneys of said !99ount :ay ;e invested ;y
the o::issioner only in ;onds or other
instru:ents of de;t of the 'overn:ent of
the PhiliAAines or its Aoliti9al su;divisions
or instru:entalities. "he o::issioner :ay
sell any of the se9urities in whi9h an
!99ount is invested, if advisa;le, for its
AroAer ad:inistration or in the ;est interest
of su9h !99ount.
1&E. G4G. Pay:ents fro: either the Life
Insuran9e !99ount or #on-Life !99ount, as
the 9ase :ay ;e, shall ;e :ade ;y the
"reasurer of the PhiliAAines to the
o::issioner, uAon the authority of
aAAroAriate 9ertifi9ate filed with hi: ;y the
o::issioner a9ting in su9h 9aAa9ity.
1&E. G43. "he o::issioner :ay, in his
dis9retion, designate or aAAoint a duly
authoriHed reAresentative or reAresentatives
to aAAear and defend ;efore any 9ourt or
other ;ody or offi9ial having Iurisdi9tion any
or all a9tions or Aro9eedings against
Arin9iAals or assureds on insuran9e Aoli9ies
or 9ontra9ts issued to the: where the insurer
has ;e9o:e insolvent or una;le to :eet its
insuran9e o;ligations. "he o::issioner
shall have, as of the date of insolven9y of
su9h insurer or as of the date of its ina;ility
to :eet its insuran9e o;ligations, only the
rights whi9h su9h insurer would have had if
it had not ;e9o:e insolvent or una;le to
:eet its insuran9e o;ligations. +or the
AurAose of this title, the o::issioner shall
have Aower to e:Aloy su9h 9ounsel, 9ler>s
and assistants as he :ay dee: ne9essary.
1&E. G46. "he eBAense of ad:inistering an
!99ount shall ;e Aaid out of the !99ount
9on9erned. "he o::issioner shall serve as
ad:inistrator of the +und and of the
!99ounts without additional 9o:Aensation,
;ut :ay ;e allowed and Aaid fro: the
!99ount 9on9erned eBAenses in9urred in the
Aerfor:an9e of his duties in 9onne9tion with
said !99ount. "he 9o:Aensation of those
Aersons e:Aloyed ;y the o::issioner
shall ;e dee:ed ad:inistration eBAense
Aaya;le fro: the !99ount 9on9erned. "he
o::issioner shall in9lude in his annual
reAort to the &e9retary of +inan9e a
state:ent of the eBAenses of ad:inistration
of the +und and of the Life !99ount and
#on-Life !99ount for the Are9eding year.
1(!P"ER =I
1$MPUL&$R* M$"$R =E(ILE
LI!BILI"* I#&UR!#E
1&E. G4,. +or AurAoses of this 9haAter<
1DaE Motor &ehicle is any vehi9le as defined
in &e9tion G, AaragraAh DaE of ReAu;li9 !9t
#o. 3-G,, otherwise >nown as the ?Land
"ransAortation and "raffi9 ode@.
1D;E Passenger is any fare Aaying Aerson
;eing transAorted and 9onveyed in and ;y a
:otor vehi9le for transAortation of
Aassengers for 9o:Aensation, in9luding
Aersons eBAressly authoriHed ;y law or ;y
the vehi9le@s oAerator or his agents to ride
without fare.
1D9E 'hird party is any Aerson other than a
Aassenger as defined in this se9tion and shall
also eB9lude a :e:;er of the household, or
a :e:;er of the fa:ily within the se9ond
degree of 9onsanguinity or affinity, of a
:otor vehi9le owner or land transAortation
oAerator, as li>ewise defined herein, or his
e:Aloyee in resAe9t of death, ;odily inIury,
or da:age to AroAerty arising out of and in
the 9ourse of e:Aloy:ent.
1DdE (ner or motor vehicle oner :eans
the a9tual legal owner of a :otor vehi9le, in
whose na:e su9h vehi9le is duly registered
with the Land "ransAortation $ffi9eF
1DeE )and transportation operator :eans the
owner or owners of :otor vehi9les for
transAortation of Aassengers for
9o:Aensation, in9luding s9hool ;uses.
1DfE Insurance policy or Policy refers to a
9ontra9t of insuran9e against Aassenger and
third-Aarty lia;ility for death or ;odily
inIuries and da:age to AroAerty arising fro:
:otor vehi9le a99idents.
1&E. G48. It shall ;e unlawful for any land
transAortation oAerator or owner of a :otor
vehi9le to oAerate the sa:e in the Au;li9
highways unless there is in for9e in relation
thereto a Aoli9y of insuran9e or guaranty in
9ash or surety ;ond issued in a99ordan9e
with the Arovisions of this 9haAter to
inde:nify the death, ;odily inIury, andKor
da:age to AroAerty of a third-Aarty or
Aassenger, as the 9ase :ay ;e, arising fro:
the use thereof.
1&E. G44. "he o::issioner shall furnish
the Land "ransAortation $ffi9e with a list of
insuran9e 9o:Aanies authoriHed to issue the
Aoli9y of insuran9e or surety ;ond reCuired
;y this 9haAter.
1&E. G47. "he Land "ransAortation $ffi9e
shall not allow the registration or renewal of
registration of any :otor vehi9le without
first reCuiring fro: the land transAortation
oAerator or :otor vehi9le owner 9on9erned
the Aresentation and filing of a
su;stantiating do9u:entation in a for:
aAAroved ;y the o::issioner eviden9ing
that the Aoli9y of insuran9e or guaranty in
9ash or surety ;ond reCuired ;y this 9haAter
is in effe9t.
1&E. G75. Every land transAortation
oAerator and every owner of a :otor vehi9le
shall, ;efore aAAlying for the registration or
renewal of registration of any :otor vehi9le,
at his oAtion, either se9ure an insuran9e
Aoli9y or surety ;ond issued ;y any
insuran9e 9o:Aany authoriHed ;y the
o::issioner or :a>e a 9ash deAosit in
su9h a:ount as herein reCuired as li:it of
lia;ility for AurAoses sAe9ified in &e9tion
G48.
1DaE In the 9ase of a land transAortation
oAerator, the insuran9e guaranty in 9ash or
surety ;ond shall 9over lia;ility for death or
;odily inIuries of third-Aarties andKor
Aassengers arising out of the use of su9h
vehi9le in the a:ount not less than "welve
thousand Aesos DP-.,555.55E Aer Aassenger
or third-Aarty and an a:ount, for ea9h of
su9h 9ategories, in any one a99ident of not
less than that set forth in the following s9ale<
1D-E Motor vehi9les with an authoriHed
9aAa9ity of twenty-siB D.,E or :ore
Aassengers< +ifty thousand Aesos
DP65,555.55EF
1D.E Motor vehi9les with an authoriHed
9aAa9ity of fro: twelve D-.E to twenty-five
D.6E Aassengers< +orty thousand Aesos
DP35,555.55EF
1DGE Motor vehi9les with an authoriHed
9aAa9ity of fro: siB D,E to eleven D--E
Aassengers< "hirty thousand Aesos
DPG5,555.55EF
1D3E Motor vehi9les with an authoriHed
9aAa9ity of five D6E or less Aassengers< +ive
thousand Aesos DP6,555.55E :ultiAlied ;y
the authoriHed 9aAa9ity.
1Provided, hoever, "hat su9h 9ash deAosit
:ade to, or surety ;ond Aosted with, the
o::issioner shall ;e resorted to ;y hi: in
9ases of a99idents the inde:nities for whi9h
to third-Aarties andKor Aassengers are not
settled a99ordingly ;y the land
transAortation oAerator and, in that event, the
said 9ash deAosit shall ;e reAlenished or
su9h surety ;ond shall ;e restored within
siBty D,5E days after i:Aair:ent or eBAiry,
as the 9ase :ay ;e, ;y su9h land
transAortation oAerator, otherwise, he shall
se9ure the insuran9e Aoli9y reCuired ;y this
9haAter. "he aforesaid 9ash deAosit :ay ;e
invested ;y the o::issioner in readily
:ar>eta;le govern:ent ;onds, andKor
se9urities.
1D;E In the 9ase of an owner of a :otor
vehi9le, the insuran9e or guaranty in 9ash or
surety ;ond shall 9over lia;ility for death or
inIury to third-Aarties in an a:ount not less
than that set forth in the following s9ale in
any one a99ident<
1D-E Private ars
1DiE Banta:< "wenty thousand Aesos
DP.5,555.55EF
1DiiE Light< "wenty thousand Aesos
DP.5,555.55EF and
1DiiiE (eavy< "hirty thousand Aesos
DPG5,555.55E.
1D.E $ther Private =ehi9les
1DiE "ri9y9les, :otor9y9les and s9ooters<
"welve thousand Aesos DP-.,555.55EF
1DiiE =ehi9les with an unladen weight of
.,,55 >ilos or less< "wenty thousand Aesos
DP.5,555.55EF
1DiiiE =ehi9les with an unladen weight of
;etween .,,5- >ilos and G,7G5 >ilos< "hirty
thousand Aesos DPG5,555.55EF and
1DivE =ehi9les with an unladen weight over
G,7G5 >ilos< +ifty thousand Aesos
DP65,555.55E.
1"he o::issioner :ay, if warranted, set
forth s9hedule of inde:nities for the
Aay:ent of 9lai:s for death or ;odily
inIuries with the 9overages set forth herein.
1&E. G7-. !ny 9lai: for death or inIury to
any Aassenger or third-Aarty Aursuant to the
Arovisions of this 9haAter shall ;e Aaid
without the ne9essity of Aroving fault or
negligen9e of any >ind< Provided, "hat for
AurAoses of this se9tion<
1DaE "he total inde:nity in resAe9t of any
Aerson shall not ;e less than +ifteen
thousand Aesos DP-6,555.55EF
1D;E "he following Aroofs of loss, when
su;:itted under oath, shall ;e suffi9ient
eviden9e to su;stantiate the 9lai:<
1D-E Poli9e reAort of a99identF and
1D.E )eath 9ertifi9ate and eviden9e
suffi9ient to esta;lish the AroAer AayeeF or
1DGE Medi9al reAort and eviden9e of :edi9al
or hosAital dis;urse:ent in resAe9t of whi9h
refund is 9lai:edF
1D9E lai: :ay ;e :ade against one :otor
vehi9le only. In the 9ase of an o99uAant of a
vehi9le, 9lai:, shall lie against the insurer of
the vehi9le in whi9h the o99uAant is riding,
:ounting or dis:ounting fro:. In any other
9ase, 9lai: shall lie against the insurer of the
dire9tly offending vehi9le. In all 9ases, the
right of the Aarty Aaying the 9lai: to re9over
against the owner of the vehi9le resAonsi;le
for the a99ident shall ;e :aintained.
1&E. G7.. #o land transAortation oAerator
or owner of :otor vehi9le shall ;e
unreasona;ly denied the Aoli9y of insuran9e
or surety ;ond reCuired ;y this 9haAter ;y
the insuran9e 9o:Aanies authoriHed to issue
the sa:e, otherwise, the Land
"ransAortation $ffi9e shall reCuire fro: said
land transAortation oAerator or owner of the
vehi9le, in lieu of a Aoli9y of insuran9e or
surety ;ond, a 9ertifi9ate that a 9ash deAosit
has ;een :ade with the o::issioner in
su9h a:ount reCuired as li:its of inde:nity
in &e9tion G75 to answer for the Aassenger
andKor third-Aarty lia;ility of su9h land
transAortation oAerator or owner of the
vehi9le.
1#o insuran9e 9o:Aany :ay issue the
Aoli9y of insuran9e or surety ;ond reCuired
under this 9haAter unless so authoriHed
under eBisting laws.
1"he authority to engage in the 9asualty
andKor surety lines of ;usiness of an
insuran9e 9o:Aany that refuses to issue or
renew, without Iust 9ause, the insuran9e
Aoli9y or surety ;ond therein reCuired shall
;e withdrawn i::ediately.
1&E. G7G. #o 9an9ellation of the Aoli9y
shall ;e valid unless written noti9e thereof is
given to the land transAortation oAerator or
owner of the vehi9le and to the Land
"ransAortation $ffi9e at least fifteen D-6E
days Arior to the intended effe9tive date
thereof. UAon re9eiAt of su9h noti9e, the
Land "ransAortation $ffi9e, unless it
re9eives eviden9e of a new valid insuran9e
or guaranty in 9ash or surety ;ond as
Ares9ri;ed in this 9haAter, or an endorse:ent
of revival of the 9an9elled one, shall order
the i::ediate 9onfis9ation of the Alates of
the :otor vehi9le 9overed ;y su9h 9an9elled
Aoli9y. "he sa:e :ay ;e reissued only uAon
Aresentation of a new insuran9e Aoli9y or
that a guaranty in 9ash or surety ;ond has
;een :ade or Aosted with the o::issioner
and whi9h :eets the reCuire:ents of this
9haAter, or an endorse:ent or revival of the
9an9elled one.
1&E. G73. If the 9an9ellation of the Aoli9y
or surety ;ond is 9onte:Alated ;y the land
transAortation oAerator or owner of the
vehi9le, he shall, ;efore the Aoli9y or surety
;ond 9eases to ;e effe9tive, se9ure a si:ilar
Aoli9y of insuran9e or surety ;ond to reAla9e
the Aoli9y or surety ;ond to ;e 9an9elled or
:a>e a 9ash deAosit in suffi9ient a:ount
with the o::issioner, and without any
gaA, file the reCuired do9u:entation with
the Land "ransAortation $ffi9e, and notify
the insuran9e 9o:Aany 9on9erned of the
9an9ellation of its Aoli9y or surety ;ond.
1&E. G76. In 9ase of 9hange of owner shiA
of a :otor vehi9le, or 9hange of the engine
of an insured vehi9le, there shall ;e no need
of issuing a new Aoli9y until the neBt date of
registration or renewal of registration of
su9h vehi9le, and< Provided, "hat the
insuran9e 9o:Aany shall agree to 9ontinue
the Aoli9y, su9h 9hange of ownershiA or
su9h 9hange of the engine shall ;e indi9ated
in a 9orresAonding endorse:ent ;y the
insuran9e 9o:Aany 9on9erned, and a signed
duAli9ate of su9h endorse:ent shall, within
a reasona;le ti:e, ;e filed with the Land
"ransAortation $ffi9e.
1&E. G7,. In the settle:ent and Aay:ent of
9lai:s, the inde:nity shall not ;e availed of
;y any a99ident vi9ti: or 9lai:ant as an
instru:ent of enri9h:ent ;y reason of an
a99ident, ;ut as an assistan9e or restitution
insofar as 9an fairly ;e as9ertained.
1&E. G78. !ny Aerson having any 9lai:
uAon the Aoli9y issued Aursuant to this
9haAter shall, without any unne9essary
delay, Aresent to the insuran9e 9o:Aany
9on9erned a written noti9e of 9lai: setting
forth the nature, eBtent and duration of the
inIuries sustained as 9ertified ;y a duly
li9ensed Ahysi9ian. #oti9e of 9lai: :ust ;e
filed within siB D,E :onths fro: the date of
a99ident, otherwise, the 9lai: shall ;e
dee:ed waived. !9tion or suit for re9overy
of da:age due to loss or inIury :ust ;e
;rought, in AroAer 9ases, with the
o::issioner or the 9ourts within one D-E
year fro: denial of the 9lai:, otherwise, the
9lai:ant@s right of a9tion shall Ares9ri;e.
1&E. G74. "he insuran9e 9o:Aany
9on9erned shall forthwith as9ertain the truth
and eBtent of the 9lai: and :a>e Aay:ent
within five D6E wor>ing days after rea9hing
an agree:ent. If no agree:ent is rea9hed,
the insuran9e 9o:Aany shall Aay only the
no-fault inde:nity Arovided in &e9tion G7-
without AreIudi9e to the 9lai:ant fro:
Aursuing his 9lai: further, in whi9h 9ase, he
shall not ;e reCuired or 9o:Aelled ;y the
insuran9e 9o:Aany to eBe9ute any Cuit
9lai: or do9u:ent releasing it fro: lia;ility
under the Aoli9y of insuran9e or surety ;ond
issued.
1In 9ase of any disAute in the enfor9e:ent of
the Arovisions of any Aoli9y issued Aursuant
to this 9haAter, the adIudi9ation of su9h
disAute shall ;e within the original and
eB9lusive Iurisdi9tion of the o::issioner,
su;Ie9t to the li:itations Arovided in &e9tion
3G7.
1&E. G77. It shall ;e unlawful for a land
transAortation oAerator or owner of :otor
vehi9le to reCuire his or its drivers or other
e:Aloyees to 9ontri;ute in the Aay:ent of
Are:iu:s.
1&E. 355. #o govern:ent offi9e or agen9y
having the duty of i:Ale:enting the
Arovisions of this 9haAter nor any offi9ial or
e:Aloyee thereof shall a9t as agent in
Aro9uring the insuran9e Aoli9y or surety
;ond Arovided for herein. "he 9o::ission
of an agent Aro9uring the said Aoli9y or ;ond
shall in no 9ase eB9eed ten Aer9ent D-5LE of
the a:ount of the Are:iu:s therefor.
1&E. 35-. !ny land transAortation oAerator
or owner of :otor vehi9le or any other
Aerson violating any of the Arovisions of the
Are9eding se9tions shall ;e Aunished ;y a
fine of not less than +ive hundred Aesos
DP655.55E andKor i:Arison:ent for not :ore
than siB D,E :onths. "he violation of &e9tion
G75 ;y a land transAortation oAerator shall
;e a suffi9ient 9ause for the revo9ation of
the 9ertifi9ate of Au;li9 9onvenien9e issued
;y the Land "ransAortation +ran9hising and
Regulatory Board 9overing the vehi9le
9on9erned.
1&E. 35.. /henever any violation of the
Arovisions of this 9haAter is 9o::itted ;y a
9orAoration or asso9iation, or ;y a
govern:ent offi9e or entity, the eBe9utive
offi9er or offi9ers of said 9orAoration,
asso9iation or govern:ent offi9e or entity
who shall have >nowingly Aer:itted, or
failed to Arevent, said violation shall ;e held
lia;le as Arin9iAals.
1(!P"ER =II
1MU"U!L BE#E+I" !&&$I!"I$#&
!#)
"RU&"& +$R (!RI"!BLE U&E&
1"I"LE l
1MU"U!L BE#E+I" !&&$I!"I$#&
1&E. 35G. !ny so9iety, asso9iation or
9orAoration, without 9aAital sto9>, for:ed or
organiHed not for Arofit ;ut :ainly for the
AurAose of Aaying si9> ;enefits to :e:;ers,
or of furnishing finan9ial suAAort to
:e:;ers while out of e:Aloy:ent, or of
Aaying to relatives of de9eased :e:;ers of
fiBed or any su: of :oney, irresAe9tive of
whether su9h ai: or AurAose is 9arried out
;y :eans of fiBed dues or assess:ents
9olle9ted regularly fro: the :e:;ers, or of
Aroviding, ;y the issuan9e of 9ertifi9ates of
insuran9e, Aay:ent of its :e:;ers of
a99ident or life insuran9e ;enefits out of
su9h fiBed and regular dues or assess:ents,
;ut in no 9ase shall in9lude any so9iety,
asso9iation, or 9orAoration with su9h :utual
;enefit features and whi9h shall ;e 9arried
out Aurely fro: voluntary 9ontri;utions
9olle9ted not regularly andKor no fiBed
a:ount fro: who:soever :ay 9ontri;ute,
shall ;e >nown as a :utual ;enefit
asso9iation within the intent of this ode.
1!ny so9iety, asso9iation, or 9orAoration
Arin9iAally organiHed as a la;or union shall
;e governed ;y the La;or ode
notwithstanding any :utual ;enefit feature
Arovisions in its 9harter as in9ident to its
organiHation.
1In no 9ase shall a :utual ;enefit
asso9iation ;e organiHed and authoriHed to
transa9t ;usiness as a 9harita;le or
;enevolent organiHation, and whenever it
has this feature as in9ident to its eBisten9e,
the 9orresAonding 9harter Arovision shall ;e
revised to 9onfor: with the Arovision of this
se9tion. Mutual ;enefit asso9iation, already
li9ensed to transa9t ;usiness as su9h on the
date this ode ;e9o:es effe9tive, having
9harita;le or ;enevolent feature shall
a;andon su9h in9idental AurAose uAon
effe9tivity of this ode if they desire to
9ontinue oAerating as su9h :utual ;enefit
asso9iations.
1&E. 353. ! :utual ;enefit asso9iation,
;efore it :ay transa9t as su9h, :ust first
se9ure a li9ense fro: the o::issioner.
"he aAAli9ation for su9h li9ense shall ;e
filed with the o::issioner together with
9ertified true 9oAies of the arti9les of
in9orAoration or the 9onstitution and ;ylaws
of the asso9iation, and all a:end:ents
thereto, and su9h other do9u:ents or
testi:onies as the o::issioner :ay
reCuire.
1#o li9ense shall ;e granted to a :utual
;enefit asso9iation until the o::issioner
shall have ;een satisfied ;y su9h
eBa:ination as he :ay :a>e and su9h
eviden9e as he :ay reCuire that the
asso9iation is Cualified under eBisting laws
to oAerate and transa9t ;usiness as su9h. "he
o::issioner :ay refuse to issue a li9ense
to any :utual ;enefit asso9iation if, in his
Iudg:ent, su9h refusal will ;est Aro:ote the
interest of the :e:;ers of su9h asso9iation
and of the AeoAle of this 9ountry. !ny
li9ense issued shall eBAire on the last day of
)e9e:;er of the third year following its
issuan9e and, uAon AroAer aAAli9ation, :ay
;e renewed if the asso9iation is 9ontinuing
to 9o:Aly with eBisting laws, rules and
regulations, orders, instru9tions, rulings and
de9isions of the o::issioner. Every
asso9iation re9eiving any su9h li9ense shall
;e su;Ie9t to the suAervision of the
o::issioner< Provided, "hat no su9h
li9ense shall ;e granted to any su9h
asso9iation if su9h asso9iation has no
a9tuary.
1&E. 356. #o :utual ;enefit asso9iation
shall ;e issued a li9ense to oAerate as su9h
unless it has 9onstituted and esta;lished a
'uaranty +und ;y deAositing with the
o::issioner an initial :ini:u: a:ount
of +ive :illion Aesos DP6,555,555.55E in
9ash, or in govern:ent se9urities with a total
value eCual to su9h a:ount, to answer for
any valid ;enefit 9lai: of any of its
:e:;ers.
1!ll :oneys re9eived ;y the o::issioner
for this AurAose :ust ;e deAosited ;y hi: in
interest-;earing deAosits with any ;an> or
;an>s authoriHed to transa9t ;usiness in the
PhiliAAines for the a99ount of the Aarti9ular
asso9iation 9onstituting the 'uaranty +und.
1!ny a99rual to su9h fund, ;e it interest
earned or dividend additions on :oneys or
se9urities so deAosited, :ay, with the Arior
aAAroval of the o::issioner, ;e
withdrawn ;y the asso9iation if there is no
Aending ;enefit 9lai: against it, in9luding
interest thereon or dividend additions
thereto.
1"he o::issioner, Arior to or after
li9ensing a :utual ;enefit asso9iation, :ay
reCuire su9h asso9iation to in9rease its
'uaranty +und fro: the initial :ini:u:
a:ount reCuired to an a:ount eCual to the
9aAital invest:ent reCuired of an eBisting
do:esti9 insuran9e 9o:Aany under &e9tion
.57 of this ode.
1&E. 35,. Every :utual ;enefit asso9iation
li9ensed to do ;usiness as su9h shall issue
:e:;ershiA 9ertifi9ates to its :e:;ers
sAe9ifying the ;enefits to whi9h su9h
:e:;ers are entitled.
1&u9h 9ertifi9ates, together with the arti9les
of in9orAoration of the asso9iation or its
9onstitution and ;ylaws, and all eBisting
laws as :ay ;e Aertinent shall 9onstitute the
agree:ent, as of the date of its issuan9e,
;etween the asso9iation and the :e:;er.
"he :e:;ershiA 9ertifi9ate shall ;e in a
for: Areviously aAAroved ;y the
o::issioner.
1&E. 358. ! :utual ;enefit asso9iation
:ay, ;y reinsuran9e agree:ent, 9ede in
whole or in Aart any individual ris> or ris>s
under 9ertifi9ates of insuran9e issued ;y it,
only to a life insuran9e 9o:Aany authoriHed
to transa9t ;usiness or to a Arofessional
reinsurer authoriHed to a99eAt life ris>s in
the PhiliAAines< Provided, "hat a 9oAy of the
draft of su9h reinsuran9e agree:ent shall ;e
su;:itted to the o::issioner for his
aAAroval. "he asso9iation :ay ta>e 9redit
for the reserves on su9h 9eded ris>s to the
eBtent reinsured.
1&E. 354. "he 9onstitution or ;ylaws of a
:utual ;enefit asso9iation :ust distin9tly
state the AurAose for whi9h dues andKor
assess:ents are :ade and 9olle9ted and the
Aortion thereof whi9h :ay ;e used for
eBAenses.
1)eath ;enefit and other relief funds shall
;e 9reated and used eB9lusively for Aaying
;enefits due the :e:;ers under their
resAe9tive :e:;ershiA 9ertifi9ates. !
general fund shall li>ewise ;e 9reated and
used for eBAenses of ad:inistration of the
asso9iation.
1! :utual ;enefit asso9iation shall only
:aintain free and unassigned surAlus of not
:ore than twenty Aer9ent D.5LE of its total
lia;ilities as verified ;y the o::issioner.
!ny a:ount in eB9ess shall ;e returned to
the :e:;ers ;y way of dividends,
enhan9ing the eCuity value or Aroviding
;enefits in >ind and other relevant servi9es.
In addition, su;Ie9t to the aAAroval of the
o::issioner, a :utual ;enefit asso9iation
:ay allo9ate a Aortion for 9aAa9ity ;uilding
and resear9h and develoA:ent su9h as
develoAing new Arodu9ts and servi9es,
uAgrading and i:Aroving oAerating syste:s
and eCuiA:ent and 9ontinuing :e:;er
edu9ation.
1&E. 357. Every outstanding :e:;ershiA
9ertifi9ate :ust have an eCuity value
eCuivalent to at least fifty Aer9ent D65LE of
the total 9ontri;utions 9olle9ted thereon. "he
eCuity value only aAAlies to ;asi9 life
insuran9e Arodu9t and eB9ludes oAtional
Arodu9ts.
1&E. 3-5. Every :utual ;enefit asso9iation
:ust a99u:ulate and :aintain, out of the
Aeriodi9 dues 9olle9ted fro: its :e:;ers,
suffi9ient reserves for the Aay:ent of 9lai:s
or o;ligations for whi9h it shall hold funds
in se9urities satisfa9tory to the
o::issioner 9onsisting of ;onds of the
'overn:ent of the PhiliAAines, or any of its
Aoliti9al su;divisions and instru:entalities,
or in su9h other good se9urities as :ay ;e
aAAroved ;y the o::issioner.
1"he reserve lia;ility shall ;e esta;lished in
a99ordan9e with a9tuarial Aro9edures and
shall ;e aAAroved ;y the o::issioner.
1"he arti9les of in9orAoration or the
9onstitution and ;ylaws of a :utual ;enefit
asso9iation :ust Arovide that if its reserve as
to all or any 9lass of 9ertifi9ates ;e9o:es
i:Aaired, its ;oard of dire9tors or trustees
:ay reCuire that there shall ;e Aaid ;y the
:e:;ers to the asso9iation the a:ount of
the :e:;ers@ eCuita;le AroAortion of su9h
defi9ien9y as as9ertained ;y said ;oard and
that if the Aay:ent ;e not :ade it shall stand
as an inde;tedness against the :e:;ershiA
9ertifi9ates of the defaulting :e:;ers and
draw interest not to eB9eed five Aer9ent
D6LE Aer annu: 9o:Aounded annually.
1&E. 3--. ! :utual ;enefit asso9iation
:ay invest su9h Aortion of its funds as shall
not ;e reCuired to :eet Aending 9lai:s and
other o;ligations in any of the 9lasses of
invest:ents or tyAes of se9urities in whi9h
life insuran9e 9o:Aanies doing ;usiness in
the PhiliAAines :ay invest.
1It :ay also grant loans to :e:;ers on the
se9urity of a Aledge or 9hattel :ortgage of
Aersonal AroAerties of the ;orrowers, or in
the a;sen9e thereof, on the se9urity of the
:e:;ershiA 9ertifi9ate of the ;orrowing
:e:;ers, in whi9h event su9h loan shall
;e9o:e a first lien on the Aro9eeds thereof.
1&E. 3-.. "he o::issioner or any of his
duly designated reAresentatives, shall have
the Aower of visitation, audit and
eBa:ination into the affairs, finan9ial
9ondition, and :ethods of doing ;usiness of
all :utual ;enefit asso9iations, and he shall
9ause su9h eBa:ination to ;e :ade at least
on9e every two D.E years or whenever it :ay
;e dee:ed AroAer and ne9essary. +ree
a99ess to the ;oo>s, re9ords and do9u:ents
of the asso9iation shall ;e a99orded to the
o::issioner, or to his reAresentatives, in
su9h :anner that the o::issioner or his
reAresentatives :ay readily verify or
deter:ine the true affairs, finan9ial
9ondition, and :ethod of doing ;usiness of
su9h asso9iation. In the 9ourse of su9h
eBa:ination, the o::issioner or his duly
designated reAresentatives shall have
authority to ad:inister oaths and ta>e
testi:ony or other eviden9e on any :atter
relating to the affairs of the asso9iation.
1!ll :inutes of the Aro9eedings of the ;oard
of dire9tors or trustees of the asso9iation,
and those of the regular or sAe9ial :eetings
of the :e:;ers, shall ;e ta>en, and a 9oAy
thereof, in English or in PiliAino, shall ;e
su;:itted to the o::issioner@s
reAresentatives or eBa:iners in the 9ourse of
su9h eBa:ination.
1! 9oAy of the findings of su9h
eBa:ination, together with the
re9o::endations of the o::issioner,
shall ;e furnished the asso9iation for its
infor:ation and 9o:Alian9e, and the sa:e
shall ;e ta>en uA i::ediately in the
:eetings of the ;oard of dire9tors or trustees
and of the :e:;ers of the asso9iation.
1&E. 3-G. Every :utual ;enefit asso9iation
shall, annually on or ;efore the thirtieth day
of !Aril of ea9h year, render to the
o::issioner an annual state:ent in su9h
for: and detail as :ay ;e Ares9ri;ed ;y the
o::issioner, signed and sworn to ;y the
Aresident, se9retary, treasurer, and a9tuary of
the asso9iation, showing the eBa9t 9ondition
of its affairs on the Are9eding thirty-first day
of )e9e:;er.
1&E. 3-3. #o :oney, aid or ;enefit to ;e
Aaid, Arovided or tendered ;y any :utual
;enefit asso9iation, shall ;e lia;le to
atta9h:ent, garnish:ent, or other Aro9ess,
or ;e seiHed, ta>en, aAAroAriated, or aAAlied
;y any legal or eCuita;le Aro9ess to Aay any
de;t or lia;ility of a :e:;er or ;enefi9iary,
or any other Aerson who :ay have a right
thereunder, either ;efore or after Aay:ent.
1&E. 3-6. !ny :e:;er of a :utual ;enefit
asso9iation shall have the right at all ti:es to
9hange the ;enefi9iary or ;enefi9iaries or
add another ;enefi9iary or other
;enefi9iaries in a99ordan9e with the rules
and regulations of the asso9iation unless he
has eBAressly waived this right in the
:e:;ershiA 9ertifi9ate. Every asso9iation
:ay, under su9h rules as it :ay adoAt, li:it
the s9oAe of ;enefi9iaries and Arovide that
no ;enefi9iary shall have or o;tain any
vested interest in the Aro9eeds of any
9ertifi9ate until the 9ertifi9ate has ;e9o:e
due and Aaya;le under the ter:s of the
:e:;ershiA 9ertifi9ate.
1&E. 3-,. !ny 9haAter affiliate
indeAendently li9ensed as a :utual ;enefit
asso9iation :ay 9onsolidate or :erge with
any other si:ilar 9haAter affiliate or with the
:other asso9iation.
1&E. 3-8. !ny :utual ;enefit asso9iation
:ay ;e 9onverted into and li9ensed as a
:utual life insuran9e 9o:Aany ;y
9o:Alying with the reCuire:ents of the
Aertinent Arovisions of this ode and
su;:itting the sAe9ifi9 Alan for su9h
9onversion to the o::issioner for his
aAAroval. &u9h Alan, as aAAroved, shall then
;e su;:itted to the :e:;ers either in the
regular :eeting or in a sAe9ial :eeting
9alled for the AurAose for their adoAtion. "he
affir:ative vote of at least two-thirds D.KGE
of all the :e:;ers shall ;e ne9essary in
order to 9onsider su9h Alan as adoAted.
1#o su9h 9onversion shall ta>e effe9t unless
and until aAAroved ;y the o::issioner.
1&E. 3-4. #o :utual ;enefit asso9iation
shall ;e dissolved without first notifying the
o::issioner and furnishing hi: with a
9ertified 9oAy of the resolution authoriHing
the dissolution, duly adoAted ;y the
affir:ative vote of two-thirds D.KGE of the
:e:;ers at a :eeting 9alled for that
AurAose, the finan9ial state:ents as of the
date of the resolution, and su9h other AaAers
or do9u:ents as :ay ;e reCuired ;y the
o::issioner.
1#o dissolution shall Aro9eed until and
unless aAAroved ;y the o::issioner and
all Aro9eedings in 9onne9tion therewith shall
;e witnessed and attested ;y his duly
designated reAresentative.
1#o :utual ;enefit asso9iation shall ;e
offi9ially de9lared as dissolved until after
the o::issioner so 9ertifies that all
outstanding 9lai:s against the asso9iation
have ;een duly settled and liCuidated.
1&E. 3-7. "he o::issioner shall, after
noti9e and hearing, have the Aower either to
susAend or revo>e the li9ense issued to a
:utual ;enefit asso9iation if he finds that
the asso9iation has<
1DaE +ailed to 9o:Aly with any Arovision of
this odeF
1D;E +ailed to 9o:Aly with any other law or
regulation o;ligatory uAon itF
1D9E +ailed to 9o:Aly with any order, ruling,
instru9tion, reCuire:ent or re9o::endation
of the o::issionerF
1DdE EB9eeded its Aower to the AreIudi9e of
its :e:;ersF
1DeE ondu9ted its ;usiness fraudulently or
haHardouslyF
1DfE Rendered its affairs and 9ondition to one
of insolven9yF or
1DgE +ailed to 9arry out its ai:s and
AurAoses for whi9h it was organiHed due to
any 9ause.
1!fter re9eiAt of the order fro: the
o::issioner susAending or revo>ing the
li9ense, the asso9iation :ust i::ediately
eBert efforts to re:ove su9h 9ause or 9auses
whi9h ;rought a;out the order and, uAon
AroAer showing, :ay aAAly with the
o::issioner for the lifting of the order
and restoration or revival of the li9ense so
revo>ed or susAended.
1&E. 3.5. +or failure to re:ove su9h 9ause
or 9auses whi9h ;rought a;out the
susAension or revo9ation of the li9ense of a
:utual ;enefit asso9iation, the
o::issioner shall aAAly under this ode
for an order fro: the AroAer 9ourt to
liCuidate su9h asso9iation.
1"he Arovisions of "itles -3 and -6, haAter
III, Aertaining to the aAAoint:ent of a
9onservator and Aro9eedings uAon
insolven9y of an insuran9e 9o:Aany shall,
insofar as Ara9ti9a;le, aAAly to :utual
;enefit asso9iations.
1&E. 3.-. "o se9ure the enfor9e:ent of
any Arovision under this title, the
o::issioner :ay issue su9h rules, rulings,
instru9tions, orders and 9ir9ulars.
1&E. 3... "he violation of any Arovision
of this title shall su;Ie9t the Aerson violating
or the offi9er of the asso9iation resAonsi;le
therefor to a fine of not less than "en
thousand Aesos DP-5,555.55E, or
i:Arison:ent of not eB9eeding three DGE
years, or ;oth su9h fine and i:Arison:ent,
at the dis9retion of the 9ourt.
1&E. 3.G. !ll Arovisions of this ode
governing life insuran9e 9o:Aanies and
su9h other Arovisions whenever Ara9ti9a;le
and ne9essary, shall ;e aAAli9a;le to :utual
;enefit asso9iations.
1"I"LE .
1"RU&"& +$R (!RI"!BLE U&E&
1&E. 3.3. "he ter: trust for charitable
uses, within the intent of this ode, shall
in9lude, all the real or Aersonal AroAerties or
funds, as well as those a9Cuired with the
fruits or in9o:e therefro: or in eB9hange or
su;stitution thereof, given to or re9eived ;y
any Aerson, 9orAoration, asso9iation,
foundation, or entity, eB9eAt the #ational
'overn:ent, its instru:entalities or Aoliti9al
su;divisions, for 9harita;le, ;enevolent,
edu9ational, Aious, religious, or other uses
for the ;enefit of the Au;li9 at large or a
Aarti9ular Aortion thereof or for the ;enefit
of an indefinite nu:;er of Aersons.
1&E. 3.6. "he ter: trustee shall in9lude
any individual, 9orAoration, asso9iation,
foundation, or entity, eB9eAt the #ational
'overn:ent, its instru:entalities or Aoliti9al
su;divisions, in 9harge of, or a9ting for, or
9on9erned with the ad:inistration of, the
trust referred to in the se9tion i::ediately
Are9eding and with the AroAer aAAli9ation of
trust AroAerty.
1&E. 3.,. "he ter: trust property shall
in9lude all real or Aersonal AroAerties or
funds Aertaining to the trust as well as those
a9Cuired with the fruits or in9o:e therefro:
or in eB9hange or su;stitution thereof.
1&E. 3.8. !ll trustees shall, ;efore
entering in the Aerfor:an9e of the duties of
their trust, o;tain a 9ertifi9ate of registration
fro: the o::issioner. "he registration
shall eBAire on )e9e:;er G- of the third
year following its issuan9e unless it is
renewed.
1!ll Arovisions of this ode governing
:utual ;enefit asso9iations and su9h other
Arovisions herein, whenever Ara9ti9a;le and
ne9essary, shall ;e aAAli9a;le to trusts for
9harita;le uses.
1&E. 3.4. "he treasurer of a 9harita;le
trust shall file a fidelity ;ond in the a:ount
9o::ensurate with the value of the trust
AroAerty in his 9ustody, as :ay ;e
deter:ined ;y the o::issioner.
1(!P"ER =III
1"RU&" BU&I#E&& I# 'E#ER!L
1&E. 3.7. !n insuran9e 9o:Aany :ay
engage in li:ited trust ;usiness, 9onsisting
of :anaging funds Aertaining only to
retire:ent and Are-need Alans, Arovided it
has se9ured a li9ense to do so fro: the
Bang>o &entral ng PiliAinas. "his trust
;usiness shall ;e seAarate and distin9t fro:
the general ;usiness of the insuran9e
9o:Aany and shall ;e su;Ie9t to rules and
regulations as :ay ;e Aro:ulgated ;y the
Bang>o &entral ng PiliAinas in 9onsultation
with the o::issioner.
1(!P"ER IR
1RE'I&"R!"I$#, RE&P$#&IBILI"IE&
!#)
$=ER&I'(" $+ &EL+-RE'UL!"$R*
$R'!#IM!"I$#&
1&E 3G5. "he o::issioner shall have the
Aower to register as a self-regulatory
organiHation, or otherwise grant li9enses,
and to regulate, suAervise, eBa:ine, susAend
or otherwise dis9ontinue, as a 9ondition for
the oAeration of organiHations whose
oAerations are related to or 9onne9ted with
the insuran9e :ar>et su9h as, ;ut not li:ited
to, asso9iations of insuran9e 9o:Aanies,
whether life or non-life, reinsurers,
a9tuaries, agents, ;ro>ers, dealers, :utual
;enefit asso9iations, trusts, rating agen9ies,
and other Aersons regulated ;y the
o::issioner, whi9h are engaged in the
;usiness regulated ;y this ode.
1"he o::issioner :ay Ares9ri;e rules and
regulations whi9h are ne9essary or
aAAroAriate in the Au;li9 interest or for the
Arote9tion of investors to govern self-
regulatory organiHations and other
organiHations li9ensed or regulated Aursuant
to the authority granted hereunder in9luding,
;ut not li:ited to, the reCuire:ent of
9ooAeration within and a:ong all
Aarti9iAants in the insuran9e :ar>et to
ensure transAaren9y and fa9ilitate eB9hange
of infor:ation.
1&E. 3G-. !n asso9iation 9annot ;e
registered as a self-regulatory organiHation
unless the o::issioner deter:ines that<
1DaE "he asso9iation is so organiHed and has
the 9aAa9ity to ;e a;le to 9arry out the
AurAoses of this ode and to 9o:Aly with,
and to enfor9e 9o:Alian9e ;y its :e:;ers
and Aersons asso9iated with its :e:;ers,
with the Arovisions of this ode, the rules
and regulations thereunder, and the rules of
the asso9iation.
1D;E "he rules of the asso9iation,
notwithstanding anything in the orAoration
ode to the 9ontrary, Arovide the following<
1D-E Sualifi9ations and the disCualifi9ations
on :e:;ershiA of the asso9iationF
1D.E ! fair reAresentation of its :e:;ers to
serve on the ;oard of dire9tors of the
asso9iation and the ad:inistration of its
affairs, and that any natural Aerson
asso9iated with a Iuridi9al entity that is a
:e:;er shall also ;e dee:ed to ;e a
:e:;er for this AurAoseF
1DGE "he Aresident of the asso9iation and at
least two D.E indeAendent dire9tors as
:e:;ers of the ;oard of dire9tors of the
asso9iationF
1D3E ECuita;le allo9ation of reasona;le dues,
fees, and other 9harges a:ong :e:;ers and
other Aersons using any fa9ility or syste:
whi9h the asso9iation oAerates or 9ontrolsF
1D6E "he Arevention of fraudulent and
:aniAulative a9ts and Ara9ti9es to Arote9t
the insuring Au;li9 and the Aro:otion of Iust
and eCuita;le Arin9iAles of ;usinessF
1D,E Me:;ers and Aersons asso9iated with
its :e:;ers su;Ie9t to dis9iAline for
violation of any Arovision of this ode, the
rules or regulations thereunder, or the rules
of the asso9iationF
1D8E +air Aro9edure for the dis9iAlining of
:e:;ers and Aersons asso9iated with
:e:;ersF and
1D4E "he Arohi;ition or li:itation of a99ess
to servi9es offered ;y the asso9iation or a
:e:;er thereof.
1&E. 3G.. ! self-regulatory organiHation
:ay eBa:ine and verify the Cualifi9ations of
an aAAli9ant to ;e9o:e a :e:;er in
a99ordan9e with Aro9edures esta;lished ;y
the rules of the asso9iation.
1! self-regulatory organiHation shall deny
:e:;ershiA or 9ondition the :e:;ershiA of
an entity, if it does not :eet the standards of
finan9ial resAonsi;ility, oAerational
9aAa;ility, training, eBAerien9e, or
9o:Aeten9e that are Ares9ri;ed ;y the rules
of the asso9iationF or has engaged, and there
is a reasona;le li>elihood it will again
engage, in a9ts or Ara9ti9es in9onsistent with
Iust and eCuita;le Arin9iAles of fair trade.
1! self-regulatory organiHation :ay deny
:e:;ershiA to an entity not engaged in a
tyAe of ;usiness in whi9h the rules of the
asso9iation reCuire :e:;ers to ;e engaged.
1&E. 3GG. UAon the filing of an aAAli9ation
for registration as a self-regulatory
organiHation under this title, the
o::issioner shall have ninety D75E days
within whi9h to either grant registration or
institute a Aro9eeding to deter:ine whether
registration should ;e denied. In the event
Aro9eedings are instituted, the
o::issioner shall have two hundred
seventy D.85E days within whi9h to 9on9lude
su9h Aro9eedings at whi9h ti:e he shall, ;y
order, grant or deny su9h registration.
1&E. 3G3. Every self-regulatory
organiHation shall 9o:Aly with the
Arovisions of this ode, the rules and
regulations thereunder, and its own rules,
and enfor9e 9o:Alian9e therewith ;y its
:e:;ers, Aersons asso9iated with its
:e:;ers or its Aarti9iAants, notwithstanding
any Arovision of the orAoration ode to the
9ontrary.
1&E. 3G6. Ea9h self-regulatory
organiHation shall su;:it to the
o::issioner for Arior aAAroval any
AroAosed rule or a:end:ent thereto,
together with a 9on9ise state:ent of the
reason and effe9t of the AroAosed
a:end:ent.
1/ithin siBty D,5E days after su;:ission of
a AroAosed a:end:ent, the o::issioner
shall, ;y order, aAArove the AroAosed
a:end:ent. $therwise, the sa:e :ay ;e
:ade effe9tive ;y the self-regulatory
organiHation.
1In the event of an e:ergen9y reCuiring
a9tion for the Arote9tion of the insuring
Au;li9, a self-regulatory organiHation :ay
Aut a AroAosed a:end:ent into effe9t
su::arily< Provided, hoever, "hat a 9oAy
of the sa:e shall ;e i::ediately su;:itted
to the o::issioner.
1"he o::issioner is further authoriHed, if
after :a>ing aAAroAriate reCuest in writing
to a self-regulatory organiHation that su9h
organiHation effe9t on its own ;ehalf
sAe9ified 9hanges in its rules and Ara9ti9es
and, after due noti9e and hearing, it
deter:ines that su9h 9hanges have not ;een
effe9ted, and that su9h 9hanges are
ne9essary, ;y rule or regulation or ;y order,
:ay alter, a;rogate or suAAle:ent the rules
of su9h self-regulatory organiHation insofar
as ne9essary or aAAroAriate to effe9t su9h
9hanges in resAe9t of su9h :atters as<
1DaE &afeguards in resAe9t of the finan9ial
resAonsi;ility of :e:;ers and adeCuate
Arovision against the evasion of finan9ial
resAonsi;ility through the use of 9orAorate
for:s or sAe9ial AartnershiAsF
1D;E "he suAervision of :ar>et Ara9ti9esF
1D9E "he :anner, :ethod and Ala9e of
soli9iting ;usinessF
1DdE "he fiBing of reasona;le rates of fees,
interest, listing and other 9harges, ;ut not
rates of 9o::issionF and self-regulatory
organiHationF and
1DeE "he suAervision, auditing and
dis9iAlining of :e:;ers.
1In addition to the general Aowers of the
o::issioner over the entities under
suAervision, the o::issioner, after due
noti9e and hearing, is authoriHed, in the
Au;li9 interest and to Arote9t the insuring
Au;li9<
1D-E "o susAend for a Aeriod not eB9eeding
twelve D-.E :onths or to revo>e the
registration of a self-regulatory organiHation,
or to 9ensure or i:Aose li:itations on the
a9tivities, fun9tions and oAerations of su9h
self-regulatory organiHation, if the
o::ission finds that su9h a self-regulatory
organiHation has willfully violated or is
una;le to 9o:Aly with any Arovision of this
ode or of the rules and regulations
thereunder, or its own rules, or has failed to
enfor9e 9o:Alian9e therewith ;y a :e:;er
of, Aerson asso9iated with a :e:;er, or a
Aarti9iAant in su9h self-regulatory
organiHationF
1D.E "o eBAel fro: a self-regulatory
organiHation any :e:;er thereof or any
Aarti9iAant therein who is found to have
willfully violated any Arovision of this ode
or susAend for a Aeriod not eB9eeding twelve
D-.E :onths for violation of any Arovision of
this ode or any other law ad:inistered ;y
the o::ission, or the rules and regulations
thereunder, or effe9ted, dire9tly or
indire9tly, any transa9tion for any Aerson
who, su9h :e:;er or Aarti9iAant had reason
to ;elieve, was violating in resAe9t of su9h
transa9tion any of su9h ArovisionsF and
1DGE "o re:ove fro: offi9e or 9ensure any
offi9er or dire9tor of a self-regulatory
organiHation if it finds that su9h offi9er or
dire9tor has violated any Arovision of this
ode, any other law ad:inistered ;y the
o::issioner, the rules or regulations
thereunder and the rules of su9h self-
regulatory organiHation, or has a;used his
authority, or without reasona;le Iustifi9ation
or eB9use has failed to enfor9e 9o:Alian9e
with any of su9h Arovisions.
1&E. 3G,. DaE ! self-regulatory
organiHation is authoriHed to dis9iAline a
:e:;er of or Aarti9iAant in su9h self-
regulatory organiHation, or any Aerson
asso9iated with a :e:;er, in9luding
susAending or eBAelling su9h :e:;er or
Aarti9iAant, or susAending or ;arring su9h
Aerson fro: ;eing asso9iated with a
:e:;er, if engaged in a9ts or Ara9ti9es
in9onsistent with Iust and eCuita;le
Arin9iAles of fairness or in willful violation
of any Arovision of this ode, any other law
ad:inistered ;y the o::ission, the rules
or regulations thereunder, or the rules of the
self-regulatory organiHation. In any
dis9iAlinary Aro9eeding ;y a self-regulatory
organiHation Dother than a su::ary
Aro9eeding Aursuant to AaragraAh D;E of this
se9tionE the self-regulatory organiHation
shall ;ring sAe9ifi9 9harges, Arovide noti9e
to the Aerson 9harged, afford the Aerson
9harged with an oAAortunity to defend
against the 9harges, and >eeA a re9ord of the
Aro9eedings. ! deter:ination to i:Aose a
dis9iAlinary san9tion shall ;e suAAorted ;y a
written state:ent of the offense, a su::ary
of the eviden9e Aresented and a state:ent of
the san9tion i:Aosed.
1D;E ! self-regulatory organiHation :ay
su::arily<
1D-E &usAend a :e:;er, Aarti9iAant or
Aerson asso9iated with a :e:;er who has
;een or is eBAelled or susAended fro: any
other self-regulatory organiHationF or
1D.E &usAend a :e:;er who the self-
regulatory organiHation finds to ;e in su9h
finan9ial or oAerating diffi9ulty that the
:e:;er or Aarti9iAant 9annot ;e Aer:itted
to 9ontinue to do ;usiness as a :e:;er with
safety to investors, 9reditors, other :e:;ers,
Aarti9iAants or the self-regulatory
organiHation< Provided, "hat the self-
regulatory organiHation i::ediately notifies
the o::ission of the a9tion ta>en. !ny
Aerson aggrieved ;y a su::ary a9tion
Aursuant to this AaragraAh shall ;e Aro:Atly
afforded an oAAortunity for a hearing ;y the
asso9iation in a99ordan9e with the Are9eding
AaragraAh. "he o::issioner, ;y order,
:ay stay a su::ary a9tion on his own or
uAon aAAli9ation ;y any Aerson aggrieved
there;y, if the o::issioner deter:ines
su::arily or after due noti9e and hearing
Dwhi9h hearing :ay 9onsist solely of the
su;:ission of affidavits or Aresentation of
oral argu:entsE, that a stay is 9onsistent
with the Au;li9 interest and the Arote9tion of
the insuring Au;li9.
1D9E ! self-regulatory organiHation shall
Aro:Atly notify the o::ission of any
dis9iAlinary san9tion on any :e:;er thereof
or Aarti9iAant therein, any denial of
:e:;ershiA or Aarti9iAation in su9h
organiHation, or the i:Aosition of any
dis9iAlinary san9tion on a Aerson asso9iated
with a :e:;er or a ;ar of su9h Aerson fro:
;e9o:ing so asso9iated. /ithin thirty DG5E
days after su9h noti9e, any aggrieved Aerson
:ay aAAeal to the o::issioner fro:, or
the o::issioner on its own :otion within
su9h Aeriod, :ay institute review of, the
de9ision of the self-regulatory organiHation,
at the 9on9lusion of whi9h, after due noti9e
and hearing Dwhi9h :ay 9onsist solely of
review of the re9ord ;efore the self-
regulatory organiHationE, the o::issioner
shall affir:, :odify or set aside the
san9tion. In su9h Aro9eeding, the
o::issioner shall deter:ine whether the
aggrieved Aerson has engaged or o:itted to
engage in the a9ts and Ara9ti9es as found ;y
the self-regulatory organiHation, whether
su9h a9ts and Ara9ti9es 9onstitute willful
violations of this ode, any other law
ad:inistered ;y the o::ission, the rules
or regulations thereunder, or the rules of the
self-regulatory organiHation as sAe9ified ;y
su9h organiHation, whether su9h Arovisions
were aAAlied in a :anner 9onsistent with the
AurAoses of this ode, and whether, with
due regard for the Au;li9 interest and the
Arote9tion of investors, the san9tion is
eB9essive or oAAressive.
1(!P"ER R
1"(E I#&UR!#E $MMI&&I$#ER
1"I"LE l
1!)MI#I&"R!"I=E !#)
!)JU)I!"$R* P$/ER&
1&E. 3G8. "he Insuran9e o::issioner
shall ;e aAAointed ;y the President of the
ReAu;li9 of the PhiliAAines for a ter: of siB
D,E years without reaAAoint:ent and who
shall serve as su9h until the su99essor shall
have ;een aAAointed and Cualified. If the
Insuran9e o::issioner is re:oved ;efore
the eBAiration of his ter: of offi9e, the
reason for the re:oval :ust ;e Au;lished.
1"he Insuran9e o::issioner shall have the
duty to see that all laws relating to
insuran9e, insuran9e 9o:Aanies and other
insuran9e :atters, :utual ;enefit
asso9iations, and trusts for 9harita;le uses
are faithfully eBe9uted and to Aerfor: the
duties i:Aosed uAon hi: ;y this ode, and
shall, notwithstanding any eBisting laws to
the 9ontrary, have sole and eB9lusive
authority to regulate the issuan9e and sale of
varia;le 9ontra9ts as defined in &e9tion .G4
hereof and to Arovide for the li9ensing of
Aersons selling su9h 9ontra9ts, and to issue
su9h reasona;le rules and regulations
governing the sa:e.
1"he o::issioner :ay issue su9h rulings,
instru9tions, 9ir9ulars, orders and de9isions
as :ay ;e dee:ed ne9essary to se9ure the
enfor9e:ent of the Arovisions of this ode,
to ensure the effi9ient regulation of the
insuran9e industry in a99ordan9e with glo;al
;est Ara9ti9es and to Arote9t the insuring
Au;li9. EB9eAt as otherwise sAe9ified,
de9isions :ade ;y the o::issioner shall
;e aAAeala;le to the &e9retary of +inan9e.
1In addition to the foregoing, the
o::issioner shall have the following
Aowers and fun9tions<
1DaE +or:ulate Aoli9ies and
re9o::endations on issues 9on9erning the
insuran9e industry, advise ongress and
other govern:ent agen9ies on all asAe9ts of
the insuran9e industry and AroAose
legislation and a:end:ents theretoF
1D;E !AArove, reIe9t, susAend or revo>e
li9enses or 9ertifi9ates of registration
Arovided for ;y this odeF
1D9E I:Aose san9tions for the violation of
laws and the rules, regulations and orders
issued Aursuant theretoF
1DdE PreAare, aAArove, a:end or reAeal
rules, regulations and orders, and issue
oAinions and Arovide guidan9e on and
suAervise 9o:Alian9e with su9h rules,
regulations and ordersF
1DeE Enlist the aid and suAAort of, andKor
deAutiHe any and all enfor9e:ent agen9ies
of the govern:ent in the i:Ale:entation of
its Aowers and fun9tions under this odeF
1DfE Issue 9ease and desist orders to Arevent
fraud or inIury to the insuring Au;li9F
1DgE Punish for 9onte:At of the
o::issioner, ;oth dire9t and indire9t, in
a99ordan9e with the Aertinent Arovisions of
and Aenalties Ares9ri;ed ;y the Rules of
ourtF
1DhE o:Ael the offi9ers of any registered
insuran9e 9orAoration or asso9iation to 9all
:eetings of sto9>holders or :e:;ers
thereof under its suAervisionF
1DiE Issue su;Aoena duces tecum and
su::on witnesses to aAAear in any
Aro9eeding of the o::ission and, in
aAAroAriate 9ases, order the eBa:ination,
sear9h and seiHure of all do9u:ents, AaAers,
files and re9ords, taB returns, and ;oo>s of
a99ounts of any entity or Aerson under
investigation as :ay ;e ne9essary for the
AroAer disAosition of the 9ases ;efore it,
su;Ie9t to the Arovisions of eBisting lawsF
1DIE &usAend or revo>e, after AroAer noti9e
and hearing, the li9ense or 9ertifi9ate of
authority of any entity or Aerson under its
regulation, uAon any of the grounds
Arovided ;y lawF
1D>E ondu9t an eBa:ination to deter:ine
9o:Alian9e with laws and regulations if the
9ir9u:stan9es so warrant as deter:ined ;y
aAAroAriate rules and regulationsF
1DlE Investigate not oftener than on9e a year
fro: the last date of eBa:ination to
deter:ine whether an institution is
9ondu9ting its ;usiness on a safe and sound
;asis< Provided, "hat, the
defi9ien9iesKirregularities found ;y or
dis9overed ;y an audit shall ;e i::ediately
addressedF
1D:E InCuire into the solven9y and liCuidity
of the institutions under its suAervision and
enfor9e Aro:At 9orre9tive a9tionF
1DnE "o retain and utiliHe, in addition to its
annual ;udget, all fees, 9harges and other
in9o:e derived fro: the regulation of
insuran9e 9o:Aanies and other suAervised
Aersons or entitiesF
1DoE "o fiB and assess fees, 9harges and
Aenalties as the o::issioner :ay find
reasona;le in the eBer9ise of regulationF and
1DAE EBer9ise su9h other Aowers as :ay ;e
Arovided ;y law as well as those whi9h :ay
;e i:Alied fro:, or whi9h are ne9essary or
in9idental to the eBAress Aowers granted the
o::ission to a9hieve the o;Ie9tives and
AurAoses of this ode.
1"he o::ission shall inde:nify the
o::issioner, )eAuty o::issioner, and
other offi9ials of the o::ission, in9luding
Aersonnel Aerfor:ing suAervision and
eBa:ination fun9tions, for all 9osts and
eBAenses reasona;ly in9urred ;y su9h
Aersons in 9onne9tion with any 9ivil or
9ri:inal a9tions, suits or Aro9eedings to
whi9h they :ay ;e :ade a Aarty to ;y the
reason of the Aerfor:an9e of their duties and
fun9tions, unless they are finally adIudged in
su9h a9tions, suits or Aro9eedings to ;e
lia;le for negligen9e or :is9ondu9t.
1In the event of settle:ent or 9o:Aro:ise,
inde:nifi9ation shall ;e Arovided only in
9onne9tion with su9h :atters 9overed ;y the
settle:ent as to whi9h the o::ission is
advised ;y eBternal 9ounsel that the Aersons
to ;e inde:nified did not 9o::it any
negligen9e or :is9ondu9t<
1"he 9osts and eBAenses in9urred in
defending the afore:entioned a9tion, suit or
Aro9eeding :ay ;e Aaid ;y the o::ission
in advan9e of the final disAosition of su9h
a9tion, suit or Aro9eeding uAon re9eiAt of an
underta>ing ;y or on ;ehalf of the
o::issioner, )eAuty o::issioner,
offi9er or e:Aloyee to reAay the a:ount
advan9ed should it ulti:ately ;e deter:ined
;y the o::ission that the Aerson is not
entitled to ;e inde:nified.
1&E. 3G4. In addition to the ad:inistrative
san9tions Arovided elsewhere in this ode,
the Insuran9e o::issioner is here;y
authoriHed, at his dis9retion, to i:Aose uAon
insuran9e 9o:Aanies, their dire9tors andKor
offi9ers andKor agents, for any willful failure
or refusal to 9o:Aly with, or violation of
any Arovision of this ode, or any order,
instru9tion, regulation, or ruling of the
Insuran9e o::issioner, or any
9o::ission or irregularities, andKor
9ondu9ting ;usiness in an unsafe or unsound
:anner as :ay ;e deter:ined ;y the
Insuran9e o::issioner, the following<
1DaE +ines not less than +ive thousand Aesos
DP6,555.55E and not :ore than "wo hundred
thousand Aesos DP.55,555.55EF and
1D;E &usAension, or after due hearing,
re:oval of dire9tors andKor offi9ers andKor
agents.
1&E. 3G7. "he o::issioner shall have
the Aower to adIudi9ate 9lai:s and
9o:Alaints involving any loss, da:age or
lia;ility for whi9h an insurer :ay ;e
answera;le under any >ind of Aoli9y or
9ontra9t of insuran9e, or for whi9h su9h
insurer :ay ;e lia;le under a 9ontra9t of
suretyshiA, or for whi9h a reinsurer :ay ;e
sued under any 9ontra9t of reinsuran9e it
:ay have entered intoF or for whi9h a
:utual ;enefit asso9iation :ay ;e held
lia;le under the :e:;ershiA 9ertifi9ates it
has issued to its :e:;ers, where the a:ount
of any su9h loss, da:age or lia;ility,
eB9luding interest, 9ost and attorney@s fees,
;eing 9lai:ed or sued uAon any >ind of
insuran9e, ;ond, reinsuran9e 9ontra9t, or
:e:;ershiA 9ertifi9ate does not eB9eed in
any single 9lai: +ive :illion Aesos
DP6,555,555.55E.
1"he Aower of the o::issioner does not
9over the relationshiA ;etween the insuran9e
9o:Aany and its agentsK;ro>ers ;ut is
li:ited to adIudi9ating 9lai:s and
9o:Alaints filed ;y the insured against the
insuran9e 9o:Aany.
1"he o::issioner :ay authoriHe any
offi9er or grouA of offi9ers under hi: to
9ondu9t investigation, inCuiry andKor
hearing and de9ide 9lai:s and he :ay issue
rules governing the 9ondu9t of adIudi9ation
and resolution of 9ases. "he Rules of ourt
shall have suAAletory aAAli9ation.
1"he Aarty filing an a9tion Aursuant to the
Arovisions of this se9tion there;y su;:its
his Aerson to the Iurisdi9tion of the
o::issioner. "he o::issioner shall
a9Cuire Iurisdi9tion over the Aerson of the
i:Aleaded Aarty or Aarties in a99ordan9e
with and Aursuant to the Arovisions of the
Rules of ourt.
1"he authority to adIudi9ate granted to the
o::issioner under this se9tion shall ;e
9on9urrent with that of the 9ivil 9ourts, ;ut
the filing of a 9o:Alaint with the
o::issioner shall Are9lude the 9ivil 9ourts
fro: ta>ing 9ogniHan9e of a suit involving
the sa:e su;Ie9t :atter.
1!ny de9ision, order or ruling rendered ;y
the o::issioner after a hearing shall have
the for9e and effe9t of a Iudg:ent. !ny
Aarty :ay aAAeal fro: a final order, ruling
or de9ision of the o::issioner ;y filing
with the o::issioner within thirty DG5E
days fro: re9eiAt of 9oAy of su9h order,
ruling or de9ision a noti9e of aAAeal to the
ourt of !AAeals in the :anner Arovided for
in the Rules of ourt for aAAeals fro: the
Regional "rial ourt to the ourt of
!AAeals.
1+or the AurAose of any Aro9eeding under
this se9tion, the o::issioner, or any
offi9er thereof designated ;y hi: is
e:Aowered to ad:inister oaths and
affir:ation, su;Aoena witnesses, 9o:Ael
their attendan9e, ta>e eviden9e, and reCuire
the Arodu9tion of any ;oo>s, AaAers,
do9u:ents, or 9ontra9ts or other re9ords
whi9h are relevant or :aterial to the inCuiry.
1! full and 9o:Alete re9ord shall ;e >eAt of
all Aro9eedings had ;efore the
o::issioner, or the offi9ers thereof
designated ;y hi:, and all testi:ony shall
;e ta>en down and trans9ri;ed ;y a
stenograAher aAAointed ;y the
o::issioner.
1In order to Aro:ote Aarty autono:y in the
resolution of 9ases, the o::issioner shall
esta;lish a syste: for resolving 9ases
through the use of alternative disAute
resolution.
1"I"LE .
1+EE& !#) $"(ER &$URE& $+
+U#)&
1&E. 335. DaE +or the issuan9e or renewal
of 9ertifi9ates of authority, li9enses and
9ertifi9ates of registration, Aursuant to
Aertinent Arovisions of this ode, the
o::issioner shall 9olle9t and re9eive fees
whi9h shall ;e not less than the following<
1+or ea9h 9ertifi9ate of authority issued to
an insuran9e 9o:Aany doing ;usiness in the
PhiliAAines, "wo hundred Aesos DP.55.55E.
1+or ea9h sAe9ial 9ertifi9ate of authority
issued to a servi9ing insuran9e 9o:Aany,
$ne hundred Aesos DP-55.55E.
1+or ea9h li9ense issued to a general agent
of an insuran9e 9o:Aany, +ifty Aesos
DP65.55E.
1+or ea9h li9ense issued to an insuran9e
agent, "wenty-five Aesos DP.6.55E.
1+or ea9h li9ense issued to an agent of
varia;le 9ontra9t Aoli9y, "wenty-five Aesos
DP.6.55E.
1+or ea9h li9ense issued to an insuran9e
;ro>er, $ne hundred Aesos DP-55.55E.
1+or ea9h li9ense issued to a reinsuran9e
;ro>er, $ne hundred Aesos DP-55.55E.
1+or ea9h li9ense issued to an insuran9e
adIuster, $ne hundred Aesos DP-55.55E.
1+or ea9h 9ertifi9ate of registration issued to
an a9tuary, +ifty Aesos DP65.55E.
1+or ea9h 9ertifi9ate of registration issued to
a resident agent, +ifty Aesos DP65.55E.
1+or ea9h li9ense issued to a rating
organiHation, $ne hundred Aesos DP-55.55E.
1+or ea9h 9ertifi9ate of registration issued to
a non-life 9o:Aany underwriter, +ifty Aesos
DP65.55E.
1+or ea9h li9ense issued to a :utual ;enefit
asso9iation, "en Aesos DP-5.55E.
1+or ea9h 9ertifi9ate of registration issued to
a trust for 9harita;le uses, "en Aesos
DP-5.55E.
1!ll 9ertifi9ates of authority and all other
li9enses, as well as all 9ertifi9ates of
registration, issued to any Aerson,
AartnershiA, asso9iation or 9orAoration under
the Aertinent Arovisions of this ode for
whi9h no eBAiration date has ;een
Ares9ri;ed, shall eBAire on the last day of
)e9e:;er of the third year fro: its issuan9e
and shall ;e renewed uAon aAAli9ation
therefor and Aay:ent of the 9orresAonding
fee, if the li9ensee or holder of su9h li9ense
or 9ertifi9ate is 9ontinuing to 9o:Aly with
all the aAAli9a;le Arovisions of eBisting
laws, and of rules, instru9tions, orders and
de9isions of the o::issioner.
1D;E +or the filing of the annual state:ent
referred to in &e9tion ..7, the
o::issioner shall 9olle9t and re9eive fro:
the insuran9e 9o:Aany so filing a fee of not
less than +ive hundred Aesos DP655.55E<
Provided, "hat a fine of not less than $ne
hundred Aesos DP-55.55E shall ;e i:Aosed
and 9olle9ted ;y the o::issioner for ea9h
wee> of delay, or any fra9tion thereof, in the
filing of the annual state:ent.
1+or the filing of annual state:ent referred
to in &e9tion 3-G, the o::issioner shall
9olle9t and re9eive fro: the :utual ;enefit
asso9iation so filing a fee of not less than
"en Aesos DP-5.55E< Provided, "hat a fine of
not less than "en Aesos DP-5.55E shall ;e
i:Aosed and 9olle9ted ;y the o::issioner
for ea9h wee> of delay, or any fra9tion
thereof, in the filing of the annual state:ent.
1D9E +or the eBa:ination Ares9ri;ed in
&e9tion .6G, the o::issioner shall 9olle9t
and re9eive fees a99ording to the a:ount of
its total assets, in the 9ase of a do:esti9
9o:Aany, or of its assets in the PhiliAAines,
in the 9ase of a foreign 9o:Aany, not less
than the a:ount as follows<
1D-E "wo :illion Aesos or :ore ;ut less than
+our :illion Aesos, +our hundred Aesos
DP355.55EF
1D.E +our :illion Aesos or :ore ;ut less than
&iB :illion Aesos, Eight hundred Aesos
DP455.55EF
1DGE &iB :illion Aesos or :ore ;ut less than
Eight :illion Aesos, $ne thousand two
hundred Aesos DP-,.55.55EF
1D3E Eight :illion Aesos or :ore ;ut less
than "en :illion Aesos, $ne thousand siB
hundred Aesos DP-,,55.55EF
1D6E "en :illion Aesos or :ore, "wo
thousand Aesos DP.,555.55EF
1Provided, "hat if the said eBa:ination is
:ade in Ala9es outside the MetroAolitan
Manila area, ;esides these fees, the
o::issioner shall reCuire of the 9o:Aany
eBa:ined the Aay:ent of the a9tual and
ne9essary travelling and su;sisten9e
eBAenses of the eBa:iner or eBa:iners
9on9erned.
1+or the eBa:ination Ares9ri;ed in &e9tion
3-., the o::issioner shall 9olle9t and
re9eive a :ini:u: fee of not less than $ne
hundred Aesos DP-55.55E fro: the :utual
;enefit asso9iation eBa:ined< Provided,
"hat if su9h asso9iation has total assets of
:ore than $ne hundred thousand Aesos
DP-55,555.55E, an additional fee of not less
than "en Aesos DP-5.55E for every +ifty
thousand Aesos DP65,555.55E in eB9ess
thereof shall ;e i:Aosed<
1DdE +or the filing of an aAAli9ation to
withdraw fro: the PhiliAAines under "itle
-4, the o::issioner shall 9olle9t and
re9eive fro: the foreign 9o:Aany so
withdrawing a fee of not less than $ne
thousand Aesos DP-,555.55E.
1DeE "he o::issioner :ay fiB and 9olle9t
fees or 9harges for do9u:ents, trans9riAts, or
other :aterials whi9h :ay ;e furnished ;y
hi: not in eB9ess of reasona;le 9ost.
1&E. 33-. "he o::issioner, in
a99ordan9e with the rules and regulations of
the )eAart:ent of Budget and Manage:ent
and other relevant regulatory agen9ies, shall
sour9e the salary, allowan9es and other
eBAenses fro: the retained a:ount of the
fees, 9harges, Aenalties and other in9o:e
fro: the regulation of insuran9e 9o:Aanies
and other 9overed Aersons and entities, and
fro: the Insuran9e +und, whi9h is 9reated
out of the Aro9eeds of taBes on insuran9e
Are:iu:s :entioned in &e9tion .66 of the
#ational Internal Revenue ode, as
a:ended.
1MI&ELL!#E$U& PR$=I&I$#&
1&E. 33.. !ny Aerson, 9o:Aany or
9orAoration su;Ie9t to the suAervision and
9ontrol of the o::issioner who violates
any Arovision of this ode, for whi9h no
Aenalty is Arovided, shall ;e dee:ed guilty
of a Aenal offense, and uAon 9onvi9tion ;e
Aunished ;y a fine not eB9eeding "wo
hundred thousand Aesos DP.55,555.55E or
i:Arison:ent of siB D,E :onths, or ;oth, at
the dis9retion of the 9ourt.
1If the offense is 9o::itted ;y a 9o:Aany
or 9orAoration, the offi9ers, dire9tors, or
other Aersons resAonsi;le for its oAeration,
:anage:ent, or ad:inistration, unless it 9an
;e Aroved that they have ta>en no Aart in the
9o::ission of the offense, shall li>ewise ;e
guilty of a Aenal offense, and uAon
9onvi9tion ;e Aunished ;y a fine not
eB9eeding "wo hundred thousand Aesos
DP.55,555.55E or i:Arison:ent of siB D,E
:onths, or ;oth, at the dis9retion of the
9ourt.
1&E. 33G. !ll 9ri:inal a9tions for the
violation of any of the Arovisions of this
ode shall Ares9ri;e after three DGE years
fro: the dis9overy of su9h violation<
Provided, "hat su9h a9tions shall in any
event Ares9ri;e after ten D-5E years fro: the
9o::ission of su9h violation.
1&E. 333. !ny Aerson, AartnershiA,
asso9iation or 9orAoration heretofore
authoriHed, li9ensed or registered ;y the
o::issioner shall ;e dee:ed to have ;een
authoriHed, li9ensed or registered under the
Arovisions of this ode and shall ;e
governed ;y the Arovisions thereof<
Provided, hoever, "hat where any su9h
Aerson, AartnershiA, asso9iation or
9orAoration is affe9ted ;y the new
reCuire:ents of this ode, said Aerson,
AartnershiA, asso9iation or 9orAoration shall,
unless otherwise herein Arovided, ;e given a
Aeriod of one D-E year fro: the effe9tivity of
this ode within whi9h to 9o:Aly with the
sa:e.
1&E. 336. 'ransitory Provision. T Renewal
of eBisting li9enses, 9ertifi9ates of authority
or a99reditation whi9h will eBAire on June
G5, .5-G shall ;e valid until )e9e:;er G-,
.5-6. "hereafter, renewal shall ;e filed on
the last day of )e9e:;er every third year
following the date of eBAiry of the li9ense,
9ertifi9ate of authority or a99reditation.
1&E. 33,. Repealing Clause. T EB9eAt as
eBAressly Arovided ;y this ode, all laws,
de9rees, orders, rules and regulations or
Aarts thereof, in9onsistent with any
Arovision of this ode shall ;e dee:ed
reAealed, a:ended or :odified a99ordingly.
1&E. 338. Separability Clause. T If any
Arovision of this ode or any Aart hereof ;e
de9lared invalid or un9onstitutional, the
re:ainder of the law or other Arovisions not
otherwise affe9ted shall re:ain valid and
su;sisting.
1&E. 334. "his ode shall ta>e effe9t
fifteen D-6E days following its Au;li9ation in
a newsAaAer of general 9ir9uation.2
!AAroved,
D&gd.E JI!!"#
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*cting Senate
President
D&gd.E F$'ICI%"
($'M"T$ JR)
Secretary +eneral
House of
Representatives
"his !9t whi9h is a 9onsolidation of (ouse
Bill #o. 34,8 and &enate Bill #o. G.45 was
finally Aassed ;y the (ouse of
ReAresentatives and the &enate on +e;ruary
,, .5-G.
D&gd.E $MM%
'IRI"*R$#$S
Secretary of the
Senate
D&gd.E M%RI'# ()
(%R+%*#%P
Secretary +eneral
House of
Representatives
!AAroved< !U' -6 .5-G
D&gd.E ($I!" S) %,+I" III
President of the Philippines