old vs new insuranceq code (as corrected)

8/10/2019 Old vs New InsuranceQ Code (as Corrected)

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OLD INSURANCE CODE NEW INSURANCE CODE

COMPULSORY MOTOR VEHICLE LIABILITY INSURANCE

Section 373. For purposes of this chapter:

(a) "Motor Vehicle" is any vehicle as dened in section three,paragraph (a) of Republic Act u!bered Four housand #ne $undred hirty%&i', #therise non as the "*and ransportation and ra+code-"

(b) ".assenger" is any fare paying person being transported andconveyed in and by a !otor vehicle for transportation of passengersfor co!pensation, including persons e'pressly authori/ed by la orby the vehicle0s operator or his agents to ride ithout fare-

(c) "hird%.arty" is any person other than a passenger as dened inthis section and shall also e'clude a !e!ber of the household, or a!e!ber of the fa!ily ithin the second degree of consanguinity ora+nity, of a !otor vehicle oner or land transportation operator, aslieise dened herein, or his e!ployee in respect of death, bodilyin1ury, or da!age to property arising out of and in the course of e!ploy!ent- (As a!ended by .residential 2ecree o- 3435 and3643)

(d) "#ner" or "Motor vehicle oner" !eans the actual legal oner of a !otor vehicle, in hose na!e such vehicle is duly registered iththe *and ransportation o!!ission7

(e) "*and transportation operator" !eans the oner or oners of !otor vehicles for transportation of passengers for co!pensation,

including school buses7

(f) "8nsurance policy" or ".olicy" refers to a contract of insuranceagainst passenger and thirty%party liability for death or bodily in1uriesand da!aged to property arising fro! !otor vehicle accidents- (Asa!ended by .residential 2ecree o- 3599 and 3435)

Section 374. 8t shall be unlaful for any land transportation operator or oner of a!otor vehicle to operate the sa!e in the public highays unless there is in force inrelation thereto a policy of insurance or guaranty in cash or surety bond issued inaccordance ith the provisions of this chapter to inde!nify the death, bodily in1ury,

“COMPULSORY MOTOR VEHICLE LIABILITY INSURANCE

“SEC. 3!. For purposes of this chapter:

(a) Motor Vehicle is any vehicle as dened in &ection ;, paragraph(a) of Republic Act o- 53;<, otherise non as the =*and ransportation and ra+c ode>-

(b) Passenger is any fare paying person being transported andconveyed in and by a !otor vehicle for transportation of passengersfor co!pensation, including persons e'pressly authori/ed by la orby the vehicle>s operator or his agents to ride ithout fare-

(c) Third party is any person other than a passenger as dened inthis section and shall also e'clude a !e!ber of the household, or a!e!ber of the fa!ily ithin the second degree of consanguinity or

a+nity, of a !otor vehicle oner or land transportation operator, aslieise dened herein, or his e!ployee in respect of death, bodilyin1ury, or da!age to property arising out of and in the course of e!ploy!ent-

(d) Owner or motor vehicle owner !eans the actual legal oner of a!otor vehicle, in hose na!e such vehicle is duly registered ith the*and ransportation #+ce7

(e) Land transportation operator !eans the oner or oners of !otor vehicles for transportation of passengers for co!pensation,including school buses-

(f) Insurance policy or Policy refers to a contract of insurance againstpassenger and third%party liability for death or bodily in1uries andda!age to property arising fro! !otor vehicle accidents- #$A?@

“SEC. 37. 8t shall be unlaful for any land transportation operatoror oner of a !otor vehicle to operate the sa!e in the publichighays unless there is in force in relation thereto a policy of insurance or guaranty in cash or surety bond issued in accordanceith the provisions of this chapter to inde!nify the death, bodilyin1ury, andor da!age to property of a third%party or passenger, as



andor da!age to property of a third%party or passenger, as the case !ay be, arisingfro! the use thereof- (As a!ended by .residential 2ecree o- 3599 and 3435)

Section 37". he o!!issioner shall furnish the *and ransportation o!!issioner

ith a list of insurance co!panies authori/ed to issue the policy of insurance orsurety bond reBuired by this chapter- (As a!ended by .residential 2ecree o- 3435)

Section 37!. he *and ransportation o!!ission shall not allo the registration orreneal of registration of any !otor vehicle ithout rst reBuiring fro! the landtransportation operator or !otor vehicle oner concerned the presentation and lingof a substantiating docu!entation in a for! approved by the o!!issionerevidencing that the policy of insurance or guaranty in cash or surety bond reBuiredby this chapter is in eCect- (As a!ended by .residential 2ecree o- 3599)

Section 377. @very land transportation operator and every oner of a !otor vehicleshall, before applying for the registration or reneal of registration of any !otorvehicle, at his option, either secure an insurance policy or surety bond issued by anyinsurance co!pany authori/ed by the o!!issioner or !ae a cash deposit in sucha!ount as herein reBuired as li!it of liability for purposes specied in section threehundred seventy%four-

(3) 8n the case of a land transportation operator the insuranceguaranty in cash or surety bond shall cover liability for death orbodily in1uries of third%parties andor passengers arising out of theuse of such vehicle in the a!ount not less than telve thousandpesos per passenger or third party and an a!ount, for each of suchcategories, in any one accident of not less than that set forth in the

folloing scale

(a) Motor vehicles ith an authori/ed capacity of tenty%si'or !ore passengers: Fifty thousand pesos7

(b) Motor vehicles ith an authori/ed capacity of fro! telveto tenty%ve passengers: Forty thousand pesos7

(c) Motor vehicles ith an authori/ed capacity of fro! si' toeleven passengers: hirty thousand pesos7

the case !ay be, arising fro! the use thereof- D # $A?@

“SEC. 3. he o!!issioner shall furnish the *and ransportation#+ce ith a list of insurance co!panies authori/ed to issue thepolicy of insurance or surety bond reBuired by this chapter- D #

$A?@

“SEC. 3#. he *and ransportation #+ce shall not allo theregistration or reneal of registration of any !otor vehicle ithoutrst reBuiring fro! the land transportation operator or !otor vehicleoner concerned the presentation and ling of a substantiatingdocu!entation in a for! approved by the o!!issioner evidencingthat the policy of insurance or guaranty in cash or surety bondreBuired by this chapter is in eCect- % D # $A?@

&@- ;6E- @very land transportation operator and every oner of a!otor vehicle shall, before applying for the registration or reneal of registration of any !otor vehicle, at his option, either secure an

insurance policy or surety bond issued by any insurance co!panyauthori/ed by the o!!issioner or !ae a cash deposit in sucha!ount as herein reBuired as li!it of liability for purposes specied in&ection ;4-

(a) 8n the case of a land transportation operator, the insuranceguaranty in cash or surety bond shall cover liability for death or bodilyin1uries of third%parties andor passengers arising out of the use of such vehicle in the a!ount not less than elve thousand pesos(.3G,EEE-EE) per passenger or third%party and an a!ount, for each of such categories, in any one accident of not less than that set forth inthe folloing scale:

(3) Motor vehicles ith an authori/ed capacity of tenty%si' (G<) or!ore passengers: Fifty thousand pesos (.9E,EEE-EE)7

(G) Motor vehicles ith an authori/ed capacity of fro! telve (3G) totenty%ve (G9) passengers: Forty thousand pesos (.5E,EEE-EE)7

(;) Motor vehicles ith an authori/ed capacity of fro! si' (<) toeleven (33) passengers: hirty thousand pesos (.;E,EEE-EE)7

(5) Motor vehicles ith an authori/ed capacity of ve (9) or less



(d) Motor vehicles ith an authori/ed capacity of ve or lesspassengers: Five thousand pesos !ultiplied by the authori/edcapacity-

.rovided, hoever, hat such cash deposit !ade to, or surety bondposted ith, the o!!issioner shall be resorted to by hi! in cases of accidents the inde!nities for hich to third%parties andorpassengers are not settled accordingly by the land transportationoperator and, in that event, the said cash deposit shall bereplenished or such surety bond shall be restored ith si'ty daysafter i!pair!ent or e'piry, as the case !ay be, by such landtransportation operator, otherise, he shall secure the insurancepolicy reBuired by this chapter- he aforesaid cash deposit !ay beinvested by the o!!issioner in readily !aretable govern!entbonds andor securities-

(G) 8n the case of an oner of a !otor vehicle, the insurance or

guaranty in cash or surety bond shall cover liability for death or in1uryto third parties in an a!ount not less than that set forth in thefolloing scale in any one accident:

8- .rivate ars

(a) Hanta! enty thousand pesos7

(b) *ight enty thousand pesos7

(c) $eavy hirty thousand pesos7

88- #ther .rivate Vehicles

(a) ricycles, !otorcyles, and scooters : elve thousand pesos7

(b) Vehicles ith an unladen eight of G,<EE ilos or less : enty thousand pesos7(c) Vehicles ith an unladen eight of beteen G,<E3 ilos and;,6;E ilos

: hirty thousand pesos7

(d) Vehicles ith an unladen eight over ;,6;E ilos : Fifty thousand pesos-

he o!!issioner !ay, if arranted, set forth schedule of inde!nities for thepay!ent of clai!s for death or bodily in1uries ith the coverages set forth herein- (Asa!ended by .residential 2ecree o- 3599 and 3435)

passengers: Five thousand pesos (.9,EEE-EE) !ultiplied by theauthori/ed capacity-

Provided, however, hat such cash deposit !ade to, or surety bondposted ith, the o!!issioner shall be resorted to by hi! in cases of

accidents the inde!nities for hich to third%parties andor passengersare not settled accordingly by the land transportation operator and, inthat event, the said cash deposit shall be replenished or such suretybond shall be restored ithin si'ty (<E) days after i!pair!ent ore'piry, as the case !ay be, by such land transportation operator,otherise, he shall secure the insurance policy reBuired by thischapter- he aforesaid cash deposit !ay be invested by theo!!issioner in readily !aretable govern!ent bonds, andorsecurities-

(b) 8n the case of an oner of a !otor vehicle, the insurance orguaranty in cash or surety bond shall cover liability for death or in1uryto third%parties in an a!ount not less than that set forth in the

folloing scale in any one accident:

(3) .rivate ars

(i) Hanta!: enty thousand pesos (.GE,EEE-EE)7

(ii) *ight: enty thousand pesos (.GE,EEE-EE)7 and

(iii) $eavy: hirty thousand pesos (.;E,EEE-EE)-

(G) #ther .rivate Vehicles

(i) ricycles, !otorcycles and scooters: elve thousand pesos(.3G,EEE-EE)7

(ii) Vehicles ith an unladen eight of G,<EE ilos or less: entythousand pesos (.GE,EEE-EE)7

(iii) Vehicles ith an unladen eight of beteen G,<E3 ilos and;,6;E ilos: hirty thousand pesos (.;E,EEE-EE)7 and



Section 37. Any clai! for death or in1ury to any passenger or third party pursuantto the provisions of this chapter shall be paid ithout the necessity of proving fault ornegligence of any ind7 .rovided, hat for purposes of this section

(i) he total inde!nity in respect of any person shall not e'ceed vethousand pesos7

(ii) he folloing proofs of loss, hen sub!itted under oath, shall besu+cient evidence to substantiate the clai!:

(a) .olice report of accident and

(b) 2eath certicate and evidence su+cient to establish theproper payee or

(c) Medical report and evidence of !edical or hospitaldisburse!ent in respect of hich refund is clai!ed7

(iii) lai! !ay be !ade against one !otor vehicle only- 8n the case of an occupant of a vehicle, clai! shall lie against the insurer of thevehicle in hich the occupant is riding, !ounting or dis!ountingfro!- 8n any other case, clai! shall lie against the insurer of thedirectly oCending vehicle- 8n all cases, the right of the party payingthe clai! to recover against the oner of the vehicle responsible forthe accident shall be !aintained-

(iv) Vehicles ith an unladen eight over ;,6;E ilos: Fifty thousandpesos (.9E,EEE-EE)-

he o!!issioner !ay, if arranted, set forth schedule of inde!nities for the pay!ent of clai!s for death or bodily in1uries ith

the coverages set forth herein- # $A?@

“SEC. 3#$. Any clai! for death or in1ury to any passenger or third%party pursuant to the provisions of this chapter shall be paid ithoutthe necessity of proving fault or negligence of any ind: Provided, hat for purposes of this section:

(a) he total inde!nity in respect of any person shall not be lessthan Fifteen thousand pesos (.39,EEE-EE)7 (.reviously 9,EEE-EE)

(b) he folloing proofs of loss, hen sub!itted under oath, shall besu+cient evidence to substantiate the clai!:

(3) .olice report of accident7 and

(G) 2eath certicate and evidence su+cient to establish the properpayee7 or

(;) Medical report and evidence of !edical or hospital disburse!entin respect of hich refund is clai!ed7

(c) lai! !ay be !ade against one !otor vehicle only- 8n the case of an occupant of a vehicle, clai!, shall lie against the insurer of thevehicle in hich the occupant is riding, !ounting or dis!ountingfro!- 8n any other case, clai! shall lie against the insurer of thedirectly oCending vehicle- 8n all cases, the right of the party payingthe clai! to recover against the oner of the vehicle responsible forthe accident shall be !aintained-

“SEC. 3#%. o land transportation operator or oner of !otorvehicle shall be unreasonably denied the policy of insurance or suretybond reBuired by this chapter by the insurance co!panies authori/edto issue the sa!e, otherise, the *and ransportation #+ce shall



Section 37#. o land transportation operator or oner of !otor vehicle shall beunreasonably denied the policy of insurance or surety bond reBuired by this chapterby the insurance co!panies authori/ed to issue the sa!e, otherise, the *and ransportation o!!ission shall reBuire fro! said land transportation operator oroner of the vehicle, in lieu of a policy of insurance or surety bond, a certicate thata cash deposit has been !ade ith the o!!issioner in such a!ount reBuired asli!its of inde!nity in section three hundred seventy%seven to anser for thepassenger andor third%party liability of such land transportation operator or oner of the vehicle-

o insurance co!pany !ay issue the policy of insurance or surety bond reBuiredunder this chapter unless so authori/ed under e'isting las-

he authority to engage in the casualty andor surety lines of business of aninsurance co!pany that refuses to issue or rene, ithout 1ust cause, the insurancepolicy or surety bond therein reBuired shall be ithdran i!!ediately- (As a!endedby .residential 2ecree o- 3599 and 3435)

Section 3&. o cancellation of the policy shall be valid unless ritten noticethereof is given to the land transportation operator or oner of the vehicle and to the*and ransportation o!!ission at least fteen days prior to the intended eCective

date thereof-

Ipon receipt of such notice, the *and ransportation o!!ission, unless it receivesevidence of a ne valid insurance or guaranty in cash or surety bond as prescribed inthis chapter, or an endorse!ent of revival of the cancelled one, shall order thei!!ediate conscation of the plates of the !otor vehicle covered by such cancelledpolicy- he sa!e !ay be re%issued only upon presentation of a ne insurance policyor that a guaranty in cash or surety band has been !ade or posted ith theo!!issioner and hich !eets the reBuire!ents of this chapter, or an endorse!entor revival of the cancelled one- (As a!ended by .residential 2ecree o- 3599)

reBuire fro! said land transportation operator or oner of the vehicle,in lieu of a policy of insurance or surety bond, a certicate that a cashdeposit has been !ade ith the o!!issioner in such a!ountreBuired as li!its of inde!nity in &ection ;6E to anser for thepassenger andor third%party liability of such land transportationoperator or oner of the vehicle- D # $A?@

o insurance co!pany !ay issue the policy of insurance or suretybond reBuired under this chapter unless so authori/ed under e'istinglas-

he authority to engage in the casualty andor surety lines of business of an insurance co!pany that refuses to issue or rene,ithout 1ust cause, the insurance policy or surety bond thereinreBuired shall be ithdran i!!ediately- % # $A?@

“SEC. 3#3. o cancellation of the policy shall be valid unless rittennotice thereof is given to the land transportation operator or oner of the vehicle and to the *and ransportation #+ce at least fteen (39)days prior to the intended eCective date thereof- Ipon receipt of suchnotice, the *and ransportation #+ce, unless it receives evidence of ane valid insurance or guaranty in cash or surety bond as prescribedin this chapter, or an endorse!ent of revival of the cancelled one,shall order the i!!ediate conscation of the plates of the !otorvehicle covered by such cancelled policy- he sa!e !ay be reissuedonly upon presentation of a ne insurance policy or that a guaranty incash or surety bond has been !ade or posted ith the o!!issionerand hich !eets the reBuire!ents of this chapter, or an endorse!entor revival of the cancelled one- % # $A?@

SEC. 3#4- 8f the cancellation of the policy or surety bond isconte!plated by the land transportation operator or oner of thevehicle, he shall, before the policy or surety bond ceases to beeCective, secure a si!ilar policy of insurance or surety bond toreplace the policy or surety bond to be cancelled or !ae a cashdeposit in su+cient a!ount ith the o!!issioner, and ithout anygap, le the reBuired docu!entation ith the *and ransportation#+ce, and notify the insurance co!pany concerned of the



Section 3$. 8f the cancellation of the policy or surety bond is conte!plated by theland transportation operator or oner of the vehicle, he shall, before the policy orsurety bond ceases to be eCective, secure a si!ilar policy of insurance or suretybond to replace the policy or surety bond to be cancelled or !ae a cash deposit insu+cient a!ount ith the o!!issioner and ithout any gap, le the reBuireddocu!entation ith the *and ransportation o!!ission, and notify the insuranceco!pany concerned of the cancellation of its policy or surety bond- (As a!ended by.residential 2ecree o- 3599)

Section 3%. 8n case of change of onership of a !otor vehicle, or change of theengine of an insured vehicle, there shall be no need of issuing a ne policy until thene't date of registration or reneal of registration of such vehicle, and provided thatthe insurance co!pany shall agree to continue the policy, such change of onershipor such change of the engine shall be indicated in a corresponding endorse!ent bythe insurance co!pany concerned, and a signed duplicate of such endorse!ent

shall, ithin a reasonable ti!e, be led ith the *and ransportation o!!ission-

Section 33. 8n the settle!ent and pay!ent of clai!s, the inde!nity shall not beavailed of by any accident victi! or clai!ant as an instru!ent of enrich!ent byreason of an accident, but as an assistance or restitution insofar as can fairly beascertained-

Section 34. Any person having any clai! upon the policy issued pursuant to thischapter shall, ithout any unnecessary delay, present to the insurance co!panyconcerned a ritten notice of clai! setting forth the a!ount of his loss, andor the

nature, e'tent and duration of the in1uries sustained as certied by a duly licensedphysician- otice of clai! !ust be led ithin si' !onths fro! date of the accident,otherise, the clai! shall be dee!ed aived- Action or suit for recovery of da!agedue to loss or in1ury !ust be brought, in proper cases, ith the o!!issioner or theourts ithin one year fro! date of accident, otherise, the clai!ant0s right of actionshall prescribe- (As a!ended by .residential 2ecree 3435)

Section 3". he insurance co!pany concerned shall forthith ascertain the truthand e'tent of the clai! and !ae pay!ent ithin ve oring days after reaching anagree!ent- 8f no agree!ent is reached, the insurance co!pany shall pay only the"no%fault" inde!nity provided in section three hundred seventy%eight ithoutpre1udice to the clai!ant fro! pursuing his clai! further, in hich case, he shall not

cancellation of its policy or surety bond- # $A?@

SEC. 3#". 8n case of change of oner ship of a !otor vehicle, orchange of the engine of an insured vehicle, there shall be no need of issuing a ne policy until the ne't date of registration or reneal of

registration of such vehicle, and: Provided, hat the insuranceco!pany shall agree to continue the policy, such change of onership or such change of the engine shall be indicated in acorresponding endorse!ent by the insurance co!pany concerned,and a signed duplicate of such endorse!ent shall, ithin areasonable ti!e, be led ith the *and ransportation #+ce- #$A?@

“SEC. 3#!. 8n the settle!ent and pay!ent of clai!s, the inde!nityshall not be availed of by any accident victi! or clai!ant as aninstru!ent of enrich!ent by reason of an accident, but as anassistance or restitution insofar as can fairly be ascertained- #$A?@

“SEC. 3#7. Any person having any clai! upon the policy issuedpursuant to this chapter shall, ithout any unnecessary delay,present to the insurance co!pany concerned a ritten notice of clai!setting forth the nature, e'tent and duration of the in1uries sustainedas certied by a duly licensed physician- otice of clai! !ust be ledithin si' (<) !onths fro! the date of accident, otherise, the clai!shall be dee!ed aived- Action or suit for recovery of da!age due toloss or in1ury !ust be brought, in proper cases, ith theo!!issioner or the courts ithin one (3) year fro! denial of theclai!, otherise, the clai!ant>s right of action shall prescribe- #$A?@

“SEC. 3#. he insurance co!pany concerned shall forthithascertain the truth and e'tent of the clai! and !ae pay!ent ithinve (9) oring days after reaching an agree!ent- 8f no agree!ent isreached, the insurance co!pany shall pay only the no%fault inde!nityprovided in &ection ;63 ithout pre1udice to the clai!ant fro!pursuing his clai! further, in hich case, he shall not be reBuired orco!pelled by the insurance co!pany to e'ecute any Buit clai! ordocu!ent releasing it fro! liability under the policy of insurance orsurety bond issued- # $A?@

8n case of any dispute in the enforce!ent of the provisions of any



be reBuired or co!pelled by the insurance co!pany to e'ecute any Buit clai! ordocu!ent releasing it fro! liability under the policy of insurance or surety bondissued- (As a!ended by .residential 2ecree o- 3599)

8n case of any dispute in the enforce!ent of the provisions of any policy issuedpursuant to this chapter, the ad1udication of such dispute shall be ithin the originaland e'clusive 1urisdiction of the o!!issioner, sub1ect to the li!itations provided insection four hundred si'teen-

Section 3!. 8t shall be unlaful for a land transportation operator or oner of !otor vehicle to reBuire his or its drivers or other e!ployees to contribute in thepay!ent of pre!iu!s-

Section 37. o govern!ent o+ce or agency having the duty of i!ple!enting theprovisions of this chapter nor any o+cial or e!ployee thereof shall act as agent inprocuring the insurance policy or surety bond provided for herein- he co!!ission of an agent procuring the said policy or bond shall in no case e'ceed ten per centu! of the a!ount of the pre!iu!s therefor-

Section 3. Any land transportation operator or oner of !otor vehicle or anyother person violating any of the provisions of the preceding sections shall bepunished by a ne of not less than ve hundred pesos but not !ore than onethousand pesos andor i!prison!ent for not !ore than si' !onths- he violation of

section three hundred seventy%seven by a land transportation operator shall be asu+cient cause for the revocation of the certicate of public convenience issued bythe Hoard of ransportation covering the vehicle concerned-

Section 3#. Jhenever any violation of the provisions of this chapter is co!!ittedby a corporation or association, or by a govern!ent o+ce or entity, the e'ecutiveo+cer or o+cers of said corporation, association or govern!ent o+ce or entity hoshall have noingly per!itted, or failed to prevent, said violation shall be held liableas principals-

policy issued pursuant to this chapter, the ad1udication of suchdispute shall be ithin the original and e'clusive 1urisdiction of theo!!issioner, sub1ect to the li!itations provided in &ection 5;6- #$A?@

“SEC. 3##- 8t shall be unlaful for a land transportation operator oroner of !otor vehicle to reBuire his or its drivers or other e!ployeesto contribute in the pay!ent of pre!iu!s- # $A?@

“SEC. 4&&. o govern!ent o+ce or agency having the duty of i!ple!enting the provisions of this chapter nor any o+cial ore!ployee thereof shall act as agent in procuring the insurance policyor surety bond provided for herein- he co!!ission of an agentprocuring the said policy or bond shall in no case e'ceed ten percent(3EK) of the a!ount of the pre!iu!s therefor- # $A?@

&@- 5E3- Any land transportation operator or oner of !otorvehicle or any other person violating any of the provisions of the

preceding sections shall be punished by a ne of not less than Fivehundred pesos (.9EE-EE) andor i!prison!ent for not !ore than si'(<) !onths- he violation of &ection ;6E by a land transportationoperator shall be a su+cient cause for the revocation of thecerticate of public convenience issued by the *and ransportationFranchising and Regulatory Hoard (.reviously Hoard of ransportation)covering the vehicle concerned-

“SEC. 4&%- Jhenever any violation of the provisions of this chapteris co!!itted by a corporation or association, or by a govern!ento+ce or entity, the e'ecutive o+cer or o+cers of said corporation,association or govern!ent o+ce or entity ho shall have noinglyper!itted, or failed to prevent, said violation shall be held liable as

principals- # $A?@

CHAPTER VII

“MUTUAL BENE'IT ASSOCIATIONS ANDTRUSTS 'OR CHARITABLE USES

“TITLE (



C)*+te, VIIMUTUAL BENE'IT ASSOCIATIONS AND TRUSTS 'OR CHARITABLE USES

Tit(e $MUTUAL BENE'IT ASSOCIATIONS

Section 3#&. Any society, association or corporation, ithout capital stoc, for!edor organi/ed not for prot but !ainly for the purpose of paying sic benets to!e!bers, or of furnishing nancial support to !e!bers hile out of e!ploy!ent, orof paying to relatives of deceased !e!bers of 'ed or any su! of !oney,

irrespective of hether such ai! or purpose is carried out by !eans of 'ed dues orassess!ents collected regularly fro! the !e!bers, or of providing, by the issuanceof certicates of insurance, pay!ent of its !e!bers of accident or life insurancebenets out of such 'ed and regular dues or assess!ents, but in no case shallinclude any society, association, or corporation ith such !utual benet features andhich shall be carried out purely fro! voluntary contributions collected not regularlyand or no 'ed a!ount fro! ho!soever !ay contribute, shall be non as a!utual benet association ithin the intent of this ode-

Any society, association, or corporation principally organi/ed as labor union shall begoverned by the *abor ode notithstanding any !utual benet feature provisions inits charter as incident to its organi/ation-

8n no case shall a !utual benet association be organi/ed and authori/ed to transactbusiness as a charitable or benevolent organi/ation, and henever it has this featureas incident to its e'istence, the corresponding charter provision shall be revised toconfor! ith the provision of this section- Mutual benet association, alreadylicensed to transact business as such on the date this ode beco!es eCective,having charitable or benevolent feature shall abandon such incidental purpose uponeCectivity of this ode if they desire to continue operating as such !utual benetassociations- (As a!ended by .residential 2ecree o- 3599)

“MUTUAL BENE'IT ASSOCIATIONS

&@- 5E;- Any society, association or corporation, ithout capitalstoc, for!ed or organi/ed not for prot but !ainly for the purpose of paying sic benets to !e!bers, or of furnishing nancial support to!e!bers hile out of e!ploy!ent, or of paying to relatives of deceased !e!bers of 'ed or any su! of !oney, irrespective of hether such ai! or purpose is carried out by !eans of 'ed dues orassess!ents collected regularly fro! the !e!bers, or of providing,by the issuance of certicates of insurance, pay!ent of its !e!bersof accident or life insurance benets out of such 'ed and regulardues or assess!ents, but in no case shall include any society,association, or corporation ith such !utual benet features andhich shall be carried out purely fro! voluntary contributionscollected not regularly andor no 'ed a!ount fro! ho!soever !aycontribute, shall be non as a !utual benet association ithin theintent of this ode-

Any society, association, or corporation principally organi/ed as alabor union shall be governed by the *abor ode notithstanding any!utual benet feature provisions in its charter as incident to itsorgani/ation-

8n no case shall a !utual benet association be organi/ed andauthori/ed to transact business as a charitable or benevolentorgani/ation, and henever it has this feature as incident to itse'istence, the corresponding charter provision shall be revised toconfor! ith the provision of this section- Mutual benet association,already licensed to transact business as such on the date this ode

beco!es eCective, having charitable or benevolent feature shallabandon such incidental purpose upon eCectivity of this ode if theydesire to continue operating as such !utual benet associations- #$A?@

SEC. 4&4. A !utual benet association, before it !ay transact as



Section 3#$. A !utual benet association, before it !ay transact as such, !ust rstsecure a license fro! the o!!issioner- he application for such license shall beled ith the o!!issioner together ith certied true copies of the articles of incorporation or the constitution and by%las of the association, and all a!end!entsthereto, and such other docu!ents or testi!onies as the o!!issioner !ay reBuire-

o license shall be granted to a !utual benet association until the o!!issionershall have been satised by such e'a!ination as !ay !ae and such evidence as he!ay reBuire that the association is Bualied under e'isting las to operate andtransact business as such- he o!!issioner !ay refuse to issue a license to any!utual benet association if, in his 1udg!ent, such refusal ill best pro!ote theinterest of the !e!bers of such association and of the people of this country- Anylicense issued shall e'pire on the last day of Lune of the year folloing its issuanceand, upon proper application, !ay be reneed if the association is continuing toco!ply ith e'isting las, rules and regulations, orders, instructions, rulings anddecisions of the o!!issioner- @very association receiving any such license shall besub1ect to the supervision of the o!!issioner7 .rovided, hat no such license shallbe granted to any such association if such association has no actuary-

All !utual benet association e'isting and licensed as such under the provisions of Article @ight, hapter Forty%#ne of the Revised Ad!inistrative ode, as a!ended byAct o- ;<3G, shall, upon eCectivity of this ode, surrender their respective licensesto the o!!issioner and apply for ne licenses under the provisions of this code if they still desire to continue operating as such !utual benet associations-

Section 3#%. o !utual benet association shall be issued a license to operate assuch unless it has constituted and established a ?uaranty Fund by depositing iththe o!!issioner an initial !ini!u! a!ount of ten thousand pesos in cash, or ingovern!ent securities ith a total value eBual to such a!ount, to anser for anyvalid benet clai! of any of its !e!bers-

All !oneys received by the o!!issioner for this purpose !ust be deposited by hi!in interest%bearing deposits ith any ban or bans authori/ed to transact business inthe .hilippines for the account of the particular association constituting the ?uaranty

such, !ust rst secure a license fro! the o!!issioner- heapplication for such license shall be led ith the o!!issionertogether ith certied true copies of the articles of incorporation orthe constitution and bylas of the association, and all a!end!entsthereto, and such other docu!ents or testi!onies as theo!!issioner !ay reBuire-

o license shall be granted to a !utual benet association until theo!!issioner shall have been satised by such e'a!ination as he!ay !ae and such evidence as he !ay reBuire that the associationis Bualied under e'isting las to operate and transact business assuch- he o!!issioner !ay refuse to issue a license to any !utualbenet association if, in his 1udg!ent, such refusal ill best pro!otethe interest of the !e!bers of such association and of the people of this country- Any license issued shall e'pire on the last day of 2ece!ber of the third year folloing its issuance (.reviously: on thelast day of Lune of the year folloing its issuance) and, upon properapplication, !ay be reneed if the association is continuing toco!ply ith e'isting las, rules and regulations, orders, instructions,

rulings and decisions of the o!!issioner- @very associationreceiving any such license shall be sub1ect to the supervision of theo!!issioner: Provided, hat no such license shall be granted to anysuch association if such association has no actuary-

(2@*@@2 .R#V8&8#&: All !utual benet association e'isting andlicensed as such under the provisions of Article @ight, hapter Forty%#ne of the Revised Ad!inistrative ode, as a!ended by Act o-;<3G, shall, upon eCectivity of this ode, surrender their respectivelicenses to the o!!issioner and apply for ne licenses under theprovisions of this code if they still desire to continue operating assuch !utual benet associations- D portion of &ec- ;63)

“SEC. 4&"- o !utual benet association shall be issued a license tooperate as such unless it has constituted and established a ?uarantyFund by depositing ith the o!!issioner an initial !ini!u! a!ountof Five !illion pesos (.9,EEE,EEE-EE) in cash (.reviously: 3E,EEE-EE),or in govern!ent securities ith a total value eBual to such a!ount,



Fund-

Any accrual to such fund, be it interest earned or dividend additions on !oneys orsecurities so deposited, !ay, ith the prior approval of the o!!issioner, be

ithdran by the association if there is no pending benet clai! against it, includinginterest thereon or dividend additions thereto-

he o!!issioner, prior to or after licensing a !utual benet association, !ayreBuire such association to increase its ?uaranty Fund fro! the initial !ini!u!a!ount reBuired to an a!ount eBual to at least ten per centu! of its assets, if suchassets e'ceed one hundred thousand pesos, but in no case shall such increasee'ceed the !a'i!u! a!ount of capital invest!ent reBuired of a do!estic insuranceco!pany under section to hundred and three of this ode- (As a!ended by.residential 2ecree o- 3599)

Section 3#3. @very !utual benet association licensed to do business as such shallissue !e!bership certicates to its !e!bers specifying the benets to hich such!e!bers are entitled-

&uch certicates, together ith the articles of incorporation of the association or itsconstitution and by%las, and all e'isting las as !ay be pertinent shall constitutethe agree!ent, as of the date of its issuance, beteen the association and the!e!ber- he !e!bership certicate shall be in a for! previously approved by the

o!!issioner-

Section 3#4. A !utual benet association !ay, by reinsurance agree!ent, cede inhole or in part any individual ris or riss under certicates of insurance issued byit, only to a life insurance co!pany authori/ed to transact business or to aprofessional reinsurer authori/ed to accept life riss in the .hilippines7 .rovided, hat

to anser for any valid benet clai! of any of its !e!bers-

All !oneys received by the o!!issioner for this purpose !ust bedeposited by hi! in interest%bearing deposits ith any ban or bansauthori/ed to transact business in the .hilippines for the account of the particular association constituting the ?uaranty Fund-

Any accrual to such fund, be it interest earned or dividend additionson !oneys or securities so deposited, !ay, ith the prior approval of the o!!issioner, be ithdran by the association if there is nopending benet clai! against it, including interest thereon ordividend additions thereto-

he o!!issioner, prior to or after licensing a !utual benetassociation, !ay reBuire such association to increase its ?uarantyFund fro! the initial !ini!u! a!ount reBuired to an a!ount eBual tothe capital invest!ent reBuired of an e'isting do!estic insuranceco!pany under &ection GE6 of this ode- (.reviously: a!ount eBual

to at least ten per centu! of its assets, if such assets e'ceed onehundred thousand pesos, but in no case shall such increase e'ceedthe !a'i!u! a!ount of capital invest!ent reBuired of a do!esticinsurance co!pany under section to hundred and three of thisode-)

SEC. 4&!- @very !utual benet association licensed to do businessas such shall issue !e!bership certicates to its !e!bers specifyingthe benets to hich such !e!bers are entitled-

&uch certicates, together ith the articles of incorporation of theassociation or its constitution and bylas, and all e'isting las as!ay be pertinent shall constitute the agree!ent, as of the date of itsissuance, beteen the association and the !e!ber- he !e!bershipcerticate shall be in a for! previously approved by theo!!issioner- D # $A?@

SEC. 4&7- A !utual benet association !ay, by reinsuranceagree!ent, cede in hole or in part any individual ris or riss undercerticates of insurance issued by it, only to a life insurance co!panyauthori/ed to transact business or to a professional reinsurer



copy of the draft of such reinsurance agree!ent shall be sub!itted to theo!!issioner for his approval- he association !ay tae credit for the reserves onsuch ceded riss to the e'tent reinsured-

Section 3#". he constitution or by%las of a !utual benet association !ustdistinctly state the purpose for hich dues andor assess!ents are !ade andcollected and the portion thereof hich !ay be used for e'penses-

2eath benet and other relief funds shall be created and used e'clusively for payingbenets due the !e!bers under their respective !e!bership certicates- A generalfund shall lieise be created and used for e'penses of ad!inistration of theassociation-

Section 3#!. @very outstanding !e!bership certicate !ust have, after three fullyears of being continuously in force, an eBuity value eBuivalent to at least fty percentu! of the total !e!bership dues collected thereon-

Section 3#7. @very !utual benet association !ust accu!ulate and !aintain, outof the periodic dues collected fro! its !e!bers, su+cient reserves for the pay!entof clai!s or obligations for hich it shall hold funds in securities satisfactory to theo!!issioner consisting of bonds of the ?overn!ent of the .hilippines, or any of itspolitical subdivisions and instru!entalities, or in such other good securities as !aybe approved by the o!!issioner-

he reserve liability shall be established in accordance ith acturial procedures and

authori/ed to accept life riss in the .hilippines: Provided, hat a copyof the draft of such reinsurance agree!ent shall be sub!itted to theo!!issioner for his approval- he association !ay tae credit forthe reserves on such ceded riss to the e'tent reinsured- # $A?@

SEC. 4&- he constitution or bylas of a !utual benet association!ust distinctly state the purpose for hich dues andor assess!entsare !ade and collected and the portion thereof hich !ay be usedfor e'penses-

2eath benet and other relief funds shall be created and usede'clusively for paying benets due the !e!bers under theirrespective !e!bership certicates- A general fund shall lieise becreated and used for e'penses of ad!inistration of the association-

A !utual benet association shall only !aintain free and unassignedsurplus of not !ore than tenty percent (GEK) of its total liabilities asveried by the o!!issioner- Any a!ount in e'cess shall be returned

to the !e!bers by ay of dividends, enhancing the eBuity value orproviding benets in ind and other relevant services- 8n addition,sub1ect to the approval of the o!!issioner, a !utual benetassociation !ay allocate a portion for capacity building and researchand develop!ent such as developing ne products and services,upgrading and i!proving operating syste!s and eBuip!ent andcontinuing !e!ber education- (@JA22@2 .ARA?RA.$)

SEC. 4&#- @very outstanding !e!bership certicate !ust have aneBuity value eBuivalent to at least fty percent (9EK) of the total

contributions collected thereon- he eBuity value only applies to basiclife insurance product and e'cludes optional products- D (@JA22@2&@@@)

“SEC. 4$&- @very !utual benet association !ust accu!ulate and!aintain, out of the periodic dues collected fro! its !e!bers,su+cient reserves for the pay!ent of clai!s or obligations for hichit shall hold funds in securities satisfactory to the o!!issionerconsisting of bonds of the ?overn!ent of the .hilippines, or any of itspolitical subdivisions and instru!entalities, or in such other good



shall be approved by the o!!issioner-

he articles of incorporation or the constitution and by%las of a !utual benetassociation !ust provide that if its reserve as to all or any class of certicates

beco!es i!paired, its board of directors or trustees !ay reBuire that there shall bepaid by the !e!bers to the association the a!ount of the !e!bers0 eBuitableproportion of such deciency as ascertained by said board and that if the pay!ent benot !ade it shall stand as an indebtedness against the !e!bership certicates of the defaulting !e!bers and dra interest not to e'ceed ve per centu! per annu!co!pounded annually-

Section 3#. A !utual benet association !ay invest such portion of its funds asshall not be reBuired to !eet pending clai!s and other obligations in any of theclasses of invest!ents or types of securities in hich life insurance co!panies doingbusiness in the .hilippines !ay invest-

8t !ay also grant loans to !e!bers on the security of a pledge or chattel !ortgageof personal properties of the borroers, or in the absence thereof, on the security of the !e!bership certicate of the borroing !e!bers, in hich event such loan shallbeco!e a rst lien on the proceed thereof-

Section 3##. he o!!issioner or any of his duly designated representatives, shallhave the poer of visitation, audit and e'a!ination into the aCairs, nancialcondition, and !ethods of doing business of all !utual benet associations, and heshall cause such e'a!ination to be !ade at least once every to years or heneverit !ay be dee!ed proper and necessary- Free access to the boos, records anddocu!ents of the association shall be accorded to the o!!issioner, to hisrepresentatives, in such !anner that the o!!issioner or his representatives !ayreadily verify or deter!ine the true aCairs, nancial condition, and !ethod of doingbusiness of such association- 8n the course of such e'a!ination, the o!!issioner orhis duly designated representatives shall have authority to ad!inister oaths and taetesti!ony or other evidence on any !atter relating to the aCairs of the association-

All !inutes of the proceedings of the board of directors or trustees of the association,and those of the regular or special !eetings of the !e!bers, shall be tae, and acopy thereof, in @nglish or in .ilipino, shall be sub!itted to the o!!issioner0srepresentatives or e'a!iners in the course of such e'a!ination-

securities as !ay be approved by the o!!issioner-

he reserve liability shall be established in accordance ith actuarialprocedures and shall be approved by the o!!issioner-

he articles of incorporation or the constitution and bylas of a!utual benet association !ust provide that if its reserve as to all orany class of certicates beco!es i!paired, its board of directors ortrustees !ay reBuire that there shall be paid by the !e!bers to theassociation the a!ount of the !e!bers> eBuitable proportion of suchdeciency as ascertained by said board and that if the pay!ent benot !ade it shall stand as an indebtedness against the !e!bershipcerticates of the defaulting !e!bers and dra interest not toe'ceed ve percent (9K) per annu! co!pounded annually- #$A?@

“SEC. 4$$. A !utual benet association !ay invest such portion of its funds as shall not be reBuired to !eet pending clai!s and other

obligations in any of the classes of invest!ents or types of securitiesin hich life insurance co!panies doing business in the .hilippines!ay invest-

8t !ay also grant loans to !e!bers on the security of a pledge orchattel !ortgage of personal properties of the borroers, or in theabsence thereof, on the security of the !e!bership certicate of theborroing !e!bers, in hich event such loan shall beco!e a rstlien on the proceeds thereof- # $A?@

SEC. 4$%. he o!!issioner or any of his duly designatedrepresentatives, shall have the poer of visitation, audit and

e'a!ination into the aCairs, nancial condition, and !ethods of doingbusiness of all !utual benet associations, and he shall cause suche'a!ination to be !ade at least once every to (G) years orhenever it !ay be dee!ed proper and necessary- Free access to theboos, records and docu!ents of the association shall be accorded tothe o!!issioner, or to his representatives, in such !anner that theo!!issioner or his representatives !ay readily verify or deter!inethe true aCairs, nancial condition, and !ethod of doing business of such association- 8n the course of such e'a!ination, theo!!issioner or his duly designated representatives shall haveauthority to ad!inister oaths and tae testi!ony or other evidence



A copy of the ndings of such e'a!ination, together ith the reco!!endations of the o!!issioner, shall be furnished the association for its infor!ation andco!pliance, and the sa!e shall be taen up i!!ediately in the !eetings of theboard of directors or trustees and of the !e!bers of the association-

Section 4&&. @very !utual benet association shall, annually on or before thethirtieth day of April of each year, render to the o!!issioner an annual state!entin such for! and details as !ay be prescribed by the o!!issioner, signed andsorn to by the president, secretary, treasurer, and actuary of the association,shoing the e'act condition of its aCairs on the preceding thirty%rst day of 2ece!ber-

Section 4&$. o !oney, aid or benet to be paid, provided or tendered by any!utual benet association, shall be liable to attach!ent, garnish!ent, or otherprocess, or be sei/ed, taen, appropriated, or applied by any legal or eBuitableprocess to pay any debt of liability of a !e!ber or beneciary, or any other personho !ay have a right thereunder, either before or after pay!ent-

Section 4&%. Any !e!ber of a !utual benet association shall have the right at allti!es to change the beneciary or beneciaries or add another beneciary or otherbeneciaries in accordance ith the rules and regulations of the association unlesshe has e'pressly aived this right in the !e!bership certicate- @very association!ay, under such rules as it !ay adopt, li!it the scope of beneciaries and providethat no beneciary shall have or obtain any vested interest in the proceeds of anycerticate until the certicate has beco!e due and payable under the ter!s of the!e!bership certicate-

on any !atter relating to the aCairs of the association-

All !inutes of the proceedings of the board of directors or trustees of the association, and those of the regular or special !eetings of the!e!bers, shall be taen, and a copy thereof, in @nglish or in .ilipino,shall be sub!itted to the o!!issioner>s representatives ore'a!iners in the course of such e'a!ination-

A copy of the ndings of such e'a!ination, together ith thereco!!endations of the o!!issioner, shall be furnished theassociation for its infor!ation and co!pliance, and the sa!e shall betaen up i!!ediately in the !eetings of the board of directors ortrustees and of the !e!bers of the association- # $A?@

“SEC. 4$3. @very !utual benet association shall, annually on orbefore the thirtieth day of April of each year, render to theo!!issioner an annual state!ent in such for! and detail as !ay beprescribed by the o!!issioner, signed and sorn to by the

president, secretary, treasurer, and actuary of the association,shoing the e'act condition of its aCairs on the preceding thirty%rstday of 2ece!ber- D # $A?@

SEC. 4$4. o !oney, aid or benet to be paid, provided or tenderedby any !utual benet association, shall be liable to attach!ent,garnish!ent, or other process, or be sei/ed, taen, appropriated, orapplied by any legal or eBuitable process to pay any debt or liabilityof a !e!ber or beneciary, or any other person ho !ay have aright thereunder, either before or after pay!ent- # $A?@

SEC. 4$". Any !e!ber of a !utual benet association shall havethe right at all ti!es to change the beneciary or beneciaries or addanother beneciary or other beneciaries in accordance ith the rulesand regulations of the association unless he has e'pressly aived thisright in the !e!bership certicate- @very association !ay, undersuch rules as it !ay adopt, li!it the scope of beneciaries andprovide that no beneciary shall have or obtain any vested interest inthe proceeds of any certicate until the certicate has beco!e due



Section 4&3. Any chapter a+liate independently licensed as a !utual benetassociation !ay consolidate or !erge ith any other si!ilar chapter a+liate or ith

the !other association-

Section 4&4. Any !utual benet association !ay be converted into and licensed asa !utual life insurance co!pany by co!plying ith the reBuire!ents of the pertinentprovisions of this ode and sub!itting the specic plan for such conversion to theo!!issioner for his approval- &uch plan, as approved, shall then be sub!itted tothe !e!bers either in the regular !eeting or in a special !eeting called for thepurpose for their adoption- he a+r!ative vote of at least to%thirds of all the!e!bers shall be necessary in order to consider such plan as adopted-

o such conversion shall tae eCect unless and until approved by the o!!issioner-

Section 4&". o !utual benet association shall be dissolved ithout rst notifyingthe o!!issioner and furnishing hi! ith a certied copy of the resolutionauthori/ing the dissolution, duly adopted by the a+r!ative vote of to%thirds of the!e!bers at a !eeting called for that purpose, the nancial state!ents as of thedate of the resolution, and such other papers or docu!ents as !ay be reBuired bythe o!!issioner-

o dissolution shall proceed until and unless approved by the o!!issioner and allproceedings in connection thereith shall be itnessed and attested by his dulydesignated representative-

o !utual benet association shall be o+cially declared as dissolved until after theo!!issioner so certies that all outstanding clai!s against the association havebeen duly settled and liBuidated-

and payable under the ter!s of the !e!bership certicate- #$A?@

SEC. 4$!- Any chapter a+liate independently licensed as a !utualbenet association !ay consolidate or !erge ith any other si!ilarchapter a+liate or ith the !other association- D # $A?@

SEC. 4$7- Any !utual benet association !ay be converted intoand licensed as a !utual life insurance co!pany by co!plying iththe reBuire!ents of the pertinent provisions of this ode andsub!itting the specic plan for such conversion to the o!!issionerfor his approval- &uch plan, as approved, shall then be sub!itted tothe !e!bers either in the regular !eeting or in a special !eetingcalled for the purpose for their adoption- he a+r!ative vote of atleast to%thirds (G;) of all the !e!bers shall be necessary in orderto consider such plan as adopted-

o such conversion shall tae eCect unless and until approved by

the o!!issioner- # $A?@

SEC. 4$- o !utual benet association shall be dissolved ithoutrst notifying the o!!issioner and furnishing hi! ith a certiedcopy of the resolution authori/ing the dissolution, duly adopted by thea+r!ative vote of to%thirds (G;) of the !e!bers at a !eetingcalled for that purpose, the nancial state!ents as of the date of theresolution, and such other papers or docu!ents as !ay be reBuiredby the o!!issioner-

o dissolution shall proceed until and unless approved by theo!!issioner and all proceedings in connection thereith shall beitnessed and attested by his duly designated representative-

o !utual benet association shall be o+cially declared as dissolveduntil after the o!!issioner so certies that all outstanding clai!sagainst the association have been duly settled and liBuidated- #$A?@

“SEC. 4$#. he o!!issioner shall, after notice and hearing, havethe poer either to suspend or revoe the license issued to a !utual



Section 4&!. he o!!issioner shall after notice and hearing, have the poereither to suspend or revoe the licensed issued to a !utual benet association if hends that the association has:

(a) failed to co!ply ith any provision of this ode7

(b) failed to co!ply ith any other la or regulation obligatory uponit7

(c) failed to co!ply ith any order, ruling, instruction, reBuire!ent,or reco!!endation of the o!!issioner7

(d) e'ceeded its poer to the pre1udice of its !e!bers7

(e) conducted its business fraudulently or ha/ardously7

(f) rendered its aCairs and condition to one of insolvency7 or

(g) failed to carry out its ai!s and purposes for hich it asorgani/ed due to any cause-

After receipt of the order fro! the o!!issioner suspending or revoing the license,the association !ust i!!ediately e'ert eCorts to re!ove such cause or causes hichbrought about the order, and, upon proper shoing, !ay apply ith theo!!issioner for the lifting of the order and restoration or revival of the license sorevoed or suspended-

Section 4&7. For failure to re!ove such cause or causes hich brought about thesuspension or revocation of the license of a !utual benet association, theo!!issioner shall apply under this ode for an order fro! the proper court toliBuidate such association-

he provisions of titles fourteen and fteen, chapter three, pertaining to theappoint!ent of a conservator and proceedings upon insolvency of an insuranceco!pany, shall, insofar as practicable, apply to !utual benet associations-

Section 4&. o secure the enforce!ent of any provision under this title, the

benet association if he nds that the association has:

(a) Failed to co!ply ith any provision of this ode7

(b) Failed to co!ply ith any other la or regulation obligatory upon

it7

(c) Failed to co!ply ith any order, ruling, instruction, reBuire!entor reco!!endation of the o!!issioner7

(d) @'ceeded its poer to the pre1udice of its !e!bers7

(e) onducted its business fraudulently or ha/ardously7

(f) Rendered its aCairs and condition to one of insolvency7 or

(g) Failed to carry out its ai!s and purposes for hich it asorgani/ed due to any cause-

After receipt of the order fro! the o!!issioner suspending orrevoing the license, the association !ust i!!ediately e'ert eCortsto re!ove such cause or causes hich brought about the order and,upon proper shoing, !ay apply ith the o!!issioner for the liftingof the order and restoration or revival of the license so revoed orsuspended- # $A?@

SEC. 4%&. For failure to re!ove such cause or causes hich broughtabout the suspension or revocation of the license of a !utual benetassociation, the o!!issioner shall apply under this ode for anorder fro! the proper court to liBuidate such association-

he provisions of itles 35 and 39, hapter 888, pertaining to theappoint!ent of a conservator and proceedings upon insolvency of aninsurance co!pany shall, insofar as practicable, apply to !utualbenet associations- # $A?@

SEC. 4%$. o secure the enforce!ent of any provision under thistitle, the o!!issioner !ay issue such rules, rulings, instructions,



o!!issioner !ay issue such rules, rulings, instructions, orders and circulars,sub1ect to the approval of the &ecretary of Finance-

Section 4&#. he violation of any provision of this title shall sub1ect the person

violating or the o+cer of the association responsible therefor to a ne of note'ceeding one thousand pesos, or i!prison!ent of not e'ceeding three years, orboth such ne and i!prison!ent, at the discretion of the court-

Tit(e %TRUSTS 'OR CHARITABLE USES

Section 4$&. he ter! "trust for charitable uses", ithin the intent of this ode,shall include, all the real or personal properties or funds, as ell as those acBuiredith the fruits or inco!e therefro! or in e'change or substitution thereof, given to orreceived by any person, corporation, association, foundation, or entity, e'cept theational ?overn!ent, it instru!entalities or political subdivisions, for charitable,benevolent, educational, pious, religious, or other uses for the benet of the public atlarge or a particular portion thereof or for the benet of an indenite nu!ber of persons-

Section 4$$. he ter! "trustee" shall include any individual, corporation,association, foundation, or entity, e'cept the ational ?overn!ent, itsinstru!entalities or political subdivisions, in charge of, or acting for, or concerned

ith the ad!inistration of, the trust referred to in the section i!!ediately precedingand ith the proper application of trust property-

Section 4$%. he ter! "trust property" shall include all real or personal properties or

orders and circulars-

SEC. 4%%- he violation of any provision of this title shall sub1ect theperson violating or the o+cer of the association responsible thereforto a ne of not less than en thousand pesos (.3E,EEE-EE), ori!prison!ent of not e'ceeding three (;) years, or both such ne andi!prison!ent, at the discretion of the court- (.reviously: ne of note'ceeding one thousand pesos)

“SEC. 4%3- All provisions of this ode governing life insuranceco!panies and such other provisions henever practicable andnecessary, shall be applicable to !utual benet associations- (@J.R#V8&8#)

8*@ G

RI&& F#R $AR8AH*@ I&@&

SEC. 4%4. he ter! trust for charitable uses, ithin the intent of thisode, shall include, all the real or personal properties or funds, as ellas those acBuired ith the fruits or inco!e therefro! or in e'changeor substitution thereof, given to or received by any person,corporation, association, foundation, or entity, e'cept the ational?overn!ent, its instru!entalities or political subdivisions, forcharitable, benevolent, educational, pious, religious, or other uses forthe benet of the public at large or a particular portion thereof or forthe benet of an indenite nu!ber of persons- D # $A?@

SEC. 4%". he ter! trustee shall include any individual, corporation,association, foundation, or entity, e'cept the ational ?overn!ent, its

instru!entalities or political subdivisions, in charge of, or acting for,or concerned ith the ad!inistration of, the trust referred to in thesection i!!ediately preceding and ith the proper application of trust property- # $A?@

SEC. 4%!. he ter! trust property shall include all real or personal



funds pertaining to the trust as ell as those acBuired ith the fruits or inco!etherefro! or in e'change or substitution thereof-

Section 4$3. All trustees shall, before entering in the perfor!ance of the duties of

their trust, obtain a certicate of registration fro! the o!!issioner-

rustees ho are already discharging the duties of their trust on the date this odebeco!es eCective !ay continue as such, sub1ect to the provisions of this ode-

All provisions of this ode governing !utual benet associations and such otherprovisions herein, henever practicable and necessary, shall be applicable to trustsfor charitable uses-

properties or funds pertaining to the trust as ell as those acBuiredith the fruits or inco!e therefro! or in e'change or substitutionthereof- # $A?@

SEC. 4%7. All trustees shall, before entering in the perfor!ance of the duties of their trust, obtain a certicate of registration fro! theo!!issioner- he registration shall e'pire on 2ece!ber ;3 of thethird year folloing its issuance unless it is reneed- (A22@2)

(2@*@@2: rustees ho are already discharging the duties of theirtrust on the date this ode beco!es eCective !ay continue as such,sub1ect to the provisions of this ode-)

All provisions of this ode governing !utual benet associations andsuch other provisions herein, henever practicable and necessary,shall be applicable to trusts for charitable uses-

SEC. 4%. he treasurer of a charitable trust shall le a delity bond

in the a!ount co!!ensurate ith the value of the trust property inhis custody, as !ay be deter!ined by the o!!issioner- -NEW

$A.@R V888

RI& HI&8@&& 8 ?@@RA*

&@- 5G6- An insurance co!pany !ay engage in li!ited trustbusiness, consisting of !anaging funds pertaining only to retire!entand pre%need plans, provided it has secured a license to do so fro!the Hango &entral ng .ilipinas- his trust business shall be separateand distinct fro! the general business of the insurance co!pany andshall be sub1ect to rules and regulations as !ay be pro!ulgated bythe Hango &entral ng .ilipinas in consultation ith the o!!issioner-

$A.@R 8

R@?8&RA8#, R@&.#&8H8*88@& A2#V@R&8?$ #F &@*F%R@?I*A#RN#R?A8OA8#&

&@ 5;E- he o!!issioner shall have the poer to register as a



self%regulatory organi/ation, or otherise grant licenses, and toregulate, supervise, e'a!ine, suspend or otherise discontinue, as acondition for the operation of organi/ations hose operations arerelated to or connected ith the insurance !aret such as, but notli!ited to, associations of insurance co!panies, hether life or non%life, reinsurers, actuaries, agents, broers, dealers, !utual benet

associations, trusts, rating agencies, and other persons regulated bythe o!!issioner, hich are engaged in the business regulated bythis ode-

he o!!issioner !ay prescribe rules and regulations hich arenecessary or appropriate in the public interest or for the protection of investors to govern self%regulatory organi/ations and otherorgani/ations licensed or regulated pursuant to the authority grantedhereunder including, but not li!ited to, the reBuire!ent of cooperation ithin and a!ong all participants in the insurance !aretto ensure transparency and facilitate e'change of infor!ation-

&@- 5;3- An association cannot be registered as a self%regulatoryorgani/ation unless the o!!issioner deter!ines that:

(a) he association is so organi/ed and has the capacity to be able tocarry out the purposes of this ode and to co!ply ith, and toenforce co!pliance by its !e!bers and persons associated ith its!e!bers, ith the provisions of this ode, the rules and regulationsthereunder, and the rules of the association-

(b) he rules of the association, notithstanding anything in theorporation ode to the contrary, provide the folloing:

(3) Pualications and the disBualications on !e!bership of theassociation7

(G) A fair representation of its !e!bers to serve on the board of directors of the association and the ad!inistration of its aCairs, andthat any natural person associated ith a 1uridical entity that is a!e!ber shall also be dee!ed to be a !e!ber for this purpose7

(;) he president of the association and at least to (G) independentdirectors as !e!bers of the board of directors of the association7



(5) @Buitable allocation of reasonable dues, fees, and other chargesa!ong !e!bers and other persons using any facility or syste! hichthe association operates or controls7

(9) he prevention of fraudulent and !anipulative acts and practicesto protect the insuring public and the pro!otion of 1ust and eBuitableprinciples of business7

(<) Me!bers and persons associated ith its !e!bers sub1ect todiscipline for violation of any provision of this ode, the rules orregulations thereunder, or the rules of the association7

() Fair procedure for the disciplining of !e!bers and personsassociated ith !e!bers7 and

(4) he prohibition or li!itation of access to services oCered by theassociation or a !e!ber thereof-

&@- 5;G- A self%regulatory organi/ation !ay e'a!ine and verify theBualications of an applicant to beco!e a !e!ber in accordance ithprocedures established by the rules of the association-

A self%regulatory organi/ation shall deny !e!bership or conditionthe !e!bership of an entity, if it does not !eet the standards of nancial responsibility, operational capability, training, e'perience, orco!petence that are prescribed by the rules of the association7 or hasengaged, and there is a reasonable lielihood it ill again engage, inacts or practices inconsistent ith 1ust and eBuitable principles of fairtrade-

A self%regulatory organi/ation !ay deny !e!bership to an entity notengaged in a type of business in hich the rules of the associationreBuire !e!bers to be engaged-

&@- 5;;- Ipon the ling of an application for registration as a self%regulatory organi/ation under this title, the o!!issioner shall haveninety (6E) days ithin hich to either grant registration or institute aproceeding to deter!ine hether registration should be denied- 8nthe event proceedings are instituted, the o!!issioner shall haveto hundred seventy (GE) days ithin hich to conclude suchproceedings at hich ti!e he shall, by order, grant or deny such



registration-

&@- 5;5- @very self%regulatory organi/ation shall co!ply ith theprovisions of this ode, the rules and regulations thereunder, and itson rules, and enforce co!pliance thereith by its !e!bers, personsassociated ith its !e!bers or its participants, notithstanding any

provision of the orporation ode to the contrary-

&@- 5;9- @ach self%regulatory organi/ation shall sub!it to theo!!issioner for prior approval any proposed rule or a!end!entthereto, together ith a concise state!ent of the reason and eCect of the proposed a!end!ent-

Jithin si'ty (<E) days after sub!ission of a proposed a!end!ent,the o!!issioner shall, by order, approve the proposed a!end!ent-#therise, the sa!e !ay be !ade eCective by the self%regulatoryorgani/ation-

8n the event of an e!ergency reBuiring action for the protection of the insuring public, a self%regulatory organi/ation !ay put a proposeda!end!ent into eCect su!!arily: Provided, however, hat a copy of the sa!e shall be i!!ediately sub!itted to the o!!issioner-

he o!!issioner is further authori/ed, if after !aing appropriatereBuest in riting to a self%regulatory organi/ation that suchorgani/ation eCect on its on behalf specied changes in its rules andpractices and, after due notice and hearing, it deter!ines that suchchanges have not been eCected, and that such changes arenecessary, by rule or regulation or by order, !ay alter, abrogate orsupple!ent the rules of such self%regulatory organi/ation insofar asnecessary or appropriate to eCect such changes in respect of such!atters as:

(a) &afeguards in respect of the nancial responsibility of !e!bersand adeBuate provision against the evasion of nancial responsibilitythrough the use of corporate for!s or special partnerships7

(b) he supervision of !aret practices7



(c) he !anner, !ethod and place of soliciting business7

(d) he 'ing of reasonable rates of fees, interest, listing and othercharges, but not rates of co!!ission7 and self%regulatoryorgani/ation7 and

(e) he supervision, auditing and disciplining of !e!bers-

8n addition to the general poers of the o!!issioner over theentities under supervision, the o!!issioner, after due notice andhearing, is authori/ed, in the public interest and to protect theinsuring public:

(3) o suspend for a period not e'ceeding telve (3G) !onths or torevoe the registration of a self%regulatory organi/ation, or to censureor i!pose li!itations on the activities, functions and operations of such self%regulatory organi/ation, if the o!!ission nds that such aself%regulatory organi/ation has illfully violated or is unable toco!ply ith any provision of this ode or of the rules and regulationsthereunder, or its on rules, or has failed to enforce co!pliancethereith by a !e!ber of, person associated ith a !e!ber, or aparticipant in such self%regulatory organi/ation7

(G) o e'pel fro! a self%regulatory organi/ation any !e!ber thereof or any participant therein ho is found to have illfully violated anyprovision of this ode or suspend for a period not e'ceeding telve(3G) !onths for violation of any provision of this ode or any otherla ad!inistered by the o!!ission, or the rules and regulationsthereunder, or eCected, directly or indirectly, any transaction for anyperson ho, such !e!ber or participant had reason to believe, asviolating in respect of such transaction any of such provisions7 and

(;) o re!ove fro! o+ce or censure any o+cer or director of a self%regulatory organi/ation if it nds that such o+cer or director hasviolated any provision of this ode, any other la ad!inistered by theo!!issioner, the rules or regulations thereunder and the rules of such self%regulatory organi/ation, or has abused his authority, orithout reasonable 1ustication or e'cuse has failed to enforceco!pliance ith any of such provisions-

&@- 5;<- (a) A self%regulatory organi/ation is authori/ed to discipline



a !e!ber of or participant in such self%regulatory organi/ation, or anyperson associated ith a !e!ber, including suspending or e'pellingsuch !e!ber or participant, or suspending or barring such personfro! being associated ith a !e!ber, if engaged in acts or practicesinconsistent ith 1ust and eBuitable principles of fairness or in illfulviolation of any provision of this ode, any other la ad!inistered by

the o!!ission, the rules or regulations thereunder, or the rules of the self%regulatory organi/ation- 8n any disciplinary proceeding by aself%regulatory organi/ation (other than a su!!ary proceedingpursuant to paragraph (b) of this section) the self%regulatoryorgani/ation shall bring specic charges, provide notice to the personcharged, aCord the person charged ith an opportunity to defendagainst the charges, and eep a record of the proceedings- Adeter!ination to i!pose a disciplinary sanction shall be supported bya ritten state!ent of the oCense, a su!!ary of the evidencepresented and a state!ent of the sanction i!posed-

(b) A self%regulatory organi/ation !ay su!!arily:

(3) &uspend a !e!ber, participant or person associated ith a!e!ber ho has been or is e'pelled or suspended fro! any otherself%regulatory organi/ation7 or

(G) &uspend a !e!ber ho the self%regulatory organi/ation nds tobe in such nancial or operating di+culty that the !e!ber orparticipant cannot be per!itted to continue to do business as a!e!ber ith safety to investors, creditors, other !e!bers,participants or the self%regulatory organi/ation: Provided, hat theself%regulatory organi/ation i!!ediately noties the o!!ission of the action taen- Any person aggrieved by a su!!ary actionpursuant to this paragraph shall be pro!ptly aCorded an opportunity

for a hearing by the association in accordance ith the precedingparagraph- he o!!issioner, by order, !ay stay a su!!ary actionon his on or upon application by any person aggrieved thereby, if the o!!issioner deter!ines su!!arily or after due notice andhearing (hich hearing !ay consist solely of the sub!ission of a+davits or presentation of oral argu!ents), that a stay is consistentith the public interest and the protection of the insuring public-

(c) A self%regulatory organi/ation shall pro!ptly notify theo!!ission of any disciplinary sanction on any !e!ber thereof orparticipant therein, any denial of !e!bership or participation in such



C)*+te, VIIITHE INSURANCE COMMISSIONER

Tit(e $ADMINISTRATIVE AND AD/UDICATORY POWERS

Section 4$4. he 8nsurance o!!issioner shall have the duty to see that all lasrelating to insurance, insurance co!panies and other insurance !atters, !utual

benet associations, and trusts for charitable uses are faithfully e'ecuted and toperfor! the duties i!posed upon hi! by this ode, and shall, notithstanding anye'isting las to the contrary, have sole and e'clusive authority to regulate theissuance and sale of variable contracts as dened in section to hundred thirty%toand to provide for the licensing of persons selling such contracts, and to issue suchreasonable rules and regulations governing the sa!e-

he o!!issioner !ay issue such ruling, instructions, circulars, orders and decisionas he !ay dee! necessary to secure the enforce!ent of the provisions of this ode,sub1ect to the approval of the &ecretary of Finance- @'cept as otherise specied,decisions !ade by the o!!issioner shall be appealable to the &ecretary of Finance-

organi/ation, or the i!position of any disciplinary sanction on aperson associated ith a !e!ber or a bar of such person fro!beco!ing so associated- Jithin thirty (;E) days after such notice, anyaggrieved person !ay appeal to the o!!issioner fro!, or theo!!issioner on its on !otion ithin such period, !ay instituterevie of, the decision of the self%regulatory organi/ation, at the

conclusion of hich, after due notice and hearing (hich !ay consistsolely of revie of the record before the self%regulatory organi/ation),the o!!issioner shall a+r!, !odify or set aside the sanction- 8nsuch proceeding, the o!!issioner shall deter!ine hether theaggrieved person has engaged or o!itted to engage in the acts andpractices as found by the self%regulatory organi/ation, hether suchacts and practices constitute illful violations of this ode, any otherla ad!inistered by the o!!ission, the rules or regulationsthereunder, or the rules of the self%regulatory organi/ation asspecied by such organi/ation, hether such provisions ere appliedin a !anner consistent ith the purposes of this ode, and hether,ith due regard for the public interest and the protection of investors,the sanction is e'cessive or oppressive- % @J

$A.@R

$@ 8&IRA@ #MM8&&8#@R

8*@ l A2M88&RA8V@ A2 A2LI28A#RN .#J@R&

&@- 5;- he 8nsurance o!!issioner shall be appointed by the.resident of the Republic of the .hilippines for a ter! of si' (<) yearsithout reappoint!ent and ho shall serve as such until thesuccessor shall have been appointed and Bualied- 8f the 8nsuranceo!!issioner is re!oved before the e'piration of his ter! of o+ce,

the reason for the re!oval !ust be published- (@J .ARA?RA.$)

he 8nsurance o!!issioner shall have the duty to see that all lasrelating to insurance, insurance co!panies and other insurance!atters, !utual benet associations, and trusts for charitable usesare faithfully e'ecuted and to perfor! the duties i!posed upon hi!by this ode, and shall, notithstanding any e'isting las to thecontrary, have sole and e'clusive authority to regulate the issuanceand sale of variable contracts as dened in &ection G;4 hereof and toprovide for the licensing of persons selling such contracts, and to



issue such reasonable rules and regulations governing the sa!e-

he o!!issioner !ay issue such rulings, instructions, circulars,orders and decisions as !ay be dee!ed necessary to secure theenforce!ent of the provisions of this ode, to ensure the e+cientregulation of the insurance industry in accordance ith global best

practices and to protect the insuring public- @'cept as otherisespecied, decisions !ade by the o!!issioner shall be appealable tothe &ecretary of Finance- (.reviously: sub1ect to the approval of the&ecretary of Finance-)

8n addition to the foregoing, the o!!issioner shall have thefolloing poers and functions:

(a) For!ulate policies and reco!!endations on issues concerningthe insurance industry, advise ongress and other govern!ent

agencies on all aspects of the insurance industry and proposelegislation and a!end!ents thereto7

(b) Approve, re1ect, suspend or revoe licenses or certicates of registration provided for by this ode7

(c) 8!pose sanctions for the violation of las and the rules,regulations and orders issued pursuant thereto7

(d) .repare, approve, a!end or repeal rules, regulations and orders,and issue opinions and provide guidance on and superviseco!pliance ith such rules, regulations and orders7

(e) @nlist the aid and support of, andor deputi/e any and allenforce!ent agencies of the govern!ent in the i!ple!entation of itspoers and functions under this ode7

(f) 8ssue cease and desist orders to prevent fraud or in1ury to theinsuring public7

(g) .unish for conte!pt of the o!!issioner, both direct andindirect, in accordance ith the pertinent provisions of and penalties



prescribed by the Rules of ourt7

(h) o!pel the o+cers of any registered insurance corporation orassociation to call !eetings of stocholders or !e!bers thereof under its supervision7

(i) 8ssue subpoena duces tecum and su!!on itnesses to appear inany proceeding of the o!!ission and, in appropriate cases, orderthe e'a!ination, search and sei/ure of all docu!ents, papers, lesand records, ta' returns, and boos of accounts of any entity orperson under investigation as !ay be necessary for the properdisposition of the cases before it, sub1ect to the provisions of e'istinglas7

(1) &uspend or revoe, after proper notice and hearing, the license orcerticate of authority of any entity or person under its regulation,upon any of the grounds provided by la7

() onduct an e'a!ination to deter!ine co!pliance ith las andregulations if the circu!stances so arrant as deter!ined byappropriate rules and regulations7

(l) 8nvestigate not oftener than once a year fro! the last date of e'a!ination to deter!ine hether an institution is conducting itsbusiness on a safe and sound basis: Provided, hat, thedecienciesirregularities found by or discovered by an audit shall bei!!ediately addressed7

(!) 8nBuire into the solvency and liBuidity of the institutions underits supervision and enforce pro!pt corrective action7

(n) o retain and utili/e, in addition to its annual budget, all fees,charges and other inco!e derived fro! the regulation of insuranceco!panies and other supervised persons or entities7

(o) o ' and assess fees, charges and penalties as theo!!issioner !ay nd reasonable in the e'ercise of regulation7 and

(p) @'ercise such other poers as !ay be provided by la as ell asthose hich !ay be i!plied fro!, or hich are necessary or



Section 4$". 8n addition to the ad!inistrative sanctions provided elsehere in thisode, the 8nsurance o!!issioner is hereby authori/ed, at his discretion, to i!poseupon the insurance co!panies, their directors andor o+cers andor agents, for anyillful failure or refusal to co!ply ith, or violation of any provision of this ode, orany order, instruction, regulation, or ruling of the 8nsurance o!!issioner, or anyco!!ission or irregularities, andor conducting business in an unsafe or unsound!anner as !ay be deter!ined by the 8nsurance o!!issioner, the folloing:

(a) nes not in e'cess of ve hundred pesos a day7 and

(b) suspension, or after due hearing, re!oval of directors andoro+cers andor agents-

Section 4$!. he o!!issioner shall have the poer to ad1udicate clai!s andco!plaints involving any loss, da!age or liability for hich in insurer !ay beanserable under any ind of policy or contract of insurance, or for hich such

insurer !ay be liable under a contract of suretyship, or for hich a reinsurer !ay besued under any contract of reinsurance it !ay have entered into7 or for hich a!utual benet association !ay be held liable under the !e!bership certicates ithas issued to its !e!bers, here the a!ount of any such loss, da!age or liability,e'cluding interest, cost and attorney0s fees, being clai!ed or sued upon any ind of insurance, bond, reinsurance contract, or !e!bership certicate does not e'ceed inany single clai! one hundred thousand pesos-

incidental to the e'press poers granted the o!!ission to achievethe ob1ectives and purposes of this ode-

he o!!ission shall inde!nify the o!!issioner, 2eputyo!!issioner, and other o+cials of the o!!ission, includingpersonnel perfor!ing supervision and e'a!ination functions, for all

costs and e'penses reasonably incurred by such persons inconnection ith any civil or cri!inal actions, suits or proceedings tohich they !ay be !ade a party to by the reason of the perfor!anceof their duties and functions, unless they are nally ad1udged in suchactions, suits or proceedings to be liable for negligence or!isconduct-

8n the event of settle!ent or co!pro!ise, inde!nication shall beprovided only in connection ith such !atters covered by thesettle!ent as to hich the o!!ission is advised by e'ternal counselthat the persons to be inde!nied did not co!!it any negligence or!isconduct:

he costs and e'penses incurred in defending the afore!entionedaction, suit or proceeding !ay be paid by the o!!ission in advanceof the nal disposition of such action, suit or proceeding upon receiptof an undertaing by or on behalf of the o!!issioner, 2eputyo!!issioner, o+cer or e!ployee to repay the a!ount advancedshould it ulti!ately be deter!ined by the o!!ission that the personis not entitled to be inde!nied- (@J)

“SEC. 43. 8n addition to the ad!inistrative sanctions providedelsehere in this ode, the 8nsurance o!!issioner is herebyauthori/ed, at his discretion, to i!pose upon insurance co!panies,their directors andor o+cers andor agents, for any illful failure or

refusal to co!ply ith, or violation of any provision of this ode, orany order, instruction, regulation, or ruling of the 8nsuranceo!!issioner, or any co!!ission or irregularities, andor conductingbusiness in an unsafe or unsound !anner as !ay be deter!ined bythe 8nsurance o!!issioner, the folloing:

(a) Fines not less than Five thousand pesos (.9,EEE-EE) and not !orethan o hundred thousand pesos (.GEE,EEE-EE)7 and (.reviously:nes not in e'cess of ve hundred pesos a day)



he insurer or surety !ay, in the sa!e action le a counterclai! against the insuredor the obligee-

he insurer or surety !ay also le a cross%clai! against a party for any clai! arisingout of the transaction or occurrence that is the sub1ect !atter of the original action orof a counterclai! therein-

Jith leave of the o!!issioner, an insurer or surety !ay le a third%party co!plaintagainst its reinsurers for inde!nication, contribution, subrogation or any otherrelief, in respect of the transaction that is the sub1ect !atter of the original actionled ith the o!!issioner-

he party ling an action pursuant to the provisions of this section thereby sub!itshis person to the 1urisdiction of the o!!issioner- he o!!issioner shall acBuire 1urisdiction over the person of the i!pleaded party or parties in accordance ith and

pursuant to the provisions of the Rules of ourt-

he authority to ad1udicate granted to the o!!issioner under this section shall beconcurrent ith that of the civil courts, but the ling of a co!plaint ith theo!!issioner shall preclude the civil courts fro! taing cogni/ance of a suitinvolving the sa!e sub1ect !atter-

Any decision, order or ruling rendered by the o!!issioner after a hearing shall havethe force and eCect of a 1udg!ent- Any party !ay appeal fro! a nal order, ruling ordecision of the o!!issioner by ling ith the o!!issioner ithin thirty days fro!receipt of copy of such order, ruling or decision a notice of appeal and ith the&upre!e ourt telve printed or !i!eographed copies of a petition for certiorari or

revie of such order, ruling or decision, as the case !ay be- A copy of the petitionshall be served upon the o!!issioner and upon the adverse party, and proof of service thereof attached to the original of the petition-

(b) &uspension, or after due hearing, re!oval of directors andoro+cers andor agents-

“SEC. 43#. he o!!issioner shall have the poer to ad1udicateclai!s and co!plaints involving any loss, da!age or liability forhich an insurer !ay be anserable under any ind of policy or

contract of insurance, or for hich such insurer !ay be liable under acontract of suretyship, or for hich a reinsurer !ay be sued underany contract of reinsurance it !ay have entered into7 or for hich a!utual benet association !ay be held liable under the !e!bershipcerticates it has issued to its !e!bers, here the a!ount of anysuch loss, da!age or liability, e'cluding interest, cost and attorney>sfees, being clai!ed or sued upon any ind of insurance, bond,reinsurance contract, or !e!bership certicate does not e'ceed inany single clai! Five !illion pesos (.9,EEE,EEE-EE)- (previously:3EE,EEE-EE)

he poer of the o!!issioner does not cover the relationshipbeteen the insurance co!pany and its agentsbroers but is li!itedto ad1udicating clai!s and co!plaints led by the insured against theinsurance co!pany-

he o!!issioner !ay authori/e any o+cer or group of o+cersunder hi! to conduct investigation, inBuiry andor hearing and decideclai!s and he !ay issue rules governing the conduct of ad1udicationand resolution of cases- he Rules of ourt shall have suppletoryapplication- % A22@2

(2@*@@2: he insurer or surety !ay, in the sa!e action le acounterclai! against the insured or the obligee-

he insurer or surety !ay also le a cross%clai! against a party forany clai! arising out of the transaction or occurrence that is thesub1ect !atter of the original action or of a counterclai! therein-

Jith leave of the o!!issioner, an insurer or surety !ay le a third%party co!plaint against its reinsurers for inde!nication,contribution, subrogation or any other relief, in respect of thetransaction that is the sub1ect !atter of the original action led ith



As soon as a decision, order or ruling has beco!e nal and e'ecutory, theo!!issioner shall !otu propio or on !otion of the interested party, issue a rit of e'ecution reBuired the sheriC or the proper o+cer to ho! it is directed to e'ecutesaid decision, order or aard, pursuant to Rule thirty%nine of the Rules of ourt-

For the purpose of any proceeding under this section, the o!!issioner, or anyo+cer thereof designated by hi!, e!poered to ad!inister oaths and a+r!ation,subpoena itnesses, co!pel their attendance, tae evidence, and reBuire theproduction of any boos, papers, docu!ents, or contracts or other records hich arerelevant or !aterial to the inBuiry- 8n case of contu!acy by, or refusal to obey asubpoena issued to any person, the o!!issioner !ay invoe the aid of any court of

rst instance ithin the 1urisdiction of hich such proceeding is carried on, heresuch person resides or carries on his on business, in reBuiring the attendance andtesti!ony of itnesses and the production of boos, papers, docu!ents, contracts orother records- And such court !ay issue an order reBuiring such person to appearbefore the o!!issioner, or o+cer designated by the o!!issioner, there toproduce records, if so ordered or to give testi!ony touching the !atter in Buestion-Any failure to obey such order of the court !ay be published by such court as aconte!pt thereof-

A full and co!plete record shall be ept of all proceedings had before theco!!issioner, or the o+cers thereof designated by hi!, and all testi!ony shall betaen don and transcribed by a stenographer appointed by the o!!issioner-

A transcribed copy of the evidence and proceeding, or any specic part thereof, of any hearing taen by a stenographer appointed by the o!!issioner, being certiedby such stenographer to be a true and correct transcript of the testi!ony on thishearing of a particular itness, or of a specic proof thereof, carefully co!pared byhi! fro! his original notes, and to be a correct state!ent of evidence andproceeding had in such hearing so purporting to be taen and subscribed, !ay bereceived as evidence by the o!!issioner and by any court ith the sa!e eCect asif such stenographer ere present and testied to the facts so certied- (As a!endedby .residential 2ecree o- 3599)

the o!!issioner-)

he party ling an action pursuant to the provisions of this sectionthereby sub!its his person to the 1urisdiction of the o!!issioner- he o!!issioner shall acBuire 1urisdiction over the person of thei!pleaded party or parties in accordance ith and pursuant to theprovisions of the Rules of ourt-

he authority to ad1udicate granted to the o!!issioner under thissection shall be concurrent ith that of the civil courts, but the lingof a co!plaint ith the o!!issioner shall preclude the civil courtsfro! taing cogni/ance of a suit involving the sa!e sub1ect !atter-

Any decision, order or ruling rendered by the o!!issioner after ahearing shall have the force and eCect of a 1udg!ent- Any party !ayappeal fro! a nal order, ruling or decision of the o!!issioner byling ith the o!!issioner ithin thirty (;E) days fro! receipt of

copy of such order, ruling or decision a notice of appeal to the ourtof Appeals in the !anner provided for in the Rules of ourt forappeals fro! the Regional rial ourt to the ourt of Appeals-(.R@V8#I&*N: notice of appeal and ith the &upre!e ourt telveprinted or !i!eographed copies of a petition for certiorari or revieof such order, ruling or decision, as the case !ay be- A copy of thepetition shall be served upon the o!!issioner and upon the adverseparty, and proof of service thereof attached to the original of thepetition-)

2@*@@2: As soon as a decision, order or ruling has beco!e nal ande'ecutory, the o!!issioner shall !otu propio or on !otion of theinterested party, issue a rit of e'ecution reBuired the sheriC or theproper o+cer to ho! it is directed to e'ecute said decision, order oraard, pursuant to Rule thirty%nine of the Rules of ourt-

For the purpose of any proceeding under this section, theo!!issioner, or any o+cer thereof designated by hi! is e!poeredto ad!inister oaths and a+r!ation, subpoena itnesses, co!pel



Tit(e %

'EES AND OTHER SOURCES O' 'UNDS

Section 4$7. (3) For the issuance or reneal of certicates of authority, licenses andcerticates of registration, pursuant to pertinent provisions of this ode, theo!!issioner shall collect and receive fees hich shall be not less than thefolloing:

For each certicate of authority issued to an insurance co!panydoing business in the .hilippines, to hundred pesos-

their attendance, tae evidence, and reBuire the production of anyboos, papers, docu!ents, or contracts or other records hich arerelevant or !aterial to the inBuiry-

(2@*@@2 &@@@: 8n case of contu!acy by, or refusal to obey asubpoena issued to any person, the o!!issioner !ay invoe the aid

of any court of rst instance ithin the 1urisdiction of hich suchproceeding is carried on, here such person resides or carries on hison business, in reBuiring the attendance and testi!ony of itnessesand the production of boos, papers, docu!ents, contracts or otherrecords- And such court !ay issue an order reBuiring such person toappear before the o!!issioner, or o+cer designated by theo!!issioner, there to produce records, if so ordered or to givetesti!ony touching the !atter in Buestion- Any failure to obey suchorder of the court !ay be published by such court as a conte!ptthereof-)

A full and co!plete record shall be ept of all proceedings hadbefore the o!!issioner, or the o+cers thereof designated by hi!,

and all testi!ony shall be taen don and transcribed by astenographer appointed by the o!!issioner-

8n order to pro!ote party autono!y in the resolution of cases, theo!!issioner shall establish a syste! for resolving cases through theuse of alternative dispute resolution- D A22@2

(2@*@@2 .ARA?RA.$: A transcribed copy of the evidence andproceeding, or any specic part thereof, of any hearing taen by astenographer appointed by the o!!issioner, being certied by suchstenographer to be a true and correct transcript of the testi!ony onthis hearing of a particular itness, or of a specic proof thereof,

carefully co!pared by hi! fro! his original notes, and to be a correctstate!ent of evidence and proceeding had in such hearing sopurporting to be taen and subscribed, !ay be received as evidenceby the o!!issioner and by any court ith the sa!e eCect as if suchstenographer ere present and testied to the facts so certied-)



For each special certicate of authority issued to a servicinginsurance co!pany, one hundred pesos-

For each license issued to a general agent of an insurance co!pany,fty pesos-

For each license issued to an insurance agent, tenty%ve pesos-

For each license issued to an agent of variable contract policy,tenty%ve pesos-

For each license issued to an insurance broer, one hundred pesos-

For each license issued to an reinsurance broer, one hundred pesos-

For each license issued to an insurance ad1uster, one hundred pesos-

For each certicate of registration issued to an actuary, fty pesos-

For each certicate of registration issued to a resident agent, ftypesos-

For each license issued to a rating organi/ation, one hundred pesos-

For each certicate of registration issued to a non%life co!panyunderriter, fty pesos-

For each license issued to a !utual benet association, ten pesos-

For each certicate of registration issued to a trust for charitableuses, ten pesos-

8*@ G

F@@& A2 #$@R &#IR@& #F FI2&

&@- 55E- (a) For the issuance or reneal of certicates of authority,licenses and certicates of registration, pursuant to pertinentprovisions of this ode, the o!!issioner shall collect and receivefees hich shall be not less than the folloing:

For each certicate of authority issued to an insurance co!panydoing business in the .hilippines, o hundred pesos (.GEE-EE)-

For each special certicate of authority issued to a servicinginsurance co!pany, #ne hundred pesos (.3EE-EE)-

For each license issued to a general agent of an insurance co!pany,Fifty pesos (.9E-EE)-

For each license issued to an insurance agent, enty%ve pesos(.G9-EE)-

For each license issued to an agent of variable contract policy, enty%ve pesos (.G9-EE)-

For each license issued to an insurance broer, #ne hundred pesos(.3EE-EE)-

For each license issued to a reinsurance broer, #ne hundred pesos(.3EE-EE)-



All certicates of authority and all other licenses, as ell as allcerticates of registration, issued to any person, partnership,association or corporation under the pertinent provisions of this odefor hich no e'piration date has been prescribed, shall e'pire on thelast day of Lune of each year and shall be reneed annually uponapplication therefor and pay!ent of the corresponding fee, if thelicensee or holder of such license or certicate is continuing toco!ply ith all the applicable provisions of e'isting las, and of rules, instructions, orders and decisions of the o!!issioner-

(G) For the ling of the annual state!ent referred to in section tohundred tenty%three, the o!!issioner shall collect and receivefro! the insurance co!pany so ling a fee of ve hundred pesos7.rovided, hat a ne of one hundred pesos shall be i!posed andcollected by the o!!issioner for each ee of delay, or any fractionthereof, in the ling of the annual state!ent-

For the ling of annual state!ent referred to in section four hundred,the o!!issioner shall collect and receive fro! the !utual benet

association so ling a fee of ten pesos7 .rovided, hat a ne of tenpesos shall be i!posed and collected by the o!!issioner for eachee of delay, or any fraction thereof, in the ling of the annualstate!ent-

(;) For the e'a!ination prescribed in section to hundred forty%si',the o!!issioner shall collect and receive fees according to thea!ount of its total assets, in the case of a do!estic co!pany, or of its assets in the .hilippines, in the case of a foreign co!pany, asfollos:

For each license issued to an insurance ad1uster, #ne hundred pesos(.3EE-EE)-

For each certicate of registration issued to an actuary, Fifty pesos(.9E-EE)-

For each certicate of registration issued to a resident agent, Fiftypesos (.9E-EE)-

For each license issued to a rating organi/ation, #ne hundred pesos(.3EE-EE)-

For each certicate of registration issued to a non%life co!panyunderriter, Fifty pesos (.9E-EE)-

For each license issued to a !utual benet association, en pesos(.3E-EE)-

For each certicate of registration issued to a trust for charitableuses, en pesos (.3E-EE)-

All certicates of authority and all other licenses, as ell as allcerticates of registration, issued to any person, partnership,association or corporation under the pertinent provisions of this odefor hich no e'piration date has been prescribed, shall e'pire on the

last day of 2ece!ber of the third year fro! its issuance and shall bereneed upon application therefor and pay!ent of the correspondingfee, if the licensee or holder of such license or certicate is continuingto co!ply ith all the applicable provisions of e'isting las, and of rules, instructions, orders and decisions of the o!!issioner-

(b) For the ling of the annual state!ent referred to in &ection GG6,the o!!issioner shall collect and receive fro! the insuranceco!pany so ling a fee of not less than Five hundred pesos (.9EE-EE):Provided, hat a ne of not less than #ne hundred pesos (.3EE-EE)shall be i!posed and collected by the o!!issioner for each ee of



(a) o !illion pesos or !ore but less than four !illion pesos,Four hundred pesos7

(b) Four !illion pesos or !ore but less than si' !illion pesos,@ight hundred pesos7

(c) &i' !illion pesos or !ore but less than eight !illion pesos,#ne thousand to hundred pesos7

(d) @ight !illion pesos or !ore but less than ten !illionpesos, #ne thousand si' hundred pesos7

(e) en !illion pesos or !ore, o thousand pesos7

.rovided, hat if the said e'a!ination is !ade in places outside theMetropolitan Manila area, besides these fees, the o!!issioner shallreBuire of the co!pany e'a!ined the pay!ent of the actual andnecessary travelling and subsistence e'penses of the e'a!iner ore'a!iners concerned-

For the e'a!ination prescribed in section three hundred ninety%nine,the o!!issioner shall collect and receive a !ini!u! fee of onehundred pesos fro! the !utual benet association e'a!ined7.rovided, hat if such association has total assets of !ore than onehundred thousand pesos, an additional fee of ten pesos for every ftythousand pesos in e'cess thereof shall be i!posed7 .rovided, Further, hat such fee shall not e'ceed to thousand pesos-

(5) For the ling of an application to ithdra fro! the .hilippinesunder title eighteen, the o!!issioner shall collect and receive fro!the foreign co!pany so ithdraing a fee of one thousand pesos-

(9) he o!!issioner !ay ' and collect fees or charges fordocu!ents, transcripts, or other !aterials hich !ay be furnished byhi! not in e'cess of reasonable cost- (As a!ended by .residential2ecree o- 3599)

delay, or any fraction thereof, in the ling of the annual state!ent-

For the ling of annual state!ent referred to in &ection 53;, theo!!issioner shall collect and receive fro! the !utual benetassociation so ling a fee of not less than en pesos (.3E-EE):Provided, hat a ne of not less than en pesos (.3E-EE) shall be

i!posed and collected by the o!!issioner for each ee of delay,or any fraction thereof, in the ling of the annual state!ent-

(c) For the e'a!ination prescribed in &ection G9;, the o!!issionershall collect and receive fees according to the a!ount of its totalassets, in the case of a do!estic co!pany, or of its assets in the.hilippines, in the case of a foreign co!pany, not less than thea!ount as follos:

(3) o !illion pesos or !ore but less than Four !illion pesos, Fourhundred pesos (.5EE-EE)7

(G) Four !illion pesos or !ore but less than &i' !illion pesos, @ighthundred pesos (.4EE-EE)7

(;) &i' !illion pesos or !ore but less than @ight !illion pesos, #nethousand to hundred pesos (.3,GEE-EE)7

(5) @ight !illion pesos or !ore but less than en !illion pesos, #nethousand si' hundred pesos (.3,<EE-EE)7

(9) en !illion pesos or !ore, o thousand pesos (.G,EEE-EE)7

Provided, hat if the said e'a!ination is !ade in places outside theMetropolitan Manila area, besides these fees, the o!!issioner shallreBuire of the co!pany e'a!ined the pay!ent of the actual andnecessary travelling and subsistence e'penses of the e'a!iner ore'a!iners concerned-

For the e'a!ination prescribed in &ection 53G, the o!!issionershall collect and receive a !ini!u! fee of not less than #ne hundredpesos (.3EE-EE) fro! the !utual benet association e'a!ined:Provided, hat if such association has total assets of !ore than #nehundred thousand pesos (.3EE,EEE-EE), an additional fee of not less



Section 4$. 8f the total e'penses of the 8nsurance o!!issioner for every scalyear e'ceed the aggregate a!ount of the fees collected under the pertinentprovisions of this ode, the e'cess shall be charged against the 8nsurance Fund,hich shall hereafter be created out of the proceeds of ta'es on insurance pre!iu!s!entioned in section to hundred fty%ve of the ational 8nternal Revenue ode, as

a!ended7 .rovided, hoever, hat pending the creation of said 8nsurance Fund, theprovisions of section to, three and four of Republic Act u!bered o $undred&eventy%Five, shall continue to re!ain in force and eCect-

MISCELLANEOUS PROVISIONS

Section 4$#. Any person, co!pany or corporation sub1ect to the supervision andcontrol of the o!!issioner ho violates any provision of this ode, for hich nopenalty is provided, shall be dee!ed guilty of a penal oCense, and upon convictionbe punished by a ne not e'ceeding ten thousand pesos or i!prison!ent of si'!onths, or both, at the discretion of the court-

8f the oCense is co!!itted by a co!pany or corporation, the o+cers, directors, orother persons responsible for its operation, !anage!ent, or ad!inistration, unless itcan be proved that they have taen no part in the co!!ission of the oCense, shalllieise be guilty of a penal oCense, and upon conviction be punished by a ne note'ceeding ten thousand pesos or i!prison!ent of si' !onths, or both, at thediscretion of the court-

than en pesos (.3E-EE) for every Fifty thousand pesos (.9E,EEE-EE)in e'cess thereof shall be i!posed:

(d) For the ling of an application to ithdra fro! the .hilippinesunder itle 34, the o!!issioner shall collect and receive fro! theforeign co!pany so ithdraing a fee of not less than #ne thousand

pesos (.3,EEE-EE)-

(e) he o!!issioner !ay ' and collect fees or charges fordocu!ents, transcripts, or other !aterials hich !ay be furnished byhi! not in e'cess of reasonable cost- D # $A?@

SEC. 44$- he o!!issioner, in accordance ith the rules andregulations of the 2epart!ent of Hudget and Manage!ent and otherrelevant regulatory agencies, shall source the salary, alloances andother e'penses fro! the retained a!ount of the fees, charges,penalties and other inco!e fro! the regulation of insuranceco!panies and other covered persons and entities, and fro! the

8nsurance Fund, hich is created out of the proceeds of ta'es oninsurance pre!iu!s !entioned in &ection G99 of the ational 8nternalRevenue ode, as a!ended- D @J

(2@*@@2 .R#V8&8#: 8f the total e'penses of the 8nsuranceo!!issioner for every scal year e'ceed the aggregate a!ount of the fees collected under the pertinent provisions of this ode, thee'cess shall be charged against the 8nsurance Fund, hich shallhereafter be created out of the proceeds of ta'es on insurancepre!iu!s !entioned in section to hundred fty%ve of the ational8nternal Revenue ode, as a!ended7 .rovided, hoever, hat

pending the creation of said 8nsurance Fund, the provisions of sectionto, three and four of Republic Act u!bered o $undred &eventy%Five, shall continue to re!ain in force and eCect-)

MISCELLANEOUS PROVISIONS

SEC. 44%. Any person, co!pany or corporation sub1ect to thesupervision and control of the o!!issioner ho violates any



Section 4%&. All cri!inal actions for the violation of any of the provisions of thisode shall prescribed after three years fro! the discovery of such violation: .rovided, hat such actions shall in any event prescribe after ten years fro! the co!!ission of such violation-

Section 4%$. Any person, partnership, association or corporation heretoforeauthori/ed, licensed or registered by the 8nsurance o!!issioner shall be dee!ed tohave been authori/ed, licensed or registered under the provisions of this ode andshall be governed by the provisions thereof: .rovided, hoever, hat here any suchperson, partnership, association or corporation is aCected by the ne reBuire!entsof this ode, said person, partnership association or corporation shall, unlessotherise herein provided, be given a period of one year fro! the eCectivity of thisode ithin hich to co!ply ith the sa!e-

Section 4%%. @'cept as e'pressly provided by this ode, all las or parts thereof inconsistent ith any provision of this ode shall be dee!ed repealed-

Section 4%3. &hould any provisions of this ode or any part thereof be declaredinvalid, the other provisions, so far as they are separable fro! the invalid ones, shallre!ain in force-

Section 4%4. his ode shall tae eCect i!!ediately

provision of this ode, for hich no penalty is provided, shall bedee!ed guilty of a penal oCense, and upon conviction be punished bya ne not e'ceeding o hundred thousand pesos (.GEE,EEE-EE) ori!prison!ent of si' (<) !onths, or both, at the discretion of the court-(previously: 3E,EEE-EE)

8f the oCense is co!!itted by a co!pany or corporation, theo+cers, directors, or other persons responsible for its operation,!anage!ent, or ad!inistration, unless it can be proved that theyhave taen no part in the co!!ission of the oCense, shall lieise beguilty of a penal oCense, and upon conviction be punished by a nenot e'ceeding o hundred thousand pesos (.GEE,EEE-EE) ori!prison!ent of si' (<) !onths, or both, at the discretion of the court-- (previously: 3E,EEE-EE)

SEC. 443. All cri!inal actions for the violation of any of the

provisions of this ode shall prescribe after three (;) years fro! thediscovery of such violation: Provided, hat such actions shall in anyevent prescribe after ten (3E) years fro! the co!!ission of suchviolation- D no change

SEC. 444. Any person, partnership, association or corporationheretofore authori/ed, licensed or registered by the o!!issionershall be dee!ed to have been authori/ed, licensed or registeredunder the provisions of this ode and shall be governed by theprovisions thereof: Provided, however, hat here any such person,partnership, association or corporation is aCected by the nereBuire!ents of this ode, said person, partnership, association orcorporation shall, unless otherise herein provided, be given a period

of one (3) year fro! the eCectivity of this ode ithin hich toco!ply ith the sa!e- no change

&@- 559- Transitory Provision- D Reneal of e'isting licenses,certicates of authority or accreditation hich ill e'pire on Lune ;E,GE3; shall be valid until 2ece!ber ;3, GE39- hereafter, renealshall be led on the last day of 2ece!ber every third year folloingthe date of e'piry of the license, certicate of authority oraccreditation- % @J



&@- 55<- Repealing lause- D @'cept as e'pressly provided by thisode, all las, decrees, orders, rules and regulations or parts thereof,inconsistent ith any provision of this ode shall be dee!edrepealed, a!ended or !odied accordingly- @J

&@- 55- !eparability lause- D 8f any provision of this ode or any

part hereof be declared invalid or unconstitutional, the re!ainder of the la or other provisions not otherise aCected shall re!ain validand subsisting- @J

&@- 554- his ode shall tae eCect fteen (39) days folloing itspublication in a nespaper of general circuation-Q @J

old vs new insuranceq code (as corrected)

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