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 defned in section three,
paragraph (a) of Republic Act u!bered Four "housand #ne $undred
"hirty%&i', #ther(ise )no(n as the "*and "ransportation and "ra+c
,ode-"
(b) ".assenger" is any fare paying person being transported and
conveyed in and by a !otor vehicle for transportation of passengers
for co!pensation, including persons e'pressly authori/ed by la( or
by the vehicle0s operator or his agents to ride (ithout fare-
(c) ""hird%.arty" is any person other than a passenger as defned in
this 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 o(ner or land transportation operator, as
li)e(ise defned herein, or his e!ployee in respect of death, bodily
in1ury, or da!age to property arising out of and in the course of
e!ploy!ent- (As a!ended by .residential 2ecree o- 3435 and
3643)
(d) "#(ner" or "Motor vehicle o(ner" !eans the actual legal o(ner of
a !otor vehicle, in (hose na!e such vehicle is duly registered (ith
the *and "ransportation ,o!!ission7
(e) "*and transportation operator" !eans the o(ner or o(ners of
!otor vehicles for transportation of passengers for co!pensation,
including school buses7
(f) "8nsurance policy" or ".olicy" refers to a contract of insurance
against passenger and thirty%party liability for death or bodily in1uries
and da!aged to property arising fro! !otor vehicle accidents- (As
a!ended by .residential 2ecree o- 3599 and 3435)
Section 374. 8t shall be unla(ful for any land transportation operator or o(ner of a
!otor vehicle to operate the sa!e in the public high(ays unless there is in force in
relation thereto a policy of insurance or guaranty in cash or surety bond issued in
accordance (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 defned in &ection ;, paragraph
(a) of Republic Act o- 53;<, other(ise )no(n as the =*and
"ransportation and "ra+c ,ode>-
:(b) Passenger is any fare paying person being transported and
conveyed in and by a !otor vehicle for transportation of passengers
for co!pensation, including persons e'pressly authori/ed by la( or
by the vehicle>s operator or his agents to ride (ithout fare-
:(c) Third party is any person other than a passenger as defned in
this 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 o(ner or land transportation operator, as
li)e(ise defned herein, or his e!ployee in respect of death, bodily
in1ury, 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 o(ner of a
!otor vehicle, in (hose na!e such vehicle is duly registered (ith the
*and "ransportation #+ce7
:(e) Land transportation operator !eans the o(ner or o(ners of
!otor vehicles for transportation of passengers for co!pensation,
including school buses-
:(f) Insurance policy or Policy refers to a contract of insurance against
passenger and third%party liability for death or bodily in1uries and
da!age to property arising fro! !otor vehicle accidents- #
,$A?@
SEC. 37. 8t shall be unla(ful for any land transportation operator
or o(ner of a !otor vehicle to operate the sa!e in the public
high(ays unless there is in force in relation thereto a policy of
insurance or guaranty in cash or surety bond issued in accordance
(ith the provisions of this chapter to inde!nify the death, bodily
in1ury, andAor da!age to property of a third%party or passenger, as
andAor da!age to property of a third%party or passenger, as the case !ay be, arising
fro! 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 or
surety 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 or
rene(al of registration of any !otor vehicle (ithout frst reBuiring fro! the land
transportation operator or !otor vehicle o(ner concerned the presentation and fling
of a substantiating docu!entation in a for! approved by the ,o!!issioner
evidencing that the policy of insurance or guaranty in cash or surety bond reBuired
by this chapter is in eCect- (As a!ended by .residential 2ecree o- 3599)
Section 377. @very land transportation operator and every o(ner of a !otor vehicle
shall, before applying for the registration or rene(al of registration of any !otor
vehicle, at his option, either secure an insurance policy or surety bond issued by any
insurance co!pany authori/ed by the ,o!!issioner or !a)e a cash deposit in such
a!ount as herein reBuired as li!it of liability for purposes specifed in section three
hundred seventy%four-
(3) 8n the case of a land transportation operator the insurance
guaranty in cash or surety bond shall cover liability for death or
bodily in1uries of third%parties andAor passengers arising out of the
use of such vehicle in the a!ount not less than t(elve thousand
pesos 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 in the
follo(ing scale
(a) Motor vehicles (ith an authori/ed capacity of t(enty%si'
or !ore passengers: Fifty thousand pesos7
(b) Motor vehicles (ith an authori/ed capacity of fro! t(elve
to t(enty%fve passengers: Forty thousand pesos7
(c) Motor vehicles (ith an authori/ed capacity of fro! si' to
eleven passengers: "hirty thousand pesos7
the case !ay be, arising fro! the use thereof- D # ,$A?@
SEC. 3. "he ,o!!issioner shall furnish the *and "ransportation
#+ce (ith a list of insurance co!panies authori/ed to issue the
policy of insurance or surety bond reBuired by this chapter- D #
,$A?@
SEC. 3#. "he *and "ransportation #+ce shall not allo( the
registration or rene(al of registration of any !otor vehicle (ithout
frst reBuiring fro! the land transportation operator or !otor vehicle
o(ner concerned the presentation and fling of a substantiating
docu!entation in a for! approved by the ,o!!issioner evidencing
that the policy of insurance or guaranty in cash or surety bond
reBuired by this chapter is in eCect- % D # ,$A?@
:&@,- ;6E- @very land transportation operator and every o(ner of a
!otor vehicle shall, before applying for the registration or rene(al of
registration of any !otor vehicle, at his option, either secure an
insurance policy or surety bond issued by any insurance co!pany
authori/ed by the ,o!!issioner or !a)e a cash deposit in such
a!ount as herein reBuired as li!it of liability for purposes specifed in
&ection ;4F-
:(a) 8n the case of a land transportation operator, the insurance
guaranty in cash or surety bond shall cover liability for death or bodily
in1uries of third%parties andAor 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 in
the follo(ing scale:
:(3) Motor vehicles (ith an authori/ed capacity of t(enty%si' (G<) or
!ore passengers: Fifty thousand pesos (.9E,EEE-EE)7
:(G) Motor vehicles (ith an authori/ed capacity of fro! t(elve (3G) to
t(enty%fve (G9) passengers: Forty thousand pesos (.5E,EEE-EE)7
:(;) Motor vehicles (ith an authori/ed capacity of fro! si' (<) to
eleven (33) passengers: "hirty thousand pesos (.;E,EEE-EE)7
:(5) Motor vehicles (ith an authori/ed capacity of fve (9) or less
(d) Motor vehicles (ith an authori/ed capacity of fve or less
passengers: Five thousand pesos !ultiplied by the authori/ed
capacity-
.rovided, ho(ever, "hat such cash deposit !ade to, or surety bond
posted (ith, the ,o!!issioner shall be resorted to by hi! in cases of
accidents the inde!nities for (hich to third%parties andAor
passengers are not settled accordingly by the land transportation
operator and, in that event, the said cash deposit shall be
replenished or such surety bond shall be restored (ith si'ty days
after i!pair!ent or e'piry, as the case !ay be, by such land
transportation operator, other(ise, he shall secure the insurance
policy reBuired by this chapter- "he aforesaid cash deposit !ay be
invested by the ,o!!issioner in readily !ar)etable govern!ent
bonds andAor securities-
(G) 8n the case of an o(ner of a !otor vehicle, the insurance or
guaranty in cash or surety bond shall cover liability for death or in1ury
to third parties in an a!ount not less than that set forth in the
follo(ing 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 bet(een 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 the
pay!ent of clai!s for death or bodily in1uries (ith the coverages set forth herein- (As
a!ended by .residential 2ecree o- 3599 and 3435)
passengers: Five thousand pesos (.9,EEE-EE) !ultiplied by the
authori/ed capacity-
:Provided, however, "hat such cash deposit !ade to, or surety bond
posted (ith, the ,o!!issioner shall be resorted to by hi! in cases of
accidents the inde!nities for (hich to third%parties andAor passengers
are not settled accordingly by the land transportation operator and, in
that event, the said cash deposit shall be replenished or such surety
bond shall be restored (ithin si'ty (<E) days after i!pair!ent or
e'piry, as the case !ay be, by such land transportation operator,
other(ise, he shall secure the insurance policy reBuired by this
chapter- "he aforesaid cash deposit !ay be invested by the
,o!!issioner in readily !ar)etable govern!ent bonds, andAor
securities-
:(b) 8n the case of an o(ner of a !otor vehicle, the insurance or
guaranty in cash or surety bond shall cover liability for death or in1ury
to third%parties in an a!ount not less than that set forth in the
follo(ing 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) $eavy: "hirty thousand pesos (.;E,EEE-EE)-
:(G) #ther .rivate Vehicles
:(i) "ricycles, !otorcycles and scooters: "(elve thousand pesos
(.3G,EEE-EE)7
:(ii) Vehicles (ith an unladen (eight of G,<EE )ilos or less: "(enty
thousand pesos (.GE,EEE-EE)7
:(iii) Vehicles (ith an unladen (eight of bet(een G,<E3 )ilos and
;,6;E )ilos: "hirty thousand pesos (.;E,EEE-EE)7 and
Section 37. Any clai! for death or in1ury to any passenger or third party pursuant
to the provisions of this chapter shall be paid (ithout the necessity of proving fault or
negligence of any )ind7 .rovided, "hat for purposes of this section
(i) "he total inde!nity in respect of any person shall not e'ceed fve
thousand pesos7
(ii) "he follo(ing proofs of loss, (hen sub!itted under oath, shall be
su+cient evidence to substantiate the clai!:
(a) .olice report of accident and
(b) 2eath certifcate and evidence su+cient to establish the
proper payee or
(c) Medical report and evidence of !edical or hospital
disburse!ent in respect of (hich refund is clai!ed7
(iii) ,lai! !ay be !ade against one !otor vehicle only- 8n the case of
an occupant of a vehicle, clai! shall lie against the insurer of the
vehicle in (hich the occupant is riding, !ounting or dis!ounting
fro!- 8n any other case, clai! shall lie against the insurer of the
directly oCending vehicle- 8n all cases, the right of the party paying
the clai! to recover against the o(ner of the vehicle responsible for
the accident shall be !aintained-
:(iv) Vehicles (ith an unladen (eight over ;,6;E )ilos: Fifty thousand
pesos (.9E,EEE-EE)-
:"he ,o!!issioner !ay, if (arranted, set forth schedule of
inde!nities for the pay!ent of clai!s for death or bodily in1uries (ith
the coverages set forth herein- # ,$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 (ithout
the 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 less
than Fifteen thousand pesos (.39,EEE-EE)7 (.reviously 9,EEE-EE)
:(b) "he follo(ing proofs of loss, (hen sub!itted under oath, shall be
su+cient evidence to substantiate the clai!:
:(3) .olice report of accident7 and
:(G) 2eath certifcate and evidence su+cient to establish the proper
payee7 or
:(;) Medical report and evidence of !edical or hospital disburse!ent
in 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 the
vehicle in (hich the occupant is riding, !ounting or dis!ounting
fro!- 8n any other case, clai! shall lie against the insurer of the
directly oCending vehicle- 8n all cases, the right of the party paying
the clai! to recover against the o(ner of the vehicle responsible for
the accident shall be !aintained-
SEC. 3#%. o land transportation operator or o(ner of !otor
vehicle shall be unreasonably denied the policy of insurance or surety
bond reBuired by this chapter by the insurance co!panies authori/ed
to issue the sa!e, other(ise, the *and "ransportation #+ce shall
Section 37#. o land transportation operator or o(ner of !otor vehicle shall be
unreasonably denied the policy of insurance or surety bond reBuired by this chapter
by the insurance co!panies authori/ed to issue the sa!e, other(ise, the *and
"ransportation ,o!!ission shall reBuire fro! said land transportation operator or
o(ner of the vehicle, in lieu of a policy of insurance or surety bond, a certifcate that
a cash deposit has been !ade (ith the ,o!!issioner in such a!ount reBuired as
li!its of inde!nity in section three hundred seventy%seven to ans(er for the
passenger andAor third%party liability of such land transportation operator or o(ner of
the vehicle-
o insurance co!pany !ay issue the policy of insurance or surety bond reBuired
under this chapter unless so authori/ed under e'isting la(s-
"he authority to engage in the casualty andAor surety lines of business of an
insurance co!pany that refuses to issue or rene(, (ithout 1ust cause, the insurance
policy or surety bond therein reBuired shall be (ithdra(n i!!ediately- (As a!ended
by .residential 2ecree o- 3599 and 3435)
Section 3&. o cancellation of the policy shall be valid unless (ritten notice
thereof is given to the land transportation operator or o(ner of the vehicle and to the
*and "ransportation ,o!!ission at least ffteen days prior to the intended eCective
date thereof-
Ipon receipt of such notice, the *and "ransportation ,o!!ission, unless it receives
evidence of a ne( valid insurance or guaranty in cash or surety bond as prescribed in
this chapter, or an endorse!ent of revival of the cancelled one, shall order the
i!!ediate confscation of the plates of the !otor vehicle covered by such cancelled
policy- "he sa!e !ay be re%issued only upon presentation of a ne( insurance policy
or that a guaranty in cash or surety band has been !ade or posted (ith the
,o!!issioner and (hich !eets the reBuire!ents of this chapter, or an endorse!ent
or revival of the cancelled one- (As a!ended by .residential 2ecree o- 3599)
reBuire fro! said land transportation operator or o(ner of the vehicle,
in lieu of a policy of insurance or surety bond, a certifcate that a cash
deposit has been !ade (ith the ,o!!issioner in such a!ount
reBuired as li!its of inde!nity in &ection ;6E to ans(er for the
passenger andAor third%party liability of such land transportation
operator or o(ner of the vehicle- D # ,$A?@
:o insurance co!pany !ay issue the policy of insurance or surety
bond reBuired under this chapter unless so authori/ed under e'isting
la(s-
:"he authority to engage in the casualty andAor surety lines of
business of an insurance co!pany that refuses to issue or rene(,
(ithout 1ust cause, the insurance policy or surety bond therein
reBuired shall be (ithdra(n i!!ediately- % # ,$A?@
SEC. 3#3. o cancellation of the policy shall be valid unless (ritten
notice thereof is given to the land transportation operator or o(ner of
the vehicle and to the *and "ransportation #+ce at least ffteen (39)
days prior to the intended eCective date thereof- Ipon receipt of such
notice, the *and "ransportation #+ce, unless it receives evidence of a
ne( valid insurance or guaranty in cash or surety bond as prescribed
in this chapter, or an endorse!ent of revival of the cancelled one,
shall order the i!!ediate confscation of the plates of the !otor
vehicle covered by such cancelled policy- "he sa!e !ay be reissued
only upon presentation of a ne( insurance policy or that a guaranty in
cash or surety bond has been !ade or posted (ith the ,o!!issioner
and (hich !eets the reBuire!ents of this chapter, or an endorse!ent
or revival of the cancelled one- % # ,$A?@
:SEC. 3#4- 8f the cancellation of the policy or surety bond is
conte!plated by the land transportation operator or o(ner of the
vehicle, he shall, before the policy or surety bond ceases to be
eCective, secure a si!ilar policy of insurance or surety bond to
replace the policy or surety bond to be cancelled or !a)e a cash
deposit in su+cient a!ount (ith the ,o!!issioner, and (ithout any
gap, fle 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 the
land transportation operator or o(ner of the vehicle, he shall, before the policy or
surety bond ceases to be eCective, secure a si!ilar policy of insurance or surety
bond to replace the policy or surety bond to be cancelled or !a)e a cash deposit in
su+cient a!ount (ith the ,o!!issioner and (ithout any gap, fle the reBuired
docu!entation (ith the *and "ransportation ,o!!ission, and notify the insurance
co!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 o(nership of a !otor vehicle, or change 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 rene(al of registration of such vehicle, and provided that
the insurance co!pany shall agree to continue the policy, such change of o(nership
or such change of the engine shall be indicated in a corresponding endorse!ent by
the insurance co!pany concerned, and a signed duplicate of such endorse!ent
shall, (ithin a reasonable ti!e, be fled (ith the *and "ransportation ,o!!ission-
Section 33. 8n the settle!ent and pay!ent of clai!s, the inde!nity shall not be
availed of by any accident victi! or clai!ant as an instru!ent of enrich!ent by
reason of an accident, but as an assistance or restitution insofar as can fairly be
ascertained-
Section 34. Any person having any clai! upon the policy issued pursuant to this
chapter shall, (ithout any unnecessary delay, present to the insurance co!pany
concerned a (ritten notice of clai! setting forth the a!ount of his loss, andAor the
nature, e'tent and duration of the in1uries sustained as certifed by a duly licensed
physician- otice of clai! !ust be fled (ithin si' !onths fro! date of the accident,
other(ise, the clai! shall be dee!ed (aived- Action or suit for recovery of da!age
due to loss or in1ury !ust be brought, in proper cases, (ith the ,o!!issioner or the
,ourts (ithin one year fro! date of accident, other(ise, the clai!ant0s right of action
shall prescribe- (As a!ended by .residential 2ecree 3435)
Section 3". "he insurance co!pany concerned shall forth(ith ascertain the truth
and e'tent of the clai! and !a)e pay!ent (ithin fve (or)ing days after reaching an
agree!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 (ithout
pre1udice 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 o(ner ship of a !otor vehicle, or
change 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 rene(al of
registration of such vehicle, and: Provided, "hat the insurance
co!pany shall agree to continue the policy, such change of
o(nership or such change of the engine shall be indicated in a
corresponding endorse!ent by the insurance co!pany concerned,
and a signed duplicate of such endorse!ent shall, (ithin a
reasonable ti!e, be fled (ith the *and "ransportation #+ce- #
,$A?@
SEC. 3#!. 8n the settle!ent and pay!ent of clai!s, the inde!nity
shall not be availed of by any accident victi! or clai!ant as an
instru!ent of enrich!ent by reason of an accident, but as an
assistance or restitution insofar as can fairly be ascertained- #
,$A?@
SEC. 3#7. Any person having any clai! upon the policy issued
pursuant 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 sustained
as certifed by a duly licensed physician- otice of clai! !ust be fled
(ithin si' (<) !onths fro! the date of accident, other(ise, the clai!
shall be dee!ed (aived- Action or suit for recovery of da!age due to
loss or in1ury !ust be brought, in proper cases, (ith the
,o!!issioner or the courts (ithin one (3) year fro! denial of the
clai!, other(ise, the clai!ant>s right of action shall prescribe- #
,$A?@
SEC. 3#. "he insurance co!pany concerned shall forth(ith
ascertain the truth and e'tent of the clai! and !a)e pay!ent (ithin
fve (9) (or)ing days after reaching an agree!ent- 8f no agree!ent is
reached, the insurance co!pany shall pay only the no%fault inde!nity
provided in &ection ;63 (ithout pre1udice to the clai!ant fro!
pursuing his clai! further, in (hich case, he shall not be reBuired or
co!pelled by the insurance co!pany to e'ecute any Buit clai! or
docu!ent releasing it fro! liability under the policy of insurance or
surety bond issued- # ,$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! or
docu!ent releasing it fro! liability under the policy of insurance or surety bond
issued- (As a!ended by .residential 2ecree o- 3599)
8n case of any dispute in the enforce!ent of the provisions of any policy issued
pursuant to this chapter, the ad1udication of such dispute shall be (ithin the original
and e'clusive 1urisdiction of the ,o!!issioner, sub1ect to the li!itations provided in
section four hundred si'teen-
Section 3!. 8t shall be unla(ful for a land transportation operator or o(ner of
!otor vehicle to reBuire his or its drivers or other e!ployees to contribute in the
pay!ent of pre!iu!s-
Section 37. o govern!ent o+ce or agency having the duty of i!ple!enting the
provisions of this chapter nor any o+cial or e!ployee thereof shall act as agent in
procuring 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 o(ner of !otor vehicle or any
other person violating any of the provisions of the preceding sections shall be
punished by a fne of not less than fve hundred pesos but not !ore than one
thousand pesos andAor i!prison!ent for not !ore than si' !onths- "he violation of
section three hundred seventy%seven by a land transportation operator shall be a
su+cient cause for the revocation of the certifcate of public convenience issued by
the Hoard of "ransportation covering the vehicle concerned-
Section 3#. Jhenever any violation of the provisions of this chapter is co!!itted
by a corporation or association, or by a govern!ent o+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 )no(ingly per!itted, or failed to prevent, said violation shall be held liable
as principals-
policy issued pursuant to this chapter, the ad1udication of such
dispute shall be (ithin the original and e'clusive 1urisdiction of the
,o!!issioner, sub1ect to the li!itations provided in &ection 5;6- #
,$A?@
SEC. 3##- 8t shall be unla(ful for a land transportation operator or
o(ner of !otor vehicle to reBuire his or its drivers or other e!ployees
to contribute in the pay!ent of pre!iu!s- # ,$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 or
e!ployee thereof shall act as agent in procuring 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 percent
(3EK) of the a!ount of the pre!iu!s therefor- # ,$A?@
:&@,- 5E3- Any land transportation operator or o(ner of !otor
vehicle or any other person violating any of the provisions of the
preceding sections shall be punished by a fne of not less than Five
hundred pesos (.9EE-EE) andAor i!prison!ent for not !ore than si'
(<) !onths- "he violation of &ection ;6E by a land transportation
operator shall be a su+cient cause for the revocation of the
certifcate of public convenience issued by the *and "ransportation
Franchising and Regulatory Hoard (.reviously Hoard of "ransportation)
covering the vehicle concerned-
SEC. 4&%- Jhenever any violation of the provisions of this chapter
is co!!itted by a corporation or association, or by a govern!ent
o+ce or entity, the e'ecutive o+cer or o+cers of said corporation,
association or govern!ent o+ce or entity (ho shall have )no(ingly
per!itted, or failed to prevent, said violation shall be held liable as
principals- # ,$A?@
:CHAPTER VII
MUTUAL BENE'IT ASSOCIATIONS AND
TRUSTS 'OR CHARITABLE USES
TITLE (
C)*+te, VII
MUTUAL 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!ed
or organi/ed not for proft but !ainly for the purpose of paying sic) benefts to
!e!bers, or of furnishing fnancial support to !e!bers (hile out of e!ploy!ent, or
of paying to relatives of deceased !e!bers of f'ed or any su! of !oney,
irrespective of (hether such ai! or purpose is carried out by !eans of f'ed dues or
assess!ents collected regularly fro! the !e!bers, or of providing, by the issuance
of certifcates of insurance, pay!ent of its !e!bers of accident or life insurance
benefts out of such f'ed and regular dues or assess!ents, but in no case shall
include any society, association, or corporation (ith such !utual beneft features and
(hich shall be carried out purely fro! voluntary contributions collected not regularly
and or no f'ed a!ount fro! (ho!soever !ay contribute, shall be )no(n as a
!utual beneft association (ithin the intent of this ,ode-
Any society, association, or corporation principally organi/ed as labor union shall be
governed by the *abor ,ode not(ithstanding any !utual beneft feature provisions in
its charter as incident to its organi/ation-
8n no case shall a !utual beneft association be organi/ed and authori/ed to transact
business as a charitable or benevolent organi/ation, and (henever it has this feature
as incident to its e'istence, the corresponding charter provision shall be revised to
confor! (ith the provision of this section- Mutual beneft association, already
licensed to transact business as such on the date this ,ode beco!es eCective,
having charitable or benevolent feature shall abandon such incidental purpose upon
eCectivity of this ,ode if they desire to continue operating as such !utual beneft
associations- (As a!ended by .residential 2ecree o- 3599)
MUTUAL BENE'IT ASSOCIATIONS
:&@,- 5E;- Any society, association or corporation, (ithout capital
stoc), for!ed or organi/ed not for proft but !ainly for the purpose of
paying sic) benefts to !e!bers, or of furnishing fnancial support to
!e!bers (hile out of e!ploy!ent, or of paying to relatives of
deceased !e!bers of f'ed or any su! of !oney, irrespective of
(hether such ai! or purpose is carried out by !eans of f'ed dues or
assess!ents collected regularly fro! the !e!bers, or of providing,
by the issuance of certifcates of insurance, pay!ent of its !e!bers
of accident or life insurance benefts out of such f'ed and regular
dues or assess!ents, but in no case shall include any society,
association, or corporation (ith such !utual beneft features and
(hich shall be carried out purely fro! voluntary contributions
collected not regularly andAor no f'ed a!ount fro! (ho!soever !ay
contribute, shall be )no(n as a !utual beneft association (ithin the
intent of this ,ode-
:Any society, association, or corporation principally organi/ed as a
labor union shall be governed by the *abor ,ode not(ithstanding any
!utual beneft feature provisions in its charter as incident to its
organi/ation-
:8n no case shall a !utual beneft association be organi/ed and
authori/ed to transact business as a charitable or benevolent
organi/ation, and (henever it has this feature as incident to its
e'istence, the corresponding charter provision shall be revised to
confor! (ith the provision of this section- Mutual beneft association,
already licensed to transact business as such on the date this ,ode
beco!es eCective, having charitable or benevolent feature shall
abandon such incidental purpose upon eCectivity of this ,ode if they
desire to continue operating as such !utual beneft associations- #
,$A?@
:SEC. 4&4. A !utual beneft association, before it !ay transact as
Section 3#$. A !utual beneft association, before it !ay transact as such, !ust frst
secure a license fro! the ,o!!issioner- "he application for such license shall be
fled (ith the ,o!!issioner together (ith certifed true copies of the articles of
incorporation or the constitution and by%la(s of the association, and all a!end!ents
thereto, and such other docu!ents or testi!onies as the ,o!!issioner !ay reBuire-
o license shall be granted to a !utual beneft association until the ,o!!issioner
shall have been satisfed by such e'a!ination as !ay !a)e and such evidence as he
!ay reBuire that the association is Bualifed under e'isting la(s to operate and
transact business as such- "he ,o!!issioner !ay refuse to issue a license to any
!utual beneft association if, in his 1udg!ent, such refusal (ill best pro!ote the
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 Lune of the year follo(ing its issuance
and, upon proper application, !ay be rene(ed if the association is continuing to
co!ply (ith e'isting la(s, rules and regulations, orders, instructions, rulings and
decisions of the ,o!!issioner- @very association receiving any such license shall be
sub1ect to the supervision of the ,o!!issioner7 .rovided, "hat no such license shall
be granted to any such association if such association has no actuary-
All !utual beneft 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 by
Act o- ;<3G, shall, upon eCectivity of this ,ode, surrender their respective licenses
to the ,o!!issioner and apply for ne( licenses under the provisions of this code if
they still desire to continue operating as such !utual beneft associations-
Section 3#%. o !utual beneft association shall be issued a license to operate as
such unless it has constituted and established a ?uaranty Fund by depositing (ith
the ,o!!issioner an initial !ini!u! a!ount of ten thousand pesos in cash, or in
govern!ent securities (ith a total value eBual to such a!ount, to ans(er for any
valid beneft 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 ban)s authori/ed to transact business in
the .hilippines for the account of the particular association constituting the ?uaranty
such, !ust frst secure a license fro! the ,o!!issioner- "he
application for such license shall be fled (ith the ,o!!issioner
together (ith certifed true copies of the articles of incorporation or
the constitution and byla(s of the association, and all a!end!ents
thereto, and such other docu!ents or testi!onies as the
,o!!issioner !ay reBuire-
:o license shall be granted to a !utual beneft association until the
,o!!issioner shall have been satisfed by such e'a!ination as he
!ay !a)e and such evidence as he !ay reBuire that the association
is Bualifed under e'isting la(s to operate and transact business as
such- "he ,o!!issioner !ay refuse to issue a license to any !utual
beneft association if, in his 1udg!ent, such refusal (ill best pro!ote
the 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 follo(ing its issuance (.reviously: on the
last day of Lune of the year follo(ing its issuance) and, upon proper
application, !ay be rene(ed if the association is continuing to
co!ply (ith e'isting la(s, rules and regulations, orders, instructions,
rulings and decisions of the ,o!!issioner- @very association
receiving any such license shall be sub1ect to the supervision of the
,o!!issioner: Provided, "hat no such license shall be granted to any
such association if such association has no actuary-
(2@*@"@2 .R#V8&8#&: All !utual beneft 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 by Act o-
;<3G, shall, upon eCectivity of this ,ode, surrender their respective
licenses to the ,o!!issioner and apply for ne( licenses under the
provisions of this code if they still desire to continue operating as
such !utual beneft associations- D portion of &ec- ;63)
SEC. 4&"- o !utual beneft association shall be issued a license to
operate as such unless it has constituted and established a ?uaranty
Fund by depositing (ith the ,o!!issioner an initial !ini!u! a!ount
of 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 or
securities so deposited, !ay, (ith the prior approval of the ,o!!issioner, be
(ithdra(n by the association if there is no pending beneft clai! against it, including
interest thereon or dividend additions thereto-
"he ,o!!issioner, prior to or after licensing a !utual beneft association, !ay
reBuire 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 such
assets e'ceed one hundred thousand pesos, but in no case shall such increase
e'ceed the !a'i!u! a!ount of capital invest!ent reBuired of a do!estic insurance
co!pany under section t(o hundred and three of this ,ode- (As a!ended by
.residential 2ecree o- 3599)
Section 3#3. @very !utual beneft association licensed to do business as such shall
issue !e!bership certifcates to its !e!bers specifying the benefts to (hich such
!e!bers are entitled-
&uch certifcates, together (ith the articles of incorporation of the association or its
constitution and by%la(s, and all e'isting la(s as !ay be pertinent shall constitute
the agree!ent, as of the date of its issuance, bet(een the association and the
!e!ber- "he !e!bership certifcate shall be in a for! previously approved by the
,o!!issioner-
Section 3#4. A !utual beneft association !ay, by reinsurance agree!ent, cede in
(hole or in part any individual ris) or ris)s under certifcates of insurance issued by
it, only to a life insurance co!pany authori/ed to transact business or to a
professional reinsurer authori/ed to accept life ris)s in the .hilippines7 .rovided, "hat
to ans(er for any valid beneft 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 ban)s
authori/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 additions
on !oneys or securities so deposited, !ay, (ith the prior approval of
the ,o!!issioner, be (ithdra(n by the association if there is no
pending beneft clai! against it, including interest thereon or
dividend additions thereto-
:"he ,o!!issioner, prior to or after licensing a !utual beneft
association, !ay reBuire such association to increase its ?uaranty
Fund fro! the initial !ini!u! a!ount reBuired to an a!ount eBual to
the capital invest!ent reBuired of an e'isting do!estic insurance
co!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 one
hundred thousand pesos, but in no case shall such increase e'ceed
the !a'i!u! a!ount of capital invest!ent reBuired of a do!estic
insurance co!pany under section t(o hundred and three of this
,ode-)
:SEC. 4&!- @very !utual beneft association licensed to do business
as such shall issue !e!bership certifcates to its !e!bers specifying
the benefts to (hich such !e!bers are entitled-
:&uch certifcates, together (ith the articles of incorporation of the
association or its constitution and byla(s, and all e'isting la(s as
!ay be pertinent shall constitute the agree!ent, as of the date of its
issuance, bet(een the association and the !e!ber- "he !e!bership
certifcate shall be in a for! previously approved by the
,o!!issioner- D # ,$A?@
:SEC. 4&7- A !utual beneft association !ay, by reinsurance
agree!ent, cede in (hole or in part any individual ris) or ris)s under
certifcates of insurance issued by it, only to a life insurance co!pany
authori/ed to transact business or to a professional reinsurer
copy of the draft of such reinsurance agree!ent shall be sub!itted to the
,o!!issioner for his approval- "he association !ay ta)e credit for the reserves on
such ceded ris)s to the e'tent reinsured-
Section 3#". "he constitution or by%la(s of a !utual beneft association !ust
distinctly state the purpose for (hich dues andAor assess!ents are !ade and
collected and the portion thereof (hich !ay be used for e'penses-
2eath beneft and other relief funds shall be created and used e'clusively for paying
benefts due the !e!bers under their respective !e!bership certifcates- A general
fund shall li)e(ise be created and used for e'penses of ad!inistration of the
association-
Section 3#!. @very outstanding !e!bership certifcate !ust have, after three full
years of being continuously in force, an eBuity value eBuivalent to at least ffty per
centu! of the total !e!bership dues collected thereon-
Section 3#7. @very !utual beneft association !ust accu!ulate and !aintain, out
of the periodic dues collected fro! its !e!bers, su+cient reserves for the pay!ent
of clai!s or obligations for (hich it shall hold funds in securities satisfactory to the
,o!!issioner consisting of bonds of the ?overn!ent of the .hilippines, or any of its
political subdivisions and instru!entalities, or in such other good securities as !ay
be approved by the ,o!!issioner-
"he reserve liability shall be established in accordance (ith acturial procedures and
authori/ed to accept life ris)s in the .hilippines: Provided, "hat a copy
of the draft of such reinsurance agree!ent shall be sub!itted to the
,o!!issioner for his approval- "he association !ay ta)e credit for
the reserves on such ceded ris)s to the e'tent reinsured- # ,$A?@
:SEC. 4&- "he constitution or byla(s of a !utual beneft association
!ust distinctly state the purpose for (hich dues andAor assess!ents
are !ade and collected and the portion thereof (hich !ay be used
for e'penses-
:2eath beneft and other relief funds shall be created and used
e'clusively for paying benefts due the !e!bers under their
respective !e!bership certifcates- A general fund shall li)e(ise be
created and used for e'penses of ad!inistration of the association-
:A !utual beneft association shall only !aintain free and unassigned
surplus of not !ore than t(enty percent (GEK) of its total liabilities as
verifed 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 or
providing benefts in )ind and other relevant services- 8n addition,
sub1ect to the approval of the ,o!!issioner, a !utual beneft
association !ay allocate a portion for capacity building and research
and develop!ent such as developing ne( products and services,
upgrading and i!proving operating syste!s and eBuip!ent and
continuing !e!ber education- (@JAA22@2 .ARA?RA.$)
:SEC. 4&#- @very outstanding !e!bership certifcate !ust have an
eBuity value eBuivalent to at least ffty percent (9EK) of the total
contributions collected thereon- "he eBuity value only applies to basic
life insurance product and e'cludes optional products- D (@JAA22@2
&@"@,@)
SEC. 4$&- @very !utual beneft 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 (hich
it shall hold funds in securities satisfactory to the ,o!!issioner
consisting of bonds of the ?overn!ent of the .hilippines, or any of its
political 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%la(s of a !utual beneft
association !ust provide that if its reserve as to all or any class of certifcates
beco!es i!paired, its board of directors or trustees !ay reBuire that there shall be
paid by the !e!bers to the association the a!ount of the !e!bers0 eBuitable
proportion of such defciency as ascertained by said board and that if the pay!ent be
not !ade it shall stand as an indebtedness against the !e!bership certifcates of
the defaulting !e!bers and dra( interest not to e'ceed fve per centu! per annu!
co!pounded annually-
Section 3#. A !utual beneft 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 securities in (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 or chattel !ortgage
of personal properties of the borro(ers, or in the absence thereof, on the security of
the !e!bership certifcate of the borro(ing !e!bers, in (hich event such loan shall
beco!e a frst lien on the proceed thereof-
Section 3##. "he ,o!!issioner or any of his duly designated representatives, shall
have the po(er of visitation, audit and e'a!ination into the aCairs, fnancial
condition, and !ethods of doing business of all !utual beneft associations, and he
shall cause such e'a!ination to be !ade at least once every t(o years or (henever
it !ay be dee!ed proper and necessary- Free access to the boo)s, records and
docu!ents of the association shall be accorded to the ,o!!issioner, to his
representatives, in such !anner that the ,o!!issioner or his representatives !ay
readily verify or deter!ine the true aCairs, fnancial condition, and !ethod of doing
business of such association- 8n the course of such e'a!ination, the ,o!!issioner or
his duly designated representatives shall have authority to ad!inister oaths and ta)e
testi!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 ta)e, and a
copy thereof, in @nglish or in .ilipino, shall be sub!itted to the ,o!!issioner0s
representatives 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 actuarial
procedures and shall be approved by the ,o!!issioner-
:"he articles of incorporation or the constitution and byla(s of a
!utual beneft association !ust provide that if its reserve as to all or
any class of certifcates beco!es i!paired, its board of directors or
trustees !ay reBuire that there shall be paid by the !e!bers to the
association the a!ount of the !e!bers> eBuitable proportion of such
defciency as ascertained by said board and that if the pay!ent be
not !ade it shall stand as an indebtedness against the !e!bership
certifcates of the defaulting !e!bers and dra( interest not to
e'ceed fve percent (9K) per annu! co!pounded annually- #
,$A?@
SEC. 4$$. A !utual beneft 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 securities
in (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 or
chattel !ortgage of personal properties of the borro(ers, or in the
absence thereof, on the security of the !e!bership certifcate of the
borro(ing !e!bers, in (hich event such loan shall beco!e a frst
lien on the proceeds thereof- # ,$A?@
:SEC. 4$%. "he ,o!!issioner or any of his duly designated
representatives, shall have the po(er of visitation, audit and
e'a!ination into the aCairs, fnancial condition, and !ethods of doing
business of all !utual beneft associations, and he shall cause such
e'a!ination to be !ade at least once every t(o (G) years or
(henever it !ay be dee!ed proper and necessary- Free access to the
boo)s, records and docu!ents of the association shall be accorded to
the ,o!!issioner, or to his representatives, in such !anner that the
,o!!issioner or his representatives !ay readily verify or deter!ine
the true aCairs, fnancial condition, and !ethod of doing business of
such association- 8n the course of such e'a!ination, the
,o!!issioner or his duly designated representatives shall have
authority to ad!inister oaths and ta)e testi!ony or other evidence
A copy of the fndings of such e'a!ination, together (ith the reco!!endations of
the ,o!!issioner, shall be furnished the association for its infor!ation and
co!pliance, and the sa!e shall be ta)en up i!!ediately in the !eetings of the
board of directors or trustees and of the !e!bers of the association-
Section 4&&. @very !utual beneft association shall, annually on or before the
thirtieth day of April of each year, render to the ,o!!issioner an annual state!ent
in such for! and details as !ay be prescribed by the ,o!!issioner, signed and
s(orn to by the president, secretary, treasurer, and actuary of the association,
sho(ing the e'act condition of its aCairs on the preceding thirty%frst day of
2ece!ber-
Section 4&$. o !oney, aid or beneft to be paid, provided or tendered by any
!utual beneft association, shall be liable to attach!ent, garnish!ent, or other
process, or be sei/ed, ta)en, appropriated, or applied by any legal or eBuitable
process to pay any debt of liability of a !e!ber or benefciary, or any other person
(ho !ay have a right thereunder, either before or after pay!ent-
Section 4&%. Any !e!ber of a !utual beneft association shall have the right at all
ti!es to change the benefciary or benefciaries or add another benefciary or other
benefciaries in accordance (ith the rules and regulations of the association unless
he has e'pressly (aived this right in the !e!bership certifcate- @very association
!ay, under such rules as it !ay adopt, li!it the scope of benefciaries and provide
that no benefciary shall have or obtain any vested interest in the proceeds of any
certifcate until the certifcate has beco!e due and payable under the ter!s of the
!e!bership certifcate-
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 ta)en, and a copy thereof, in @nglish or in .ilipino,
shall be sub!itted to the ,o!!issioner>s representatives or
e'a!iners in the course of such e'a!ination-
:A copy of the fndings of such e'a!ination, together (ith the
reco!!endations of the ,o!!issioner, shall be furnished the
association for its infor!ation and co!pliance, and the sa!e shall be
ta)en up i!!ediately in the !eetings of the board of directors or
trustees and of the !e!bers of the association- # ,$A?@
SEC. 4$3. @very !utual beneft association shall, annually on or
before the thirtieth day of April of each year, render to the
,o!!issioner an annual state!ent in such for! and detail as !ay be
prescribed by the ,o!!issioner, signed and s(orn to by the
president, secretary, treasurer, and actuary of the association,
sho(ing the e'act condition of its aCairs on the preceding thirty%frst
day of 2ece!ber- D # ,$A?@
:SEC. 4$4. o !oney, aid or beneft to be paid, provided or tendered
by any !utual beneft association, shall be liable to attach!ent,
garnish!ent, or other process, or be sei/ed, ta)en, appropriated, or
applied by any legal or eBuitable process to pay any debt or liability
of a !e!ber or benefciary, or any other person (ho !ay have a
right thereunder, either before or after pay!ent- # ,$A?@
:SEC. 4$". Any !e!ber of a !utual beneft association shall have
the right at all ti!es to change the benefciary or benefciaries or add
another benefciary or other benefciaries in accordance (ith the rules
and regulations of the association unless he has e'pressly (aived this
right in the !e!bership certifcate- @very association !ay, under
such rules as it !ay adopt, li!it the scope of benefciaries and
provide that no benefciary shall have or obtain any vested interest in
the proceeds of any certifcate until the certifcate has beco!e due
Section 4&3. Any chapter a+liate independently licensed as a !utual beneft
association !ay consolidate or !erge (ith any other si!ilar chapter a+liate or (ith
the !other association-
Section 4&4. Any !utual beneft association !ay be converted into and licensed as
a !utual life insurance co!pany by co!plying (ith the reBuire!ents of the pertinent
provisions of this ,ode and sub!itting the specifc plan for such conversion to the
,o!!issioner for his approval- &uch plan, as approved, shall then be sub!itted to
the !e!bers either in the regular !eeting or in a special !eeting called for the
purpose for their adoption- "he a+r!ative vote of at least t(o%thirds of all the
!e!bers shall be necessary in order to consider such plan as adopted-
o such conversion shall ta)e eCect unless and until approved by the ,o!!issioner-
Section 4&". o !utual beneft association shall be dissolved (ithout frst notifying
the ,o!!issioner and furnishing hi! (ith a certifed copy of the resolution
authori/ing the dissolution, duly adopted by the a+r!ative vote of t(o%thirds of the
!e!bers at a !eeting called for that purpose, the fnancial state!ents as of the
date of the resolution, and such other papers or docu!ents as !ay be reBuired by
the ,o!!issioner-
o dissolution shall proceed until and unless approved by the ,o!!issioner and all
proceedings in connection there(ith shall be (itnessed and attested by his duly
designated representative-
o !utual beneft association shall be o+cially declared as dissolved until after the
,o!!issioner so certifes that all outstanding clai!s against the association have
been duly settled and liBuidated-
and payable under the ter!s of the !e!bership certifcate- #
,$A?@
:SEC. 4$!- Any chapter a+liate independently licensed as a !utual
beneft association !ay consolidate or !erge (ith any other si!ilar
chapter a+liate or (ith the !other association- D # ,$A?@
:SEC. 4$7- Any !utual beneft association !ay be converted into
and licensed as a !utual life insurance co!pany by co!plying (ith
the reBuire!ents of the pertinent provisions of this ,ode and
sub!itting the specifc plan for such conversion to the ,o!!issioner
for his approval- &uch plan, as approved, shall then be sub!itted to
the !e!bers either in the regular !eeting or in a special !eeting
called for the purpose for their adoption- "he a+r!ative vote of at
least t(o%thirds (GA;) of all the !e!bers shall be necessary in order
to consider such plan as adopted-
:o such conversion shall ta)e eCect unless and until approved by
the ,o!!issioner- # ,$A?@
:SEC. 4$- o !utual beneft association shall be dissolved (ithout
frst notifying the ,o!!issioner and furnishing hi! (ith a certifed
copy of the resolution authori/ing the dissolution, duly adopted by the
a+r!ative vote of t(o%thirds (GA;) of the !e!bers at a !eeting
called for that purpose, the fnancial state!ents as of the date of the
resolution, and such other papers or docu!ents as !ay be reBuired
by the ,o!!issioner-
:o dissolution shall proceed until and unless approved by the
,o!!issioner and all proceedings in connection there(ith shall be
(itnessed and attested by his duly designated representative-
:o !utual beneft association shall be o+cially declared as dissolved
until after the ,o!!issioner so certifes that all outstanding clai!s
against the association have been duly settled and liBuidated- #
,$A?@
SEC. 4$#. "he ,o!!issioner shall, after notice and hearing, have
the po(er either to suspend or revo)e the license issued to a !utual
Section 4&!. "he ,o!!issioner shall after notice and hearing, have the po(er
either to suspend or revo)e the licensed issued to a !utual beneft association if he
fnds 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!ent,
or reco!!endation of the ,o!!issioner7
(d) e'ceeded its po(er 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 (as
organi/ed due to any cause-
After receipt of the order fro! the ,o!!issioner suspending or revo)ing the license,
the association !ust i!!ediately e'ert eCorts to re!ove such cause or causes (hich
brought about the order, and, upon proper sho(ing, !ay apply (ith the
,o!!issioner for the lifting of the order and restoration or revival of the license so
revo)ed or suspended-
Section 4&7. For failure to re!ove such cause or causes (hich brought about the
suspension or revocation of the license of a !utual beneft association, the
,o!!issioner shall apply under this ,ode for an order fro! the proper court to
liBuidate such association-
"he provisions of titles fourteen and ffteen, chapter three, pertaining to the
appoint!ent of a conservator and proceedings upon insolvency of an insurance
co!pany, shall, insofar as practicable, apply to !utual beneft associations-
Section 4&. "o secure the enforce!ent of any provision under this title, the
beneft association if he fnds 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!ent
or reco!!endation of the ,o!!issioner7
:(d) @'ceeded its po(er 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 (as
organi/ed due to any cause-
:After receipt of the order fro! the ,o!!issioner suspending or
revo)ing the license, the association !ust i!!ediately e'ert eCorts
to re!ove such cause or causes (hich brought about the order and,
upon proper sho(ing, !ay apply (ith the ,o!!issioner for the lifting
of the order and restoration or revival of the license so revo)ed or
suspended- # ,$A?@
:SEC. 4%&. For failure to re!ove such cause or causes (hich brought
about the suspension or revocation of the license of a !utual beneft
association, the ,o!!issioner shall apply under this ,ode for an
order fro! the proper court to liBuidate such association-
:"he provisions of "itles 35 and 39, ,hapter 888, pertaining to the
appoint!ent of a conservator and proceedings upon insolvency of an
insurance co!pany shall, insofar as practicable, apply to !utual
beneft associations- # ,$A?@
:SEC. 4%$. "o secure the enforce!ent of any provision under this
title, 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 fne of not
e'ceeding one thousand pesos, or i!prison!ent of not e'ceeding three years, or
both such fne 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 acBuired
(ith the fruits or inco!e therefro! or in e'change or substitution thereof, given to or
received by any person, corporation, association, foundation, or entity, e'cept the
ational ?overn!ent, it instru!entalities or political subdivisions, for charitable,
benevolent, educational, pious, religious, or other uses for the beneft of the public at
large or a particular portion thereof or for the beneft of an indefnite nu!ber of
persons-
Section 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 the section i!!ediately preceding
and (ith the proper application of trust property-
Section 4$%. "he ter! "trust property" shall include all real or personal properties or
orders and circulars-
:SEC. 4%%- "he violation of any provision of this title shall sub1ect the
person violating or the o+cer of the association responsible therefor
to a fne of not less than "en thousand pesos (.3E,EEE-EE), or
i!prison!ent of not e'ceeding three (;) years, or both such fne and
i!prison!ent, at the discretion of the court- (.reviously: fne of not
e'ceeding one thousand pesos)
SEC. 4%3- All provisions of this ,ode governing life insurance
co!panies and such other provisions (henever practicable and
necessary, shall be applicable to !utual beneft associations- (@J
.R#V8&8#)
:"8"*@ G
:"RI&"& F#R ,$AR8"AH*@ I&@&
:SEC. 4%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 acBuired (ith the fruits or inco!e therefro! or in e'change
or 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, for
charitable, benevolent, educational, pious, religious, or other uses for
the beneft of the public at large or a particular portion thereof or for
the beneft of an indefnite nu!ber of persons- D # ,$A?@
:SEC. 4%". "he ter! trustee shall include any individual, corporation,
association, foundation, or entity, e'cept the ational ?overn!ent, its
instru!entalities or political subdivisions, in charge of, or acting for,
or concerned (ith the ad!inistration of, the trust referred to in the
section i!!ediately preceding and (ith the proper application of
trust property- # ,$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!e
therefro! or in e'change or substitution thereof-
Section 4$3. All trustees shall, before entering in the perfor!ance of the duties of
their trust, obtain a certifcate of registration fro! the ,o!!issioner-
"rustees (ho are already discharging the duties of their trust on the date this ,ode
beco!es eCective !ay continue as such, sub1ect to the provisions of this ,ode-
All provisions of this ,ode governing !utual beneft associations and such other
provisions herein, (henever practicable and necessary, shall be applicable to trusts
for charitable uses-
properties or funds pertaining to the trust as (ell as those acBuired
(ith the fruits or inco!e therefro! or in e'change or substitution
thereof- # ,$A?@
:SEC. 4%7. All trustees shall, before entering in the perfor!ance of
the duties of their trust, obtain a certifcate of registration fro! the
,o!!issioner- "he registration shall e'pire on 2ece!ber ;3 of the
third year follo(ing its issuance unless it is rene(ed- (A22@2)
(2@*@"@2: "rustees (ho are already discharging the duties of their
trust 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 beneft associations and
such other provisions herein, (henever practicable and necessary,
shall be applicable to trusts for charitable uses-
:SEC. 4%. "he treasurer of a charitable trust shall fle a fdelity bond
in the a!ount co!!ensurate (ith the value of the trust property in
his custody, as !ay be deter!ined by the ,o!!issioner- -NEW.
:,$A."@R V888
:"RI&" HI&8@&& 8 ?@@RA*
:&@,- 5G6- An insurance co!pany !ay engage in li!ited trust
business, consisting of !anaging funds pertaining only to retire!ent
and pre%need plans, provided it has secured a license to do so fro!
the Hang)o &entral ng .ilipinas- "his trust business shall be separate
and distinct fro! the general business of the insurance co!pany and
shall be sub1ect to rules and regulations as !ay be pro!ulgated by
the Hang)o &entral ng .ilipinas in consultation (ith the ,o!!issioner-
:,$A."@R 8M
:R@?8&"RA"8#, R@&.#&8H8*8"8@& A2
#V@R&8?$" #F &@*F%R@?I*A"#RN
#R?A8OA"8#&
:&@, 5;E- "he ,o!!issioner shall have the po(er to register as a
self%regulatory organi/ation, or other(ise grant licenses, and to
regulate, supervise, e'a!ine, suspend or other(ise discontinue, as a
condition for the operation of organi/ations (hose operations are
related to or connected (ith the insurance !ar)et such as, but not
li!ited to, associations of insurance co!panies, (hether life or non%
life, reinsurers, actuaries, agents, bro)ers, dealers, !utual beneft
associations, trusts, rating agencies, and other persons regulated by
the ,o!!issioner, (hich are engaged in the business regulated by
this ,ode-
:"he ,o!!issioner !ay prescribe rules and regulations (hich are
necessary or appropriate in the public interest or for the protection of
investors to govern self%regulatory organi/ations and other
organi/ations licensed or regulated pursuant to the authority granted
hereunder including, but not li!ited to, the reBuire!ent of
cooperation (ithin and a!ong all participants in the insurance !ar)et
to ensure transparency and facilitate e'change of infor!ation-
:&@,- 5;3- An association cannot be registered as a self%regulatory
organi/ation unless the ,o!!issioner deter!ines that:
:(a) "he association is so organi/ed and has the capacity to be able to
carry out the purposes of this ,ode and to co!ply (ith, and to
enforce co!pliance by its !e!bers and persons associated (ith its
!e!bers, (ith the provisions of this ,ode, the rules and regulations
thereunder, and the rules of the association-
:(b) "he rules of the association, not(ithstanding anything in the
,orporation ,ode to the contrary, provide the follo(ing:
:(3) Pualifcations and the disBualifcations on !e!bership of the
association7
:(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, and
that 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 t(o (G) independent
directors as !e!bers of the board of directors of the association7
:(5) @Buitable allocation of reasonable dues, fees, and other charges
a!ong !e!bers and other persons using any facility or syste! (hich
the association operates or controls7
:(9) "he prevention of fraudulent and !anipulative acts and practices
to protect the insuring public and the pro!otion of 1ust and eBuitable
principles of business7
:(<) Me!bers and persons associated (ith its !e!bers sub1ect to
discipline for violation of any provision of this ,ode, the rules or
regulations thereunder, or the rules of the association7
:(F) Fair procedure for the disciplining of !e!bers and persons
associated (ith !e!bers7 and
:(4) "he prohibition or li!itation of access to services oCered by the
association or a !e!ber thereof-
:&@,- 5;G- A self%regulatory organi/ation !ay e'a!ine and verify the
Bualifcations of an applicant to beco!e a !e!ber in accordance (ith
procedures established by the rules of the association-
:A self%regulatory organi/ation shall deny !e!bership or condition
the !e!bership of an entity, if it does not !eet the standards of
fnancial responsibility, operational capability, training, e'perience, or
co!petence that are prescribed by the rules of the association7 or has
engaged, and there is a reasonable li)elihood it (ill again engage, in
acts or practices inconsistent (ith 1ust and eBuitable principles of fair
trade-
:A self%regulatory organi/ation !ay deny !e!bership to an entity not
engaged in a type of business in (hich the rules of the association
reBuire !e!bers to be engaged-
:&@,- 5;;- Ipon the fling of an application for registration as a self%
regulatory organi/ation under this title, the ,o!!issioner shall have
ninety (6E) days (ithin (hich to either grant registration or institute a
proceeding to deter!ine (hether registration should be denied- 8n
the event proceedings are instituted, the ,o!!issioner shall have
t(o hundred seventy (GFE) days (ithin (hich to conclude such
proceedings at (hich ti!e he shall, by order, grant or deny such
registration-
:&@,- 5;5- @very self%regulatory organi/ation shall co!ply (ith the
provisions of this ,ode, the rules and regulations thereunder, and its
o(n rules, and enforce co!pliance there(ith by its !e!bers, persons
associated (ith its !e!bers or its participants, not(ithstanding any
provision of the ,orporation ,ode to the contrary-
:&@,- 5;9- @ach self%regulatory organi/ation shall sub!it to the
,o!!issioner for prior approval any proposed rule or a!end!ent
thereto, 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-
#ther(ise, the sa!e !ay be !ade eCective by the self%regulatory
organi/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 proposed
a!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 !a)ing appropriate
reBuest in (riting to a self%regulatory organi/ation that such
organi/ation eCect on its o(n behalf specifed changes in its rules and
practices and, after due notice and hearing, it deter!ines that such
changes have not been eCected, and that such changes are
necessary, by rule or regulation or by order, !ay alter, abrogate or
supple!ent the rules of such self%regulatory organi/ation insofar as
necessary or appropriate to eCect such changes in respect of such
!atters as:
:(a) &afeguards in respect of the fnancial responsibility of !e!bers
and adeBuate provision against the evasion of fnancial responsibility
through the use of corporate for!s or special partnerships7
:(b) "he supervision of !ar)et practices7
:(c) "he !anner, !ethod and place of soliciting business7
:(d) "he f'ing of reasonable rates of fees, interest, listing and other
charges, but not rates of co!!ission7 and self%regulatory
organi/ation7 and
:(e) "he supervision, auditing and disciplining of !e!bers-
:8n addition to the general po(ers of the ,o!!issioner over the
entities under supervision, the ,o!!issioner, after due notice and
hearing, is authori/ed, in the public interest and to protect the
insuring public:
:(3) "o suspend for a period not e'ceeding t(elve (3G) !onths or to
revo)e the registration of a self%regulatory organi/ation, or to censure
or i!pose li!itations on the activities, functions and operations of
such self%regulatory organi/ation, if the ,o!!ission fnds that such a
self%regulatory organi/ation has (illfully violated or is unable to
co!ply (ith any provision of this ,ode or of the rules and regulations
thereunder, or its o(n rules, or has failed to enforce co!pliance
there(ith by a !e!ber of, person associated (ith a !e!ber, or a
participant 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 any
provision of this ,ode or suspend for a period not e'ceeding t(elve
(3G) !onths for violation of any provision of this ,ode or any other
la( ad!inistered by the ,o!!ission, or the rules and regulations
thereunder, or eCected, directly or indirectly, any transaction for any
person (ho, such !e!ber or participant had reason to believe, (as
violating 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 fnds that such o+cer or director has
violated any provision of this ,ode, any other la( ad!inistered by the
,o!!issioner, the rules or regulations thereunder and the rules of
such self%regulatory organi/ation, or has abused his authority, or
(ithout reasonable 1ustifcation or e'cuse has failed to enforce
co!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 any
person associated (ith a !e!ber, including suspending or e'pelling
such !e!ber or participant, or suspending or barring such person
fro! being associated (ith a !e!ber, if engaged in acts or practices
inconsistent (ith 1ust and eBuitable principles of fairness or in (illful
violation 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 a
self%regulatory organi/ation (other than a su!!ary proceeding
pursuant to paragraph (b) of this section) the self%regulatory
organi/ation shall bring specifc charges, provide notice to the person
charged, aCord the person charged (ith an opportunity to defend
against the charges, and )eep a record of the proceedings- A
deter!ination to i!pose a disciplinary sanction shall be supported by
a (ritten state!ent of the oCense, a su!!ary of the evidence
presented 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 other
self%regulatory organi/ation7 or
:(G) &uspend a !e!ber (ho the self%regulatory organi/ation fnds to
be in such fnancial or operating di+culty that the !e!ber or
participant 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 the
self%regulatory organi/ation i!!ediately notifes the ,o!!ission of
the action ta)en- Any person aggrieved by a su!!ary action
pursuant to this paragraph shall be pro!ptly aCorded an opportunity
for a hearing by the association in accordance (ith the preceding
paragraph- "he ,o!!issioner, by order, !ay stay a su!!ary action
on his o(n or upon application by any person aggrieved thereby, if
the ,o!!issioner deter!ines su!!arily or after due notice and
hearing ((hich hearing !ay consist solely of the sub!ission of
a+davits or presentation of oral argu!ents), that a stay is consistent
(ith the public interest and the protection of the insuring public-
:(c) A self%regulatory organi/ation shall pro!ptly notify the
,o!!ission of any disciplinary sanction on any !e!ber thereof or
participant therein, any denial of !e!bership or participation in such
C)*+te, VIII
THE INSURANCE COMMISSIONER
Tit(e $
ADMINISTRATIVE AND AD/UDICATORY POWERS
Section 4$4. "he 8nsurance ,o!!issioner shall have the duty to see that all la(s
relating to insurance, insurance co!panies and other insurance !atters, !utual
beneft associations, and trusts for charitable uses are faithfully e'ecuted and to
perfor! the duties i!posed upon hi! by this ,ode, and shall, not(ithstanding any
e'isting la(s to the contrary, have sole and e'clusive authority to regulate the
issuance and sale of variable contracts as defned in section t(o hundred thirty%t(o
and to provide 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 ruling, instructions, circulars, orders and decision
as 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 other(ise specifed,
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 a
person associated (ith a !e!ber or a bar of such person fro!
beco!ing so associated- Jithin thirty (;E) days after such notice, any
aggrieved person !ay appeal to the ,o!!issioner fro!, or the
,o!!issioner on its o(n !otion (ithin such period, !ay institute
revie( of, the decision of the self%regulatory organi/ation, at the
conclusion of (hich, after due notice and hearing ((hich !ay consist
solely of revie( of the record before the self%regulatory organi/ation),
the ,o!!issioner shall a+r!, !odify or set aside the sanction- 8n
such proceeding, the ,o!!issioner shall deter!ine (hether the
aggrieved person has engaged or o!itted to engage in the acts and
practices as found by the self%regulatory organi/ation, (hether such
acts and practices constitute (illful violations 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 as
specifed by such organi/ation, (hether such provisions (ere applied
in 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 M
:"$@ 8&IRA,@ ,#MM8&&8#@R
:"8"*@ l :A2M88&"RA"8V@ A2 A2LI28,A"#RN .#J@R&
:&@,- 5;F- "he 8nsurance ,o!!issioner shall be appointed by the
.resident of the Republic of the .hilippines for a ter! of si' (<) years
(ithout reappoint!ent and (ho shall serve as such until the
successor shall have been appointed and Bualifed- 8f the 8nsurance
,o!!issioner is re!oved before the e'piration of his ter! of o+ce,
the reason for the re!oval !ust be published- (@J .ARA?RA.$)
:"he 8nsurance ,o!!issioner shall have the duty to see that all la(s
relating to insurance, insurance co!panies and other insurance
!atters, !utual beneft associations, and trusts for charitable uses
are faithfully e'ecuted and to perfor! the duties i!posed upon hi!
by this ,ode, and shall, not(ithstanding any e'isting la(s to the
contrary, have sole and e'clusive authority to regulate the issuance
and sale of variable contracts as defned in &ection G;4 hereof and to
provide 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 the
enforce!ent of the provisions of this ,ode, to ensure the e+cient
regulation of the insurance industry in accordance (ith global best
practices and to protect the insuring public- @'cept as other(ise
specifed, decisions !ade by the ,o!!issioner shall be appealable to
the &ecretary of Finance- (.reviously: sub1ect to the approval of the
&ecretary of Finance-)
:8n addition to the foregoing, the ,o!!issioner shall have the
follo(ing po(ers and functions:
:(a) For!ulate policies and reco!!endations on issues concerning
the insurance industry, advise ,ongress and other govern!ent
agencies on all aspects of the insurance industry and propose
legislation and a!end!ents thereto7
:(b) Approve, re1ect, suspend or revo)e licenses or certifcates of
registration provided for by this ,ode7
:(c) 8!pose sanctions for the violation of la(s 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 supervise
co!pliance (ith such rules, regulations and orders7
:(e) @nlist the aid and support of, andAor deputi/e any and all
enforce!ent agencies of the govern!ent in the i!ple!entation of its
po(ers and functions under this ,ode7
:(f) 8ssue cease and desist orders to prevent fraud or in1ury to the
insuring public7
:(g) .unish for conte!pt of the ,o!!issioner, both direct and
indirect, 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 or
association to call !eetings of stoc)holders or !e!bers thereof
under its supervision7
:(i) 8ssue subpoena duces tecum and su!!on (itnesses to appear in
any proceeding of the ,o!!ission and, in appropriate cases, order
the e'a!ination, search and sei/ure of all docu!ents, papers, fles
and records, ta' returns, and boo)s of accounts of any entity or
person under investigation as !ay be necessary for the proper
disposition of the cases before it, sub1ect to the provisions of e'isting
la(s7
:(1) &uspend or revo)e, after proper notice and hearing, the license or
certifcate of authority of any entity or person under its regulation,
upon any of the grounds provided by la(7
:()) ,onduct an e'a!ination to deter!ine co!pliance (ith la(s and
regulations if the circu!stances so (arrant as deter!ined by
appropriate 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 its
business on a safe and sound basis: Provided, "hat, the
defcienciesAirregularities found by or discovered by an audit shall be
i!!ediately addressed7
:(!) 8nBuire into the solvency and liBuidity of the institutions under
its 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 insurance
co!panies and other supervised persons or entities7
:(o) "o f' and assess fees, charges and penalties as the
,o!!issioner !ay fnd reasonable in the e'ercise of regulation7 and
:(p) @'ercise such other po(ers as !ay be provided by la( as (ell as
those (hich !ay be i!plied fro!, or (hich are necessary or
Section 4$". 8n addition to the ad!inistrative sanctions provided else(here in this
,ode, the 8nsurance ,o!!issioner is hereby authori/ed, at his discretion, to i!pose
upon the insurance co!panies, their directors andAor o+cers andAor agents, for any
(illful failure or refusal to co!ply (ith, or violation of any provision of this ,ode, or
any order, instruction, regulation, or ruling of the 8nsurance ,o!!issioner, or any
co!!ission or irregularities, andAor conducting business in an unsafe or unsound
!anner as !ay be deter!ined by the 8nsurance ,o!!issioner, the follo(ing:
(a) fnes not in e'cess of fve hundred pesos a day7 and
(b) suspension, or after due hearing, re!oval of directors andAor
o+cers andAor agents-
Section 4$!. "he ,o!!issioner shall have the po(er to ad1udicate clai!s and
co!plaints involving any loss, da!age or liability for (hich in insurer !ay be
ans(erable 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 be
sued under any contract of reinsurance it !ay have entered into7 or for (hich a
!utual beneft association !ay be held liable under the !e!bership certifcates it
has 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 certifcate does not e'ceed in
any single clai! one hundred thousand pesos-
incidental to the e'press po(ers granted the ,o!!ission to achieve
the ob1ectives and purposes of this ,ode-
:"he ,o!!ission shall inde!nify the ,o!!issioner, 2eputy
,o!!issioner, and other o+cials of the ,o!!ission, including
personnel perfor!ing supervision and e'a!ination functions, for all
costs and e'penses reasonably incurred by such persons in
connection (ith any civil or cri!inal actions, suits or proceedings to
(hich they !ay be !ade a party to by the reason of the perfor!ance
of their duties and functions, unless they are fnally ad1udged in such
actions, suits or proceedings to be liable for negligence or
!isconduct-
:8n the event of settle!ent or co!pro!ise, inde!nifcation shall be
provided only in connection (ith such !atters covered by the
settle!ent as to (hich the ,o!!ission is advised by e'ternal counsel
that the persons to be inde!nifed did not co!!it any negligence or
!isconduct:
:"he costs and e'penses incurred in defending the afore!entioned
action, suit or proceeding !ay be paid by the ,o!!ission in advance
of the fnal disposition of such action, suit or proceeding upon receipt
of an underta)ing by or on behalf of the ,o!!issioner, 2eputy
,o!!issioner, o+cer or e!ployee to repay the a!ount advanced
should it ulti!ately be deter!ined by the ,o!!ission that the person
is not entitled to be inde!nifed- (@J)
SEC. 43. 8n addition to the ad!inistrative sanctions provided
else(here in this ,ode, the 8nsurance ,o!!issioner is hereby
authori/ed, at his discretion, to i!pose upon insurance co!panies,
their directors andAor o+cers andAor agents, for any (illful failure or
refusal to co!ply (ith, or violation of any provision of this ,ode, or
any order, instruction, regulation, or ruling of the 8nsurance
,o!!issioner, or any co!!ission or irregularities, andAor conducting
business in an unsafe or unsound !anner as !ay be deter!ined by
the 8nsurance ,o!!issioner, the follo(ing:
:(a) Fines not less than Five thousand pesos (.9,EEE-EE) and not !ore
than "(o hundred thousand pesos (.GEE,EEE-EE)7 and (.reviously:
fnes not in e'cess of fve hundred pesos a day)
"he insurer or surety !ay, in the sa!e action fle a counterclai! against the insured
or the obligee-
"he insurer or surety !ay also fle a cross%clai! against a party for any clai! arising
out of the transaction or occurrence that is the sub1ect !atter of the original action or
of a counterclai! therein-
Jith leave of the ,o!!issioner, an insurer or surety !ay fle a third%party co!plaint
against its reinsurers for inde!nifcation, contribution, subrogation or any other
relief, in respect of the transaction that is the sub1ect !atter of the original action
fled (ith the ,o!!issioner-
"he party fling an action pursuant to the provisions of this section thereby sub!its
his 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 be
concurrent (ith that of the civil courts, but the fling of a co!plaint (ith the
,o!!issioner shall preclude the civil courts fro! ta)ing cogni/ance of a suit
involving the sa!e sub1ect !atter-
Any decision, order or ruling rendered by the ,o!!issioner after a hearing shall have
the force and eCect of a 1udg!ent- Any party !ay appeal fro! a fnal order, ruling or
decision of the ,o!!issioner by fling (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 t(elve 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 petition
shall 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 andAor
o+cers andAor agents-
SEC. 43#. "he ,o!!issioner shall have the po(er to ad1udicate
clai!s and co!plaints involving any loss, da!age or liability for
(hich an insurer !ay be ans(erable 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 be sued under
any contract of reinsurance it !ay have entered into7 or for (hich a
!utual beneft association !ay be held liable under the !e!bership
certifcates it has issued to its !e!bers, (here the a!ount of any
such loss, da!age or liability, e'cluding interest, cost and attorney>s
fees, being clai!ed or sued upon any )ind of insurance, bond,
reinsurance contract, or !e!bership certifcate does not e'ceed in
any single clai! Five !illion pesos (.9,EEE,EEE-EE)- (previously:
3EE,EEE-EE)
:"he po(er of the ,o!!issioner does not cover the relationship
bet(een the insurance co!pany and its agentsAbro)ers but is li!ited
to ad1udicating clai!s and co!plaints fled by the insured against the
insurance co!pany-
:"he ,o!!issioner !ay authori/e any o+cer or group of o+cers
under hi! to conduct investigation, inBuiry andAor hearing and decide
clai!s and he !ay issue rules governing the conduct of ad1udication
and resolution of cases- "he Rules of ,ourt shall have suppletory
application- % A22@2
(2@*@"@2: "he insurer or surety !ay, in the sa!e action fle a
counterclai! against the insured or the obligee-
"he insurer or surety !ay also fle a cross%clai! against a party for
any clai! arising out of the transaction or occurrence that is the
sub1ect !atter of the original action or of a counterclai! therein-
Jith leave of the ,o!!issioner, an insurer or surety !ay fle a third%
party co!plaint against its reinsurers for inde!nifcation,
contribution, subrogation or any other relief, in respect of the
transaction that is the sub1ect !atter of the original action fled (ith
As soon as a decision, order or ruling has beco!e fnal and e'ecutory, the
,o!!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'ecute
said decision, order or a(ard, pursuant to Rule thirty%nine of the Rules of ,ourt-
For the purpose of any proceeding under this section, the ,o!!issioner, or any
o+cer thereof designated by hi!, e!po(ered to ad!inister oaths and a+r!ation,
subpoena (itnesses, co!pel their attendance, ta)e evidence, and reBuire the
production of any boo)s, papers, docu!ents, or contracts or other records (hich are
relevant or !aterial to the inBuiry- 8n case of contu!acy by, or refusal to obey a
subpoena issued to any person, the ,o!!issioner !ay invo)e the aid of any court of
frst instance (ithin the 1urisdiction of (hich such proceeding is carried on, (here
such person resides or carries on his o(n business, in reBuiring the attendance and
testi!ony of (itnesses and the production of boo)s, papers, docu!ents, contracts or
other records- And such court !ay issue an order reBuiring such person to appear
before the ,o!!issioner, or o+cer designated by the ,o!!issioner, there to
produce 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 a
conte!pt thereof-
A full and co!plete record shall be )ept of all proceedings had before the
co!!issioner, or the o+cers thereof designated by hi!, and all testi!ony shall be
ta)en do(n and transcribed by a stenographer appointed by the ,o!!issioner-
A transcribed copy of the evidence and proceeding, or any specifc part thereof, of
any hearing ta)en by a stenographer appointed by the ,o!!issioner, being certifed
by such stenographer to be a true and correct transcript of the testi!ony on this
hearing of a particular (itness, or of a specifc proof thereof, carefully co!pared by
hi! fro! his original notes, and to be a correct state!ent of evidence and
proceeding had in such hearing so purporting to be ta)en and subscribed, !ay be
received as evidence by the ,o!!issioner and by any court (ith the sa!e eCect as
if such stenographer (ere present and testifed to the facts so certifed- (As a!ended
by .residential 2ecree o- 3599)
the ,o!!issioner-)
:"he party fling an action pursuant to the provisions of this section
thereby sub!its his 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 be concurrent (ith that of the civil courts, but the fling
of a co!plaint (ith the ,o!!issioner shall preclude the civil courts
fro! ta)ing cogni/ance of a suit involving the sa!e sub1ect !atter-
:Any decision, order or ruling rendered by the ,o!!issioner after a
hearing shall have the force and eCect of a 1udg!ent- Any party !ay
appeal fro! a fnal order, ruling or decision of the ,o!!issioner by
fling (ith the ,o!!issioner (ithin thirty (;E) days fro! receipt of
copy of such order, ruling or decision a notice of appeal to the ,ourt
of Appeals in the !anner provided for in the Rules of ,ourt for
appeals fro! the Regional "rial ,ourt to the ,ourt of Appeals-
(.R@V8#I&*N: notice of appeal and (ith the &upre!e ,ourt t(elve
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
petition shall be served upon the ,o!!issioner and upon the adverse
party, and proof of service thereof attached to the original of the
petition-)
2@*@"@2: As soon as a decision, order or ruling has beco!e fnal and
e'ecutory, the ,o!!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'ecute said decision, order or
a(ard, pursuant to Rule thirty%nine of the Rules of ,ourt-
:For the purpose of any proceeding under this section, the
,o!!issioner, or any o+cer thereof designated by hi! is e!po(ered
to ad!inister oaths and a+r!ation, subpoena (itnesses, co!pel
Tit(e %
'EES AND OTHER SOURCES O' 'UNDS
Section 4$7. (3) For the issuance or rene(al of certifcates of authority, licenses and
certifcates of registration, pursuant to pertinent provisions of this ,ode, the
,o!!issioner shall collect and receive fees (hich shall be not less than the
follo(ing:
For each certifcate of authority issued to an insurance co!pany
doing business in the .hilippines, t(o hundred pesos-
their attendance, ta)e evidence, and reBuire the production of any
boo)s, papers, docu!ents, or contracts or other records (hich are
relevant or !aterial to the inBuiry-
(2@*@"@2 &@"@,@: 8n case of contu!acy by, or refusal to obey a
subpoena issued to any person, the ,o!!issioner !ay invo)e the aid
of any court of frst instance (ithin the 1urisdiction of (hich such
proceeding is carried on, (here such person resides or carries on his
o(n business, in reBuiring the attendance and testi!ony of (itnesses
and the production of boo)s, papers, docu!ents, contracts or other
records- And such court !ay issue an order reBuiring such person to
appear before the ,o!!issioner, or o+cer designated by the
,o!!issioner, there to produce records, if so ordered or to give
testi!ony touching the !atter in Buestion- Any failure to obey such
order of the court !ay be published by such court as a conte!pt
thereof-)
:A full and co!plete record shall be )ept of all proceedings had
before the ,o!!issioner, or the o+cers thereof designated by hi!,
and all testi!ony shall be ta)en do(n and transcribed by a
stenographer appointed by the ,o!!issioner-
:8n order to pro!ote party autono!y in the resolution of cases, the
,o!!issioner shall establish a syste! for resolving cases through the
use of alternative dispute resolution- D A22@2
(2@*@"@2 .ARA?RA.$: A transcribed copy of the evidence and
proceeding, or any specifc part thereof, of any hearing ta)en by a
stenographer appointed by the ,o!!issioner, being certifed by such
stenographer to be a true and correct transcript of the testi!ony on
this hearing of a particular (itness, or of a specifc proof thereof,
carefully co!pared by hi! fro! his original notes, and to be a correct
state!ent of evidence and proceeding had in such hearing so
purporting to be ta)en and subscribed, !ay be received as evidence
by the ,o!!issioner and by any court (ith the sa!e eCect as if such
stenographer (ere present and testifed to the facts so certifed-)
For each special certifcate of authority issued to a servicing
insurance co!pany, one hundred pesos-
For each license issued to a general agent of an insurance co!pany,
ffty pesos-
For each license issued to an insurance agent, t(enty%fve pesos-
For each license issued to an agent of variable contract policy,
t(enty%fve pesos-
For each license issued to an insurance bro)er, one hundred pesos-
For each license issued to an reinsurance bro)er, one hundred pesos-
For each license issued to an insurance ad1uster, one hundred pesos-
For each certifcate of registration issued to an actuary, ffty pesos-
For each certifcate of registration issued to a resident agent, ffty
pesos-
For each license issued to a rating organi/ation, one hundred pesos-
For each certifcate of registration issued to a non%life co!pany
under(riter, ffty pesos-
For each license issued to a !utual beneft association, ten pesos-
For each certifcate of registration issued to a trust for charitable
uses, ten pesos-
:"8"*@ G
:F@@& A2 #"$@R &#IR,@& #F FI2&
:&@,- 55E- (a) For the issuance or rene(al of certifcates of authority,
licenses and certifcates of registration, pursuant to pertinent
provisions of this ,ode, the ,o!!issioner shall collect and receive
fees (hich shall be not less than the follo(ing:
:For each certifcate of authority issued to an insurance co!pany
doing business in the .hilippines, "(o hundred pesos (.GEE-EE)-
:For each special certifcate of authority issued to a servicing
insurance 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%fve pesos
(.G9-EE)-
:For each license issued to an agent of variable contract policy,
"(enty%fve pesos (.G9-EE)-
:For each license issued to an insurance bro)er, #ne hundred pesos
(.3EE-EE)-
:For each license issued to a reinsurance bro)er, #ne hundred pesos
(.3EE-EE)-
All certifcates of authority and all other licenses, as (ell as all
certifcates of registration, issued to any person, partnership,
association or corporation under the pertinent provisions of this ,ode
for (hich no e'piration date has been prescribed, shall e'pire on the
last day of Lune of each year and shall be rene(ed annually upon
application therefor and pay!ent of the corresponding fee, if the
licensee or holder of such license or certifcate is continuing to
co!ply (ith all the applicable provisions of e'isting la(s, and of
rules, instructions, orders and decisions of the ,o!!issioner-
(G) For the fling of the annual state!ent referred to in section t(o
hundred t(enty%three, the ,o!!issioner shall collect and receive
fro! the insurance co!pany so fling a fee of fve hundred pesos7
.rovided, "hat a fne of one hundred pesos shall be i!posed and
collected by the ,o!!issioner for each (ee) of delay, or any fraction
thereof, in the fling of the annual state!ent-
For the fling of annual state!ent referred to in section four hundred,
the ,o!!issioner shall collect and receive fro! the !utual beneft
association so fling a fee of ten pesos7 .rovided, "hat a fne of ten
pesos shall be i!posed and collected by the ,o!!issioner for each
(ee) of delay, or any fraction thereof, in the fling of the annual
state!ent-
(;) For the e'a!ination prescribed in section t(o hundred forty%si',
the ,o!!issioner shall collect and receive fees according to the
a!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, as
follo(s:
:For each license issued to an insurance ad1uster, #ne hundred pesos
(.3EE-EE)-
:For each certifcate of registration issued to an actuary, Fifty pesos
(.9E-EE)-
:For each certifcate of registration issued to a resident agent, Fifty
pesos (.9E-EE)-
:For each license issued to a rating organi/ation, #ne hundred pesos
(.3EE-EE)-
:For each certifcate of registration issued to a non%life co!pany
under(riter, Fifty pesos (.9E-EE)-
:For each license issued to a !utual beneft association, "en pesos
(.3E-EE)-
:For each certifcate of registration issued to a trust for charitable
uses, "en pesos (.3E-EE)-
:All certifcates of authority and all other licenses, as (ell as all
certifcates of registration, issued to any person, partnership,
association or corporation under the pertinent provisions of this ,ode
for (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 be
rene(ed upon application therefor and pay!ent of the corresponding
fee, if the licensee or holder of such license or certifcate is continuing
to co!ply (ith all the applicable provisions of e'isting la(s, and of
rules, instructions, orders and decisions of the ,o!!issioner-
:(b) For the fling of the annual state!ent referred to in &ection GG6,
the ,o!!issioner shall collect and receive fro! the insurance
co!pany so fling a fee of not less than Five hundred pesos (.9EE-EE):
Provided, "hat a fne 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 t(o hundred pesos7
(d) @ight !illion pesos or !ore but less than ten !illion
pesos, #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 the
Metropolitan Manila area, besides these fees, the ,o!!issioner shall
reBuire of the co!pany e'a!ined the pay!ent of the actual and
necessary travelling and subsistence e'penses of the e'a!iner or
e'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 one
hundred pesos fro! the !utual beneft association e'a!ined7
.rovided, "hat if such association has total assets of !ore than one
hundred thousand pesos, an additional fee of ten pesos for every ffty
thousand pesos in e'cess thereof shall be i!posed7 .rovided, Further,
"hat such fee shall not e'ceed t(o thousand pesos-
(5) For the fling of an application to (ithdra( fro! the .hilippines
under title eighteen, the ,o!!issioner shall collect and receive fro!
the foreign co!pany so (ithdra(ing a fee of one thousand pesos-
(9) "he ,o!!issioner !ay f' and collect fees or charges for
docu!ents, transcripts, or other !aterials (hich !ay be furnished by
hi! not in e'cess of reasonable cost- (As a!ended by .residential
2ecree o- 3599)
delay, or any fraction thereof, in the fling of the annual state!ent-
:For the fling of annual state!ent referred to in &ection 53;, the
,o!!issioner shall collect and receive fro! the !utual beneft
association so fling a fee of not less than "en pesos (.3E-EE):
Provided, "hat a fne 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 fling of the annual state!ent-
:(c) For the e'a!ination prescribed in &ection G9;, the ,o!!issioner
shall collect and receive fees according to the a!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, not less than the
a!ount as follo(s:
:(3) "(o !illion pesos or !ore but less than Four !illion pesos, Four
hundred pesos (.5EE-EE)7
:(G) Four !illion pesos or !ore but less than &i' !illion pesos, @ight
hundred pesos (.4EE-EE)7
:(;) &i' !illion pesos or !ore but less than @ight !illion pesos, #ne
thousand t(o hundred pesos (.3,GEE-EE)7
:(5) @ight !illion pesos or !ore but less than "en !illion pesos, #ne
thousand 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 the
Metropolitan Manila area, besides these fees, the ,o!!issioner shall
reBuire of the co!pany e'a!ined the pay!ent of the actual and
necessary travelling and subsistence e'penses of the e'a!iner or
e'a!iners concerned-
:For the e'a!ination prescribed in &ection 53G, the ,o!!issioner
shall collect and receive a !ini!u! fee of not less than #ne hundred
pesos (.3EE-EE) fro! the !utual beneft association e'a!ined:
Provided, "hat if such association has total assets of !ore than #ne
hundred 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 fscal
year e'ceed the aggregate a!ount of the fees collected under the pertinent
provisions 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 t(o hundred ffty%fve of the ational 8nternal Revenue ,ode, as
a!ended7 .rovided, ho(ever, "hat pending the creation of said 8nsurance Fund, the
provisions of section t(o, 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 and
control of the ,o!!issioner (ho violates any provision of this ,ode, for (hich no
penalty is provided, shall be dee!ed guilty of a penal oCense, and upon conviction
be punished by a fne 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, or
other persons responsible for its operation, !anage!ent, or ad!inistration, unless it
can be proved that they have ta)en no part in the co!!ission of the oCense, shall
li)e(ise be guilty of a penal oCense, and upon conviction be punished by a fne not
e'ceeding ten thousand pesos or i!prison!ent of si' !onths, or both, at the
discretion 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 fling of an application to (ithdra( fro! the .hilippines
under "itle 34, the ,o!!issioner shall collect and receive fro! the
foreign co!pany so (ithdra(ing a fee of not less than #ne thousand
pesos (.3,EEE-EE)-
:(e) "he ,o!!issioner !ay f' and collect fees or charges for
docu!ents, transcripts, or other !aterials (hich !ay be furnished by
hi! not in e'cess of reasonable cost- D # ,$A?@
:SEC. 44$- "he ,o!!issioner, in accordance (ith the rules and
regulations of the 2epart!ent of Hudget and Manage!ent and other
relevant regulatory agencies, shall source the salary, allo(ances and
other e'penses fro! the retained a!ount of the fees, charges,
penalties and other inco!e fro! the regulation of insurance
co!panies and other covered persons and entities, and fro! the
8nsurance Fund, (hich is created out of the proceeds of ta'es on
insurance pre!iu!s !entioned in &ection G99 of the ational 8nternal
Revenue ,ode, as a!ended- D @J
(2@*@"@2 .R#V8&8#: 8f the total e'penses of the 8nsurance
,o!!issioner for every fscal year e'ceed the aggregate a!ount of
the fees collected under the pertinent provisions 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 t(o hundred ffty%fve of the ational
8nternal Revenue ,ode, as a!ended7 .rovided, ho(ever, "hat
pending the creation of said 8nsurance Fund, the provisions of section
t(o, three and four of Republic Act u!bered "(o $undred &eventy%
Five, shall continue to re!ain in force and eCect-)
:MISCELLANEOUS PROVISIONS
:SEC. 44%. Any person, co!pany or corporation sub1ect to the
supervision and control of the ,o!!issioner (ho violates any
Section 4%&. All cri!inal actions for the violation of any of the provisions of this
,ode shall prescribed after three years fro! the discovery of such violation: .rovided,
"hat such actions shall in any event prescribe after ten years fro! the co!!ission of
such violation-
Section 4%$. Any person, partnership, association or corporation heretofore
authori/ed, licensed or registered by the 8nsurance ,o!!issioner shall be dee!ed to
have been authori/ed, licensed or registered under the provisions of this ,ode and
shall be governed by the provisions thereof: .rovided, ho(ever, "hat (here any such
person, partnership, association or corporation is aCected by the ne( reBuire!ents
of this ,ode, said person, partnership association or corporation shall, unless
other(ise herein provided, be given a period of one year fro! the eCectivity of this
,ode (ithin (hich to co!ply (ith the sa!e-
Section 4%%. @'cept as e'pressly provided by this ,ode, all la(s 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 declared
invalid, the other provisions, so far as they are separable fro! the invalid ones, shall
re!ain in force-
Section 4%4. "his ,ode shall ta)e eCect i!!ediately
provision of this ,ode, for (hich no penalty is provided, shall be
dee!ed guilty of a penal oCense, and upon conviction be punished by
a fne not e'ceeding "(o hundred thousand pesos (.GEE,EEE-EE) or
i!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, the
o+cers, directors, or other persons responsible for its operation,
!anage!ent, or ad!inistration, unless it can be proved that they
have ta)en no part in the co!!ission of the oCense, shall li)e(ise be
guilty of a penal oCense, and upon conviction be punished by a fne
not e'ceeding "(o hundred thousand pesos (.GEE,EEE-EE) or
i!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! the
discovery of such violation: Provided, "hat such actions shall in any
event prescribe after ten (3E) years fro! the co!!ission of such
violation- D no change
:SEC. 444. Any person, partnership, association or corporation
heretofore authori/ed, licensed or registered by the ,o!!issioner
shall be dee!ed to have been authori/ed, licensed or registered
under the provisions of this ,ode and shall be governed by the
provisions thereof: Provided, however, "hat (here any such person,
partnership, association or corporation is aCected by the ne(
reBuire!ents of this ,ode, said person, partnership, association or
corporation shall, unless other(ise herein provided, be given a period
of one (3) year fro! the eCectivity of this ,ode (ithin (hich to
co!ply (ith the sa!e- no change
:&@,- 559- Transitory Provision- D Rene(al of e'isting licenses,
certifcates of authority or accreditation (hich (ill e'pire on Lune ;E,
GE3; shall be valid until 2ece!ber ;3, GE39- "hereafter, rene(al
shall be fled on the last day of 2ece!ber every third year follo(ing
the date of e'piry of the license, certifcate of authority or
accreditation- % @J
:&@,- 55<- Repealing lause- D @'cept as e'pressly provided by this
,ode, all la(s, decrees, orders, rules and regulations or parts thereof,
inconsistent (ith any provision of this ,ode shall be dee!ed
repealed, a!ended or !odifed accordingly- @J
:&@,- 55F- !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 other(ise aCected shall re!ain valid
and subsisting- @J
:&@,- 554- "his ,ode shall ta)e eCect ffteen (39) days follo(ing its
publication in a ne(spaper of general circuation-Q @J