Facts:

1. White Gold Marine Services procured a protection and indemnity coverage for its vessels
from Steamship Mutual Underwriting Association Limited (Steamship Mutual) through
Pioneer Insurance and Surety Corporation.
2. White Gold failed to pay its accounts
o Steamship refused to renew the coverage and thereafter filed a case for collection
of sum of money.
o White Gold filed a complaint against Steamship Mutual claiming that it does not
have a certificate of authority for an insurance corporation
o and that Pioneer does not have any license as an insurance agent or insurance
broker of Steamship Mutual
3. The Insurance Commission dismissed the complaint .
o no need for Steamship Mutual to secure a license because it was not engaged in
the insurance business
 Protection and Indemnity club
 "an association composed of shipowners in general who band together for
the specific purpose of providing insurance cover on a mutual basis against
liabilities incidental to shipowning that the members incur in favor of third
parties
o
Pioneer need not obtain another license because Steamship is not engaged in the
insurance business
o Pioneer is already licensed therefore a separate license would be redundant and
not necessary
4. The CA affirmed the decision of the Insurance Commissioner
o Pioneer only acted as a collection agent of Steamship Mutual

Issues: (1) Is Steamship Mutual, a P & I Club, engaged in the insurance business in the
Philippines? (2) Does Pioneer need a license as an insurance agent/broker for Steamship Mutual?

Ruling:

1. Yes. Steamship Mutual is engaged in the Insurance Business in the Philippines.

1. A P and I club is a form of insurance.
 "an association composed of shipowners in general who band together for
the specific purpose of providing insurance cover on a mutual basis against
liabilities incidental to shipowning that the members incur in favor of third
parties
2. the test to determine if a contract is an insurance contract or not, depends on
1. the nature of the promise
2. the act required to be performed
3. and the exact nature of the agreement in the light of the occurrence,
contingency of circumstance under which the performance becomes
requisite.
 It is not by what is is called.
  an insurance contract is a contract of indemnity. In it, one undertakes
for a consideration to indemnify another against loss, damage or
liability arising from an unknown or contingent event
3. Therefore Steamship Mutual is engaged in the business of insurance because its
primary purpose is to provide protection and indemnity coverage
0. A P & I Club is "a form of insurance against third party liability, where the
third party is anyone other than the P & I Club and the members. By
definition then, Steamship Mutual as a P & I Club is a mutual insurance
association engaged in the marine insurance business.
2. Yes. Although Pioneer is already an insurance company it still needs a separate license,
in accordance with the law, to act as an insurance agent for Steamship.

Principle:

1. An insurance contract is based its purpose not what it is called. It is a contract where
one undertakes for a consideration to indemnify another against loss, damage or liability
arising from an unknown or contingent event.
2. An insurance company is required by law to obtain a certificate of authority before
engaging in insurance business here in the Philippines. And insurance agent, even if it's
already a legitimate insurance company, needs a separate license to be an agent or
broker.
o Since a contract of insurance involves public interest, regulation by the State is
necessary.