Insurance Law Review 2016. Day 3 (1)

7/26/2019 Insurance Law Review 2016. Day 3 (1)

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RE UISITES OF


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CONCEALMENT+a/&ar$% >n' - $)e (a*$ )!*)

)e ne5le*$- $'*'##un!*a$e 'r "!-*l'-e

+ / &ar$% *'n*eal!n5 !- "u$%

'un" $' "!-*l'-e -u*)(a*$ $' $)e '$)er

RE UISITES OF


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CONCEALMENTa/&ar$% *'n*eal!n5 #a>e- n'

arran$% a- $' *'n*eale"(a*$

/'$)er &ar$% )a- n' #ean-

'( a-*er$a!n!n5 $)e (a*$*'n*eale"

W AT MUST BE


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COMMUNICATED

All (a*$- !$)!n )!->n' le"5eMa$er!al $' $)e *'n$ra*$O$)er &ar$% )a- n' #ean-

'( a-*er$a!n!n5

e #a>e- n' arran$%In('r#a$!'n )!*) &r'.e 'r

$en" $' &r'.e (al-!$% '(

W AT NEED NOT BECO C


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COMMUNICATED

T)'-e )!*) $)e '$)er>n' -

T)'-e )!*), !n $)ee er*!-e '( 'r"!nar% *a-e,

$)e '$)er 'u5)$ $' >n'an" )!*) $)e '$)er )a- n'rea-'n $' -u&&'-e )!#!5n'ran$

W AT NEED NOT BECOMMUNICATED


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COMMUNICATED

T)'-e '( )!*) $)e '$)er a!.e-*'##un!*a$!'n

T)'-e )!*) &r'.e 'r $en" $' &r'.e$)e e !-$en*e '( a r!-> e *lu"e" % aarran$%, an" )!*) are n'$'$)er !-e #a$er!al an"

T)'-e )!*) rela$e $' a r!-> e *e&$e"(r'# $)e &'l!*%, an" )!*) are n'$'$)er !-e #a$er!al

W AT NEED NOT BECOMMUNICATED


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COMMUNICATED

General *au-e- '&en $' )!-!n u!r% )!*) #a% a e*$ $)e&'l!$!*al 'r #a$er!al &er!l-*'n$e#&la$e" +


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COMMUNICATED

Na$ure 'r a#'un$ '(!n$ere-$, e *e&$ !n an- er$' an !n u!r% +< /

In('r#a$!'n '( )!- ' n

@u"5#en$ +


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De$er#!ne" n'$ % e.en$

r' a le an" rea-'na le!n uen*e '( (a*$- u&'n $)e&ar$% $' )'#*'##un!*a$!'n !- "ue !n('r#!n5 )!- e-$!#a$e '( $)e"!-a".an$a5e- '( $)e&r'&'-e" *'n$ra*$ OR !n

TEST OF MATERIALITY


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TEST OF MATERIALITY

A--e--#en$ '( r!->, !n#a>!n5 '#!$$!n5 (ur$)er!n u!r!e-, *au-e )!# $'re@e*$ $)e r!-> 'r a**e&$ !$a$ )!5)er &re#!u#ra$e "! eren$ $er#-

MATERIALITY


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Sunlife v. CA, 245 SCRA 268 -w*ere t*e applicant concealedprior medical *istory and *edied in a plane cras*/ t*erewas still concealmentnotwit*standin+ t*e apparentlac3 of relation )etween t*efact concealed and t*e causeof deat*

BAR 2001


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BAR 2001 A applied for non-medical life

insurance& 7e did not inform t*einsurer t*at *e was e.amined andcon2ned at St& Lu3eJs 7ospital w*ere*e was dia+nosed for lun+ cancer& Adied in a plane cras*& Is t*e insurerlia)le considerin+ t*at t*e fact

concealed *ad no )earin+ wit* t*ecause of deat* of A8

ANSWER


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ANSWER T*e insurer is not lia)le& T*e concealed

fact is material to t*e appro,al andissuance of t*e policy& Accordin+ to adecided case/ t*e insured need not dieof t*e disease *e failed to disclose tot*e insurer& It is suKcient t*at *is non-disclosure misled t*e insurer in formin+

*is estimate of t*e ris3s of t*e proposedinsurance policy or in ma3in+ furt*erin5uiries&

BAR 2011


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BAR 2011 An insured/ w*o +ains 3nowled+e of a

material fact already after t*eeEecti,ity of t*e insurance policy/ isnot o)li+ed to di,ul+e it& T*e reason fort*is is t*at t*e test of concealment ofmaterial fact is determined

BAR 2011


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BAR 2011 A& at t*e time of t*e issuance of t*e

policy&B& at any time )efore t*e payment ofpremium&C& at t*e time of t*e payment of t*epremium&D& at any time )efore t*e policy

)ecomes eEecti,e&

ANSWER


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ANSWER

D& at any time )efore t*e policy)ecomes eEecti,e&

WAIVER OF RIG T TOINFORMATION


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INFORMATION

B% $er#- '( !n-uran*e OR

Ne5le*$ $' #a>e !n u!r!e-

*'n*eal#en$ en$!$le- $)eun5u!l$% &ar$% $' re-*!n"


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CONCEALMENTIN MARINE INSURANCE


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IN MARINE INSURANCE

-$a$e e a*$ an" )'le $ru$) !nrela$!'n $' all #a$$er- $)a$ )ere&re-en$-

!n('r#a$!'n '( el!e( 're &e*$a$!'n '( a $)!r" &er-'na- $' a #a$er!al (a*$ !-MATERIAL

!n-ure" !- &re-u#e" $' >n'&r!'r l'-- a$ $!#e '( !n-ur!n5


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W EN INCONTESTABILITYCLAUSE


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CLAUSE

DOES NOT A LY Fraud of a ,icious type is present w*en policy

was ta3en out

Bene2ciary failed to furnis* proof of deat* orto comply wit* any condition imposed )y t*epolicy after t*e loss *as *appened

T*at t*e action was not )rou+*t wit*in timespeci2ed


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S!GG%ST%D ANS=%R


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9B< $ay t*e incontesta)ility period set in e,enin cases of fraud as alle+ed in t*is case8

T*e incontesta)ility clause s*all not apply)ecause t*e niece did not *a,e insura)leinterest on t*e life of *er aunt& 7ence/ s*ecannot use t*e clause to reco,er&

CA?%AT


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T*e facts were culled from t*e case $anila Ban3ers ,& A)an 9@uly :(/

:10>:

90< In,estment products suc* as )onds andsecurities/ trust accounts/ and ot*er similarinstruments

9:< Deposit accounts or transactions w*ic*are unfunded/ or t*at are 2ctitious orfraudulent


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W AT TO DO WIT DICE CLUSIONS

Grounds for Petition for Certiorari: e cess of


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Grounds for Petition for Certiorari: e .cess of

urisdiction or wit* suc* +ra,e a)use of discretion asto amount to a lac3 or e.cess of urisdiction&

petition for certiorari may only )e 2led wit*in t*irty

9>1< days from notice of denial of claim for depositinsurance&


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INS!R%D D%P SIT

dd * ll d i i *


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add to+et*er all deposits in t*e)an3 maintained in t*e sameri+*t and capacity for *is

)ene2ts eit*er in *is own nameor in t*e name of ot*ers &


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OINT ACCOUNT


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P(11/111 @uan W or PedroX:

P'11/111Pedro W $ariaX0

BalanceAccount 7olderAccount X


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W O WILL AY 800,000 0 st > years of RA (4Q / P:41/111 s*all )e


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0 > years of RA (4Q / P:41/111 s all )e

paid )y PDIC/ P:41/111 )y t*e national+o,ernment

Con+ress s*all annually appropriate t*enecessary fundin+ to reim)urse t*eCorporation for any payment to insureddepositors paid in e.cess of P:41/111&11&

After > years/ solely )y PDIC


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IN CASE OF T REATED ORIM ENDING CLOSURE OF BANK


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PDIC/ in coordination wit* t*eBan+3o Sentral/ may conduct a

special e.amination as t*eBoard of Directors/ )y anaKrmati,e ,ote of a ma orityof all of its mem)ers


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SANCTIONS AGAINST UNSAFE ANDUNSOUND BANK RACTICES


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If no correcti,e action )y monetary )oard wit*in4 days from su)mission of report/ PDIC )oards*all ta3e correcti,e action

PDIC Board may issue cease and desist order andcorrect practices wit*in 4 days/ may impose 2ne

If practice will cause insol,ency or dissipateassets/ period to correct is 04 days


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ROLE OF DIC IN CLOSEDBANKS %Eecti,e immediately upon ta3eo,er as recei,er of


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y p

suc* )an3/ t*e powers/ functions and duties/ as wellas all allowances/ remunerations and per5uisites oft*e directors/ oKcers/ and stoc3*olders of suc*)an3 are suspended/ and t*e rele,ant pro,isions oft*e Articles of Incorporation and By-laws of t*eclosed )an3 are li3ewise deemed suspended


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S LITTING OF DE OSITS A deposit account wit* an outstandin+ )alance of


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more t*at t*e statutory ma.imum amount ofinsured deposit maintained under t*e name ofnatural or uridical persons is )ro3en down andtransferred into two 9:< or more accounts in t*ename s of natural or uridical persons or entitiesw*o *a,e no )ene2cial owners*ip on transferreddeposits in t*eir names

S LITTING OF DE OSITS Transfer is made wit*in 0:1 days immediately


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precedin+ or durin+ a )an3-declared )an3 *oliday/or immediately precedin+ a closure order issued )yt*e $onetary Board of t*e Ban+3o Sentral n+Pilipinas for t*e purpose of a,ailin+ of t*e ma.imumdeposit insurance co,era+e&

BAR 2000 BD *as a )an3 deposit of *alf a


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BD as a )an3 deposit of alf amillion pesos& Since t*e PDIC limitis P:41/111/ BD would li3e someprotection for t*e e.cess )y ta3in+out an insurance a+ainst all ris3sarisin+ from unsound )an3practices& Does BD *a,e insura)leinterest under t*e Insurance Code8

ANSWER#es/ BD *as insura)le interest in


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#es/ BD as insura)le interest in*is )an3 deposit& In case of loss tot*e e.tent of t*e amount notco,ered )y PDIC/ BD will )edamni2ed& 7e will suEerpecuniary loss of P:41/111 sincePDIC Law only co,ers accounts upto P:41/111&

BAR 2010 =*en CCID%NTAL Ban3 folded up due


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pto insol,ency/ $anuel *ad t*efollowin+ separate deposits in *isname" P:11/111 in sa,in+s deposit

P:41/111 in time deposit P41/111 in acurrent account P0 million in a trustaccount and P> million in money

mar3et placement& !nder t*eP*ilippine Deposit InsuranceCorporation Act/ *ow muc* could$anuel reco,er8 %.plain& 9:;


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FRAMEWORK


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GeneralConcepts Life Insurance

Non-LifeInsurance

Payment ofProceeds

Grounds forRescission PDIC Law

Summary ofAmendments inInsurance Code


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OLD AND NEW INSURANCE CODECOM ARED

S!$$AR# F A$%ND$%NTSLD INS!RANC% C D% INS!RANC% C D% F :10>

S%CTI N >" C NS%NT F S%CTI N >" C NS%NT F S OUSE


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S%CTI N >" C NS%NT FUSBAND Y

S%CTI N >" C NS%NT F S OUSE

S%CTI N >" T*e married woman or t*eminor *erein allowed to ta3e out aninsurance policy may e.ercise all t*eri+*ts and pri,ile+es of an owner undera policy&

All ri+*ts/ title and interest in t*e policyof insurance ta3en out )y an ori+inalowner on t*e life or *ealt* of a #!n'rs*all automatically ,est in t*e minorupon t*e deat* of t*e ori+inal owner/unless ot*erwise pro,ided for in t*epolicy&

S%CTI N >" D%L%TI N F $ARRI%D= $AN $IN R PR ?ISI N TA ING

!T A P LIC#&All ri+*ts/ title and interest in t*epolicy of insurance ta3en out )y anori+inal owner on t*e life or *ealt*of $)e &er-'n !n-ure" s*all

automatically ,est in t*e la$$erupon t*e deat* of t*e ori+inalowner/ unless ot*erwise pro,idedfor in t*e policy&

S!$$AR# F A$%ND$%NTS


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LD INS!RANC% C D% INS!RANC% C D% F :10>

S%CTI N " %,ery&er-'n / partners*ip/

association/ orcorporation dulyaut*ori ed to transactinsurance )usiness aselsew*ere pro,ided int*is code/ may )e aninsurer&

S%CTI N " D%L%T%D T7% = RD VP%RS NZ

Section & %,ery*'r&'ra$!'n /partners*ip/ orassociation/ dulyaut*ori ed to transactinsurance )usiness aselsew*ere pro,ided int*is Code/ may )e aninsurer


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S%CTI N 41/ F !RT7 PARAGRAP7& S%CTI N 41/ F !RT7 PARAGRAP7"


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S%CTI N 41/ F !RT7 PARAGRAP7&Group insurance and +roup annuitypolicies/ *owe,er/ may )etypewritten and need not )e inprinted form&

S%CTI N 41/ F !RT7 PARAGRAP7Deleted VT#P%=RITT%NZ pro,isionand replaced it wit*"

Notwit*standin+ t*e fore+oin+/ t*epolicy may )e in electronic formsu) ect to t*e pertinent pro,isionsof Repu)lic Act No& 'Q(:/ ot*erwise3nown as t*e [%lectronicCommerce ActJ and to suc* rulesand re+ulations as may )eprescri)ed )y t*e Commissioner&


S%CTI N 1" An open policy is one Section 1& An open policy is one in


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S%CTI N 1 An open policy is onein w*ic* t*e ,alue of t*e t*in+insured is not a+reed upon/ )ut isleft to )e ascertained in case ofloss&

Section 1& An open policy is one inw*ic* t*e ,alue of t*e t*in+insured is not a+reed upon/ an"$)e a#'un$ '( $)e !n-uran*e#erel% re&re-en$- $)e!n-urer;- #a !#u# l!a !l!$%9T)e .alue '( -u*) $)!n5 !n-ure"-)all e a-*er$a!ne" a$ $)e$!#e '( $)e l'--9


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S%CTI N QQ"An insurer is entitled S%CTI N QQ& An insurer is entitled


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S%CTI N QQ An insurer is entitledto payment of t*e premium assoon as t*e t*in+ insured ise.posed to t*e peril insureda+ainst& Notwit*standin+ anya+reement to t*e contrary/ nopolicy or contract of insuranceissued )y an insurance company is,alid and )indin+ unless and untilt*e premium t*ereof *as )eenpaid/ e.cept in t*e case of a life oran industrial life policy w*ene,ert*e +race period pro,ision applies&

S%CTI N QQ& An insurer is entitledto payment of t*e premiumYNotwit*standin+ any a+reementYpremium t*ereof *as )een paid/e.cept in t*e case of a life or anindustrial life policy w*ene,er t*e+race period pro,ision applies/ 'r)ene.er un"er $)e r'>er an"a5en*% a5ree#en$- !$) "ul%l!*en-e" !n$er#e"!ar!e-, an!ne$% +=0/6"a% *re"!$e $en-!'n !- 5!.en9 N' *re"!$e $en-!'n $' a "ul% l!*en-e"!n$er#e"!ar% -)'ul" e *ee"n!ne$% +=0/ "a%- (r'# "a$e '(!--uan*e '( $)e &'l!*%9



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S%CTI N Q'" An ac3nowled+mentin a policy or contract of insuranceor t*e receipt of premium isconclusi,e e,idence of itspayment/ so far as to ma3e t*epolicy )indin+/ notwit*standin+ any

stipulation t*erein t*at it s*all not)e )indin+ until t*e premium isactually paid&

S%CTI N Q'& Becomes Section Q(and in its place"

Se*$!'n H9 E#&l'%ee- '( $)eRe&u l!* '( $)e )!l!&&!ne-,!n*lu"!n5 !$- &'l!$!*al

-u "!.!-!'n- an"!n-$ru#en$al!$!e-, an"5'.ern#en$6' ne" 'r6*'n$r'lle" *'r&'ra$!'n-, #a%&a% $)e!r !n-uran*e &re#!u#-an" l'an ' l!5a$!'n- $)r'u5)

-alar% "e"u*$!'n:


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Section ( & =*ere t*e insured iso,erinsured )y dou)le insurance "

9)< =*ere t*e policy under w*ic* t*einsured claims is a ,alued policy/ t*einsured must +i,e credit as a+ainst t*e,aluation for any sum recei,ed )y *im

under any ot*er policy wit*out re+ardto t*e actual ,alue of t*e su) ectmatter insured

9c< =*ere t*e policy under w*ic* t*einsured claims is an un,alued policy *emust +i,e credit/ as a+ainst t*e fullinsura)le ,alue/ for any sum recei,ed)y *im under any policy

S%CTI N ( " =*ere t*e insured !n a&'l!*% '$)er $)an l!(e is o,er insured)y dou)le insurance"

H9)< =*ere t*e policy under w*ic* t*einsured claims is a ,alued policy/ anysum recei,ed )y *im under any ot*er

policy s*all )e deducted from t*e ,alueof t*e policy wit*out re+ard to t*eactual ,alue of t*e su) ect matterinsured

9c< =*ere t*e policy under w*ic* t*einsured claims is an un,alued policy/any sum recei,ed )y *im under anypolicy s*all )e deducted a+ainst t*e fullinsura)le ,alue/ for any sum recei,ed)y *im under any policy



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Se*$!'n 1 =9 Life insurance isinsurance on *uman li,es andinsurance appertainin+ t*ereto orconnected t*erewit*&

Section 0'0& Life insurance isinsurance on *uman li,es andinsurance appertainin+ t*ereto orconnected t*erewit*&QE.er% *'n$ra*$ 'r un"er$a>!n5('r $)e &a%#en$ '( annu!$!e-

!n*lu"!n5 *'n$ra*$- ('r $)e&a%#en$ '( lu#& -u#- un"er are$!re#en$ &r'5ra# )ere al!(e !n-uran*e *'#&an%#ana5e- 'r a*$- a- a $ru-$ee('r -u*) re$!re#en$ &r'5ra#

-)all e *'n-!"ere" a l!(e!n-uran*e *'n$ra*$ ('r&ur&'-e- '( $)!- C'"e9



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Section 0'1& T*ird para+rap*In t*e a)sence of a udicial+uardianYmay e.ercise/ in )e*alfof said minor/ any ri+*t under t*epolicy/ wit*out necessity of court

aut*ority or t*e +i,in+ of a )ond/w*ere t*e interest of t*e minor int*e particular act !n.'l.e" "'e-n'$ e *ee" $ en$% $)'u-an"&e-'-9

Section 0':& T*ird para+rap*In t*e a)sence of a udicial+uardianY may e.ercise/ in )e*alfof said minor/ any ri+*t under t*epolicy/ wit*out necessity of court

aut*ority or t*e +i,in+ of a )ond/w*ere t*e interest of t*e minor int*e particular act in,ol,ed does note.ceed F!.e )un"re" $)'u-an"&e-'- + 800,000900/ 'r !n -u*)rea-'na le a#'un$ a- #a% e

"e$er#!ne" % $)eC'##!--!'ner9


Section 0'1& T*ird para+rap* Section 0':&


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In $)e a -en*e 'r !n *a-e '( $)e!n*a&a*!$% '( $)e (a$)er 'r #'$)er,$)e 5ran"&aren$, $)e el"e-$r'$)er 'r -!-$er a$ lea-$ e!5)$een+1H/ %ear- '( a5e, 'r an% rela$!.e)' )a- a*$ual *u-$'"% '( $)e#!n'r !n-ure" 'r ene7*!ar%, -)alla*$ a- a 5uar"!an !$)'u$ nee" '( a*'ur$ 'r"er 'r @u"!*!al a&&'!n$#en$a- -u*) 5uar"!an, a- l'n5 a- -u*)&er-'n !- n'$ '$)er !-e"!- ual!7e" 'r !n*a&a*!$a$e"9

a%#en$ #a"e % $)e !n-urer&ur-uan$ $' $)!- -e*$!'n -)allrel!e.e -u*) !n-urer '( an% l!a !l!$%un"er $)e *'n$ra*$9



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N N% Section 0'Q *andles pro,isions onmicro insurance

S!#!lar $' !n"u-$r!al !n-uran*e*'n*e&$


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S%CTI N 0'Q/ PAR Q S%CTI N 0(>/ PAR Q


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Suc* certi2cate of aut*ority s*alle &!re 'n $)e la-$ "a% '( une'( ea*) %ear and s*all )erenewed annually if t*e companyis continuin+ to comply wit* t*epro,isions of t*is Code or t*ecirculars/ instructions/ rulin+s ordecisions of t*e Commissioner&%,ery company recei,in+ anysuc* certi2cates of aut*oritys*all )e su) ect to t*e pro,isionsof t*is Code and ot*er relatedlaws and to t*e urisdiction andsuper,ision of t*e Commissioner&

T*e certi2cate of aut*orityissued )y t*e Commissioners*all e.pire 'n $)e la-$ "a% '(De*e# er, $)ree +


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N N% S%CTI N 0(>/ LAST PARHNo insurance company issued wit*a ,alid certi2cate of aut*ority totransact insurance )usinessanyw*ere in t*e P*ilippines )y t*eInsurance Commissioner/ s*all )e

)arred/ pre,ented/ ordisenfranc*ised from issuin+ anyinsurance policy or fromtransactin+ any insurance )usinesswit*in t*e scope or co,era+e of itscerti2cate of aut*ority/ anyw*ere

in t*e P*ilippines/ )y any local+o,ernment unit or aut*ority/ forw*ate,er +uise or reasonw*atsoe,er/



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N N% S%CTI N 0(>/ LAST PARincludin+ under any 3ind ofordinance/ accreditation system/ orsc*eme& Any local ordinance orlocal +o,ernment unit re+ulatory

issuance imposin+ suc* restrictionor disenfranc*isement on anyinsurance company s*all )edeemed null and ,oid a initio &


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S%CTI N 0''"

Dec& >0/ 0(Q'" additional P>$Dec& >0/ 0(Q(" additional P $Dec& >0/ 0('1" additional P4$

S%CTI N 0(

Domestic insurance companyalready doin+ )usiness in t*eP*ilippines -)all )a.e a ne$'r$)

B% une


241/323

S%CTI N 0''"

Pre-licensin+ re5uirement of a newinsurance company/ in addition tot*e paid-up capital stoc3- re5uirestoc3*olders to pay in cas* to t*ecompany in proportion to t*eir

su)scription interests a contri)utedsurplus fund of not less t*an P0$

Life insurance company- not lesst*an P411/111

may also re5uire suc* company tosu)mit to *im a )usiness plans*owin+ t*e company s estimatedreceipts and dis)ursements/ as wellas t*e )asis t*erefor/ for t*e ne.tsucceedin+ t*ree years&

S%CTI N 0(

Pre-licensin+ re5uirement of a newinsurance company/ in addition tot*e paid-up capital stoc3/ re5uire t*estoc3*olders to pay in cas* to t*ecompany in proportion to t*eir

su)scription interests a contri)utedsurplus fund of not less t*an P011$

$ay also re5uire suc* company tosu)mit to *im a )usiness plans*owin+ t*e companyJs estimatedreceipts and dis)ursements/ as wellas t*e )asis t*erefor/ for t*e ne.tsucceedin+ > years&



242/323

S%CTI N 0''"

If or+ani ed as a mutualcompany/ in lieu of suc* *a&!$al-$'*> / it must *a,e a,aila)le*a-) a--e$- of at lea-$ 7.e#!ll!'n &e-'- a)o,e alllia)ilities for losses reported/e.penses/ ta.es/ le+al reser,e/and reinsurance of alloutstandin+ ris3s/ and t*econtri)uted surplus fund e5ual tot*e amounts re5uired of stoc3corporations

S%CTI N 0(

If or+ani ed as a mutualcompany/ in lieu of suc* ne$'r$) / it must *a,e a,aila)le$'$al #e# er- e u!$% !n ana#'un$ $' e "e$er#!ne" %$)e In-uran*e C'##!--!'n a)o,e all lia)ilities for lossesreported/ e.penses/ ta.es/ le+alreser,e/ and reinsurance of alloutstandin+ ris3s/ and t*econtri)uted surplus fund e5ual tot*e amounts re5uired of stoc3corporations&


243/323



244/323

S%CTI N 0''"N N%

S%CTI N 0(

For t*e purpose of t*is section/net wort* s*all consist of"H9a< Paid-up capitalH9)< Retained earnin+s

H9c< !nimpaired surplus andH9d< Re,aluation of assets asmay )e appro,ed )y t*eCommissioner&HT*e Commission may adopt forpurposes of compliance wit*

capital )uild up re5uirementunder t*is Code t*e reco+nitionas part of t*e capital account/capital notes or de)enturesw*ic* are su)ordinate to allcredits and senior only to


245/323


246/323


S%CTI N 0(0" N N% S%CTI N 0(Q Forei+n Corporations


247/323

T*e Commissioner may/ as apre-licensin+ re5uirement of anew )ranc* oKce of a forei+ninsurance company/ in additionto t*e re5uired asset or networt*/ re5uire t*e company to*a,e an additional surplus fundin an amount to )e determined)y t*e Insurance Commission&


S%CTI N 0(: S%CTI N 0('


248/323

In t*e e,ent of any companyceasin+ to do )usiness in t*eP*ilippines t*e securitiesdeposited as aforesaid s*all )ereturned u&'n $)e *'#&an% -#a>!n5 a&&l!*a$!'n $)ere('rand pro,in+ to t*e satisfaction oft*e Commissioner t*at it *as nofurt*er lia)ility under any of itspolicies in t*e P*ilippines&

T*e securities deposited asaforesaid s*all )e returned to t*ecompany upon t*eC'##!--!'ner;- r!$$ena&&r'.al and only after t*ecompany *as duly pro,en in itsapplication t*erefor t*at it *asno furt*er lia)ility w*atsoe,erunder any of its policies nor toany of its creditors in t*eP*ilippines&


S%CTI N 0( S%CTI N :11


249/323

An insurance company doin+)usiness in t*e P*ilippines s*allat all times maintain a mar+in ofsol,ency w*ic* s*all )e ane.cess of t*e ,alue of itsadmitted assets e.clusi,e of itspaid-up capital/ in t*e case of adomestic company/ or an e.cessof t*e ,alue of its admittedassets in t*e P*ilippinesY

An insurance company doin+)usiness in t*e P*ilippines s*allat all times #a!n$a!n $)e#!n!#u# &a!"6u& *a&!$al,an" ne$ 'r$) re u!re#en$-a- &re-*r! e" % $)eC'##!--!'ner9 Suc* sol,encyre5uirements s*all )e )ased on!n$erna$!'nall% a**e&$e"-'l.en*% (ra#e 'r>- andadopted only after dueconsultation wit* t*e insuranceindustry associations&


S%CTI N 0(4 S%CTI N :10


250/323

No domestic insurancecorporation s*all declare ordistri)ute any di,idend on itsoutstandin+ stoc3s e *e&$ (r'#&r'7$- a$$e-$e" in a swornstatement to t*e Commissioner)y t*e president or treasurer oft*e corporation to )e remainin+on *and after retainin+unimpaired"

No domestic insurancecorporation s*all declare ordistri)ute any di,idend on itsoutstandin+ stoc3s unle-- !$)a- #e$ $)e #!n!#u# &a!"6u& *a&!$al an" ne$ 'r$)re u!re#en$- un"er Se*$!'n1= an" e.cept from pro2tsattested in a sworn statement tot*e Commissioner )y t*epresident or treasurer of t*ecorporation to )e remainin+ on*and after retainin+ unimpaired"


S%CTI N 0(4 S%CTI N :10


251/323

9a) The entire paid-up capital stock;(b) The margin of solvency required by sectionone hundred ninety-four;(c) In the case of life insurance corporation,the legal reserve fund required by section two

hundred eleven;(d) In the case of corporations other than life,the legal reserve fund required by section twohundred thirteen;(e) sum sufficient to pay all net lossesreported, or in the course of settlement, andall liabilities for e!penses and ta!es"

(a) The entire paid-up capital stock(b) The solvency requirements defined by

#ection $%%;(c) In the case of life insurance corporations,the legal reserve fund required by #ection$&';(d) In the case of corporations other than life,the legal reserve fund required by #ection$& ; and(e) sum sufficient to pay all net lossesreported, or in the course of settlement, andall liabilities for e!penses and ta!es"The Commissioner shall prescribesolvency requirements for branches offoreign insurance companies operating inthe Philippines.


S%CTI N 0(

d f

S%CTI N :1:

d f


252/323

In any determination of t*e2nancial condition of anyinsurance company doin+)usiness in t*e P*ilippines/ t*eres*all )e allowed and admitted a-a--e$- 'nl% -u*) a--e$-' ne" )y t*e insurancecompany concerned and w*ic*consist of"

In any determination of t*e2nancial condition of anyinsurance company doin+)usiness in t*e P*ilippines/ t*eres*all )e allowed and admitted asassets only suc* assets le5all%'r ene7*!all% owned )y t*einsurance company concerneda- "e$er#!ne" % $)eC'##!--!'ner w*ic* consist of"


S%CTI N 0(

C * i * i f *

S%CTI N :1:

9 C * i * i f *


253/323

Cas* in t*e possession of t*einsurance company or in transitunder its control/ and t*e trueand duly ,eri2ed )alance of anydeposit of suc* company in a2nancially sound commercial)an3 or trust company&

9a< Cas* in t*e possession of t*einsurance company or in transitunder its control/ and t*e trueand duly ,eri2ed )alance of anydeposit of suc* company in a2nancially sound )an3 or trustcompany "ul% au$)'r! e" %$)e Ban5>' Sen$ral n5!l!&!na-9


S%CTI N 0('

S *$!' 1 H9 N i

S%CTI N :1

A l!( ! * *'#& %


254/323

Se*$!'n 1=H9 No insurancecompany s*all loan any of itsmoney or deposits to anyperson/ corporation orassociation/ e.cept upon 2rstmort+a+e or deeds of trust ofunencum)ered/ impro,ed orunimpro,ed real estateY

A l!(e !n-uran*e *'#&an% maylend to any of its policy*oldersupon t*e security of t*e ,alue ofits policy suc* sum as may )edetermined pursuant to t*epro,isions of t*e policy&

N' !n-uran*e *'#&an% -)alll'an an% '( !$- #'ne% 'r"e&'-!$- $' an% &er-'n,*'r&'ra$!'n 'r a--'*!a$!'n,e *e&$ u&'n $)e -e*ur!$% '(an% '( $)e ('ll' !n5:


S%CTI N 0('

S *$!' 1 H9 N i

S%CTI N :1

+ / F! $ #' $5 5 ' " "


255/323


+a/ F!r-$ #'r$5a5e 'r "ee"-'( $ru-$ '( re5!-$ere",unen*u# ere", !#&r'.e",un!#&r'.e" real e-$a$e,!n*lu"!n5 *'n"'#!n!u#-+ / F!r-$ #'r$5a5e- 'r "ee"-'( $ru-$ '( a*$uall%*ul$!.a$e", !#&r'.e" an"unen*u# ere" a5r!*ul$urallan"- !n $)e )!l!&&!ne-+*/ ur*)a-e #'ne%#'r$5a5e-, lea-e &ur*)a-ea5ree#en$- 'r -!#!lar-e*ur!$!e- e e*u$e" 'rre*e!.e" % !$ 'n a**'un$ '($)e -ale 'r e *)an5e '( real&r'&er$% a* u!re" &ur-uan$$' Se*$!'n- 203 an" 20H


S%CTI N 0('

S *$!' 1 H9 N i

S%CTI N :1

+"/ B' " ' '$)


256/323


+"/ B'n"- 'r '$)er!n-$ru#en$- '( !n"e $e"ne--!--ue" 'r 5uaran$ee" % $)eG'.ern#en$ '( $)e)!l!&&!ne- 'r !$- &'l!$!*al-u "!.!-!'n- au$)'r! e" %la $' !n*ur -u*) ' l!5a$!'n-'r !--ue -u*) 5uaran$ee- 'r'( 5'.ern#en$6' ne" 'r6*'n$r'lle" *'r&'ra$!'n- an"!n-$ru#en$al!$!e- !n*lu"!n5$)e Ban5>' Sen$ral n5!l!&!na- 'r


S%CTI N 0('

Se*$!'n 1 H9 No ins r nce

S%CTI N :1

+e/ O l!5a$!'n ! ue" 'r


257/323


+e/ O l!5a$! n- !--ue r5uaran$ee" % un!.er-al an>-,*'##er*!al an>-, ' -)'rean>!n5 un!$-, !n.e-$#en$)'u-e- 'r '$)er 7nan*!al!n$er#e"!ar!e- "ul% re5!-$ere"

!$) $)e Ban5>' Sen$ral n5!l!&!na- 'r

+(/ O l!5a$!'n- !--ue" 'r5uaran$ee" % ('re!5n an>- 'r*'r&'ra$!'n-, ea*) '( )!*) -)all)a.e $'$al ne$ 'r$) '( a$ lea-$

One )un"re" 7($% #!ll!'n US"'llar- + US180,000,000900/ 'r-u*) '$)er )!5)er ne$ 'r$) a-#a% e &re-*r! e" % $)eIn-uran*e C'##!--!'n, a- -)' n!n $)e!r 7nan*!al -$a$e#en$- a-'( $)e !##e"!a$el% &re*e"!n5


S%CTI N 0('

Se*$!'n 1=H9 No insurance

S%CTI N :1+5/ A--!5n#en$- '( #'ne$ar%!n $ru#en$ u*) a *a )


258/323


!n-$ru#en$- -u*) a- *a-)"e&'-!$-, "e&'-!$ *er$!7*a$e- 'r'$)er -!#!lar !n-$ru#en$- '(un!.er-al an>-, *'##er*!alan>-, !n.e-$#en$ )'u-e- 'r'$)er 7nan*!al !n$er#e"!ar!e-

"ul% re5!-$ere" !$) $)e Ban5>'Sen$ral n5 !l!&!na- 'r+)/ le"5e- '( -)are- '( -$'*>,'n"- 'r '$)er !n-$ru#en$- '(!n"e $e"ne-- -&e*!7e" !nSe*$!'n 20= 'r+!/ C)a$$el #'r$5a5e- '.er

e u!en$ n'$ #'re $)an $)ree+


259/323

Se*$! n 1=H9 No insurancecompany s*all loan any of itsmoney or deposits to anyperson/ corporation orassociation/ e.cept upon 2rstmort+a+e or deeds of trust ofunencum)ered/ impro,ed orunimpro,ed real estateY

QT)e l an- &r .! e !n $)e &re e !n5-u -e*$!'n -)all e -u @e*$ $' $)e('ll' !n5 *'n"!$!'n-:+1/ T)e a#'un$ '( l'an -e*ure" %real e-$a$e #'r$5a5e '.er a n'n6a5r!*ul$ural lan" -)all n'$ e *ee"-e.en$% &er*en$ + 0 / '( !$-a&&ra!-e" .alue, an" !n $)e *a-e '( al'an -e*ure" % a real e-$a$e#'r$5a5e '.er an a5r!*ul$ural lan",$)e a#'un$ '( l'an -)all n'$ e *ee"('r$% &er*en$ + 0 / '( !$- #ar>e$.alue: Provided , T)a$, !n n' *a-e -)all-u*) l'an )a.e a #a$ur!$% &er!'" !ne *e-- '( $ en$%67.e +28/ %ear-

+2/ Unle-- a&&r'.e" % $)eC'##!--!'ner, n' l'an #a% e5ran$e" u&'n $)e -e*ur!$% '( a#'r$5a5e 'n !#&r'.e" real e-$a$e !($)e !#&r'.e#en$- $)ere'n "' n'$el'n5 $' $)e ' ner '( $)e lan", an"$)e ' ner '( $)e !#&r'.e#en$- "'e-


S%CTI N 0('

Se*$!'n 1=H9 No insurance

S%CTI N :1

any of its political subdivisions and a long-term lease


260/323

Se*$! n 1=H9 No insurancecompany s*all loan any of itsmoney or deposits to anyperson/ corporation orassociation/ e.cept upon 2rstmort+a+e or deeds of trust ofunencum)ered/ impro,ed orunimpro,ed real estateY

any of its political subdivisions, and a long-term leasehas been executed in favor of the owner of theimprovements, the owner of the land need not be aparty to the deed of mortgage. The expiration date ofthe lease shall not, however, precede the maturity ofthe loan. The phrase improved real estate as usedherein shall mean land with permanent building orbuildings erected thereon ;!"# $ease-agreements or similar securities received onthe sale of real estate property shall not exceed onehundred percent !%&&'# of the selling price of saidproperty, or one hundred percent !%&&'# of its mar(etvalue at the time of its disposition, whichever amountis lower. )owever, in no case shall such agreementhave a maturity period not exceeding thirty !" years*


261/323


S%CTI N 0((

No loan )y any insurance

S%CTI N :14

No loan )y any insurance


262/323

No loan )y any insurancecompany on t*e security of realestate s*all )e made unless t*etitle to suc* real estate s*all*a,e 2rst )een re+istered inaccordance wit* t*e e.istin+Land Re+istration Act/ or s*all )ea titulo real duly re+istered/ or*a,e )een pre,iously re+isteredunder t*e pro,isions of t*ee.istin+ $ort+a+e Law&

No loan )y any insurancecompany on t*e security of realestate s*all )e made unless t*etitle to suc* real estate s*all*a,e 2rst )een re+istered inaccordance wit* t*e e.istin+Land Re+istration Act/ or s*all*a,e )een pre,iously re+isteredunder t*e pro,isions of t*ee.istin+ $ort+a+e Law an" $)el!en 'r !n$ere-$ '( $)e!n-uran*e *'#&an% a-#'r$5a5ee )a- eenre5!-$ere"9


S%CTI N :11

90< An insurance company may

S%CTI N :1

9)< An insurance company may


263/323

90< An insurance company maypurc*ase/ *old/ own and con,eysuc* property/ real and personal/as may *a,e )een mort+a+ed/pled+ed/ or con,eyed to it in+ood fait* in trust for its )ene2t)y reason of money loaned )y itin pursuance of t*e re+ular)usiness of t*e company/ andsuc* real or personal property asmay *a,e )een purc*ased )y itat sales under pled+es/mort+a+es orY

9)< An insurance company maypurc*ase/ *old/ an" own $)e('ll' !n5:+1/ Real &r'&er$!e- )!*)-er.e a- !$- #a!n &la*e '(u-!ne-- an" 'r ran*)'P*e-: Provided , T)a$ -u*)!n.e-$#en$ -)all n'$ !n $)e'.erall e *ee" $ en$%&er*en$ +20 / '( !$- ne$'r$) a- -)' n % !$- la$e-$7nan*!al -$a$e#en$ a&&r'.e"% $)e C'##!--!'ner9


LD INS!RANC% C D% INS!RANC% C D% F :10>S%CTI N :11 S%CTI N :1


264/323

90< An insurance company maypurc*ase/ *old/ own and con,eysuc* property/ real and personal/as may *a,e )een mort+a+ed/pled+ed/ or con,eyed to it in

+ood fait* in trust for its )ene2t)y reason of money loaned )y itin pursuance of t*e re+ular)usiness of t*e company/ andsuc* real or personal property asmay *a,e )een purc*ased )y it

at sales under pled+es/mort+a+es orY

+2/ B'n"- 'r '$)er!n-$ru#en$- '( !n"e $e"ne--of t*e Go,ernment of t*eP*ilippines or its politicalsu)di,isions aut*ori ed )y law toissue )onds at t*e reasona)lemar3et ,alue t*ereof&9>< Bonds or ot*er !n-$ru#en$- of de)t of +o,ernment-owned or-controlled corporations andentities/ includin+ t*e Ban+3oSentral n+ Pilipinas&

9 < Bonds/ de)entures or ot*er!n-$ru#en$- of inde)tedness ofany sol,ent *'r&'ra$!'n orinstitution created or e.istin+


265/323


266/323


267/323

S!$$AR# F A$%ND$%NTSOLD INSURANCE CODE NE W INSURANCE CODE OF

201 /

If t*e Commissioner is of t*eopinion upon e.amination ofot*er e,idence t*at anydomestic or forei+n insurance

company is in an unsoundcondition/ or t*at it *as failed tocomply wit* t*e pro,isions of lawor re+ulations o)li+atory upon it/or t*at its condition or met*od of)usiness is suc* as to render its

proceedin+s *a ardous to t*epu)lic or to its policy*olders/ ort*at its ne$ 'r$)re u!re#en$ / in t*e case of adomestic stoc3 company/ or itsa,aila)le cas* assets/ in t*e case


201 l!(e!n-uran*e *'#&an% -)all e


201 Section >0:


287/323

T*e Commissioner s*all/ in orderto determine t*e competence ofe,ery applicant to *a,e t*e 3ind

of license applied for/ re5uiresuc* applicant to su)mit to awritten e.amination and to passt*e same to t*e satisfaction oft*e Commissioner& Suc*e.amination s*all )e *eld at

suc* times and places as t*eCommissioner s*all from time totime determine&

T*e Commissioner s*all/ in orderto determine t*e competence ofe,ery applicant to *a,e t*e 3indof license applied for/ re5uire

suc* applicant to su)mit to awritten e.amination and to passt*e same to t*e satisfaction oft*e Commissioner& T)eC'##!--!'ner #a% "ele5a$e'r au$)'r! e $)e

a"#!n!-$ra$!'n '( $)ee a#!na$!'n $' an!n"e&en"en$ 'r5an! a$!'n,-u @e*$ $' -u*) *'n"!$!'n-$)a$ $)e C'##!--!'ner #a%&r'.!"e9


2011( Section >0'


288/323

ld penalty is P01/111&11 /enalty to procure, receive or forwardapplications of insurance in, or to issue or todeliver or accept policies or contracts ofinsurance of or for, any insurance company orcompanies not authori2ed to transactbusiness in the /hilippines, covering risks, lifeor non-life, situated in the /hilippines; and anysuch person, partnership, association orcorporation violating the provisions of thissection shall be deemed guilty of a penaloffense, and upon conviction thereof, shall foreach such offense be punished by a fine of/$ %,%%%"%%, or imprisonment of si! (7)months, or both, at the discretion of the court;3Provided , That the provisions of this sectionshall not a l to reinsurance"


201> Section > >


289/323

Any ,iolation of any pro,ision oft*is title s*all )e punis*ed )y a2ne of n'$ #'re $)an tent*ousand pesos/ or )y

imprisonment in t*e discretion oft*e court Pro,ided/ T*at/ in caseof a partners*ip/ association orcorporation/ t*e said penaltys*all )e imposed upon t*epartner/ president/ mana+er/

mana+in+ director/ director orperson in c*ar+e of its )usinessor responsi)le for t*e ,iolation&

Any ,iolation of any pro,ision oft*is title s*all )e punis*ed )y a2ne of n'$ le-- t*an Tent*ousand pesos/ 9P01/111&11


290/323

life insurance company doing business in the/hilippines be allowed to continue doing suchbusiness unless they shall engage theservices of an actuary duly accredited with theommissioner who shall, during his tenure ofoffice, be directly responsible for the directionand supervision of all actuarial workconnected with or that may be involved in thebusiness of the insurance company"

life insurance company doing business in the/hilippines be allowed to continue doing suchbusiness unless they shall engage theservices of an actuary duly accredited with theommissioner who shall, during his tenure ofoffice, be directly responsible for the directionand supervision of all actuarial workconnected with or that may be involved in thebusiness of the insurance company" TheCommissioner may also require non-lifeinsurance companies to engage theservices of an accredited actuary, inaccordance with the rules and regulationsthat the Commissioner will formulate.


201>4N N%

Section > 4The registration of the actuary shall be

suspended or revoked by the ommissioneron the following grounds3


291/323

g g(&) 8ailure to adequately perform required

functions and duties under this ode;($) 8ailure to disclose conflict of interest;(6) 8ailure to comply with the ode of

onduct of the ctuarial #ociety of the/hilippines; or(+) #uch other grounds that may bedetermined by the ommissioner"

1o actuary engaged by a life insurancecompany shall be at the same time astockholder or a director of the board, chiefe!ecutive officer or chief financial officer of thecompany or hold any position that theommissioner may determine to have aninherent conflict of interest to the position of


OLD INSURANCE CODE NE W INSURANCE CODE OF

201>'/ : nd PAR Section > Q/ : nd PAR


292/323

S%CTI N >> / : PAR

N N%

Section > Q/ : PAR 1o e!ternal auditor shall be engaged bysupervised persons or entities unless it hasbeen issued an accreditation certificate by theommissioner" The accreditation certificateshall be valid until 9ecember 6& of the thirdyear from issuance unless it is revoked orsuspended" The ommissioner shall issuerules and regulations to govern theaccreditation of the e!ternal auditor and the

revocation or suspension of the accreditation"


OLD INSURANCE CODE NE W INSURANCE CODE OF201QQ

TITL% (HBANCASS!RANC%


295/323

TITL% (HBANCASS!RANC%

T*e term ancassurance s*allmean t*e presentation and saleto )an3 customers )y aninsurance company of itsinsurance products wit*in t*epremises of t*e *ead oKce ofsuc* )an3 duly licensed )y t*eBan+3o Sentral n+ Pilipinas orany of its )ranc*es under suc*rules and re+ulations w*ic* t*eCommissioner and t*e Ban+3oSentral n+ Pilipinas maypromul+ate&


OLD INSURANCE CODE NE W INSURANCE CODE OF201


296/323

N N%Section >Q4->QQ

To en+a+e in )ancassurancearran+ement/ a )an3 is not

re5uired to *a,e e5uityowners*ip of t*e insurancecompany& No insurance companys*all enter into a )ancassurancearran+ement unless it possessesall t*e re5uirements as may )e

prescri)ed )y t*e Commissionerand t*e Ban+3o Sentral n+Pilipinas&H


201Q4->QQ


297/323

N N%No insurance product under t*issection/ w*et*er life or non-life/s*all )e issued or deli,eredunless in t*e form pre,iouslyappro,ed )y t*e Commissioner&

Section >Q & Personnel tas3ed topresent and sell insuranceproducts wit*in t*e )an3premises s*all )e duly licensed)y t*e Commissioner and s*all)e su) ect to t*e rules andre+ulations of t*is Act&




298/323

N N%Section >Q4->QQ

Section >QQ& T*e Commissionerand t*e Ban+3o Sentral n+

Pilipinas s*all promul+ate rulesand re+ulations to eEecti,elysuper,ise t*e )usiness of)ancassurance&




299/323

Section >QQ Section >(1

In t*e case of a landtransportation operator/ t*einsurance +uaranty in cas* orsurety )ond s*all co,er lia)ilityfor deat* or )odily in uries oft*ird-parties and or passen+ersarisin+ out of t*e use of suc*,e*icle in t*e amount not lesst*an Twel,e t*ousand pesos9P0:/111&11< per passen+er ort*ird -party and an amount/ foreac* of suc* cate+ories/ in anyone accident of not less t*an




300/323

Section >QQSection >(1

(&) :otor vehicles with an authori2ed capacityof twenty-si! ($7) or more passengers3 8ifty

thousand pesos; (/ %,%%%"%%);

($) :otor vehicles with an authori2ed capacityof from twelve (&$) to twenty-five ($ )passengers3 8orty thousand pesos;(/+%,%%%"%%);

(6) :otor vehicles with an authori2ed capacityof from si! (7) to eleven (&&) passengers3Thirty thousand pesos; (/6%,%%%"%%);(+) :otor vehicles with an authori2ed capacityof five ( ) or less passengers3 8ive thousand


OLD INSURANCE CODE NE W INSURANCE CODE OF201(1


301/323

Section >QQPri,ate Cars9i< Bantam" Twenty t*ousandpesos 9P:1/111&111/111&11(1


302/323

Section >QQ(

:< t*er Pri,ate ?e*icles9i< Tricycles/ motorcycles andscooters" Twel,e t*ousand pesos

9P0:/111&111/111&11< and9i,< ?e*icles wit* an unladenwei+*t o,er >/(>1 3ilos" Fiftyt*ousand esos P41 111&11 &


201(: Section 14No mutual )ene2t association


303/323

Capitali ation used to )eP01/111

s*all )e issued a license tooperate as suc* unless it *asconstituted and esta)lis*ed aGuaranty Fund )y depositin+

wit* t*e Commissioner an initialminimum amount of F!.e#!ll!'n &e-'-+ 8,000,000900/ in cas*/ or in+o,ernment securities wit* atotal ,alue e5ual to suc*

amount/ to answer for any ,alid)ene2t claim of any of itsmem)ers&


OLD INSURANCE CODE NE W INSURANCE CODE OF

201

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Insurance Law Review 2016. Day 3 (1)

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