Chapter II CLASSES OF INSURANCE Title I MARINE INSURANCE Sub-Title 1- A DEFINITION Sec. 99. Marine In urance inclu!

e " #1$ In urance a%ain t l& &' &r !a(a%e t&"

Sec. 167. The &.ner &' a hip ha an in urable intere t in e4pecte! 'rei%hta%e .hich acc&r!in% t& the &r!inar, an! pr&bable c&ur e &' thin% he .&ul! ha+e earne! but '&r the inter+enti&n &' a peril in ure! a%ain t &r &ther peril inci!ent t& the +&,a%e. Sec. 168. The intere t (enti&ne! in the la t ecti&n e4i t * in ca e &' a charter part,* .hen the hip ha br&-en %r&un! &n the chartere! +&,a%e. I' a price i t& be pai! '&r the carria%e &' %&&! it e4i t .hen the, are actuall, &n b&ar!* &r there i &(e c&ntract '&r puttin% the( &n b&ar!* an! b&th hip an! %&&! are rea!, '&r the peci'ie! +&,a%e. Sec. 169. One .h& ha an intere t in the thin% 'r&( .hich pr&'it are e4pecte! t& pr&cee! ha an in urable intere t in the pr&'it . Sec. 16:. The charterer &' a hip ha an in urable intere t in it* t& the e4tent that he i liable t& be !a(ni'ie! b, it l& . Sub-Title 1-C CONCEALMENT Sec. 16;. In (arine in urance each part, i b&un! t& c&((unicate* in a!!iti&n t& .hat i re<uire! b, ecti&n t.ent,ei%ht* all the in'&r(ati&n .hich he p& e e * (aterial t& the ri -* e4cept uch a i (enti&ne! in Secti&n thirt,* an! t& tate the e4act an! .h&le truth in relati&n t& all (atter that he repre ent * &r up&n in<uir, !i cl& e &r a u(e t& !i cl& e. Sec. 16=. In (arine in urance* in'&r(ati&n &' the belie' &r e4pectati&n &' a thir! per &n* in re'erence t& a (aterial 'act* i (aterial. Sec. 169. A per &n in ure! b, a c&ntract &' (arine in urance i pre u(e! t& ha+e -n&.le!%e* at the ti(e &' in urin%* &' a pri&r l& * i' the in'&r(ati&n (i%ht p& ibl, ha+e reache! hi( in the u ual (&!e &' tran (i i&n an! at the u ual rate &' c&((unicati&n. Sec. 116. A c&nceal(ent in a (arine in urance* in re pect t& an, &' the '&ll&.in% (atter * !&e n&t +itiate the entire c&ntract* but (erel, e4&nerate the in urer 'r&( a l& re ultin% 'r&( the ri - c&nceale!" #a$ The nati&nal character &' the in ure!0 #b$ The liabilit, &' the thin% in ure! t& capture an! !etenti&n0 #c$ The liabilit, t& ei>ure 'r&( breach &' '&rei%n la. &' tra!e0 #!$ The .ant &' nece ar, !&cu(ent 0 #e$ The u e &' 'al e an! i(ulate! paper . Sub-Title 1-D RE1RESENTATION Sec. 111. I' a repre entati&n b, a per &n in ure! b, a c&ntract &' (arine in urance* i intenti&nall, 'al e in an, (aterial re pect* &r in re pect &' an, 'act &n .hich the character an! nature &' the ri - !epen! * the in urer (a, re cin! the entire c&ntract. Sec. 115. The e+entual 'al it, &' a repre entati&n a t& e4pectati&n !&e n&t* in the ab ence &' 'rau!* a+&i! a c&ntract &' (arine in urance. Sub-Title 1-E IM1LIED ?ARRANTIES Sec. 117. In e+er, (arine in urance up&n a hip &r 'rei%ht* &r 'rei%hta%e* &r up&n an, thin% .hich i the ub2ect &' (arine in urance* a .arrant, i i(plie! that the hip i ea.&rth,. Sec. 118. A hip i ea.&rth, .hen rea &nabl, 'it t& per'&r( the er+ice an! t& enc&unter the &r!inar, peril &' the +&,a%e c&nte(plate! b, the partie t& the p&lic,. Sec. 119. An i(plie! .arrant, &' ea.&rthine i c&(plie! .ith i' the hip be ea.&rth, at the ti(e &' the &' c&((ence(ent &' the ri -* e4cept in the '&ll&.in% ca e " #a$ ?hen the in urance i (a!e '&r a peci'ie! len%th &'

#a$ )e el * cra't* aircra't* +ehicle * %&&! * 'rei%ht * car%&e * (erchan!i e* e''ect * !i bur e(ent * pr&'it * (&ne, * ecuritie * ch& e in acti&n* e+i!ence &' !ebt * +aluable paper * b&tt&(r,* an! re p&n!entia intere t an! all &ther -in! &' pr&pert, an! intere t therein* in re pect t&* appertainin% t& &r in c&nnecti&n .ith an, an! all ri - &r peril &' na+i%ati&n* tran it &r tran p&rtati&n* &r .hile bein% a e(ble!* pac-e!* crate!* bale!* c&(pre e! &r i(ilarl, prepare! '&r hip(ent &r .hile a.aitin% hip(ent* &r !urin% an, !ela, * t&ra%e* tran hip(ent* &r re hip(ent inci!ent theret&* inclu!in% .ar ri - * (arine buil!er/ ri - * an! all per &nal pr&pert, 'l&ater ri - 0 #b$ 1er &n &r pr&pert, in c&nnecti&n .ith &r appertainin% t& a (arine* inlan! (arine* tran it &r tran p&rtati&n in urance* inclu!in% liabilit, '&r l& &' &r !a(a%e ari in% &ut &' &r in c&nnecti&n .ith the c&n tructi&n* repair* &perati&n* (aintenance &r u e &' the ub2ect (atter &' uch in urance #but n&t inclu!in% li'e in urance &r uret, b&n! n&r in urance a%ain t l& b, rea &n &' b&!il, in2ur, t& an, per &n ari in% &ut &' &.ner hip* (aintenance* &r u e &' aut&(&bile $0 #c$ 1reci&u t&ne * 2e.el * 2e.elr,* preci&u (etal * .hether in c&ur e &' tran p&rtati&n &r &ther.i e0 #!$ 3ri!%e * tunnel an! &ther in tru(entalitie &' tran p&rtati&n an! c&((unicati&n #e4clu!in% buil!in% * their 'urniture an! 'urni hin% * 'i4e! c&ntent an! upplie hel! in t&ra%e$0 pier * .har+e * !&c- an! lip * an! &ther ai! t& na+i%ati&n an! tran p&rtati&n* inclu!in% !r, !&can! (arine rail.a, * !a( an! appurtenant 'acilitie '&r the c&ntr&l &' .ater.a, . #5$ "Marine protection and indemnity insurance," (eanin% in urance a%ain t* &r a%ain t le%al liabilit, &' the in ure! '&r l& * !a(a%e* &r e4pen e inci!ent t& &.ner hip* &perati&n* charterin%* (aintenance* u e* repair* &r c&n tructi&n &' an, +e el* cra't &r in tru(entalit, in u e &' &cean &r inlan! .ater.a, * inclu!in% liabilit, &' the in ure! '&r per &nal in2ur,* illne &r !eath &r '&r l& &' &r !a(a%e t& the pr&pert, &' an&ther per &n. Sub-Title 1-3 INSURA3LE INTEREST Sec. 166. The &.ner &' a hip ha in all ca e an in urable intere t in it* e+en .hen it ha been chartere! b, &ne .h& c&+enant t& pa, hi( it +alue in ca e &' l& " 1r&+i!e!* That in thi ca e the in urer hall be liable '&r &nl, that part &' the l& .hich the in ure! cann&t rec&+er 'r&( the charterer. Sec. 161. The in urable intere t &' the &.ner &' the hip h,p&thecate! b, b&tt&(r, i &nl, the e4ce &' it +alue &+er the a(&unt ecure! b,b&tt&(r,. Sec. 165. Frei%hta%e* in the en e &' a p&lic, &' (arine in urance* i%ni'ie all the bene'it !eri+e! b, the &.ner* either 'r&( the charterin% &' the hip &r it e(pl&,(ent '&r the carria%e &' hi &.n %&&! &r th& e &' &ther .

Ana Rhea Echavez Insurance Code

ti(e* the i(plie! .arrant, i n&t c&(plie! .ith unle the hip be ea.&rth, at the c&((ence(ent &' e+er, +&,a%e it un!erta-e !urin% that ti(e0 #b$ ?hen the in urance i up&n the car%& .hich* b, the ter( &' the p&lic,* !e cripti&n &' the +&,a%e* &r e tabli he! cu t&( &' the tra!e* i t& betran hippe! at an inter(e!iate p&rt* the i(plie! .arrant, i n&t c&(plie! .ith unle each +e el up&n .hich the car%& i hippe!* &rtran hippe!* be ea.&rth, at the c&((ence(ent &' each particular +&,a%e. Sec. 11:. A .arrant, &' ea.&rthine e4ten! n&t &nl, t& the c&n!iti&n &' the tructure &' the hip it el'* but re<uire that it be pr&perl, la!en* an! pr&+i!e! .ith a c&(petent (a ter* a u''icient nu(ber &' c&(petent &''icer an! ea(en* an! the re<ui ite appurtenance an! e<uip(ent* uch a balla t * cable an! anch&r * c&r!a%e an! ail * '&&!* .ater* 'uel an! li%ht * an! &ther nece ar, &r pr&per t&re an! i(ple(ent '&r the +&,a%e. Sec. 11;. ?here !i''erent p&rti&n &' the +&,a%e c&nte(plate! b, a p&lic, !i''er in re pect t& the thin% re<ui ite t& (a-e the hip ea.&rth, there'&r* a .arrant, &' ea.&rthine i c&(plie! .ith i'* at the c&((ence(ent &' each p&rti&n* the hip i ea.&rth, .ith re'erence t& that p&rti&n. Sec. 11=. ?hen the hip bec&(e un ea.&rth, !urin% the +&,a%e t& .hich an in urance relate * an unrea &nable !ela, in repairin% the !e'ect e4&nerate the in urer &n hip &r hip&.ner/ intere t 'r&( liabilit, 'r&( an, l& ari in% there'r&(. Sec. 119. A hip .hich i ea.&rth, '&r the purp& e &' an in urance up&n the hip (a,* ne+erthele * b, rea &n &' bein% un'itte! t& recei+e the car%&* beun ea.&rth, '&r the purp& e &' the in urance up&n the car%&. Sec. 156. ?here the nati&nalit, &r neutralit, &' a hip &r car%& i e4pre l, .arrante!* it i i(plie! that the hip .ill carr, the re<ui ite !&cu(ent t& h&. uch nati&nalit, &r neutralit, an! that it .ill n&t carr, an, !&cu(ent .hich ca t rea &nable u pici&n there&n. Sub-Title 1-F T@E )OAABE AND DE)IATION Sec. 151. ?hen the +&,a%e c&nte(plate! b, a (arine in urance p&lic, i !e cribe! b, the place &' be%innin% an! en!in%* the +&,a%e in ure! in &ne .hich c&n'&r( t& the c&ur e &' ailin% 'i4e! b, (ercantile u a%e bet.een th& e place . Sec. 155. I' the c&ur e &' ailin% i n&t 'i4e! b, (ercantile u a%e* the +&,a%e in ure! b, a (arine in urance p&lic, i that .a, bet.een the place peci'ie!* .hich t& a (a ter &' &r!inar, -ill an! !i creti&n* .&ul! (ean the (& t natural* !irect an! a!+anta%e&u . Sec. 157. De+iati&n i a !eparture 'r&( the c&ur e &' the +&,a%e in ure!* (enti&ne! in the la t t.& ecti&n * &r an unrea &nable !ela, in pur uin% the +&,a%e &r the c&((ence(ent &' an entirel, !i''erent +&,a%e. Sec. 158. A !e+iati&n i pr&per" #a$ ?hen cau e! b, circu( tance &+er .hich neither the (a ter n&r the &.ner &' the hip ha an, c&ntr&l0 #b$ ?hen nece ar, t& c&(pl, .ith a .arrant,* &r t& a+&i! a peril* .hether &r n&t the peril i in ure! a%ain t0 #c$ ?hen (a!e in %&&! 'aith* an! up&n rea &nable %r&un! &' belie' in it nece it, t& a+&i! a peril0 &r #!$ ?hen (a!e in %&&! 'aith* '&r the purp& e &' a+in% hu(an li'e &r relie+in% an&ther +e el in !i tre . Sec. 159. E+er, !e+iati&n n&t peci'ie! in the la t ecti&n i i(pr&per. Sec. 15:. An in urer i n&t liable '&r an, l& happenin% t& the thin% in ure! ub e<uent t& an i(pr&per !e+iati&n.

Sub-Title 1-B LOSS Sec. 15;. A l& (a, be either t&tal &r partial. .hich i n&t t&tal i partial. (a, be either actual &r c&n tructi+e. i cau e b," &' the thin% b, in-in%* &r b, t& Sec. 15=. E+er, l& Sec. 159. A t&tal l&

Sec. 176. An actual t&tal l&

#a$ A t&tal !e tructi&n &' the thin% in ure!0 #b$ The irretrie+able l& bein% br&-en up0

#c$ An, !a(a%e t& the thin% .hich ren!er it +aluele the &.ner '&r the purp& e '&r .hich he hel! it0 &r

#!$ An, &ther e+ent .hich e''ecti+el, !epri+e the &.ner &' the p& e i&n* at the p&rt &' !e tinati&n* &' the thin% in ure!. Sec. 171. A c&n tructi+e t&tal l& i &ne .hich %i+e t& a per &n in ure! a ri%ht t& aban!&n* un!er Secti&n &ne hun!re! thirt,-nine. Sec. 175. An actual l& (a, be pre u(e! 'r&( the c&ntinue! ab ence &' a hip .ith&ut bein% hear! &'. The len%th &' ti(e .hich i u''icient t& rai e thi pre u(pti&n !epen! &n the circu( tance &' the ca e. Sec. 177. ?hen a hip i pre+ente!* at an inter(e!iate p&rt* 'r&( c&(pletin% the +&,a%e* b, the peril in ure! a%ain t* the liabilit, &' a (arine in urer &n the car%& c&ntinue a'ter the, are thu re hippe!. N&thin% in thi ecti&n hall pre+ent an in urer 'r&( re<uirin% an a!!iti&nal pre(iu( i' the ha>ar! be increa e! b, thi e4ten i&n &' liabilit,. Sec. 178. In a!!iti&n t& the liabilit, (enti&ne! in the la t ecti&n* a (arine in urer i b&un! '&r !a(a%e * e4pen e &' !i char%in%* t&ra%e* re hip(ent* e4tra 'rei%hta%e* an! all &ther e4pen e incurre! in a+in% car%& re hippe! pur uant t& the la t ecti&n* up t& the a(&unt in ure!. N&thin% in thi &r in the prece!in% ecti&n hall ren!er a (arine in urer liable '&r an, a(&unt in e4ce &' the in ure! +alue &r* i' there be n&ne* &' the in urable +alue. Sec. 179. Up&n an actual t&tal l& * a per &n in ure! i entitle! t& pa,(ent .ith&ut n&tice &' aban!&n(ent. Sec. 17:. ?here it ha been a%ree! that an in urance up&n a particular thin%* &r cla &' thin% * hall be 'ree 'r&( particular a+era%e* a (arine in urer i n&t liable '&r an, particular a+era%e l& n&t !epri+in% the in ure! &' the p& e i&n* at the p&rt &' !e tinati&n* &' the .h&le &' uch thin%* &r cla &' thin% * e+en th&u%h it bec&(e entirel, .&rthle 0 but uch in urer i liable '&r hi pr&p&rti&n &' all %eneral a+era%e l& a e e! up&n the thin% in ure!. Sec. 17;. An in urance c&n'ine! in ter( t& an actual l& !&e n&t c&+er a c&n tructi+e t&tal l& * but c&+er an, l& * .hich nece aril, re ult in !epri+in% the in ure! &' the p& e i&n* at the p&rt &' !e tinati&n* &' the entire thin% in ure!. Sub-Title 1-@ A3ANDONMENT Sec. 17=. Aban!&n(ent* in (arine in urance* i the act &' the in ure! b, .hich* a'ter a c&n tructi+e t&tal l& * he !eclare the relin<ui h(ent t& the in urer &' hi intere t in the thin% in ure!. Sec. 179. A per &n in ure! b, a c&ntract &' (arine in urance (a, aban!&n the thin% in ure!* &r an, particular p&rti&n there&' eparatel, +alue! b, the p&lic,* &r &ther.i e eparatel, in ure!* an! rec&+er '&r a t&tal l& there&'* .hen the cau e &' the l& i a peril in ure! a%ain t" #a$ I' (&re than three-'&urth there&' in +alue i actuall, l& t* &r .&ul! ha+e t& be e4pen!e! t& rec&+er it 'r&( the peril0 #b$ I' it i in2ure! t& uch an e4tent a t& re!uce it +alue

Ana Rhea Echavez Insurance Code

(&re than three-'&urth 0 #c$ I' the thin% in ure! i a hip* an! the c&nte(plate! +&,a%e cann&t be la.'ull, per'&r(e! .ith&ut incurrin% either an e4pen e t& the in ure! &' (&re than three-'&urth the +alue &' the thin% aban!&ne! &r a ri - .hich a pru!ent (an .&ul! n&t ta-e un!er the circu( tance 0 &r #!$ I' the thin% in ure!* bein% car%& &r 'rei%hta%e* an! the +&,a%e cann&t be per'&r(e!* n&r an&ther hip pr&cure! b, the (a ter* .ithin a rea &nable ti(e an! .ith rea &nable !ili%ence* t& '&r.ar! the car%&* .ith&ut incurrin% the li-e e4pen e &r ri - (enti&ne! in the prece!in% ub-para%raph. 3ut 'rei%hta%e cann&t in an, ca e be aban!&ne! unle the hip i al & aban!&ne!. Sec. 186. An aban!&n(ent (u t be neither partial n&r c&n!iti&nal. Sec. 181. An aban!&n(ent (u t be (a!e .ithin a rea &nable ti(e a'ter receipt &' reliable in'&r(ati&n &' the l& * but .here the in'&r(ati&n i &' a !&ubt'ul character* the in ure! i entitle! t& a rea &nable ti(e t& (a-e in<uir,. Sec. 185. ?here the in'&r(ati&n up&n .hich an aban!&n(ent ha been (a!e pr&+e inc&rrect* &r the thin% in ure! .a & 'ar re t&re! .hen the aban!&n(ent .a (a!e that there .a then in 'act n& t&tal l& * the aban!&n(ent bec&(e ine''ectual. Sec. 187. Aban!&n(ent i (a!e b, %i+in% n&tice there&' t& the in urer* .hich (a, be !&ne &rall,* &r in .ritin%0 1r&+i!e!* That i' the n&tice be !&ne &rall,* a .ritten n&tice &' uch aban!&n(ent hall be ub(itte! .ithin e+en !a, 'r&( uch &ral n&tice. Sec. 188. A n&tice &' aban!&n(ent (u t be e4plicit* an! (u t peci', the particular cau e &' the aban!&n(ent* but nee! tate &nl, en&u%h t& h&. that there i pr&bable cau e there'&r* an! nee! n&t be acc&(panie! .ith pr&&' &' intere t &r &' l& . Sec. 189. An aban!&n(ent can be u taine! &nl, up&n the cau e peci'ie! in the n&tice there&'. Sec. 18:. An aban!&n(ent i e<ui+alent t& a tran 'er b, the in ure! &' hi intere t t& the in urer* .ith all the chance &' rec&+er, an! in!e(nit,. Sec. 18;. I' a (arine in urer pa, '&r a l& a i' it .ere an actual t&tal l& * he i entitle! t& .hate+er (a, re(ain &' the thin% in ure!* &r it pr&cee! &r al+a%e* a i' there ha! been a '&r(al aban!&n(ent. Sec. 18=. Up&n an aban!&n(ent* act !&ne in %&&! 'aith b, th& e .h& .ere a%ent &' the in ure! in re pect t& the thin% in ure!* ub e<uent t& the l& * are at the ri - &' the in urer an! '&r hi bene'it. Sec. 189. ?here n&tice &' aban!&n(ent i pr&perl, %i+en* the ri%ht &' the in ure! are n&t pre2u!ice! b, the 'act that the in urer re'u e t& accept the aban!&n(ent. Sec. 196. The acceptance &' an aban!&n(ent (a, be either e4pre &r i(plie! 'r&( the c&n!uct &' the in urer. The (ere ilence &' the in urer '&r an unrea &nable len%th &' ti(e a'ter n&tice hall be c&n true! a an acceptance. Sec. 191. The acceptance &' an aban!&n(ent* .hether e4pre &r i(plie!* i c&nclu i+e up&n the partie * an! a!(it the l& an! the u''icienc, &' the aban!&n(ent. Sec. 195. An aban!&n(ent &nce (a!e an! accepte! i irre+&cable* unle the %r&un! up&n .hich it .a (a!e pr&+e t& be un'&un!e!. Sec. 197. On an accepte! aban!&n(ent &' a hip* 'rei%hta%e earne! pre+i&u t& the l& bel&n% t& the in urer &' ai! 'rei%hta%e0 but 'rei%hta%e ub e<uentl, earne! bel&n% t& the in urer &' the hip. Sec. 198. I' an in urer re'u e t& accept a +ali! aban!&n(ent* he i liable a up&n actual t&tal l& * !e!uctin% 'r&( the a(&unt an, pr&cee! &' the thin% in ure! .hich (a, ha+e c&(e t& the

han! &' the in ure!. Sec. 199. I' a per &n in ure! &(it t& aban!&n* he (a, ne+erthele rec&+er hi actual l& . Sub-Title 1-I MEASURE OF INDEMNITA Sec. 19:. A +aluati&n in a p&lic, &' (arine in urance in c&nclu i+e bet.een the partie theret& in the a!2u t(ent &' either a partial &r t&tal l& * i' the in ure! ha &(e intere t at ri -* an! there i n& 'rau! &n hi part0 e4cept that .hen a thin% ha been h,p&thecate! b, b&tt&(r, &r re p&n!entia* be'&re it in urance* an! .ith&ut the -n&.le!%e &' the per &n actuall, pr&curin% the in urance* he (a, h&. the real +alue. 3ut a +aluati&n 'rau!ulent in 'act* entitle the in urer t& re cin! the c&ntract. Sec. 19;. A (arine in urer i liable up&n a partial l& * &nl, '&r uch pr&p&rti&n &' the a(&unt in ure! b, hi( a the l& bear t& the +alue &' the .h&le intere t &' the in ure! in the pr&pert, in ure!. Sec. 19=. ?here pr&'it are eparatel, in ure! in a c&ntract &' (arine in urance* the in ure! i entitle! t& rec&+er* in ca e &' l& * a pr&p&rti&n &' uch pr&'it e<ui+alent t& the pr&p&rti&n .hich the +alue &' the pr&pert, l& t bear t& the +alue &' the .h&le. Sec. 199. In ca e &' a +alue! p&lic, &' (arine in urance &n 'rei%hta%e &r car%&* i' a part &nl, &' the ub2ect i e4p& e! t& the ri -* the e+aluati&n applie &nl, in pr&p&rti&n t& uch part. Sec. 1:6. ?hen pr&'it are +alue! an! in ure! b, a c&ntract &' (arine in urance* a l& &' the( i c&nclu i+el, pre u(e! 'r&( a l& &' the pr&pert, &ut &' .hich the, are e4pecte! t& ari e* an! the +aluati&n 'i4e their a(&unt. Sec. 1:1. In e ti(atin% a l& un!er an &pen p&lic, &' (arine in urance the '&ll&.in% rule are t& be &b er+e!" #a$ The +alue &' a hip i it +alue at the be%innin% &' the ri -* inclu!in% all article &r char%e .hich a!! t& it per(anent +alue &r .hich are nece ar, t& prepare it '&r the +&,a%e in ure!0 #b$ The +alue &' the car%& i it actual c& t t& the in ure!* .hen la!en &n b&ar!* &r .here the c& t cann&t be a certaine!* it (ar-et +alue at the ti(e an! place &' la!in%* a!!in% the char%e incurre! in purcha in% an! placin% it &n b&ar!* but .ith&ut re'erence t& an, l& incurre! in rai in% (&ne, '&r it purcha e* &r t& an, !ra.bac- &n it e4p&rtati&n* &r t& the 'luctuati&n &' the (ar-et at the p&rt &' !e tinati&n* &r t& e4pen e incurre! &n the .a, &r &n arri+al0 #c$ The +alue &' 'rei%hta%e i the %r& 'rei%hta%e* e4clu i+e &' pri(a%e* .ith&ut re'erence t& the c& t &' earnin% it0 an! #!$ The c& t &' in urance i in each ca e t& be a!!e! t& the +alue thu e ti(ate!. Sec. 1:5. I' car%& in ure! a%ain t partial l& arri+e at the p&rt &' !e tinati&n in a !a(a%e! c&n!iti&n* the l& &' the in ure! i !ee(e! t& be the a(e pr&p&rti&n &' the +alue .hich the (ar-et price at that p&rt* &' the thin% & !a(a%e!* bear t& the (ar-et price it .&ul! ha+e br&u%ht i' &un!. Sec. 1:7. A (arine in urer i liable '&r all the e4pen e atten!ant up&n a l& .hich '&rce the hip int& p&rt t& be repaire!0 an! .here it i tipulate! in the p&lic, that the in ure! hall lab&r '&r the rec&+er, &' the pr&pert,* the in urer i liable '&r the e4pen e incurre! thereb,* uch e4pen e* in either ca e* bein% in a!!iti&n t& a t&tal l& * i' that a'ter.ar! &ccur . Sec. 1:8. A (arine in urer i liable '&r a l& 'allin% up&n the in ure!* thr&u%h a c&ntributi&n in re pect t& the thin% in ure!* re<uire! t& be (a!e b, hi( t&.ar! a %eneral a+era%e l& calle! '&r b, a peril in ure! a%ain t0 provided* that the liabilit, &' the in urer hall be li(ite! t& the pr&p&rti&n &' c&ntributi&n

Ana Rhea Echavez Insurance Code

attachin% t& hi p&lic, +alue .here thi c&ntributin% +alue &' the thin% in ure!.

le

than the

herea'ter (a!e hall be +&i! an! &' n& e''ect in &'ar a it (a, a''ect &ther cre!it&r &' the in ure!. Title 7 CASUALTA INSURANCE Sec. 1;8. Ca ualt, in urance i in urance c&+erin% l& &r liabilit, ari in% 'r&( acci!ent &r (i hap* e4clu!in% certain t,pe &' l& .hich b, la. &r cu t&( are c&n i!ere! a 'allin% e4clu i+el, .ithin the c&pe &' &ther t,pe &' in urance uch a 'ire &r (arine. It inclu!e * but i n&t li(ite! t&* e(pl&,er/ liabilit, in urance* (&t&r +ehicle liabilit, in urance* plate %la in urance* bur%lar, an! the't in urance* per &nal acci!ent an! health in urance a .ritten b, n&n-li'e in urance c&(panie * an! &ther ub tantiall, i(ilar -in! &' in urance. Title 8 SURETAS@I1 Sec. 1;9. A c&ntract &' uret, hip i an a%ree(ent .hereb, a part, calle! the uret, %uarantee the per'&r(ance b, an&ther part, calle! the principal &r &bli%&r &' an &bli%ati&n &r un!erta-in% in 'a+&r &' a thir! part, calle! the &bli%ee. It inclu!e &''icial rec&%ni>ance * tipulati&n * b&n! &r un!erta-in% i ue! b, an, c&(pan, b, +irtue &' an! un!er the pr&+i i&n &' Act N&. 97:* a a(en!e! b, Act N&. 556:. Sec. 1;:. The liabilit, &' the uret, &r uretie hall be 2&int an! e+eral .ith the &bli%&r an! hall be li(ite! t& the a(&unt &' the b&n!. It i !eter(ine! trictl, b, the ter( &' the c&ntract &' uret, hip in relati&n t& the principal c&ntract bet.een the &bli%&r an! the &bli%ee. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 1;;. The uret, i entitle! t& pa,(ent &' the pre(iu( a &&n a the c&ntract &' uret, hip &r b&n! i per'ecte! an! !eli+ere! t& the &bli%&r. N& c&ntract &' uret, hip &r b&n!in% hall be +ali! an! bin!in% unle an! until the pre(iu( there'&r ha been pai!* e4cept .here the &bli%ee ha accepte! the b&n!* in .hich ca e the b&n! bec&(e +ali! an! en'&rceable irre pecti+e &' .hether &r n&t the pre(iu( ha been pai! b, the &bli%&r t& the uret,"Provided* That i' the c&ntract &' uret, hip &r b&n! i n&t accepte! b,* &r 'ile! .ith the &bli%ee* the uret, hall c&llect &nl, rea &nable a(&unt* n&t e4cee!in% 'i't, per centu( &' the pre(iu( !ue there&n a er+ice 'ee plu the c& t &' ta(p &r &ther ta4e i(p& e! '&r the i uance &' the c&ntract &r b&n!" Provided, however, That i' the n&n-acceptance &' the b&n! be !ue t& the 'ault &r ne%li%ence &' the uret,* n& uch er+ice 'ee* ta(p &r ta4e hall be c&llecte!. In the ca e &' a c&ntinuin% b&n!* the &bli%&r hall pa, the ub e<uent annual pre(iu( a it 'all !ue until the c&ntract &' uret, hip i cancelle! b, the&bli%ee &r b, the C&((i i&ner &r b, a c&urt &' c&(petent 2uri !icti&n* a the ca e (a, be. Sec. 1;=. 1ertinent pr&+i i&n &' the Ci+il C&!e &' the 1hilippine hall be applie! in a upplet&r, character .hene+er nece ar, in interpretin% the pr&+i i&n &' a c&ntract &' uret, hip. Title 9 LIFE INSURANCE Sec. 1;9. Li'e in urance i in urance &n hu(an li+e an! in urance appertainin% theret& &r c&nnecte! there.ith. Sec. 1=6. An in urance up&n li'e (a, be (a!e pa,able &n the !eath &' the per &n* &r &n hi ur+i+in% a peci'ie! peri&!* &r &ther.i e c&ntin%entl, &n the c&ntinuance &r ce ati&n &' li'e. E+er, c&ntract &r ple!%e '&r the pa,(ent &' en!&.(ent &r annuitie hall be c&n i!ere! a li'e in urance c&ntract '&r purp& e &' thi C&!e. In the ab ence &' a 2u!icial %uar!ian* the 'ather* &r in the latter/ ab ence &r incapacit,* the (&ther* &r an, (in&r* .h& i an in ure! &r a bene'iciar, un!er a c&ntract &' li'e* health &r acci!ent in urance* (a, e4erci e* in behal' &' ai! (in&r* an, ri%ht un!er the p&lic,* .ith&ut nece it, &' c&urt auth&rit, &r the

Sec. 1:9. ?hen a per &n in ure! b, a c&ntract &' (arine in urance ha a !e(an! a%ain t &ther '&r c&ntributi&n* he (a, clai( the .h&le l& 'r&( the in urer* ubr&%atin% hi( t& hi &.n ri%ht t& c&ntributi&n. 3ut n& uch clai( can be (a!e up&n the in urer a'ter the eparati&n &' the intere t liable t& the c&ntributi&n* n&r .hen the in ure!* ha+in% the ri%ht an! &pp&rtunit, t& en'&rce the c&ntributi&n 'r&( &ther * ha ne%lecte! &r .ai+e! the e4erci e &' that ri%ht. Sec. 1::. In the ca e &' a partial l& &' hip &r it e<uip(ent* the &l! (aterial are t& be applie! t&.ar! pa,(ent '&r the ne.. Unle &ther.i e tipulate! in the p&lic,* a (arine in urer i liable '&r &nl, t.&-thir! &' the re(ainin% c& t &' repair a'ter uch !e!ucti&n* e4cept that anch&r (u t be pai! in 'ull. Title 5 FIRE INSURANCE Sec. 1:;. A u e! in thi C&!e* the ter( "fire insurance" hall inclu!e in urance a%ain t l& b, 'ire* li%htnin%* .in! t&r(* t&rna!& &r earth<ua-e an! &ther allie! ri - * .hen uch ri are c&+ere! b, e4ten i&n t& 'ire in urance p&licie &r un!er eparate p&licie . Sec. 1:=. An alterati&n in the u e &r c&n!iti&n &' a thin% in ure! 'r&( that t& .hich it i li(ite! b, the p&lic, (a!e .ith&ut the c&n ent &' the in urer* b, (ean .ithin the c&ntr&l &' the in ure!* an! increa in% the ri - * entitle an in urer t& re cin! a c&ntract &' 'ire in urance. Sec. 1:9. An alterati&n in the u e &r c&n!iti&n &' a thin% in ure! 'r&( that t& .hich it i li(ite! b, the p&lic,* .hich !&e n&t increa e the ri -* !&e n&t a''ect a c&ntract &' 'ire in urance. Sec. 1;6. A c&ntract &' 'ire in urance i n&t a''ecte! b, an, act &' the in ure! ub e<uent t& the e4ecuti&n &' the p&lic,* .hich !&e n&t +i&late it pr&+i i&n * e+en th&u%h it increa e the ri an! i the cau e &' the l& . Sec. 1;1. I' there i n& +aluati&n in the p&lic,* the (ea ure &' in!e(nit, in an in urance a%ain t 'ire i the e4pen e it .&ul! be t& the in ure! at the ti(e &' the c&((ence(ent &' the 'ire t& replace the thin% l& t &r in2ure! in the c&n!iti&n in .hich at the ti(e &' the in2ur,0 but i' there i a +aluati&n in a p&lic, &' 'ire in urance* the e''ect hall be the a(e a in a p&lic, &' (arine in urance. Sec. 1;5. ?hene+er the in ure! !e ire t& ha+e a +aluati&n na(e! in hi p&lic,* in urin% an, buil!in% &r tructure a%ain t 'ire* he (a, re<uire uch buil!in% &r tructure t& be e4a(ine! b, an in!epen!ent apprai er an! the +alue &' the in ure!/ intere t therein (a, then be 'i4e! a bet.een the in urer an! the in ure!. The c& t &' uch e4a(inati&n hall be pai! '&r b, the in ure!. A clau e hall be in erte! in uch p&lic, tatin% ub tantiall, that the +alue &' the in ure!/ intere t in uch buil!in% &r tructure ha been thu 'i4e!. In the ab ence &' an, chan%e increa in% the ri - .ith&ut the c&n ent &' the in urer &r &' 'rau! &n the part &' the in ure!* then in ca e &' a t&tal l& un!er uch p&lic,* the .h&le a(&unt & in ure! up&n the in ure!/ intere t in uch buil!in% &r tructure* a tate! in the p&lic, up&n .hich the in urer ha+e recei+e! a pre(iu(* hall be pai!* an! in ca e &' a partial l& the 'ull a(&unt &' the partial l& hall be & pai!* an! in ca e there are t.& &r (&re p&licie c&+erin% the in ure!/ intere t therein* each p&lic, hall c&ntribute pr& rata t& the pa,(ent &' uch .h&le &r partial l& . 3ut in n& ca e hall the in urer be re<uire! t& pa, (&re than the a(&unt thu tate! in uch p&lic,. Thi ecti&n hall n&t pre+ent the partie 'r&( tipulatin% in uch p&licie c&ncernin% the repairin%* rebuil!in% &r replacin% &' buil!in% &r tructure .h&ll, &r partiall, !a(a%e! &r !e tr&,e!. Sec. 1;7. N& p&lic, &' 'ire in urance hall be ple!%e!* h,p&thecate!* &r tran 'erre! t& an, per &n* 'ir( &r c&(pan, .h& act a a%ent '&r &r &ther.i e repre ent the i uin% c&(pan,* an! an, uch ple!%e* h,p&thecati&n* &r tran 'er

Ana Rhea Echavez Insurance Code

%i+in% &' a b&n!* .here the intere t &' the (in&r in the particular act in+&l+e! !&e n&t e4cee! t.ent, th&u an! pe & . Such ri%ht (a, inclu!e* but hall n&t be li(ite! t&* &btainin% a p&lic, l&an* urren!erin% the p&lic,* recei+in% the pr&cee! &' the p&lic,* an! %i+in% the (in&r/ c&n ent t& an, tran acti&n &n the p&lic,. Sec. 1=6-A. The in urer in a li'e in urance c&ntract hall be liable in ca e &' uici!e &nl, .hen it i c&((itte! a'ter the p&lic, ha been in '&rce '&r a peri&! &' t.& ,ear 'r&( the !ate &' it i ue &r &' it la t rein tate(ent* unle the p&lic, pr&+i!e a h&rter peri&!" Provided, however* That uici!e c&((itte! in the tate &' in anit, hall be c&(pen able re%ar!le &' the !ate &' c&((i i&n. #A a(en!e! b, 3ata an% 1a(ban a 3l%. =;8$. Sec. 1=1. A p&lic, &' in urance up&n li'e &r health (a, pa b, tran 'er* .ill &r ucce i&n t& an, per &n* .hether he ha an in urable intere t &r n&t* an! uch per &n (a, rec&+er up&n it .hate+er the in ure! (i%ht ha+e rec&+ere!. Sec. 1=5. N&tice t& an in urer &' a tran 'er &r be<ue t there&' i n&t nece ar, t& pre er+e the +ali!it, &' a p&lic, &' in urance up&n li'e &r health* unle thereb, e4pre l, re<uire!. Sec. 1=7. Unle the intere t &' a per &n in ure! i u ceptible &' e4act pecuniar, (ea ure(ent* the (ea ure &' in!e(nit, un!er a p&lic, &' in urance up&n li'e &r health i the u( 'i4e! in the p&lic,. Chapter III T@E 3USINESS OF INSURANCE Title 1 INSURANCE COM1ANIES* ORBANICATION* CA1ITALICATION AND AUT@ORICATION Sec. 1=8. F&r purp& e &' thi C&!e* the ter( "insurer" &r "insurance company" hall inclu!e all in!i+i!ual * partner hip * a &ciati&n * &r c&rp&rati&n * inclu!in% %&+ern(ent-&.ne! &r c&ntr&lle! c&rp&rati&n &r entitie * en%a%e! a principal in the in urance bu ine * e4ceptin% (utual bene'it a &ciati&n . Unle the c&nte4t &ther.i e re<uire * the ter( hall al & inclu!e pr&'e i&nal rein urer !e'ine! in ecti&n t.& hun!re! ei%ht,."Domestic company" hall inclu!e c&(panie '&r(e!* &r%ani>e! &r e4i tin% un!er the la. &' the 1hilippine . "Foreign company" .hen u e! .ith&ut li(itati&n hall inclu!e c&(panie '&r(e!* &r%ani>e!* &r e4i tin% un!er an, la. &ther than th& e &' the 1hilippine . Sec. 1=9. C&rp&rati&n '&r(e! &r &r%ani>e! t& a+e an, per &n &r per &n &r &ther c&rp&rati&n har(le 'r&( l& * !a(a%e* &r liabilit, ari in% 'r&( an, un-n&.n &r 'uture &r c&ntin%ent e+ent* &r t& in!e(ni', &r t& c&(pen ate an, per &n &r per &n &r &ther c&rp&rati&n '&r an, uch l& * !a(a%e* &r liabilit,* &r t& %uarantee the per'&r(ance &' &r c&(pliance .ith c&ntractual &bli%ati&n &r the pa,(ent &' !ebt &' &ther hall be -n&.n a "insurance corporations". The pr&+i i&n &' the C&rp&rati&n La. hall appl, t& all in urance c&rp&rati&n n&. &r herea'ter en%a%e! in bu ine in the 1hilippine in &'ar a the, !& n&t c&n'lict .ith the pr&+i i&n &' thi chapter. Sec. 1=:. N& per &n* partner hip* &r a &ciati&n &' per &n hall tran act an, in urance bu ine in the 1hilippine e4cept a a%ent &' a per &n &r c&rp&rati&n auth&ri>e! t& !& the bu ine &' in urance in the 1hilippine * unle p& e e! &' the capital an! a et re<uire! &' an in urance c&rp&rati&n !&in% the a(e -in! &' bu ine in the 1hilippine an! in+e te! in the a(e (anner0 n&r unle the C&((i i&ner hall ha+e %rante! t& hi( &r the( a certi'icate t& the e''ect that he &r the, ha+e c&(plie! .ith all the pr&+i i&n &' la. .hich an in urance c&rp&rati&n !&in% bu ine in the 1hilippine i re<uire! t& &b er+e. E+er, per &n* partner hip* &r a &ciati&n recei+in% an, uch certi'icate &' auth&rit, hall be ub2ect t& the in urance la. &' the 1hilippine an! t& the 2uri !icti&n an! uper+i i&n &' the

C&((i i&ner in the a(e (anner a i' an in urance c&rp&rati&n auth&ri>e! b, the la. &' the 1hilippine t& en%a%e in the bu ine &' in urance peci'ie! in the certi'icate. Sec. 1=;. N& in urance c&(pan, hall tran act an, in urance bu ine in the 1hilippine until a'ter it hall ha+e &btaine! a certi'icate &' auth&rit, '&r that purp& e 'r&( the C&((i i&ner up&n applicati&n there'&re an! pa,(ent b, the c&(pan, c&ncerne! &' the 'ee hereina'ter pre cribe!. The C&((i i&ner (a, re'u e t& i ue a certi'icate &' auth&rit, t& an, in urance c&(pan, i'* in hi 2u!%(ent* uch re'u al .ill be t pr&(&te the intere t &' the pe&ple &' thi c&untr,. N& uch certi'icate &' auth&rit, hall be %rante! t& an, uch c&(pan, until the C&((i i&ner hall ha+e ati 'ie! hi( el' b, uch e4a(inati&n a he (a, (a-e an! uch e+i!ence a he (a, re<uire that uch c&(pan, i <uali'ie! b, the la. &' the 1hilippine t& tran act bu ine therein* that the %rant &' uch auth&rit, appear t& be 2u ti'ie! in the li%ht &' ec&n&(ic re<uire(ent * an! that the !irecti&n an! a!(ini trati&n* a .ell a the inte%rit, an! re p&n ibilit, &' the &r%ani>er an! a!(ini trat&r * the 'inancial &r%ani>ati&n an! the a(&unt &' capital* n&t.ith tan!in% the pr&+i i&n &' ecti&n &ne hun!re! ei%ht,-ei%ht* rea &nabl, a ure the a'et, &' the intere t &' the p&lic,h&l!er an! the public. In &r!er t& (aintain the <ualit, &' the (ana%e(ent &' the in urance c&(panie an! a''&r! better pr&tecti&n t& p&lic,h&l!er an! the public in %eneral* an, per &n &' %&&! (&ral character* un<ue ti&ne! inte%rit, an! rec&%ni>e! c&(petence (a, be electe! &r app&inte! !irect&r &r &''icer &' in urance c&(panie . The C&((i i&ner hall pre cribe the <uali'icati&n &' the e4ecuti+e &''icer an! &ther -e, &''icial &' in urance c&(panie '&r purp& e &' thi ecti&n. N& per &n hall c&ncurrentl, be a !irect&r an!D&r &''icer &' an in urance c&(pan, an! an a!2u t(ent c&(pan,. Incu(bent !irect&r an!D&r &''icer a''ecte! b, the ab&+e pr&+i i&n are hereb, all&.e! t& h&l! &n t& their p& iti&n until the en! &' their ter( &r t.& ,ear 'r&( the e''ecti+it, &' thi !ecree* .hiche+er i h&rter. 3e'&re i uin% uch certi'icate &' auth&rit,* the C&((i i&ner (u t be ati 'ie! that the na(e &' the c&(pan, i n&t that &' an, &ther -n&.n c&(pan, tran actin% a i(ilar bu ine in the 1hilippine * &r a na(e & i(ilar a t& be calculate! t& (i lea! the public. Such certi'icate &' auth&rit, hall e4pire &n the la t !a, &' Eune &' each ,ear an! hall be rene.e! annuall, i' the c&(pan, i c&ntinuin% t& c&(pl, .ith the pr&+i i&n &' thi C&!e &r the circular * in tructi&n * rulin% &r !eci i&n &' the C&((i i&ner. E+er, c&(pan, recei+in% an, uch certi'icate &' auth&rit, hall be ub2ect t& the pr&+i i&n &' thi C&!e an! &ther relate! la. an! t& the 2uri !icti&n an! uper+i i&n &' the C&((i i&ner. N& in urance c&(pan, (a, be auth&ri>e! t& tran act in the 1hilippine the bu ine &' li'e an! n&n-li'e in urance c&ncurrentl, unle peci'icall, auth&ri>e! t& !& &" Provided* That the ter( "life" an! "non-life" in urance hall be !ee(e! t& inclu!e health* acci!ent an! !i abilit, in urance. N& in urance c&(pan, hall ha+e e<uit, in an a!2u t(ent c&(pan, an! neither hall an a!2u t(ent c&(pan, ha+e an e<uit, in an in urance c&(pan,. In urance c&(panie an! a!2u t(ent c&(panie pre entl, a''ecte! b, the ab&+e pr&+i i&n hall ha+e t.& ,ear 'r&( the e''ecti+it, &' thi Decree .ithin .hich t& !i+e t &' their t&c-h&l!in% . #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 1==. E4cept a pr&+i!e! in ecti&n t.& hun!re! ei%ht,-&ne* n& !&(e tic in urance c&(pan, hall* in a t&c- c&rp&rati&n* en%a%e in bu ine in the 1hilippine unle p& e e! &' a pai!-up capital t&c- e<ual t& at lea t 'i+e (illi&n pe & " Provided* That a !&(e tic in urance c&(pan, alrea!, !&in% bu ine in the 1hilippine .ith a pai!-up capital t&c.hich i le than 'i+e (illi&n pe & hall ha+e a pai!-up capital

Ana Rhea Echavez Insurance Code

t&c- &' at lea t three (illi&n pe & b, Dece(ber thirt,-&ne* nineteen hun!re! e+ent,-ei%ht* '&ur (illi&n pe & b, Dece(ber thirt,-&ne* nineteen hun!re! e+ent,-nine an! 'i+e (illi&n pe & b, Dece(ber thirt,-&ne* nineteen hun!re! ei%ht," Provided, further, that the Secretar, &' Finance (a,* up&n rec&((en!ati&n &' the In urance C&((i i&ner* increa e uch (ini(u( pai!-up capital t&c- re<uire(ent* un!er uch ter( an! c&n!iti&n a he (a, i(p& e* t& an a(&unt .hich* in hi &pini&n* .&ul! rea &nabl, a ure the a'et, &' the intere t &' the p&lic,h&l!er an! the public. The C&((i i&ner (a,* a a pre-licen in% re<uire(ent &' a ne. in urance c&(pan,* in a!!iti&n t& the pai!-up capital t&c-* re<uire the t&c-h&l!er t& pa, in ca h t& the c&(pan, in pr&p&rti&n t& their ub cripti&n intere t a c&ntribute! urplu 'un! &' n&t le than &ne (illi&n pe & * in the ca e &' a li'e in urance c&(pan,* &r n&t le than 'i+e hun!re! th&u an! pe & * in the ca e &' an in urance c&(pan, &ther than li'e. @e (a, al & re<uire uch c&(pan, t& ub(it t& hi( a bu ine plan h&.in% the c&(pan,/ e ti(ate! receipt an! !i bur e(ent * a .ell a the ba i there'&re* '&r the ne4t uccee!in% three ,ear . I' &r%ani>e! a a (utual c&(pan,* in lieu &' uch capital t&c-* it (u t ha+e a+ailable ca h a et &' at lea t 'i+e (illi&n pe & ab&+e all liabilitie '&r l& e rep&rte!* e4pen e * ta4e * le%al re er+e* an! rein urance &' all &ut tan!in% ri - * an! the c&ntribute! urplu 'un! e<ual t& the a(&unt re<uire! &' t&cc&rp&rati&n . A t&c- in urance c&(pan, !&in% bu ine in the 1hilippine (a,* ub2ect t& the pertinent la. an! re%ulati&n .hich n&. are &' herea'ter (a, be in '&rce* alter it &r%ani>ati&n an! tran '&r( it el' int& a (utual in urance c&(pan,. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 1=9. E+er, c&(pan, (u t* be'&re en%a%in% in the bu ine &' in urance in the 1hilippine * 'ile .ith the C&((i i&ner the '&ll&.in%" #a$ A certi'ie! c&p, &' the la t annual tate(ent &r a +eri'ie! 'inancial tate(ent e4hibitin% the c&n!iti&n an! a''air &' uch c&(pan,0 #b$ I' inc&rp&rate! un!er the la. &' the 1hilippine * a c&p, &' the article &' inc&rp&rati&n an! b,-la. * an! an, a(en!(ent t& either* certi'ie! b, the Securitie an! E4chan%e C&((i i&n t& be a c&p, &' that .hich i 'ile! in it O''ice0 #c$ I' inc&rp&rate! un!er an, la. &ther than th& e &' the 1hilippine * a certi'icate 'r&( the Securitie an! E4chan%e C&((i i&n h&.in% that it i !ul, re%i tere! in the (ercantile re%i tr, &' that C&((i i&n in acc&r!ance .ith the C&rp&rati&n La.. A c&p, &' the article &' inc&rp&rati&n an! b,-la. * an! an, a(en!(ent t& either* i' &r%ani>e! &r '&r(e! un!er an, la. re<uirin% uch t& be 'ile!* !ul, certi'ie! b, the &''icer ha+in% the cu t&!, &' a(e* &r i' n&t & &r%ani>e!* a c&p, &' the la.* charter &r !ee! &' ettle(ent un!er .hich the !ee! &' &r%ani>ati&n i (a!e* !ul, certi'ie! b, the pr&per cu t&!ian there&'* &r pr&+e! b, a''i!a+it t& be a c&p,0 al &* a certi'icate un!er the han! an! eal &' the pr&per &''icer &' uch tate &r c&untr, ha+in% uper+i i&n &' in urance bu ine therein* i' an, there be* that uch c&rp&rati&n &r c&(pan, i &r%ani>e! un!er the la. &' uch tate &r c&untr,* .ith the a(&unt &' capital t&c- &r a et an! le%al re er+e re<uire! b, thi C&!e0 #!$ I' n&t inc&rp&rate! an! &' '&rei%n !&(icile* a i!e 'r&( the certi'icate (enti&ne! in para%raph #c$ &' thi ecti&n* a certi'icate ettin% '&rth the nature an! character &' the bu ine * the l&cati&n &' the principal &''ice* the na(e &' the in!i+i!ual &r na(e &' the per &n c&(p& in% the partner hip &r a &ciati&n* the a(&unt &' actual capital e(pl&,e! &r t& be e(pl&,e! therein an! the na(e &' all &''icer an! per &n b, .h&( the bu ine i &r (a, be (ana%e!.

The certi'icate (u t be +eri'ie! b, the a''i!a+it &' the chie' &''icer* ecretar,* a%ent* &r (ana%er &' the c&(pan,0 an! i' there are an, .ritten article &' a%ree(ent &' the c&(pan,* a c&p, there&' (u t be acc&(pan, uch certi'icate. Sec. 196. The C&((i i&ner (u t re<uire a a c&n!iti&n prece!ent t& the tran acti&n &' in urance bu ine in the 1hilippine b, an, '&rei%n in urance c&(pan,* that uch c&(pan, 'ile in hi &''ice a .ritten p&.er &' att&rne, !e i%natin% &(e per &n .h& hall be a re i!ent &' the 1hilippine a it %eneral a%ent* &n .h&( an, n&tice pr&+i!e! b, la. &r b, an, in urance p&lic,* pr&&' &' l& * u((&n an! &ther le%al pr&ce e (a, be er+e! in all acti&n &r &ther le%al pr&cee!in% a%ain t uch c&(pan,* an! c&n entin% that er+ice up&n uch %eneral a%ent hall be a!(itte! an! hel! a +ali! a i' er+e! up&n the '&rei%n c&(pan, at it h&(e &''ice. An, uch '&rei%n c&(pan, hall* a 'urther c&n!iti&n prece!ent t& the tran acti&n &' in urance bu ine in the 1hilippine * (a-e an! 'ile .ith the C&((i i&ner an a%ree(ent &r tipulati&n* e4ecute! b, the pr&per auth&ritie &' ai! c&(pan, in '&r( an! ub tance a '&ll&. " "The (name of company) does here y stipulate and agree in consideration of the permission granted y the !nsurance "ommissioner to transact usiness in the Philippines, that if at any time said company shall leave the Philippines, or cease to transact usiness therein, or shall e without any agent in the Philippines on whom any notice, proof of loss, summons, or legal process may e served, then in any action or proceeding arising out any usiness or transaction which occurred in the Philippines, service of any notice provided y law, or insurance policy, proof of loss, summons, or other legal process may e made upon the !nsurance "ommissioner shall have the same force and effect as if made upon the company#" ?hene+er uch er+ice &' n&tice* pr&&' &' l& * u((&n * &r &ther le%al pr&ce hall be (a!e up&n the C&((i i&n* he (u t* .ithin ten !a, therea'ter* tran (it b, (ail* p& ta%e pai!* a c&p, &' uch n&tice* pr&&' &' l& * u((&n * &r &ther le%al pr&ce t& the c&(pan, at it h&(e &r principal &''ice. The en!in% &' uch c&p, b, the C&((i i&ner hall be a nece ar, part &' the er+ice &' the n&tice* pr&&' &' l& * &r &ther le%al pr&ce . Sec. 191. N& in urance c&(pan, &r%ani>e! &r e4i tin% un!er the %&+ern(ent &r la. &ther than th& e &' the 1hilippine hall en%a%e in bu ine in the 1hilippine unle p& e e! &' pai!up uni(paire! capital &r a et an! re er+e n&t le than that herein re<uire! &' !&(e tic in urance c&(panie * n&r until it hall ha+e !ep& ite! .ith the C&((i i&ner '&r the bene'it an! ecurit, &' the p&lic,h&l!er an! cre!it&r &' uch c&(pan, in the 1hilippine * ecuritie ati 'act&r, t& the C&((i i&ner c&n i tin% &' %&&! ecuritie &' the 1hilippine * inclu!in% ne. i ue &' t&c- &' "registered enterprises"* a thi ter( i !e'ine! in Republic Act N&. 91=:* &ther.i e -n&.n a the !nvestment !ncentives $ct* a a(en!e!* t& the actual (ar-et +alue &' n&t le than the (ini(u( pai!-up capital re<uire! &' !&(e tic in urance c&(panie " Provided* That at lea t 'i't, per centum &' uch ecuritie hall c&n i t &' b&n! &r &ther e+i!ence &' !ebt &' the B&+ern(ent &' the 1hilippine * it p&litical ub!i+i i&n an! in tru(entalitie * &r &' %&+ern(ent&.ne! &r c&ntr&lle! c&rp&rati&n an! entitie * inclu!in% the Central 3an-. The t&tal in+e t(ent &' a '&rei%n in urance c&(pan, in an, re%i tere! enterpri e hall n&t e4cee! t.ent, per centu( &' the net .&rth &' ai! '&rei%n in urance c&(pan, n&r t.ent, per centum &' the capital &' the re%i tere! enterpri e* unle pre+i&u l, auth&ri>e! in .ritin% b, the C&((i i&ner. F&r purp& e &' thi C&!e* the net .&rth &' a '&rei%n in urance c&(pan, hall re'er &nl, t& it net .&rth in the 1hilippine . Sec. 195. The C&((i i&ner hall h&l! the ecuritie * !ep& ite! a a'&re ai!* '&r the bene'it an! ecurit, &' all the p&lic,h&l!er

Ana Rhea Echavez Insurance Code

&' the c&(pan, !ep& itin% the a(e* but hall a l&n% a the c&(pan, i &l+ent* per(it the c&(pan, t& c&llect the intere t &r !i+i!en! &n the ecuritie & !ep& ite!* an!* 'r&( ti(e t& ti(e* .ith hi a ent* t& .ith!ra. an, &' uch ecuritie * up&n !ep& itin% .ith ai! C&((i i&ner &ther li-e ecuritie * the (ar-et +alue &' .hich hall be e<ual t& the (ar-et +alue &' uch a (a, be .ith!ra.n. In the e+ent &' an, c&(pan, cea in% t& !& bu ine in the 1hilippine the ecuritie !ep& ite! a a'&re ai! hall be returne! up&n the c&(pan,/ (a-in% applicati&n there'&re an! pr&+in% t& the ati 'acti&n &' the C&((i i&ner that it ha n& 'urther liabilit, un!er an, &' it p&licie in the 1hilippine . Sec. 197. E+er, '&rei%n c&(pan, !&in% bu ine in the 1hilippine hall et a i!e an a(&unt c&rre p&n!in% t& the le%al re er+e &' the p&licie .ritten in the 1hilippine an! in+e t an! -eep the a(e therein in acc&r!ance .ith the pr&+i i&n &' thi ecti&n. The le%al re er+e therein re<uire! t& be et a i!e hall be in+e te! &nl, in the cla e &' the 1hilippine ecuritie !e cribe! in ecti&n t.& hun!re!" Provided, however* That n& in+e t(ent in t&c- &r b&n! &' an, in%le entit, hall* in the a%%re%ate e4cee! t.ent, per centum &' the net .&rth &' the in+e tin% c&(pan, &r t.ent, per centu( &' the capital &' the i uin% c&(pan,* .hiche+er i the le er unle &ther.i e appr&+e! in .ritin% b, the C&((i i&ner. The ecuritie purcha e! an! -ept in the 1hilippine un!er thi ecti&n* hall n&t be ent &ut &' the territ&rial 2uri !icti&n &' the 1hilippine .ith&ut the .ritten c&n ent &' the C&((i i&ner. Title 5 MARBIN OF INSOL)ENCA Sec. 198. An in urance c&(pan, !&in% bu ine in the 1hilippine hall at all ti(e (aintain a (ar%in &' &l+enc, .hich hall be an e4ce &' the +alue &' it a!(itte! a et e4clu i+e &' it pai!-up capital* in the ca e &' a !&(e tic c&(pan,* &r an e4ce &' the +alue &' it a!(itte! a et in the 1hilippine * e4clu i+e &' it ecurit, !ep& it * in the ca e &' a '&rei%n c&(pan,* &+er the a(&unt &' it liabilitie * unearne! pre(iu( an! rein urance re er+e in the 1hilippine &' at lea t t.& per (ille &' the t&tal a(&unt &' it in urance in '&rce a &' the prece!in% calen!ar ,ear &n all p&licie * e4cept ter( in urance* in the ca e &' a li'e in urance c&(pan,* &r &' at lea t ten per centu( &' the t&tal a(&unt &' it net pre(iu( .ritten !urin% the prece!in% calen!ar ,ear* in the ca e &' a c&(pan, &ther than a li'e in urance c&(pan," Provided* That in either ca e* uch (ar%in hall in n& e+ent be le than 'i+e hun!re! th&u an! pe & " an! Provided, further* That the ter( "paid-up capital" hall n&t inclu!e c&ntribute! urplu an! capital pai! in e4ce &' par +alue. Such a et * liabilitie an! re er+e hall e4clu!e a et * liabilitie an! re er+e inclu!e! in eparate acc&unt e tabli he! in acc&r!ance .ith ecti&n t.& hun!re! thirt,- e+en. ?hene+er the a'&re(enti&ne! (ar%in be '&un! t& be le than that herein re<uire! t& be (aintaine!* the C&((i i&ner hall '&rth.ith !irect the c&(pan, t& (a-e %&&! an, uch !e'icienc, b, ca h* t& be c&ntribute! b, all t&c-h&l!er &' rec&r! in pr&p&rti&n t& their re pecti+e intere t* an! pai! t& the trea urer &' the c&(pan,* .ithin 'i'teen !a, 'r&( receipt &' the &r!er" Provided* That the c&(pan, in the interi( hall n&t be per(itte! t& ta-e an, ne. ri - &' an, -in! &r character unle an! until it (a-e %&&! an, uch !e'icienc,"Provided, further* that a t&c-h&l!er .h& a i!e 'r&( pa,in% the c&ntributi&n !ue 'r&( hi(* pa, the c&ntributi&n !ue 'r&( the an&ther t&c-h&l!er b, rea &n &' the 'ailure &r re'u al &' the latter t& !& &* hall ha+e a lien &n the certi'icate &' t&c&' the in urance c&(pan, c&ncerne! appearin% in it b&&- in the na(e &' the !e'aultin% t&c-h&l!er &n the !ate &' !e'ault* a .ell a &n an, intere t &r !i+i!en! that ha+e accrue! &r .ill accrue t& the ai! certi'icate &' t&c-* until the c&rre p&n!in% pa,(ent &r rei(bur e(ent i (a!e b, the !e'aultin% t&c-h&l!er. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 199. N& !&(e tic in urance c&rp&rati&n hall !eclare &r !i tribute an, !i+i!en! &n it &ut tan!in% t&c- e4cept 'r&( pr&'it atte te! in a .&rn tate(ent t& the C&((i i&ner b, the

pre i!ent &r trea urer &' the c&rp&rati&n t& be re(ainin% &n han! a'ter retainin% uni(paire!" #a$ The entire pai!-up capital t&c-0 #b$ The (ar%in &' &l+enc, re<uire! b, ecti&n &ne hun!re! ninet,-'&ur0 #c$ In the ca e &' li'e in urance c&rp&rati&n* the le%al re er+e 'un! re<uire! b, ecti&n t.& hun!re! ele+en0 #!$ In the ca e &' c&rp&rati&n &ther than li'e* the le%al re er+e 'un! re<uire! b, ecti&n t.& hun!re! thirteen0 #e$ A u( u''icient t& pa, all net l& e rep&rte!* &r in the c&ur e &' ettle(ent* an! all liabilitie '&r e4pen e an! ta4e . An, !i+i!en! !eclare! &r !i tribute! un!er the prece!in% para%raph hall be rep&rte! t& the C&((i i&ner .ithin thirt, !a, a'ter uch !eclarati&n &r !i tributi&n. I' the C&((i i&ner 'in! that an, uch c&rp&rati&n ha !eclare! &r !i tribute! an, uch !i+i!en! in +i&lati&n &' thi ecti&n* he (a, &r!er uch c&rp&rati&n t& cea e an! !e i t 'r&( !&in% bu ine until the a(&unt &' uch !i+i!en! &r the p&rti&n there&' in e4ce &' the a(&unt all&.e! un!er thi ecti&n ha been re t&re! t& ai! c&rp&rati&n. Title 7 ASSETS Sec. 19:. In an, !eter(inati&n &' the 'inancial c&n!iti&n &' an, in urance c&(pan, !&in% bu ine in the 1hilippine * there hall be all&.e! an! a!(itte! a a et &nl, uch a et &.ne! b, the in urance c&(pan, c&ncerne! an! .hich c&n i t &'" 1. Ca h in the p& e i&n &' the in urance c&(pan, &r in tran it un!er it c&ntr&l* an! the true an! !ul, +eri'ie! balance &' an, !ep& it &' uch c&(pan, in a 'inanciall, &un! c&((ercial ban- &r tru t c&(pan,. 5. In+e t(ent in ecuritie * inclu!in% (&ne, (ar-et in tru(ent * an! in real pr&pert, ac<uire! &r hel! in acc&r!ance .ith an! ub2ect t& the applicable pr&+i i&n &' thi C&!e an! the inc&(e reali>e! there'r&( &r accrue! there&n. 7. L&an %rante! b, the in urance c&(pan, c&ncerne! t& the e4tent &' that p&rti&n there&' a!e<uatel, ecure! b, n&n- peculati+e a et .ith rea!il, reali>able +alue in acc&r!ance .ith an! ub2ect t& the li(itati&n i(p& e! b, applicable pr&+i i&n &' thi C&!e. 8. 1&lic, l&an an! &ther p&lic, a et an! lien &n p&licie * c&ntract &r certi'icate &' a li'e in urance c&(pan,* in an a(&unt n&t e4cee!in% le%al re er+e an! &ther p&lic, liabilitie carrie! &n each in!i+i!ual li'e in urance p&lic,* c&ntract &r certi'icate. 9. The net a(&unt &' unc&llecte! an! !e'erre! pre(iu( an! annuit, c&n i!erati&n in the ca e &' a li'e in urance c&(pan, .hich carrie the 'ull (ean tabular re er+e liabilit,. :. Rein urance rec&+erable b, the ce!in% in urer" #a$ 'r&( an in urer auth&ri>e! t& tran act bu ine in thi c&untr,* the 'ull a(&unt there&'0 &r #b$ 'r&( an in urer n&t auth&ri>e! in thi c&untr,* in an a(&unt n&t e4cee!in% the liabilitie carrie! b, the ce!in% in urer '&r a(&unt .ithhel! un!er a rein urance treat, .ith uch unauth&ri>e! in urer a ecurit, '&r the pa,(ent &' &bli%ati&n thereun!er i' uch 'un! are hel! ub2ect t& .ith!ra.al b,* an! un!er the c&ntr&l &'* the ce!in% in urer. The C&((i i&ner (a, pre cribe the c&n!iti&n

Ana Rhea Echavez Insurance Code

un!er .hich a ce!in% in urer (a, be all&.e! cre!it* a an a et &r a a !e!ucti&n 'r&( l& an! unearne! pre(iu( re er+e * '&r rein urance rec&+erable 'r&( an in urer n&t auth&ri>e! in thi c&untr, but .hich pre ent ati 'act&r, e+i!ence that it (eet the applicable tan!ar! &' &l+enc, re<uire! in thi c&untr,. ;. Fun! .ithhel! b, a ce!in% in urer un!er a rein urance treat,* pr&+i!e! re er+e '&r unpai! l& e an! unearne! pre(iu( are a!e<uatel, pr&+i!e!. =. Dep& it &r a(&unt rec&+erable 'r&( un!er.ritin% a &ciati&n * ,n!icate an! rein urance 'un! * &r 'r&( an, u pen!e! ban-in% in tituti&n* t& the e4tent !ee(e! b, the C&((i i&ner t& be a+ailable '&r the pa,(ent &' l& e an! clai( an! +alue t& be !eter(ine! b, hi(. 9. Electr&nic !ata pr&ce in% (achine * a (a, be auth&ri>e! b, the C&((i i&ner t& be ac<uire! b, the in urance c&(pan, c&ncerne!* the ac<ui iti&n c& t &' .hich t& be a(&rti>e! in e<ual annual a(&unt .ithin a peri&! &' 'i+e ,ear 'r&( the !ate &' ac<ui iti&n there&'. 16. Other a et * n&t inc&n i tent .ith the pr&+i i&n &' para%raph 1 t& 9 here&'* .hich are !ee(e! b, the C&((i i&ner t& be rea!il, reali>able an! a+ailable '&r the pa,(ent &' l& e an! clai( at +alue t& be !eter(ine! b, hi(. Sec. 19;. In a!!iti&n t& uch a et a the C&((i i&ner (a, 'r&( ti(e t& ti(e !eter(ine t& be n&n-a!(itte! a et &' in urance c&(panie !&in% bu ine in the 1hilippine * the '&ll&.in% a et hall in n& ca e be all&.e! a a!(itte! a et &' an in urance c&(pan, !&in% bu ine in the 1hilippine * in an, !eter(inati&n &' it 'inancial c&n!iti&n" 1. B&&!.ill* tra!e na(e * an! &ther li-e intan%ible a et . 5. 1repai! &r !e'erre! char%e '&r e4pen e c&((i i&n pai! b, uch in urance c&(pan,. an!

Sec. 19=. N& in urance c&(pan, hall l&an an, &' it (&ne, &r !ep& it t& an, per &n* c&rp&rati&n &r a &ciati&n* e4cept up&n 'ir t (&rt%a%e &r !ee! &' tru t &' unencu(bere!* i(pr&+e! &r uni(pr&+e! real e tate* inclu!in% c&n!&(iniu( * in citie an! center &' p&pulati&n &' (unicipalitie in the 1hilippine .hen the a(&unt &' uch l&an i n&t in e4ce &' e+ent, per centu( &' the (ar-et +alue &' uch real e tate0 &r up&n the ecurit, &' 'ir t (&rt%a%e &r !ee! &' tru t &' actuall, culti+ate!* i(pr&+e! an! unencu(bere! a%ricultural lan! in the 1hilippine .hen the a(&unt &' uch l&an i n&t in e4ce &' '&rt, per centum &' the (ar-et +alue &' uch lan!0 &r up&n the purcha e (&ne, (&rt%a%e &r li-e ecuritie recei+e! b, it up&n the ale &r e4chan%e &' real pr&pert, ac<uire! pur uant t& ecti&n t.& hun!re! an! t.& hun!re! t.&0 &r up&n b&n! &r &ther e+i!ence &' !ebt &' the B&+ern(ent &' the 1hilippine &r it p&litical ub!i+i i&n auth&ri>e! b, la. t& i ue b&n! * &r up&n b&n! &r &ther e+i!ence &' !ebt &' %&+ern(ent-&.ne! &r c&ntr&lle! c&rp&rati&n an! in tru(entalitie inclu!in% the Central 3an- &r up&n &bli%ati&n i ue! &r %uarantee! b, the Internati&nal 3an- '&r Rec&n tructi&n an! De+el&p(ent0 &r up&n t&c- * b&n! &r &ther e+i!ence &' !ebt a are peci'ie! in ecti&n t.& hun!re!. A li'e in urance c&(pan,* h&.e+er* (a, len! t& an, &' it p&lic,h&l!er up&n the ecurit, &' the +alue &' it p&lic, uch u( a (a, be !eter(ine! pur uant t& the pr&+i i&n &' the p&lic,. L&an %rante! up&n the ecurit, &' real e tate '&r a peri&! l&n%er than 'i+e ,ear hall be a(&rti>e! in (&nthl,* <uarterl,* e(i-annual &r annual in tall(ent 0 1r&+i!e!* that n& uch l&an hall ha+e a (aturit, in e4ce &' t.ent, ,ear . The phra e "improved real estate" u e! ab&+e i hereb, !e'ine! t& (ean lan! .ith per(anent buil!in% &r buil!in% erecte! &r bein% erecte! there&n. E4cept a &ther.i e appr&+e! b, the C&((i i&ner* in ca e the buil!in% &r buil!in% &n lan! !& n&t bel&n% t& the &.ner &' the latter* n& l&an hall be %rante! &n the ecurit, &' the real e tate in <ue ti&n unle b&th the &.ner &' the buil!in% &r buil!in% an! the &.ner &' the lan! i%n the !ee! &' (&rt%a%e* an! unle the &.ner &' the lan! i the B&+ern(ent &' the 1hilippine &r &ne &' it p&litical ub!i+i i&n * in .hich e+ent the &.ner i n&t re<uire! t& i%n the !ee! &' (&rt%a%e. Sec. 199. N& l&an b, an, in urance c&(pan, &n the ecurit, &' real e tate hall be (a!e unle the title t& uch real e tate hall ha+e 'ir t been re%i tere! in acc&r!ance .ith the e4i tin% Lan! Re%i trati&n Act* &r hall be a titulo real !ul, re%i tere!* &r ha+e been pre+i&u l, re%i tere! un!er the pr&+i i&n &' the e4i tin% M&rt%a%e La.. Sec. 566. #1$ An in urance c&(pan, (a, purcha e* h&l!* &.n an! c&n+e, uch pr&pert,* real an! per &nal* a (a, ha+e been (&rt%a%e!* ple!%e!* &r c&n+e,e! t& it in %&&! 'aith in tru t '&r it bene'it b, rea &n &' (&ne, l&ane! b, it in pur uance &' the re%ular bu ine &' the c&(pan,* an! uch real &r per &nal pr&pert, a (a, ha+e been purcha e! b, it at ale un!er ple!%e * (&rt%a%e &r !ee! &' tru t '&r it bene'it &n acc&unt &' (&ne, l&ane! b, it0 an! uch real an! per &nal pr&pert, a (a, ha+e been c&n+e,e! t& it b, b&rr&.er in ati 'acti&n an! !i char%e &' l&an (a!e b, the c&(pan, t& the(" Provided, however, That an, real e tate purcha e! b, an in urance c&(pan, in pa,(ent &r b, rea &n &' an, l&an (a!e b, it hall be &l! b, the c&(pan, .ithin t.ent, ,ear a'ter the title theret& ha been +e te! in it. #5$ An in urance c&(pan, (a, purcha e* h&l!* &.n an! c&n+e, real an! per &nal pr&pert, a '&ll&. " #a$ The l&t .ith buil!in% there&n in .hich the c&(pan, c&n!uct an! carrie &n it bu ine . #b$ 3&n! &r &ther e+i!ence &' !ebt &' the B&+ern(ent &' the 1hilippine &r it p&litical ub!i+i i&n auth&ri>e! b, la. t& i ue b&n! at the rea &nable (ar-et +alue there&'.

7. A!+ance t& &''icer #&ther than p&lic, l&an $* .hich are n&t a!e<uatel, ecure! an! .hich are n&t pre+i&u l, auth&ri>e! b, the C&((i i&ner* a .ell a a!+ance t& e(pl&,ee * a%ent * an! &ther per &n &n (ere per &nal ecurit,. 8. Share &' t&c- &' uch in urance c&(pan,* &.ne! b, it* &r an, e<uit, therein a .ell a l&an ecure! thereb,* &r an, pr&p&rti&nate intere t in uch hare &' t&c- thr&u%h the &.ner hip b, uch in urance c&(pan, &' an intere t in an&ther c&rp&rati&n &r bu ine unit. 9. Furniture* 'urni hin%* 'i4ture * a'e * e<uip(ent* librar,* tati&ner,* literature* an! upplie . :. Ite( &' ban- cre!it repre entin% chec- * !ra't &r n&te returne! unpai! a'ter the !ate &' tate(ent. ;. The a(&unt* i' an,* b, .hich the a%%re%ate +alue &' in+e t(ent a carrie! in the le!%er a et &' uch in urance c&(pan, e4cee! the a%%re%ate +alue there&' a !eter(ine! in acc&r!ance .ith the pr&+i i&n &' thi C&!e an!D&r the rule &' the C&((i i&ner. All n&n-a!(itte! a et an! all &ther a et &' !&ubt'ul +alue &r character inclu!e! a le!%er &r n&n-le!%er a et in an, tate(ent ub(itte! b, an in urance c&(pan, t& the C&((i i&ner* &r in an, in urance e4a(iner/ rep&rt t& hi(* hall al & be rep&rte!* t& the e4tent &' the +alue !i all&.e! a !e!ucti&n 'r&( the %r& a et &' uch in urance c&(pan,* e4cept .here the C&((i i&ner per(it a re er+e t& be carrie! a(&n% the liabilitie &' uch in urance c&(pan, in lieu &' an, uch !e!ucti&n. Title 8 IN)ESTMENTS

Ana Rhea Echavez Insurance Code

#c$ 3&n! &r &ther e+i!ence &' !ebt &' the %&+ern(ent&.ne! &r c&ntr&lle! c&rp&rati&n an! entitie * inclu!in% the Central 3an-. #!$ 3&n! * !ebenture &r &ther e+i!ence &' in!ebte!ne &' an, &l+ent c&rp&rati&n &r in tituti&n create! &r e4i tin% un!er the la. &' the 1hilippine " Provided, however, That the i uin%* a u(in% &r %uaranteein% entit, &r it pre!ece &r hall n&t ha+e !e'aulte! in the pa,(ent &' intere t &n an, &' it ecuritie an! that !urin% each &' an, three inclu!in% the la t t.& &' the 'i+e 'i cal ,ear ne4t prece!in% the !ate &' ac<ui iti&n b, uch in urance c&(pan, &' uch b&n! * !ebenture * &r &ther e+i!ence &' in!ebte!ne * the net earnin% &' the i uin%* a u(in% &r %uaranteein% in tituti&n a+ailable '&r it 'i4e! char%e * a hereina'ter !e'ine!* hall ha+e been n&t le than &ne an! &ne-<uarter ti(e the t&tal &' it 'i4e! char%e '&r uch ,ear0 an! Provided, further* that n& li'e in urance c&(pan, hall in+e t in &r l&an up&n the &bli%ati&n &' an, &ne in tituti&n in the -in! per(itte! un!er thi ub- ecti&n an a(&unt in e4ce &' t.ent,-'i+e per centu( &' the t&tal a!(itte! a et &' uch in urer a &' Dece(ber thirt,-'ir t ne4t prece!in% the !ate &' uch in+e t(ent. A u e! in thi ub- ecti&n the ter( "net earnings availa le for fi%ed charges" hall (ean net inc&(e a'ter !e!uctin% &peratin% an! (aintenance e4pen e * ta4e &ther than inc&(e ta4e * !epreciati&n an! !epleti&n0 but e4clu!in% e4tra&r!inar, n&n-recurrin% ite( &' inc&(e &r e4pen e appearin% in the re%ular 'inancial tate(ent &' the i uin%* a u(in% &r %uaranteein% in tituti&n. The ter( "fi%ed charges" hall inclu!e intere t &n 'un!e! an! un'un!e! !ebt* a(&rti>ati&n &' !ebt !i c&unt* an! rental '&r lea e! pr&pertie . #e$ 1re'erre! &r %uarantee! t&c- &' an, &l+ent c&rp&rati&n &r in tituti&n create! &r e4i tin% un!er the la. &' the 1hilippine " Provided, however* That the i uin%* a u(in% &r %uaranteein% entit, &r it pre!ece &r ha pai! re%ular !i+i!en! up&n it pre'erre! &r %uarantee! t&c- '&r a peri&! &' at lea t three ,ear ne4t prece!in% the !ate &' in+e t(ent in uch pre'erre! &r %uarantee! t&c-" Provided, further* That i' the t&c- are %uarantee!* the a(&unt &' t&c& %uarantee! i n&t e4ce &' 'i't, per centu( &' the a(&unt &' the pre'erre! &r c&((&n t&c- * a the ca e (a, be* &' the %uaranteein% c&rp&rati&n" an! Provided, finally* That n& li'e in urance c&(pan, hall in+e t in &r l&an up&n &bli%ati&n &' an, &ne in tituti&n in the -in! per(itte! un!er thi ub- ecti&n an a(&unt in e4ce &' ten per centu( &' the t&tal a!(itte! a et &' uch in urer a &' Dece(ber thirt,-'ir t ne4t prece!in% the !ate &' uch in+e t(ent. #'$ C&((&n t&c- &' an, &l+ent c&rp&rati&n &r in tituti&n create! &r e4i tin% un!er the la. &' the 1hilippine up&n .hich re%ular !i+i!en! hall ha+e been pai! '&r the three ,ear ne4t prece!in% the purcha e &' uch t&c-" Provided, however* That n& li'e in urance c&(pan, hall in+e t in &r l&an up&n the &bli%ati&n &' an, &ne c&rp&rati&n &r in tituti&n in the -in! per(itte! un!er thi ub- ecti&n an a(&unt in e4ce &' ten per centu( &' the t&tal a!(itte! a et &' uch in urer a &' Dece(ber thirt,-'ir t ne4t prece!in% the !ate &' uch in+e t(ent. #%$ Certi'icate * n&te an! &ther &bli%ati&n i ue! b, the tru tee &r recei+er &' an, in tituti&n create! &r e4i tin% un!er the la. &' the 1hilippine .hich* &r the a et &' .hich* are bein% a!(ini tere! un!er the !irecti&n &' an, c&urt ha+in% 2uri !icti&n0 Provided, however, That uch certi'icate * n&te &r &ther &bli%ati&n are a!e<uatel, ecure! a t& principal an! intere t .

#h$ E<uip(ent tru t &bli%ati&n &r certi'icate .hich are a!e<uatel, ecure! &r &ther a!e<uatel, ecure! in tru(ent e+i!encin% an intere t in e<uip(ent .h&ll, &r in part .ithin the 1hilippine " Provided, however, That there i a ri%ht t& recei+e !eter(ine! p&rti&n &' rental* purcha e &r &ther 'i4e! &bli%at&r, pa,(ent '&r the u e &r purcha e &' uch e<uip(ent. #i$ An, &bli%ati&n &' an, c&rp&rati&n &r in tituti&n create! &r e4i tin% un!er the la. &' the 1hilippine .hich i * &n the !ate &' ac<ui iti&n b, the in urer* a!e<uatel, ecure! an! ha <ualitie an! characteri tic .herein the peculati+e ele(ent are n&t pre!&(inant. #2$ Such &ther ecuritie a (a, be appr&+e! b, the C&((i i&ner. #7$ An, !&(e tic in urer .hich ha &ut tan!in% in urance* annuit, &r rein urance c&ntract in currencie &ther than the nati&nal currenc, &' the 1hilippine (a, in+e t in* &r &ther.i e ac<uire &r l&an up&n ecuritie an! in+e t(ent in uch currenc, .hich are ub tantiall, &' the a(e -in! * cla e an! in+e t(ent %ra!e a th& e eli%ible '&r in+e t(ent un!er the '&re%&in% ub!i+i i&n &' thi ecti&n0 but the a%%re%ate a(&unt &' uch in+e t(ent an! &' uch ca h in uch currenc, .hich i at an,ti(e hel! b, uch in urer hall n&t e4cee! &ne an! &nehal' ti(e the a(&unt &' it re er+e an! &ther &bli%ati&n un!er uch c&ntract &r the a(&unt .hich uch in urer i re<uire! b, the la. &' an, c&untr, &r p& e i&n &ut i!e the Republic &' the 1hilippine t& be in+e t in uch c&untr, &r p& e i&n* .hiche+er hall be %reater. Sec. 561. An in urance c&(pan, (a, #1$ in+e t in e<uitie &' &ther 'inancial in tituti&n * an! #5$ en%a%e in the bu,in% an! ellin% &' h&rt-ter( !ebt in tru(ent " Provided* that an, &r all &' uch in+e t(ent hall be .ith the pri&r appr&+al &' the C&((i i&ner. Sec. 565. An, li'e in urance c&(pan, (a," #a$ Ac<uire &r c&n truct h&u in% pr&2ect an!* in c&nnecti&n .ith an, uch pr&2ect* (a, ac<uire lan! &r an, intere t therein b, purcha e* lea e &r &ther.i e* &r u e lan! ac<uire! pur uant t& an, &ther pr&+i i&n &' thi C&!e. Such c&(pan, (a, therea'ter &.n* (aintain* (ana%e* c&llect &r recei+e inc&(e 'r&(* &r ell an! c&n+e,* an, lan! &r intere t therein & ac<uire! an! an, i(pr&+e(ent there&n. The a%%re%ate b&&- +alue &' the in+e t(ent &' an, uch c&(pan, in all uch pr&2ect hall n&t e4cee! at the ti(e &' uch in+e t(ent t.ent, 'i+e per centu( &' the t&tal a!(itte! a et &' uch c&(pan, &n the thirt,-'ir t !a, &' Dece(ber ne4t prece!in%0 #b$ Ac<uire real pr&pert,* &ther than pr&pert, t& be u e! pri(aril, '&r pr&+i!in% h&u in% an! pr&pert, '&r acc&((&!ati&n &' it &.n bu ine * a an in+e t(ent '&r the pr&!ucti&n &' inc&(e* &r (a, ac<uire real pr&pert, t& be i(pr&+e! &r !e+el&pe! '&r uch in+e t(ent purp& e pur uant t& a pr&%ra( there'&r* ub2ect t& the c&n!iti&n that the c& t &' each parcel &' real pr&pert, & ac<uire! un!er the auth&rit, &' thi para%raph #b$* inclu!in% the e ti(ate! c& t t& the c&(pan, &' the i(pr&+e(ent &r !e+el&p(ent there&'* .hen a!!e! t& the b&&- +alue &' all &ther real pr&pert, hel! b, it pur uant t& thi para%raph #b$* hall n&t e4cee! t.ent,-'i+e per centum &' it a!(itte! a et a &' the thirt,-'ir t !a, &' Dece(ber ne4t prece!in%. Sec. 567. E+er, !&(e tic in urance c&(pan, hall* t& the e4tent &' an a(&unt e<ual in +alue t& t.ent,-'i+e per centu( &' the (ini(u( pai!-up capital re<uire! un!er ecti&n &ne hun!re! ei%ht,-ei%ht* in+e t it 'un! &nl, in ecuritie * ati 'act&r, t& the C&((i i&ner* c&n i tin% &' b&n! &r &ther e+i!ence &' !ebt &' the B&+ern(ent &' the 1hilippine &r it p&litical ub!i+i i&n &r in tru(entalitie * &r &' %&+ern(ent&.ne! &r c&ntr&lle! c&rp&rati&n an! entitie * inclu!in% the

Ana Rhea Echavez Insurance Code

Central 3an- &' the 1hilippine " Provided, That uch in+e t(ent hall at all ti(e be (aintaine! 'ree 'r&( an, lien &r encu(brance0 an! Provided, further* That uch ecuritie hall be !ep& ite! .ith an! hel! b, the C&((i i&ner '&r the 'aith'ul per'&r(ance b, the !ep& itin% in urer &' all it &bli%ati&n un!er it in urance c&ntract . The pr&+i i&n &' ecti&n &ne hun!re! ninet,-t.& hall* & 'ar a practicable* appl, t& the ecuritie !ep& ite! un!er thi ecti&n. E4cept a &ther.i e pr&+i!e! in thi C&!e* n& 2u!%(ent cre!it&r &r &ther clai(ant hall ha+e the ri%ht t& le+, up&n an, &' the ecuritie &' the in urer hel! &n !ep& it un!er thi ecti&n &r hel! &n !ep& it pur uant t& the re<uire(ent &' the C&((i i&ner. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 568. A'ter ati ',in% the re<uire(ent c&ntaine! in the prece!in% ecti&n* an, !&(e tic n&n-li'e in urance c&(pan,* hall in+e t* t& an a(&unt pre cribe! bel&.* it 'un! in* &r &ther.i e* ac<uire &r l&an up&n* &nl, the cla e &' in+e t(ent !e cribe! in ecti&n t.& hun!re!* inclu!in% ecuritie i ue! b, an, "registered enterprise"* a thi ter( i !e'ine! in Republic Act N&. 91=:* &ther.i e -n&.n a the In+e t(ent Incenti+e Act* an! uch &ther cla e &' in+e t(ent a (a, be auth&ri>e! b, the C&((i i&ner '&r purp& e &' thi ecti&n" Provided* That #a$ n& (&re than t.ent, per centu( &' the net .&rth &' uch c&(pan, a h&.n b, it late t 'inancial tate(ent appr&+e! b, the C&((i i&ner hall be in+e te! in the l&t an! buil!in% in .hich the in urance c&(pan, c&n!uct it bu ine an! #b$ the t&tal in+e t(ent &' an in urance c&(pan, in an, re%i tere! enterpri e hall n&t e4cee! t.ent, per centum &' the net .&rth &' ai! in urance c&(pan, a h&.n b, it a'&re ai! 'inancial tate(ent n&r t.ent, per centum &' the pai!-up capital &' the re%i tere! enterpri e e4clu!in% the inten!e! in+e t(ent* unle pre+i&u l, auth&ri>e! b, the C&((i i&ner" an!* Provided, further* That uch in+e t(ent 'ree 'r&( an, lien &r encu(brance* hall be at lea t e<ual in a(&unt t& the a%%re%ate a(&unt &' #a$ it le%al re er+e* a pr&+i!e! in ecti&n t.& hun!re! thirteen* an! #b$ it re er+e 'un! hel! '&r rein urance a pr&+i!e! '&r in the pertinent treat, pr&+i i&n in the ca e &' rein urance ce!e! t& auth&ri>e! in urer . #A a(en!e! b, 1re i!ential Decree N&.1899$. Sec. 569. A'ter ati ',in% the re<uire(ent c&ntaine! in ecti&n &ne hun!re! ninet,-&ne* &ne hun!re! ninet,-three* t.& hun!re! three an! t.& hun!re! '&ur* an, n&n-li'e in urance c&(pan, (a, in+e t an, p&rti&n &' it 'un! repre entin% earne! urplu in an, &' the in+e t(ent !e cribe! in ecti&n &ne hun!re! ninet,-ei%ht* t.& hun!re! an! t.& hun!re! &ne* &r in an, ecuritie i ue! b, a "registered enterprise" (enti&ne! in the prece!in% ecti&n " Provided* That n& in+e t(ent in t&c- &r b&n! &' an, in%le entit, hall in the a%%re%ate* e4cee! t.ent, per centu( &' the net .&rth &' the in urance c&(pan, a h&.n in it late t 'inancial tate(ent appr&+e! b, the C&((i i&ner &r t.ent, per centu( &' the pai!-up capital &' the i uin% c&(pan,* .hiche+er i le er* unle &ther.i e appr&+e! b, the C&((i i&ner. Sec. 56:. A'ter ati ',in% the (ini(u( capital in+e t(ent re<uire! in ecti&n t.& hun!re! three* an, li'e in urance c&(pan, (a, in+e t it le%al p&lic, re er+e* a pr&+i!e! in ecti&n t.& hun!re! ele+en &r in ecti&n t.& hun!re! t.el+e* in an, &' the cla e &' ecuritie &r t,pe &' in+e t(ent !e cribe! in ecti&n &ne hun!re! ninet,-ei%ht* t.& hun!re!* t.& hun!re! &ne an! t.& hun!re! t.&* ub2ect t& the li(itati&n therein c&ntaine!* an! in an, ecuritie i ue! b, an, "registered enterprise" (enti&ne! in ecti&n t.& hun!re! '&ur* 'ree 'r&( an, lien &r encu(brance* in uch a(&unt a (a, be appr&+e! b, the C&((i i&ner. Such c&(pan, (a, li-e.i e in+e t an, p&rti&n &' it earne! urplu in the a'&re ai! ecuritie &r in+e t(ent ub2ect t& the a'&re ai! li(itati&n . Sec. 56;. An, in+e t(ent (a!e in +i&lati&n &' the applicable pr&+i i&n &' thi title hall be c&n i!ere! n&n-a!(itte! a et . Sec. 56=. #1$ All b&n! &r &ther e+i!ence &' in!ebte!ne ha+in% a 'i4e! ter( an! rate &' intere t an! hel! b, an, li'e

in urance c&(pan, auth&ri>e! t& !& bu ine in thi c&untr,* i' a(pl, ecure! an! i' n&t in !e'ault a t& principal &r intere t* hall be +alue! a '&ll&. " I' purcha e! at par* at the par +alue0 i' purcha e! ab&+e &r bel&. par* &n the ba i &' the purcha e price a!2u te! & a t& brin% the +alue t& par at (aturit, an! & a t& ,iel! in the (eanti(e the e''ecti+e rate &' intere t at .hich the purcha e .a (a!e* &r in the !i creti&n &' the C&((i i&ner* &n the ba i &' the (eth&! &' calculati&n c&((&nl, -n&.n a the pr&-rata (eth&!. In appl,in% the '&re%&in% rule the purcha e price hall in n& ca e be ta-en at a hi%her 'i%ure than the actual (ar-et +alue at the ti(e &' ac<ui iti&n. The C&((i i&ner hall ha+e the p&.er t& !eter(ine the eli%ibilit, &' an, uch in+e t(ent '&r +aluati&n &n the ba i &' a(&rti>ati&n* an! (a, b, re%ulati&n pre cribe &r li(it the cla e &' ecuritie & eli%ible '&r a(&rti>ati&n. All b&n! &r &ther e+i!ence &' in!ebte!ne .hich in the 2u!%(ent &' the C&((i i&ner are n&t a(pl, ecure! hall n&t be eli%ible '&r a(&rti>ati&n an! hall be +alue! in acc&r!ance .ith para%raph t.&. The C&((i i&ner (a,* i' he 'in! that the intere t &' p&lic, h&l!er & per(it &r re<uire* b, &''icial re%ulati&n per(it &r re<uire an, cla &r cla e &' in urer * &ther than li'e in urance c&(panie * auth&ri>e! t& !& bu ine in thi c&untr,* t& +alue their b&n! &r &ther e+i!ence &' in!ebte!ne in acc&r!ance .ith the '&re%&in% rule. #5$ The in+e t(ent &' all in urer auth&ri>e! t& !& bu ine in thi c&untr,* e4cept ecuritie ub2ect t& a(&rti>ati&n an! e4cept a &ther.i e pr&+i!e! in thi chapter* hall be +alue!* in the !i creti&n &' the C&((i i&ner* at their (ar-et +alue* &r at their apprai e! +alue* &r at price !eter(ine! b, hi( a repre entin% their 'air (ar-et +alue. I' the C&((i i&ner 'in! that in +ie. &' the character &' in+e t(ent &' an, in urer auth&ri>e! t& !& bu ine in thi c&untr, it .&ul! be pru!ent '&r uch in urer t& e tabli h a pecial re er+e '&r p& ible l& e &r 'luctuati&n in the +alue &' it in+e t(ent * he (a, re<uire uch in urer t& e tabli h uch re er+e* rea &nable in a(&unt* an! (a, re<uire that uch re er+e be (aintaine! an! rep&rte! in an, tate(ent &r rep&rt &' the 'inancial c&n!iti&n &' uch in urer. The C&((i i&ner (a,* in c&nnecti&n .ith an, e4a(inati&n &r re<uire! 'inancial tate(ent &' an auth&ri>e! in urer* re<uire uch in urer t& 'urni h hi( c&(plete 'inancial tate(ent an! au!ite! rep&rt &' the 'inancial c&n!iti&n &' an, c&rp&rati&n &' .hich the ecuritie are &.ne! .h&ll, &r partl, b, uch in urer an! (a, cau e an e4a(inati&n t& be (a!e &' an, ub i!iar, &r a''iliate &' uch in urer. #7$ The t&c- &' an in urance c&(pan, hall be +alue! at the le er &' it (ar-et +alue &r it b&&- +alue a h&.n b, it la t appr&+e! annual tate(ent &r the la t rep&rt &n e4a(inati&n* .hiche+er i (&re recent. The b&&- +alue &' a hare &' c&((&n t&c- &' an in urance c&(pan, hall be a certaine! b, !i+i!in% #a$ the a(&unt &' it capital an! urplu le the +alue &' all &' it pre'erre! t&c-* i' an,* &ut tan!in%* b, #b$ the nu(ber &' hare &' it c&((&n t&c- i ue! an! &ut tan!in%. N&t.ith tan!in% the '&re%&in% pr&+i i&n * an in urer (a,* at it &pti&n* +alue it h&l!in% &' t&c- in a ub i!iar, in urance c&(pan, in an a(&unt n&t le than ac<ui iti&n c& t i' uch ac<ui iti&n c& t i le than the +alue !eter(ine! a hereinbe'&re pr&+i!e!. #8$ Real e tate re<uire! b, '&recl& ure &r b, !ee! in lieu there&'* in the ab ence &' a recent apprai al !ee(e! b, the C&((i i&ner t& be reliable* hall n&t be +alue! at an a(&unt %reater than the unpai! principal &' the !e'aulte! l&an at the !ate &' uch '&recl& ure &r !ee!* t&%ether .ith an, ta4e an! e4pen e pai! &r incurre! b, uch in urer at uch ti(e in c&nnecti&n .ith uch ac<ui iti&n* an! the c& t &' a!!iti&n &r i(pr&+e(ent therea'ter pai! b, uch in urer an! an, a(&unt &r a(&unt therea'ter pai! b, uch in urer &n an, a e (ent le+ie! '&r i(pr&+e(ent in c&nnecti&n .ith the pr&pert,. #9$ 1urcha e (&ne, (&rt%a%e recei+e! &n !i p& iti&n &' real pr&pert, hel! pur uant t& ecti&n &ne hun!re! ninet,-ei%ht hall be +alue! in an a(&unt e<ui+alent t& ninet, per centu( &' the +alue &' uch real pr&pert,. 1urcha e (&ne, (&rt%a%e

Ana Rhea Echavez Insurance Code

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recei+e! &n !i p& iti&n &' real pr&pert, &ther.i e hel! hall be +alue! in an a(&unt n&t e4cee!in% ninet, per centu( &' the +alue &' uch real pr&pert, a !eter(ine! b, an apprai al (a!e b, an apprai er at &r ab&ut the ti(e &' !i p& iti&n &' uch real pr&pert,. #:$ The t&c- &' a ub i!iar, &' an in urer hall be +alue! &n the ba i &' the %reater &' #i$ the +alue &' &nl, uch ub i!iar, &' the a et &' uch ub i!iar, a .&ul! c&n titute la.'ul in+e t(ent '&r the in urer i' ac<uire! &r hel! !irectl, b, the in urer &r #ii$ uch &ther +alue !eter(ine! pur uant t& tan!ar! an! cu(ulati+e li(itati&n * c&ntaine! in a re%ulati&n t& be pr&(ul%ate! b, the C&((i i&ner. #;$ N&t.ith tan!in% an, pr&+i i&n c&ntaine! in thi ecti&n &r el e.here in thi chapter* i' the C&((i i&ner 'in! that the intere t &' p&lic,h&l!er & per(it &r re<uire* he (a, per(it &r re<uire an, cla &r cla e &' in urer auth&ri>e! t& !& bu ine in thi c&untr, t& +alue their in+e t(ent &r an, cla &r cla e there&' a &' an, !ate heret&'&re &r herea'ter in acc&r!ance .ith an, applicable +aluati&n &r (eth&!. Sec. 569. It hall be the !ut, &' the &''icer &' the in urance c&(pan, t& rep&rt .ithin the 'ir t 'i'teen !a, &' e+er, (&nth all uch in+e t(ent a (a, be (a!e b, the( !urin% the prece!in% (&nth* an! the C&((i i&ner (a,* i' uch in+e t(ent &r an, &' the( ee( in2u!ici&u t& hi(* re<uire the ale &r !i p& al &' the a(e. The rep&rt hall al & inclu!e a li t &' in+e t(ent &l! &r !i p& e! &' b, the c&(pan, !urin% the a(e peri&!. Title 9 RESER)ES Sec. 516. E+er, li'e in urance c&(pan,* !&in% bu ine in the 1hilippine * hall annuall, (a-e a +aluati&n &' all p&licie * a!!iti&n theret&* unpai! !i+i!en! * an! all &ther &bli%ati&n &ut tan!in% &n the thirt,-'ir t !a, &' Dece(ber &' the prece!in% ,ear. All uch +aluati&n hall be (a!e up&n the net pre(iu( ba i * acc&r!in% t& the tan!ar! a!&pte! b, the c&(pan,* .hich tan!ar! hall be tate! in it annual rep&rt. Such tan!ar! &' +aluati&n .hether &' the net le+el pre(iu(* 'ull preli(inar, ter(* an, (&!i'ie! preli(inar, ter(* &r elect an! ulti(ate re er+e ba i * hall be acc&r!in% t& a tan!ar! table &' (&rtalit, .ith intere t at n&t (&re than i4 per centu( c&(p&un! intere t. ?hen the preli(inar, ter( ba i i u e!* the ter( in urance hall be li(ite! t& the 'ir t p&lic, ,ear. The re ult &' uch +aluati&n hall be rep&rte! t& the C&((i i&ner &n &r be'&re the thirtieth !a, &' April &' each ,ear acc&(panie! b, a .&rn tate(ent &' the c&(pan,/ actuar, certi',in% t& the 'i%ure an! tatin% up&n .hat (&rtalit, table it i ba e!* up&n .hat rate &' intere t the +aluati&n i (a!e* an! the (eth&! u e! in arri+in% at the re ult &btaine!. Sec. 511. The a%%re%ate net +alue & a certaine! &' the p&licie &' uch c&(pan, hall be !ee(e! it re er+e liabilit,* t& pr&+i!e '&r .hich it hall h&l! 'un! in ecure in+e t(ent e<ual t& uch net +alue* ab&+e all it &ther liabilitie 0 an! it hall be the !ut, &' the C&((i i&ner* a'ter ha+in% +eri'ie!* t& uch an e4tent a he (a, !ee( nece ar,* the +aluati&n &' all p&licie in '&rce* t& ati ', hi( el' that the c&(pan, ha uch a(&unt in a'e le%al ecuritie a'ter all &ther !ebt an! clai( a%ain t it ha+e been pr&+i!e! '&r. The re er+e liabilit, '&r +ariable c&ntract !e'ine! in ecti&n t.& hun!re! thirt,-t.& hall be e tabli he! in acc&r!ance .ith actuarial pr&ce!ure that rec&%ni>e the +ariable nature &' the bene'it pr&+i!e!* an! hall be appr&+e! b, the C&((i i&ner. Sec. 515. E+er, !&(e tic li'e in urance c&(pan,* c&n!ucte! &n the (utual plan &r a plan in .hich p&lic,h&l!er are b, the ter( &' their p&licie entitle! t& hare in the pr&'it &r urplu hall* &n all p&licie &' li'e in urance heret&'&re &r herea'ter i ue!* un!er the c&n!iti&n &' .hich the !i tributi&n &' urplu i !e'erre! t& a 'i4e! &r peci'ie! ti(e an! c&ntin%ent up&n the p&lic, bein% in '&rce an! the in ure! li+in% at that ti(e* annuall, a certain the

a(&unt &' the urplu t& .hich all uch p&licie a eparate cla are entitle!* an! hall annuall, app&rti&n t& uch p&licie a a cla the a(&unt &' the urplu & a certaine!* an! carr, the a(&unt &' uch app&rti&ne! urplu * plu the actual intere t earnin% an! accreti&n t& uch 'un!* a a !i tinct an! eparate liabilit, t& uch cla &' p&licie &n an! '&r .hich the a(e .a accu(ulate!* an! n& c&(pan, &r an, &' it &''icer hall be per(itte! t& u e an, part &' uch app&rti&ne! urplu 'un! '&r an, purp& e .hat &e+er &ther than '&r the e4pre purp& e '&r .hich the a(e .a accu(ulate!. Sec. 517. E+er, in urance c&(pan,* &ther than li'e* hall (aintain a re er+e '&r unearne! pre(iu( &n it p&licie in '&rce* .hich hall be char%e! a a liabilit, in an, !eter(inati&n &' it 'inancial c&n!iti&n. Such re er+e hall be e<ual t& '&rt, per centu( &' the %r& pre(iu( * le return an! cancellati&n * recei+e! &n p&licie &r ri - ha+in% n&t (&re than a ,ear t& run* an! pr& rata &n all %r& pre(iu( recei+e! &n p&licie &r ri ha+in% (&re than a ,ear t& run" Provided* That '&r (arine car%& ri - the re er+e hall be e<ual t& '&rt, per centum &' the pre(iu( .ritten in the p&licie up&n ,earl, ri - * an! the 'ull a(&unt &' the pre(iu( .ritten !urin% the la t t.& (&nth &' the calen!ar ,ear up&n all &ther (arine ri - n&t ter(inate!. Sec. 518. In a!!iti&n t& it liabilitie an! re er+e &n c&ntract &' in urance i ue! b, it* e+er, in urance c&(pan, hall be char%e! .ith the e ti(ate! a(&unt &' all &' it &ther liabilitie * inclu!in% ta4e * e4pen e an! &ther &bli%ati&n !ue &r accrue! at the !ate &' tate(ent* an! inclu!in% an, pecial re er+e re<uire! b, the C&((i i&ner pur uant t& the pr&+i i&n &' thi C&!e. Title : LIMIT OF SINBLE RISF Sec. 519. N& in urance c&(pan, &ther than li'e* .hether '&rei%n &r !&(e tic* hall retain an, ri - &n an, &ne ub2ect &' in urance in an a(&unt e4cee!in% t.ent, per centu( &' it net .&rth. F&r purp& e &' thi ecti&n* the ter( "su &ect of insurance" hall inclu!e all pr&pertie &r ri - in ure! b, the a(e in urer that cu t&(aril, are c&n i!ere! b, n&n-li'e c&(pan, un!er.riter t& be ub2ect t& l& &r !a(a%e 'r&( the a(e &ccurrence &' an, ha>ar! in ure! a%ain t. Rein urance ce!e! a auth&ri>e! un!er the uccee!in% title hall be !e!ucte! in !eter(inin% the ri - retaine!. A t& uret, ri -* !e!ucti&n hall al & be (a!e &' the a(&unt a u(e! b, an, &ther c&(pan, auth&ri>e! t& tran act uret, bu ine an! the +alue &' an, ecurit, (&rt%a%e* ple!%e!* &r hel! ub2ect t& the uret,/ c&ntr&l an! '&r the uret,/ pr&tecti&n. Title ; REINSURANCE TRANSACTIONS Sec. 51:. An in urance c&(pan, !&in% bu ine in the 1hilippine (a, accept rein urance &nl, &' uch ri - * an! retain ri - there&n .ithin uch li(it * a it i &ther.i e auth&ri>e! t& in ure. Sec. 51;. N& in urance c&(pan, !&in% bu ine in the 1hilippine hall ce!e all &r part &' an, ri - ituate! in the 1hilippine b, .a, &' rein urance !irectl, t& an, '&rei%n in urer n&t auth&ri>e! t& !& bu ine in the 1hilippine unle uch '&rei%n in urer &r* i' the er+ice &' a n&n-re i!ent br&-er are utili>e!* uch n&n-re i!ent br&-er i repre ente! in the 1hilippine b, a re i!ent a%ent !ul, re%i tere! .ith the C&((i i&ner a re<uire! in thi C&!e. The re i!ent a%ent &' uch unauth&ri>e! '&rei%n in urer &r n&nre i!ent br&-er hall i((e!iatel, up&n re%i trati&n 'urni h the C&((i i&ner .ith the annual tate(ent &' uch in urer* &r &' uch c&(pan, &r c&(panie .here uch br&-er (a, place 1hilippine bu ine a &' the ,ear prece!in% uch re%i trati&n* an! annuall, therea'ter a &&n a a+ailable. Sec. 51=. All in urance c&(panie * b&th li'e an! n&n-li'e* auth&ri>e! t& !& bu ine in the 1hilippine hall ce!e their e4ce ri - t& &ther c&(panie i(ilarl, auth&ri>e! t& !&

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bu ine in the 1hilippine in uch a(&unt an! un!er uch arran%e(ent a .&ul! be c&n i tent .ith &un! un!er.ritin% practice be'&re the, enter int& rein urance arran%e(ent .ith unauth&ri>e! '&rei%n in urer . Sec. 519. An, in urance c&(pan, !&in% bu ine in the 1hilippine !e irin% t& ce!e their e4ce ri - t& '&rei%n in urance &r rein urance c&(panie n&t auth&ri>e! t& tran act bu ine in the 1hilippine (a, !& & un!er the '&ll&.in% c&n!iti&n " #1$ E4cept in 'acultati+e rein urance an! e4ce &' l& c&+er * the 'ull a(&unt &' the re er+e 'un! re<uire! b, la. hall be et up in the b&&- &' an! hel! b, the ce!in% c&(pan, '&r & l&n% a the ri - c&ncerne! i in '&rce" Provided* That in ca e &' 'acultati+e in urance* the ce!in% c&(pan, hall h&. t& the ati 'acti&n &' the C&((i i&ner that the 1hilippine (ar-et cann&t pr&+i!e the 'acilitie &u%ht abr&a!. #5$ The re er+e 'un! .ithhel! hall be in+e te! in b&n! &r &ther e+i!ence &' !ebt &' the B&+ern(ent &' the 1hilippine &r it p&litical ub!i+i i&n &r in tru(entalitie * &r &' %&+ern(ent-&.ne! &r c&ntr&lle! c&rp&rati&n an! entitie * inclu!in% the Central 3an-* an!D&r &ther ecuritie acceptable un!er ecti&n t.& hun!re!. Sh&ul! an, rein urance a%ree(ent be '&r an, rea &n cancelle! &r ter(inate!* the ce!in% c&(pan, c&ncerne! hall in'&r( the C&((i i&ner in .ritin% &' uch cancellati&n &r ter(inati&n .ithin thirt, !a, 'r&( the !ate &' uch cancellati&n &r ter(inati&n &r 'r&( the !ate n&tice &r in'&r(ati&n &' uch cancellati&n &r ter(inati&n i recei+e! b, uch c&(pan, a the ca e (a, be. Sec. 556. E+er, in urance c&(pan, auth&ri>e! t& !& bu ine in the 1hilippine hall rep&rt t& the C&((i i&ner &n '&r( pre cribe! b, hi( the particular &' rein urance treatie a &' the 'ir t !a, &' Eanuar, &' the ,ear '&ll&.in% the appr&+al &' thi C&!e an! hall therea'ter i(ilarl, rep&rt t& the C&((i i&ner particular &' an, ne. treatie &r chan%e in e4i tin% treatie . Sec. 551. N& cre!it hall be all&.e! a an a!(itte! a et &r a a !e!ucti&n 'r&( liabilit,* t& an, ce!in% in urer '&r rein urance (a!e* ce!e!* rene.e!* &r &ther.i e bec&(in% e''ecti+e a'ter Eanuar, 'ir t* nineteen hun!re! e+ent,-'i+e* unle the rein urance hall be pa,able b, the a u(in% in urer &n the ba i &' the liabilit, &' the ce!in% in urer un!er the c&ntract &r c&ntract rein ure! .ith&ut !i(inuti&n becau e &' the in &l+enc, &' the ce!in% in urer n&r unle un!er the c&ntract &r c&ntract &' rein urance the liabilit, '&r uch rein urance i a u(e! b, the a u(in% in urer &r in urer a &' the a(e e''ecti+e !ate0 n&r unle the rein urance a%ree(ent pr&+i!e that pa,(ent b, the a u(in% in urer hall be (a!e !irectl, t& the ce!in% in urer &r t& it li<ui!at&r* recei+er* &r tatut&r, ucce &r e4cept #a$ .here the c&ntract peci'icall, pr&+i!e an&ther pa,ee &' uch rein urance in the e+ent &' the in &l+enc, &' the ce!in% in urer an! #b$ .here the a u(in% in urer .ith the c&n ent &' the !irect in ure! &r in ure! ha a u(e! uch p&lic, &bli%ati&n &' the ce!in% in urer a !irect &bli%ati&n &' the a u(in% in urer t& the pa,ee un!er uch p&licie an! in ub tituti&n '&r the &bli%ati&n &' the ce!in% in urer t& uch pa,ee . Sec. 555. N& li'e in urance c&(pan, !&in% bu ine in the 1hilippine hall rein ure it .h&le ri - &n an, in!i+i!ual li'e &r 2&int li+e * &r ub tantiall, all &' it in urance in '&rce* .ith&ut ha+in% 'ir t &btaine! the .ritten per(i i&n &' the C&((i i&ner. Title = ANNUAL STATEMENT Sec. 557. E+er, in urance c&(pan, !&in% bu ine in the 1hilippine hall ter(inate it 'i cal peri&! &n the thirt,-'ir t !a, &' Dece(ber e+er, ,ear* an! hall annuall, &n &r be'&re the thirtieth !a, &' April &' each ,ear ren!er t& the C&((i i&ner a

tate(ent i%ne! an! .&rn t& b, the chie' &''icer &' uch c&(pan, h&.in%* in uch '&r( an! !etail a (a, be pre cribe! b, the C&((i i&ner* the e4act c&n!iti&n &' it a''air &n the prece!in% thirt,-'ir t !a, &' Dece(ber. An, entr, in the tate(ent .hich i '&un! t& be 'al e hall c&n titute a (i !e(ean&r an! the &''icer i%nin% uch tate(ent hall be ub2ect t& the penalt, pr&+i!e! '&r un!er ecti&n '&ur hun!re! nineteen. Sec. 558. E+er, in urance c&(pan, auth&ri>e! un!er title ten &' thi chapter t& i ue* !eli+er &r u e +ariable c&ntract hall annuall, 'ile .ith the C&((i i&ner eparate annual tate(ent &' it eparate +ariable acc&unt . Such tate(ent hall be &n a '&r( pre cribe! &r appr&+e! b, the C&((i i&ner an! hall inclu!e !etail a t& all &' the inc&(e* !i bur e(ent * a et an! liabilit, ite( &' an! a &ciate! .ith the ai! eparate +ariable acc&unt . Sai! tate(ent hall be un!er &ath &' t.& &''icer &' the c&(pan, an! hall be 'ile! i(ultane&u l, .ith the annual tate(ent re<uire! b, the prece!in% ecti&n. Sec. 559. ?ithin thirt, !a, a'ter receipt &' the annual tate(ent appr&+e! b, the C&((i i&ner* e+er, in urance c&(pan, !&in% bu ine in the 1hilippine hall publi h in t.& ne. paper &' %eneral circulati&n in the Cit, &' Manila* &ne publi he! in En%li h an! &ne in 1ilipin&* a 'ull ,n&p i &' it annual 'inancial tate(ent h&.in% 'ull, the c&n!iti&n &' it bu ine * an! ettin% '&rth it re &urce an! liabilitie . Title 9 1OLICA FORMS Sec. 55:. N& p&lic,* certi'icate &r c&ntract &' in urance hall be i ue! &r !eli+ere! .ithin the 1hilippine unle in the '&r( pre+i&u l, appr&+e! b, the C&((i i&ner* an! n& applicati&n '&r( hall be u e! .ith* an! n& ri!er* clau e* .arrant, &r en!&r e(ent hall be attache! t&* printe! &r ta(pe! up&n uch p&lic,* certi'icate &r c&ntract unle the '&r( &' uch applicati&n* ri!er* clau e* .arrant, &r en!&r e(ent ha been appr&+e! b, the C&((i i&ner. Sec. 55;. In the ca e &' in!i+i!ual li'e &r en!&.(ent in urance* the p&lic, hall c&ntain in ub tance the '&ll&.in% c&n!iti&n " #a$ A pr&+i i&n that the p&lic,h&l!er i entitle! t& a %race peri&! either &' thirt, !a, &r &' &ne (&nth .ithin .hich the pa,(ent &' an, pre(iu( a'ter the 'ir t (a, be (a!e* ub2ect at the &pti&n &' the in urer t& an intere t char%e n&t in e4ce &' i4 per centum per annu( '&r the nu(ber &' !a, &' %race elap in% be'&re the pa,(ent &' the pre(iu(* !urin% .hich peri&! &' %race the p&lic, hall c&ntinue in 'ull '&rce* but in ca e the p&lic, bec&(e a clai( !urin% the ai! peri&! &' %race be'&re the &+er!ue pre(iu( i pai!* the a(&unt &' uch pre(iu( .ith intere t (a, !e !e!ucte! 'r&( the a(&unt pa,able un!er the p&lic, in ettle(ent0 #b$ A pr&+i i&n that the p&lic, hall be inc&nte table a'ter it hall ha+e been in '&rce !urin% the li'eti(e &' the in ure! '&r a peri&! &' t.& ,ear 'r&( it !ate &' i ue a h&.n in the p&lic,* &r !ate &' appr&+al &' la t rein tate(ent* e4cept '&r n&n-pa,(ent &' pre(iu( an! e4cept '&r +i&lati&n &' the c&n!iti&n &' the p&lic, relatin% t& (ilitar, &r na+al er+ice in ti(e &' .ar0 #c$ A pr&+i i&n that the p&lic, hall c&n titute the entire c&ntract bet.een the partie * but i' the c&(pan, !e ire t& (a-e the applicati&n a part &' the c&ntract it (a, !& & pr&+i!e! a c&p, &' uch applicati&n hall be in!&r e! up&n &r attache! t& the p&lic, .hen i ue!* an! in uch ca e the p&lic, hall c&ntain a pr&+i i&n that the p&lic, an! the applicati&n there'&re hall c&n titute the entire c&ntract bet.een the partie 0 #!$ A pr&+i i&n that i' the a%e &' the in ure! i c&n i!ere! in !eter(inin% the pre(iu( an! the bene'it accruin% un!er the p&lic,* an! the a%e &' the in ure! ha been (i tate!* the a(&unt pa,able un!er the p&lic,

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hall be uch a the pre(iu( .&ul! ha+e purcha e! at the c&rrect a%e0 #e$ I' the p&lic, i participatin%* a pr&+i i&n that the c&(pan, hall peri&!icall, a certain an! app&rti&n an, !i+i ible urplu accruin% &n the p&lic, un!er c&n!iti&n peci'ie! therein0 #'$ A pr&+i i&n peci',in% the &pti&n t& .hich the p&lic,h&l!er i entitle! t& in the e+ent &' !e'ault in a pre(iu( pa,(ent a'ter three 'ull annual pre(iu( hall ha+e been pai!. Such &pti&n hall c&n i t &'" #1$ A ca h urren!er +alue pa,able up&n urren!er &' the p&lic, .hich hall n&t be le than the re er+e &n the p&lic,* the ba i &' .hich hall be in!icate!* '&r the then current p&lic, ,ear an! an, !i+i!en! a!!iti&n theret&* re!uce! b, a urren!er char%e .hich hall n&t be (&re than &ne-'i'th &' the entire re er+e &r t.& an! &ne-hal' per centu( &' the a(&unt in ure! an! an, !i+i!en! a!!iti&n theret&0 #5$ One &r (&re pai!-up bene'it &n a plan &r plan peci'ie! in the p&lic, &' uch +alue a (a, be purcha e! b, the ca h urren!er +alue0 #%$ A pr&+i i&n that at an,ti(e a'ter a ca h urren!er +alue i a+ailable un!er the p&lic, an! .hile the p&lic, i in '&rce* the c&(pan, .ill a!+ance* &n pr&per a i%n(ent &r ple!%e &' the p&lic, an! &n &le ecurit, there&'* a u( e<ual t&* &r at the &pti&n &' the &.ner &' the p&lic,* le than the ca h urren!er +alue &n the p&lic,* at a peci'ie! rate &' intere t* n&t (&re than the (a4i(u( all&.e! b, la.* t& be !eter(ine! b, the c&(pan, 'r&( ti(e t& ti(e* but n&t (&re &'ten than &nce a ,ear* ub2ect t& the appr&+al &' the C&((i i&ner0 an! that the c&(pan, .ill !e!uct 'r&( uch l&an +alue an, e4i tin% in!ebte!ne &n the p&lic, an! an, unpai! balance &' the pre(iu( '&r the current p&lic, ,ear* an! (a, c&llect intere t in a!+ance &n the l&an t& the en! &' the current p&lic, ,ear* .hich pr&+i i&n (a, 'urther pr&+i!e that uch l&an (a, be !e'erre! '&r n&t e4cee!in% i4 (&nth a'ter the applicati&n there'&re i (a!e0 #h$ A table h&.in% in 'i%ure ca h urren!er +alue an! pai!-up &pti&n a+ailable un!er the p&lic, each ,ear up&n !e'ault in pre(iu( pa,(ent * !urin% at lea t t.ent, ,ear &' the p&lic, be%innin% .ith the ,ear in .hich the +alue an! &pti&n 'ir t bec&(e a+ailable* t&%ether .ith a pr&+i i&n that in the e+ent &' the 'ailure &' the p&lic,h&l!er t& elect &ne &' the ai! &pti&n .ithin the ti(e peci'ie! in the p&lic,* &ne &' ai! &pti&n hall aut&(aticall, ta-e e''ect an! n& p&lic,h&l!er hall e+er '&r'eit hi ri%ht t& a(e b, rea &n &' hi 'ailure t& & elect0 #i$ In ca e the pr&cee! &' a p&lic, are pa,able in in tall(ent &r a an annuit,* a table h&.in% the (ini(u( a(&unt &' the in tall(ent &r annuit, pa,(ent 0 #2$ A pr&+i i&n that the p&lic,h&l!er hall be entitle! t& ha+e the p&lic, rein tate! at an, ti(e .ithin three ,ear 'r&( the !ate &' !e'ault &' pre(iu( pa,(ent unle the ca h urren!er +alue ha been !ul, pai!* &r the e4ten i&n peri&! ha e4pire!* up&n pr&!ucti&n &' e+i!ence &' in urabilit, ati 'act&r, t& the c&(pan, an! up&n pa,(ent &' all &+er!ue pre(iu( an! an, in!ebte!ne t& the c&(pan, up&n ai! p&lic,* .ith intere t rate n&t e4cee!in% that .hich .&ul! ha+e been applicable t& ai! pre(iu( an! in!ebte!ne in the p&lic, ,ear pri&r t& rein tate(ent. An, &' the '&re%&in% pr&+i i&n &r p&rti&n there&' n&t

applicable t& in%le pre(iu( &r ter( p&licie hall t& that e4tent n&t be inc&rp&rate! therein0 an! an, uch p&lic, (a, be i ue! an! !eli+ere! in the 1hilippine .hich in the &pini&n &' the C&((i i&ner c&ntain pr&+i i&n &n an, &ne &r (&re &' the '&re%&in% re<uire(ent (&re 'a+&rable t& the p&lic,h&l!er than hereinbe'&re re<uire!. Thi ecti&n hall n&t appl, t& p&licie &' %r&up li'e &r in!u trial li'e in urance. Sec. 55=. N& p&lic, &' %r&up li'e in urance hall be i ue! an! !eli+ere! in the 1hilippine unle it c&ntain in ub tance the '&ll&.in% pr&+i i&n * &r pr&+i i&n .hich in the &pini&n &' the C&((i i&ner are (&re 'a+&rable t& the per &n in ure!* &r at lea t a 'a+&rable t& the per &n in ure! an! (&re 'a+&rable t& the p&lic,-h&l!er " #a$ A pr&+i i&n that the p&lic,h&l!er i entitle! t& a %race peri&! &' either thirt, !a, &r &' &ne (&nth '&r the pa,(ent &' an, pre(iu( !ue a'ter the 'ir t* !urin% .hich %race peri&! the !eath bene'it c&+era%e hall c&ntinue in '&rce* unle the p&lic,h&l!er hall ha+e %i+en the in urer .ritten n&tice &' !i c&ntinuance in a!+ance &' the !ate &' !i c&ntinuance an! in acc&r!ance .ith the ter( &' the p&lic,. The p&lic, (a, pr&+i!e that the p&lic,h&l!er hall be liable '&r the pa,(ent &' a pr& rata pre(iu( '&r the ti(e the p&lic, i in '&rce !urin% uch %race peri&!0 #b$ A pr&+i i&n that the +ali!it, &' the p&lic, hall n&t be c&nte te!* e4cept '&r n&n-pa,(ent &' pre(iu( a'ter it ha been in '&rce '&r t.& ,ear 'r&( it !ate &' i ue0 an! that n& tate(ent (a!e b, an, in ure! un!er the p&lic, relatin% t& hi in urabilit, hall be u e! in c&nte tin% the +ali!it, &' the in urance .ith re pect t& .hich uch tate(ent .a (a!e a'ter uch in urance ha been in '&rce pri&r t& the c&nte t '&r a peri&! &' t.& ,ear !urin% uch per &n/ li'eti(e n&r unle c&ntaine! in .ritten in tru(ent i%ne! b, hi(0 #c$ A pr&+i i&n that a c&p, &' the applicati&n* i' an,* &' the p&lic,h&l!er hall be attache! t& the p&lic, .hen i ue!* that all tate(ent (a!e b, the p&lic,h&l!er &r b, per &n in ure! hall be !ee(e! repre entati&n an! n&t .arrantie * an! that n& tate(ent (a!e b, an, in ure! hall be u e! in an, c&nte t unle a c&p, &' the in tru(ent c&ntainin% the tate(ent i &r ha been 'urni he! t& uch per &n &r t& hi bene'iciar,0 #!$ A pr&+i i&n ettin% '&rth the c&n!iti&n * i' an,* un!er .hich the in urer re er+e the ri%ht t& re<uire a per &n eli%ible '&r in urance t& 'urni h e+i!ence &' in!i+i!ual in urabilit, ati 'act&r, t& the in urer a a c&n!iti&n t& part &r all &' hi c&+era%e0 #e$ A pr&+i i&n peci',in% an e<uitable a!2u t(ent &' pre(iu( &r &' bene'it &r &' b&th t& be (a!e in the e+ent that the a%e &' a per &n in ure! ha been (i tate!* uch pr&+i i&n t& c&ntain a clear tate(ent &' the (eth&! &' a!2u t(ent t& be u e!0 #'$ A pr&+i i&n that an, u( bec&(in% !ue b, rea &n &' !eath &' the per &n in ure! hall be pa,able t& the bene'iciar, !e i%nate! b, the in ure!* ub2ect t& the pr&+i i&n &' the p&lic, in the e+ent that there i n& !e i%nate! bene'iciar,* a t& all &r an, part &' uch u(* li+in% at the !eath &' the in ure!* an! ub2ect t& an, ri%ht re er+e! b, the in urer in the p&lic, an! et '&rth in the certi'icate t& pa, at it &pti&n a part &' uch u( n&t e4cee!in% 'i+e hun!re! pe & t& an, per &n appearin% t& the in urer t& be e<uitabl, entitle! theret& b, rea &n &' ha+in% incurre! 'uneral &r &ther e4pen e inci!ent t& the la t illne &r !eath &' the per &n in ure!0 #%$ A pr&+i i&n that the in urer .ill i ue t& the p&lic,h&l!er '&r !eli+er, t& each per &n in ure! an in!i+i!ual certi'icate ettin% '&rth a tate(ent a t& the in urance pr&tecti&n t& .hich he i entitle!* t& .h&( the

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in urance bene'it are pa,able* an! the ri%ht para%raph #h$* #i$ an! #2$ '&ll&.in%0

et '&rth in

p&licie . Sec. 559. The ter( "industrial life insurance" a u e! in thi C&!e hall (ean that '&r( &' li'e in urance un!er .hich the pre(iu( are pa,able either (&nthl, &r &'tener* i' the 'ace a(&unt &' in urance pr&+i!e! in an, p&lic, i n&t (&re than 'i+e hun!re! ti(e that &' the current tatut&r, (ini(u( !ail, .a%e in the Cit, &' Manila* an! i' the .&r! "industrial policy" are printe! up&n the p&lic, a part &' the !e cripti+e (atter. An in!u trial li'e p&lic, hall n&t lap e '&r n&n-pa,(ent &' pre(iu( i' uch n&n-pa,(ent .a !ue t& the 'ailure &' the c&(pan, t& en! it repre entati+e &r a%ent t& the in ure! at the re i!ence &' the in ure! &r at &(e &ther place in!icate! b, hi( '&r the purp& e &' c&llectin% uch pre(iu(" Provided* That the pr&+i i&n &' thi para%raph hall n&t appl, .hen the pre(iu( &n the p&lic, re(ain unpai! '&r a peri&! &' three (&nth &r t.el+e .ee- a'ter the %race peri&! ha e4pire!. Sec. 576. In the ca e &' in!u trial li'e in urance* the p&lic, hall c&ntain in ub tance the '&ll&.in% pr&+i i&n " #a$ A pr&+i i&n that the in ure! i entitle! t& a %race peri&! &' '&ur .ee- .ithin .hich the pa,(ent &' an, pre(iu( a'ter the 'ir t (a, be (a!e* e4cept that .here pre(iu( are pa,able (&nthl,* the peri&! &' %race hall be either &ne (&nth &r thirt, !a, 0 an! that !urin% the peri&! &' %race* the p&lic, hall c&ntinue in 'ull '&rce* but i' !urin% uch %race peri&! the p&lic, bec&(e a clai(* then an, &+er!ue an! unpai! pre(iu( (a, be !e!ucte! 'r&( an, a(&unt pa,able un!er the p&lic, in ettle(ent0 #b$ A pr&+i i&n that the p&lic, hall be inc&nte table a'ter it ha been in '&rce !urin% the li'eti(e &' the in ure! '&r a peci'ie! peri&!* n&t (&re than t.& ,ear 'r&( it !ate &' i ue* e4cept '&r n&n-pa,(ent &' pre(iu( an! e4cept '&r +i&lati&n &' the c&n!iti&n &' the p&lic, relatin% t& na+al &r (ilitar, er+ice* &r er+ice au4iliar, theret&* an! e4cept a t& pr&+i i&n relatin% t& bene'it in the e+ent &' !i abilit, a !e'ine! in the p&lic,* an! th& e %rantin% a!!iti&nal in urance peci'icall, a%ain t !eath b, acci!ent &r b, acci!ental (ean * &r t& a!!iti&nal in urance a%ain t l& &'* &r l& &' u e &'* peci'ic (e(ber &' the b&!,0 #c$ A pr&+i i&n that the p&lic, hall c&n titute the entire c&ntract bet.een the partie * &r i' a c&p, &' the applicati&n i en!&r e! up&n an! attache! t& the p&lic, .hen i ue!* a pr&+i i&n that the p&lic, an! the applicati&n there'&r hall c&n titute the entire c&ntract bet.een the partie * an! in the latter ca e* a pr&+i i&n that all tate(ent (a!e b, the in ure! hall* in the ab ence &' 'rau!* be !ee(e! repre entati&n an! n&t .arrantie 0 #!$ A pr&+i i&n that i' the a%e &' the per &n in ure!* &r the a%e &' an, per &n* c&n i!ere! in !eter(inin% the pre(iu(* &r the bene'it accruin% un!er the p&lic,* ha been (i tate!* an, a(&unt pa,able &r bene'it accruin% un!er the p&lic, hall be uch a the pre(iu( pai! .&ul! ha+e purcha e! at the c&rrect a%e0 #e$ A pr&+i i&n that i' the p&lic, i a participatin% p&lic,* the c&(pan, hall peri&!icall, a certain an! app&rti&n an, !i+i ible urplu accruin% &n the p&lic, un!er the c&n!iti&n peci'ie! therein0 #'$ A pr&+i i&n that in the e+ent &' !e'ault in pre(iu( pa,(ent a'ter three 'ull ,ear / pre(iu( ha+e been pai!* the p&lic, hall be c&n+erte! int& a tipulate! '&r( &' in urance* an! that in the e+ent &' !e'ault in pre(iu( pa,(ent a'ter 'i+e 'ull ,ear / pre(iu( ha+e been pai!* a peci'ie! ca h urren!er +alue hall be a+ailable* in lieu &' the tipulate! '&r( &' in urance* at the &pti&n &' the p&lic,h&l!er. The net +alue &' uch tipulate! '&r( &' in urance an! the a(&unt &' uch ca h +alue hall n&t be le than the re er+e &n the p&lic, an! !i+i!en!

#h$ A pr&+i i&n that i' the in urance* &r an, p&rti&n &' it* &n a per &n c&+ere! un!er the p&lic, cea e becau e &' ter(inati&n &' e(pl&,(ent &r &' (e(ber hip in the cla &r cla e eli%ible '&r c&+era%e un!er the p&lic,* uch per &n hall be entitle! t& ha+e i ue! t& hi( b, the in urer* .ith&ut e+i!ence &' in urabilit,* an in!i+i!ual p&lic, &' li'e in urance .ith&ut !i abilit, &r &ther upple(entar, bene'it * pr&+i!e! applicati&n '&r the in!i+i!ual p&lic, an! pa,(ent &' the 'ir t pre(iu( t& the in urer hall be (a!e .ithin thirt, !a, a'ter uch ter(inati&n an! pr&+i!e! 'urther that" #1$ the in!i+i!ual p&lic, hall be &n an, &ne &' the '&r( * e4cept ter( in urance* then cu t&(aril, i ue! b, the in urer at the a%e an! '&r an a(&unt n&t in e4ce &' the c&+era%e un!er the %r&up p&lic,0 an! #5$ the pre(iu( &n the in!i+i!ual p&lic, hall be at the in urer/ then cu t&(ar, rate applicable t& the '&r( an! a(&unt &' the in!i+i!ual p&lic,* t& the cla &' ri - t& .hich uch per &n then bel&n% * an! t& hi a%e attaine! &n the e''ecti+e !ate &' the in!i+i!ual p&lic,. #i$ A pr&+i i&n that i' the %r&up p&lic, ter(inate &r i a(en!e! & a t& ter(inate the in urance &' an, cla &' in ure! per &n * e+er, per &n in ure! thereun!er at the !ate &' uch ter(inati&n .h& e in urance ter(inate an! .h& ha been & in ure! '&r 'i+e ,ear pri&r t& uch ter(inati&n !ate hall be entitle! t& ha+e i ue! t& hi( b, the in urer an in!i+i!ual p&lic, &' li'e in urance ub2ect t& the a(e li(itati&n a et '&rth in para%raph #h$* e4cept that the %r&up p&lic, (a, pr&+i!e that the a(&unt &' uch in!i+i!ual p&lic, hall n&t e4cee! the (aller &' #a$ the a(&unt &' the per &n/ li'e in urance pr&tecti&n cea in% le the a(&unt &' an, li'e in urance '&r .hat he i &r bec&(e eli%ible un!er an, %r&up p&lic, i ue! &r rein tate! b, the a(e &r an&ther rein urer .ithin thirt, !a, a'ter uch ter(inati&n* an! #b$ t.& th&u an! pe & 0 #2$ A pr&+i i&n that i' a per &n in ure! un!er the %r&up p&lic, !ie !urin% the thirt,-!a, peri&! .ithin .hich he .&ul! ha+e been entitle! t& an in!i+i!ual p&lic, i ue! t& hi( in acc&r!ance .ith #h$ an! #i$ ab&+e an! be'&re uch in!i+i!ual p&lic, hall ha+e bec&(e e''ecti+e* the a(&unt &' li'e in urance .hich he .&ul! ha+e been entitle! t& ha+e i ue! t& hi( a an in!i+i!ual p&lic, hall be pa,able a a clai( un!er the %r&up p&lic, .hether &r n&t applicati&n '&r the in!i+i!ual p&lic, &r the pa,(ent &' the 'ir t pre(iu( ha been (a!e0 #-$ In the ca e &' a p&lic, i ue! t& a cre!it&r t& in ure !ebt&r &' uch cre!it&r* a pr&+i i&n that the in urer .ill 'urni h t& the p&lic,h&l!er '&r !eli+er, t& each !ebt&r in ure! un!er the p&lic, a '&r( .hich .ill c&ntain a tate(ent that the li'e &' the !ebt&r i in ure! un!er the p&lic, an! that an, !eath bene'it pai! thereun!er b, rea &n &' hi !eath hall be applie! t& re!uce &r e4tin%ui h in!ebte!ne . The pr&+i i&n &' para%raph #'$ t& #2$ hall n&t appl, t& p&licie i ue! t& a cre!it&r t& in ure hi !ebt&r . I' a %r&up li'e p&lic, i &n a plan &' in urance &ther than ter(* it hall c&ntain a n&n'&r'eiture pr&+i i&n &r pr&+i i&n .hich in the &pini&n &' the C&((i i&ner i &r are e<uitable t& the in ure! &r the p&lic,h&l!er" Provided* That n&thin% herein c&ntaine! hall be & c&n true! a t& re<uire %r&up li'e p&licie t& c&ntain the a(e n&n-'&r'eiture pr&+i i&n a are re<uire! &' in!i+i!ual li'e

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a!!iti&n theret&* i' an,* at the en! &' the la t c&(plete! p&lic, ,ear '&r .hich pre(iu( hall ha+e been pai! #the p&lic, t& peci', the (&rtalit, table* rate &' intere t an! (eth&! &' +aluati&n a!&pte! t& c&(pute uch re er+e$* e4clu i+e &' an, re er+e &n !i abilit, bene'it an! acci!ental !eath bene'it * le an a(&unt n&t t& e4cee! t.& an! &ne-hal' per centum &' the (a4i(u( a(&unt in ure! b, the p&lic, an! !i+i!en! a!!iti&n theret&* i' an,* at the en! &' the la t c&(plete! p&lic, ,ear '&r .hich pre(iu( hall ha+e been pai! #the p&lic, t& peci', the (&rtalit, table* rate &' intere t an! (eth&! &' +aluati&n a!&pte! t& c&(pute uch re er+e$* e4clu i+e &' an, re er+e &n !i abilit, bene'it an! acci!ental !eath bene'it * le an a(&unt n&t t& e4cee! t.& an! &ne-hal' per centu( &' the (a4i(u( a(&unt in ure! b, the p&lic, an! !i+i!en! a!!iti&n theret&* i' an,* .hen the i ue a%e i un!er ten ,ear * an! le an a(&unt n&t t& e4cee! t.& an! &ne-hal' per centum &' the current a(&unt in ure! b, the p&lic, an! !i+i!en! a!!iti&n theret&* i' an,* i' the i ue a%e i ten ,ear &r &l!er* an! le an, e4i tin% in!ebte!ne t& the c&(pan, &n &r ecure! b, the p&lic,0 #%$ A pr&+i i&n that the p&lic, (a, be urren!ere! t& the c&(pan, at it h&(e &''ice .ithin a peri&! &' n&t le than i4t, !a, a'ter the !ue !ate &' a pre(iu( in !e'ault '&r the peci'ie! ca h +alue* pr&+i!e! that the in urer (a, !e'er pa,(ent '&r n&t (&re than i4 (&nth a'ter the applicati&n there'&re i (a!e0 #h$ A table that h&. in 'i%ure the n&n-'&r'eiture bene'it a+ailable un!er the p&lic, e+er, ,ear up&n !e'ault in pa,(ent &' pre(iu( !urin% at lea t the 'ir t t.ent, ,ear &' the p&lic,* uch table t& be%in .ith the ,ear in .hich uch +alue bec&(e a+ailable* an! a pr&+i i&n that the c&(pan, .ill 'urni h up&n re<ue t an e4ten i&n &' uch table be,&n! the ,ear h&.n in the p&lic,0 #i$ A pr&+i i&n that peci'ie .hich &ne &' the tipulate! '&r( &' in urance pr&+i!e! '&r un!er the pr&+i i&n &' para%raph #'$ &' thi ecti&n hall ta-e e''ect in the e+ent &' the in ure!/ 'ailure* .ithin i4t, !a, 'r&( the !ue !ate &' the pre(iu( in !e'ault* t& n&ti', the in urer in .ritin% a t& .hich &ne &' uch '&r( he ha electe!0 #2$ A pr&+i i&n that the p&lic, (a, be rein tate! at an, ti(e .ithin t.& ,ear 'r&( the !ue !ate &' the pre(iu( in !e'ault unle the ca h urren!er +alue ha been pai! &r the peri&! &' e4ten!e! ter( in urance e4pire!* up&n pr&!ucti&n &' e+i!ence &' in urabilit, ati 'act&r, t& the c&(pan, an! pa,(ent &' arrear &' pre(iu( .ith intere t at a rate n&t e4cee!in% i4 per centu( per annu( pa,able annuall,0 #-$ A pr&+i i&n that .hen a p&lic, hall bec&(e a clai( b, !eath &' the in ure!* ettle(ent hall be (a!e up&n receipt &' !ue pr&&' &' !eath* &r n&t later than t.& (&nth a'ter receipt &' uch pr&&'0 #l$ A title &n the 'ace an! &n the bac- &' the p&lic, c&rrectl, !e cribin% it '&r(0 #($ A pace &n the 'r&nt &r the bac- &' the p&lic, '&r the na(e &' the bene'iciar, !e i%nate! b, the in ure! .ith a re er+ati&n &' the in ure!/ ri%ht t& !e i%nate &r chan%e the bene'iciar, a'ter the i uance &' the p&lic,. The p&lic, (a, al & pr&+i!e that n& !e i%nati&n &r chan%e &' bene'iciar, hall be bin!in% &n the in urer until en!&r e! &n the p&lic, b, the in urer* an! that the in urer (a, re'u e t& en!&r e the na(e &' an, pr&p& e! bene'iciar, .h& !&e n&t appear t& the in urer t& ha+e an in urable intere t in the li'e &' the in ure!. Such p&lic, (a, al & c&ntain a pr&+i i&n that i' the bene'iciar, !e i%nate! in the p&lic, !&e n&t urren!er the p&lic, .ith !ue pr&&' &' !eath .ithin the peri&! tate! in the p&lic,* .hich hall

n&t be le than thirt, !a, a'ter the !eath &' the in ure!* &r i' the bene'iciar, i the e tate &' the in ure!* &r i a (in&r* &r !ie be'&re the in ure!* &r i n&t le%all, c&(petent t& %i+e +ali! relea e* then the in urer (a, (a-e an, pa,(ent thereun!er t& the e4ecut&r &r a!(ini trat&r &' the in ure!* &r t& an, &' the in ure!/ relati+e b, bl&&! &r le%al a!&pti&n &r c&nnecti&n b, (arria%e &r t& an, per &n appearin% t& the in urer t& be e<uitabl, entitle! theret& b, rea &n &' ha+in% incurre! e4pen e '&r the (aintenance* (e!ical attenti&n &r burial &' the in ure!0 an! #n$ A pr&+i i&n that .hen an in!u trial li'e in urance p&lic, i i ue! pr&+i!in% '&r acci!ental &r health bene'it * &r b&th* in a!!iti&n t& li'e in urance* the '&re%&in% pr&+i i&n hall appl, &nl, t& the li'e in urance p&rti&n &' the p&lic,. An, &' the '&re%&in% pr&+i i&n &r p&rti&n there&' n&t applicable t& n&n-participatin% &r ter( p&licie hall t& that e4tent n&t be inc&rp&rate! therein. The '&re%&in% pr&+i i&n hall n&t appl, t& p&licie i ue! &r %rante! pur uant t& the n&n'&r'eiture pr&+i i&n pre cribe! in pr&+i i&n &' para%raph #'$ an! #i$ &' thi ecti&n* n&r hall pr&+i i&n &' para%raph #'$* #%$* #h$* an! #i$ here&' be re<uire! in ter( in urance &' t.ent, ,ear &r le but uch ter( p&licie hall peci', the (&rtalit, table* rate &' intere t* an! (eth&! &' c&(putin% re er+e . Sec. 571. N& p&lic, &' in!u trial li'e in urance hall be i ue! &r !eli+ere! in the 1hilippine i' it c&ntain an, &' the '&ll&.in% pr&+i i&n " #a$ A pr&+i i&n that %i+e the in urer the ri%ht t& !eclare the p&lic, +&i! becau e the in ure! ha ha! an, !i ea e &r ail(ent* .hether peci'ie! &r n&t* &r becau e the in ure! ha recei+e! in tituti&nal* h& pital* (e!ical &r ur%ical treat(ent &r attenti&n* e4cept a pr&+i i&n .hich %i+e the in urer the ri%ht t& !eclare the p&lic, +&i! i' the in ure! ha * .ithin t.& ,ear pri&r t& the i uance &' the p&lic,* recei+e! in tituti&nal h& pital* (e!ical &r ur%ical treat(ent &r attenti&n an! i' the in ure! &r the clai(ant un!er the p&lic, 'ail t& h&. that the c&n!iti&n &cca i&nin% uch treat(ent &r attenti&n .a n&t &' a eri&u nature &r .a n&t (aterial t& the ri -0 #b$ A pr&+i i&n that %i+e the in urer the ri%ht t& !eclare the p&lic, +&i! becau e the in ure! ha been re2ecte! '&r in urance* unle uch ri%ht be c&n!iti&ne! up&n a h&.in% b, the in urer that -n&.le!%e &' uch re2ecti&n .&ul! ha+e le! t& a re'u al b, the in urer t& (a-e uch c&ntract0 #c$ A pr&+i i&n that all&. the c&(pan, t& pa, the pr&cee! &' the p&lic, at the !eath &' the in ure! t& an, per &n &ther than the na(e! bene'iciar,* e4cept in acc&r!ance .ith a tan!ar! pr&+i i&n a peci'ie! un!er the pr&+i i&n &' para%raph #($ &' the prece!in% ecti&n0 #!$ A pr&+i i&n that li(it the ti(e .ithin .hich an, acti&n at la. &r in e<uit, (a, be c&((ence! t& le than i4 ,ear a'ter the cau e &' acti&n hall accrue0 an! #e$ A pr&+i i&n that peci'ie an, (&!e &' ettle(ent at (aturit, &' le +alue than the a(&unt in ure! b, the p&lic, plu !i+i!en! a!!iti&n * i' an,* le an, in!ebte!ne t& the c&(pan, &n the p&lic, an! le an, pre(iu( that (a, b, the ter( &' the p&lic, be !e!ucte!* pa,(ent t& be (a!e in acc&r!ance .ith the ter( &' the p&lic,. N&thin% c&ntaine! in thi ecti&n n&r in the pr&+i i&n &' para%raph #b$ &' the prece!in% ecti&n* relatin% t& inc&nte tabilit,* hall be c&n true! a pr&hibitin% the li'e in urance c&(pan, 'r&( placin% in it in!u trial li'e p&licie pr&+i i&n li(itin% it liabilit, .ith re pect t&" #1$ !eath re ultin% 'r&( a+iati&n &ther than a a 'are-pa,in% pa en%er &n a re%ularl, che!ule! r&ute bet.een !e'initel, e tabli he! airp&rt 0 an! #5$ (ilitar, &r na+al er+ice" Provided, That i' the

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liabilit, &' the c&(pan, i li(ite! a herein pr&+i!e!* uch liabilit, hall in n& e+ent be 'i4e! at an a(&unt le than the re er+e &n the p&lic, #e4clu!in% the re er+e '&r an, a!!iti&nal bene'it in the e+ent &' !eath b, acci!ent &r acci!ental (ean &r '&r bene'it in the e+ent &' an, t,pe &' !i abilit,$* le an, in!ebte!ne &n &r ecure! b, uch p&lic,0 n&r hall an, pr&+i i&n &' thi ecti&n appl, t& an, pr&+i i&n in an in!u trial li'e in urance p&lic, '&r a!!iti&nal bene'it in the e+ent &' !eath b, acci!ent &r acci!ental (ean . Title 16 )ARIA3LE CONTRACTS Sec. 575. #1$ N& in urance c&(pan, auth&ri>e! t& tran act bu ine in the 1hilippine hall i ue* !eli+er* ell &r u e an, +ariable c&ntract in the 1hilippine * unle an! until uch c&(pan, hall ha+e ati 'ie! the C&((i i&ner that it 'inancial an! %eneral c&n!iti&n an! it (eth&! &' &perati&n * inclu!in% the i ue an! ale &' +ariable c&ntract * are n&t an! .ill n&t be ha>ar!&u t& the public &r t& it p&lic, an! c&ntract &.ner . N& '&rei%n in urance c&(pan, hall be auth&ri>e! t& i ue* !eli+er &r ell an, +ariable c&ntract in the 1hilippine * unle it i li-e.i e auth&ri>e! t& !& & b, the la. &' it !&(icile. #5$ The ter( "varia le contract" hall (ean an, p&lic, &r c&ntract &n either a %r&up &r &n an in!i+i!ual ba i i ue! b, an in urance c&(pan, pr&+i!in% '&r bene'it &r &ther c&ntractual pa,(ent &r +alue thereun!er t& +ar, & a t& re'lect in+e t(ent re ult &' an, e%re%ate! p&rt'&li& &' in+e t(ent &r &' a !e i%nate! eparate acc&unt in .hich a(&unt recei+e! in c&nnecti&n .ith uch c&ntract hall ha+e been place! an! acc&unte! '&r eparatel, an! apart 'r&( &ther in+e t(ent an! acc&unt . Thi c&ntract (a, al & pr&+i!e bene'it &r +alue inci!ental theret& pa,able in 'i4e! &r +ariable a(&unt * &r b&th. It hall n&t be !ee(e! t& be a "security" &r "securities" a !e'ine! in The Securitie Act* a a(en!e!* &r in the The In+e t(ent C&(pan, Act* a a(en!e!* n&r ub2ect t& re%ulati&n un!er ai! Act . #7$ In !eter(inin% the <uali'icati&n &' a c&(pan, re<ue tin% auth&rit, t& i ue* !eli+er* ell &r u e +ariable c&ntract * the C&((i i&ner hall al.a, c&n i!er the '&ll&.in%" #a$ the hi t&r,* 'inancial an! %eneral c&n!iti&n &' the c&(pan," Provided* That uch c&(pan,* i' a '&rei%n c&(pan,* (u t ha+e !ep& ite! .ith the C&((i i&ner '&r the bene'it an! ecurit, &' it +ariable c&ntract &.ner in the 1hilippine * ecuritie ati 'act&r, t& the C&((i i&ner c&n i tin% &' b&n! &' the B&+ern(ent &' the 1hilippine &r it in tru(entalitie .ith an actual (ar-et +alue &' t.& (illi&n pe & 0 #b$ the character* re p&n ibilit, an! 'itne &' the &''icer an! !irect&r &' the c&(pan,0 an! #c$ the la. an! re%ulati&n un!er .hich the c&(pan, i auth&ri>e! in the tate &' !&(icile t& i ue uch c&ntract . #8$ I' a'ter n&tice an! hearin%* the C&((i i&ner hall 'in! that the c&(pan, i <uali'ie! t& i ue* !eli+er* ell &r u e +ariable c&ntract in acc&r!ance .ith thi C&!e an! the re%ulati&n an! rule i ue! thereun!er* the c&rre p&n!in% &r!er &' auth&ri>ati&n hall be i ue!. An, !eci i&n &r &r!er !en,in% auth&rit, t& i ue* !eli+er* ell &r u e +ariable c&ntract hall clearl, an! !i tinctl, tate the rea &n an! %r&un! &n .hich it i ba e!. Sec. 577. An, in urance c&(pan, i uin% +ariable c&ntract pur uant t& thi C&!e (a, in it !i creti&n i ue c&ntract pr&+i!in% a c&(binati&n &' 'i4e! a(&unt an! +ariable a(&unt &' bene'it an! '&r &pti&n lu(p- u( pa,(ent &' bene'it . Sec. 578. E+er, +ariable c&ntract '&r( !eli+ere! &r i ue! '&r !eli+er, in the 1hilippine * an! e+er, certi'ie! '&r( e+i!encin% +ariable bene'it i ue! pur uant t& an, uch c&ntract &n a %r&up ba i * an! the applicati&n* ri!er an! en!&r e(ent '&r( applicable theret& an! u e! in c&nnecti&n there.ith* hall be ub2ect t& the pri&r appr&+al &' the C&((i i&ner. Sec. 579. Illu trati&n &' bene'it pa,able un!er an, +ariable c&ntract hall n&t inclu!e &r in+&l+e pr&2ecti&n &' pa t

in+e t(ent e4perience int& the 'uture an! hall c&n'&r( .ith the rule an! re%ulati&n pr&(ul%ate! b, the C&((i i&ner. Sec. 57:. )ariable c&ntract (a, be i ue! &n the in!u trial li'e ba i * pr&+i!e! that the pertinent pr&+i i&n &' thi C&!e an! &' the rule an! re%ulati&n &' the C&((i i&ner %&+ernin% +ariable c&ntract are c&(plie! .ith in c&nnecti&n .ith uch c&ntract . Sec. 57;. E+er, li'e in urance c&(pan, auth&ri>e! un!er the pr&+i i&n &' thi C&!e t& i ue* !eli+er* ell &r u e +ariable c&ntract hall* in c&nnecti&n .ith a(e* e tabli h &ne &r (&re eparate acc&unt t& be -n&.n a eparate +ariable acc&unt . All a(&unt recei+e! b, the c&(pan, in c&nnecti&n .ith an, uch c&ntract .hich are re<uire! b, the ter( there&'* t& be c&llecte! &r applie! t& &ne &r (&re !e i%nate! eparate +ariable acc&unt hall be place! in uch !e i%nate! acc&unt &r acc&unt . The a et an! liabilitie &' each uch eparate +ariable acc&unt hall at all ti(e be clearl, i!enti'iable an! !i tin%ui hable 'r&( the a et an! liabilitie in all &ther acc&unt &' the c&(pan,. N&t.ith tan!in% an, pr&+i i&n &' la. t& the c&ntrar,* the a et hel! in an, uch eparate +ariable acc&unt hall n&t be char%eable .ith liabilitie ari in% &ut &' an, &ther bu ine the c&(pan, c&n!uct but hall be hel! an! applie! e4clu i+el, '&r the bene'it &' the &.ner &r bene'iciarie &' the +ariable c&ntract applicable theret&. In the e+ent &' the in &l+enc, &' the c&(pan,* the a et &' each uch eparate +ariable acc&unt hall be applie! t& the c&ntractual clai( &' the &.ner &r bene'iciarie &' the +ariable c&ntract applicable theret&. E4cept a &ther.i e peci'icall, pr&+i!e! b, the c&ntract* n& ale* e4chan%e &r &ther tran 'er &' a et (a, be (a!e b, a c&(pan,* bet.een an, &' it eparate acc&unt &r bet.een an, &ther in+e t(ent acc&unt an! &ne &r (&re &' it eparate acc&unt * unle in the ca e &' a tran 'er int& a eparate acc&unt* uch tran 'er i (a!e &lel, t& e tabli h the acc&unt &r t& upp&rt the &perati&n &' the c&ntract .ith re pect t& the eparate acc&unt t& .hich the tran 'er i (a!e* &r in ca e &' a tran 'er 'r&( a eparate acc&unt* uch tran 'er .&ul! n&t cau e the re(ainin% a et &' the acc&unt t& bec&(e le than the re er+e an! &ther c&ntract liabilitie .ith re pect t& uch eparate acc&unt. Such tran 'er* .hether int& &r 'r&( a eparate acc&unt* hall be (a!e b, a tran 'er &' ca h* &r b, a tran 'er &' ecuritie ha+in% a +aluati&n .hich c&ul! be rea!il, !eter(ine! in the (ar-et place* pr&+i!e! that uch tran 'er &' ecuritie i appr&+e! b, the C&((i i&ner. The C&((i i&ner (a, auth&ri>e &ther tran 'er a(&n% uch acc&unt * i'* in hi &pini&n* uch tran 'er .&ul! n&t be ine<uitable. All a(&unt an! a et all&cate! t& an, uch eparate +ariable acc&unt hall be &.ne! b, the c&(pan, an! .ith re pect t& a(e the c&(pan, hall n&t be n&r h&l! it el' &ut t& be a tru tee. Sec. 57=. An, in urance c&(pan, .hich ha e tabli he! &ne &r (&re eparate +ariable acc&unt pur uant t& the prece!in% ecti&n (a, in+e t an! re-in+e t all &r an, part &' the a et all&cate! t& an, uch acc&unt in the ecuritie an! in+e t(ent auth&ri>e! b, ecti&n &ne hun!re! ninet,-ei%ht* t.& hun!re!* t.& hun!re! &ne an! t.& hun!re! t.& '&r an, &' the 'un! &' an in urance c&(pan, in uch a(&unt &r a(&unt a (a, be appr&+e! b, the C&((i i&ner. In a!!iti&n theret&* uch c&(pan, (a, al & in+e t in c&((&n t&c- &r &ther e<uitie .hich are li te! &n &r a!(itte! t& tra!in% in a ecuritie e4chan%e l&cate! in the 1hilippine * &r .hich are publicl, hel! an! tra!e! in the "over-the-counter mar'et" a !e'ine! b, the C&((i i&ner an! a t& .hich (ar-et <u&tati&n ha+e been a+ailable" Provided, however* That n& uch c&(pan, hall in+e t in e4ce &' ten per centu( &' the a et &' an, uch eparate +ariable acc&unt in an, &ne c&rp&rati&n i uin% uch c&((&n t&c-. The a et an! in+e t(ent &' uch eparate +ariable acc&unt hall n&t be ta-en int& acc&unt in appl,in% the <uantitati+e in+e t(ent li(itati&n applicable t& &ther in+e t(ent &' the c&(pan,. In the purcha e &' c&((&n capital t&c- &r &ther e<uitie * the in urer hall !e i%nate t& the br&-er* &r t& the eller i' the purcha e i n&t (a!e thr&u%h a br&-er* the peci'ic +ariable acc&unt '&r .hich the in+e t(ent i

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(a!e. Sec. 579. A et all&cate! t& an, eparate +ariable acc&unt hall be +alue! at their (ar-et +alue &n the !ate &' an, +aluati&n* &r i' there i n& rea!il, a+ailable (ar-et then in acc&r!ance .ith the ter( &' the +ariable c&ntract applicable t& uch a et * &r i' there are n& uch c&ntract ter( then in uch (anner a (a, be pre cribe! b, the rule an! re%ulati&n &' the C&((i i&ner. Sec. 586. The re er+e liabilit, '&r +ariable c&ntract hall be e tabli he! in acc&r!ance .ith actuarial pr&ce!ure that rec&%ni>e the +ariable nature &' the bene'it pr&+i!e!* an! hall be appr&+e! b, the C&((i i&ner. Title 11 CLAIMS SETTLEMENT Sec. 581. #1$ N& in urance c&(pan, !&in% bu ine in the 1hilippine hall re'u e* .ith&ut 2u t cau e* t& pa, &r ettle clai( ari in% un!er c&+era%e pr&+i!e! b, it p&licie * n&r hall an, uch c&(pan, en%a%e in un'air clai( ettle(ent practice . An, &' the '&ll&.in% act b, an in urance c&(pan,* i' c&((itte! .ith&ut 2u t cau e an! per'&r(e! .ith uch 're<uenc, a t& in!icate a %eneral bu ine practice* hall c&n titute un'air clai( ettle(ent practice " #a$ -n&.in%l, (i repre entin% t& clai(ant pertinent 'act &r p&lic, pr&+i i&n relatin% t& c&+era%e at i ue0 #b$ 'ailin% t& ac-n&.le!%e .ith rea &nable pr&(ptne pertinent c&((unicati&n .ith re pect t& clai( ari in% un!er it p&licie 0 #c$ 'ailin% t& a!&pt an! i(ple(ent rea &nable tan!ar! '&r the pr&(pt in+e ti%ati&n &' clai( ari in% un!er it p&licie 0 #!$ n&t atte(ptin% in %&&! 'aith t& e''ectuate pr&(pt* 'air an! e<uitable ettle(ent &' clai( ub(itte! in .hich liabilit, ha bec&(e rea &nabl, clear0 &r #e$ c&(pellin% p&lic,h&l!er t& in titute uit t& rec&+er a(&unt !ue un!er it p&licie b, &''erin% .ith&ut 2u ti'iable rea &n ub tantiall, le than the a(&unt ulti(atel, rec&+ere! in uit br&u%ht b, the(. #5$ E+i!ence a t& nu(ber an! t,pe &' +ali! an! 2u ti'iable c&(plaint t& the C&((i i&ner a%ain t an in urance c&(pan,* an! the C&((i i&ner/ c&(plaint e4perience .ith &ther in urance c&(panie .ritin% i(ilar line &' in urance hall be a!(i ible in e+i!ence in an a!(ini trati+e &r 2u!icial pr&cee!in% br&u%ht un!er thi ecti&n. #7$ I' it i '&un!* a'ter n&tice an! an &pp&rtunit, t& be hear!* that an in urance c&(pan, ha +i&late! thi ecti&n* each in tance &' n&n-c&(pliance .ith para%raph #1$ (a, be treate! a a eparate +i&lati&n &' thi ecti&n an! hall be c&n i!ere! u''icient cau e '&r the u pen i&n &r re+&cati&n &' the c&(pan,/ certi'icate &' auth&rit,. Sec. 585. The pr&cee! &' a li'e in urance p&lic, hall be pai! i((e!iatel, up&n (aturit, &' the p&lic,* unle uch pr&cee! are (a!e pa,able in in tall(ent &r a an annuit,* in .hich ca e the in tall(ent * &r annuitie hall be pai! a the, bec&(e !ue" Provided, however* That in the ca e &' a p&lic, (aturin% b, the !eath &' the in ure!* the pr&cee! there&' hall be pai! .ithin i4t, !a, a'ter pre entati&n &' the clai( an! 'ilin% &' the pr&&' &' the !eath &' the in ure!. Re'u al &r 'ailure t& pa, the clai( .ithin the ti(e pre cribe! herein .ill entitle the bene'iciar, t& c&llect intere t &n the pr&cee! &' the p&lic, '&r the !urati&n &' the !ela, at the rate &' t.ice the ceilin% pre cribe! b, the M&netar, 3&ar!* unle uch 'ailure &r re'u al t& pa, i ba e! &n the %r&un! that the clai( i 'rau!ulent. The pr&cee! &' the p&lic, (aturin% b, the !eath &' the in ure! pa,able t& the bene'iciar, hall inclu!e the !i c&unte! +alue &' all pre(iu( pai! in a!+ance &' their !ue !ate * but are n&t !ue an! pa,able at (aturit,. Sec. 587. The a(&unt &' an, l& &r !a(a%e '&r .hich an

in urer (a, be liable* un!er an, p&lic, &ther than li'e in urance p&lic,* hall be pai! .ithin thirt, !a, a'ter pr&&' l& i recei+e! b, the in urer an! a certain(ent &' the l& &r !a(a%e i (a!e either b, a%ree(ent bet.een the in ure! an! the in urer &r b, arbitrati&n0 but i' uch a certain(ent i n&t ha! &r (a!e .ithin i4t, !a, a'ter uch receipt b, the in urer &' the pr&&' &' l& * then the l& &r !a(a%e hall be pai! .ithin ninet, !a, a'ter uch receipt. Re'u al &r 'ailure t& pa, the l& &r !a(a%e .ithin the ti(e pre cribe! herein .ill entitle the a ure! t& c&llect intere t &n the pr&cee! &' the p&lic, '&r the !urati&n &' the !ela, at the rate &' t.ice the ceilin% pre cribe! b, the M&netar, 3&ar!* unle uch 'ailure &r re'u al t& pa, i ba e! &n the %r&un! that the clai( i 'rau!ulent. Sec. 588. In ca e &' an, liti%ati&n '&r the en'&rce(ent &' an, p&lic, &r c&ntract &' in urance* it hall be the !ut, &' the C&((i i&ner &r the C&urt* a the ca e (a, be* t& (a-e a 'in!in% a t& .hether the pa,(ent &' the clai( &' the in ure! ha been unrea &nabl, !enie! &r .ithhel!0 an! in the a''ir(ati+e ca e* the in urance c&(pan, hall be a!2u!%e! t& pa, !a(a%e .hich hall c&n i t &' att&rne,/ 'ee an! &ther e4pen e incurre! b, the in ure! per &n b, rea &n &' uch unrea &nable !enial &r .ithh&l!in% &' pa,(ent plu intere t &' t.ice the ceilin% pre cribe! b, the M&netar, 3&ar! &' the a(&unt &' the clai( !ue the in ure!* 'r&( the !ate '&ll&.in% the ti(e pre cribe! in ecti&n t.& hun!re! '&rt,-t.& &r in ecti&n t.& hun!re! '&rt,-three* a the ca e (a, be* until the clai( i 'ull, ati 'ie!0 1r&+i!e!* That the 'ailure t& pa, an, uch clai( .ithin the ti(e pre cribe! in ai! ecti&n hall be c&n i!ere! pri(a 'acie e+i!ence &' unrea &nable !ela, in pa,(ent. Title EGAMINATION OF COM1ANIES 15

Sec. 589. The C&((i i&ner hall re<uire e+er, in urance c&(pan, !&in% bu ine in the 1hilippine t& -eep it b&&- * rec&r! * acc&unt an! +&ucher in uch (anner that he &r hi auth&ri>e! repre entati+e (a, rea!il, +eri', it annual tate(ent an! a certain .hether the c&(pan, i &l+ent an! ha c&(plie! .ith the pr&+i i&n &' thi C&!e &r the circular * in tructi&n * rulin% &r !eci i&n &' the C&((i i&ner. Sec. 58:. The C&((i i&ner hall at lea t &nce a ,ear an! .hene+er he c&n i!er the public intere t & !e(an! * cau e an e4a(inati&n t& be (a!e int& the a''air * 'inancial c&n!iti&n an! (eth&! &' bu ine &' e+er, in urance c&(pan, auth&ri>e! t& tran act bu ine in the 1hilippine an! &' an, &ther per &n* 'ir( &r c&rp&rati&n (ana%in% the a''air an!D&r pr&pert, &' uch in urance c&(pan,. Such c&(pan,* a .ell a uch (ana%in% per &n* 'ir( &r c&rp&rati&n* hall ub(it t& the e4a(iner all uch b&&- * paper an! ecuritie a he (a, re<uire an! uch e4a(iner hall al & ha+e the p&.er t& e4a(ine the &''icer &' uch c&(pan, un!er &ath t&uchin% it bu ine an! 'inancial c&n!iti&n* an! the auth&rit, t& tran act bu ine in the 1hilippine &' an, uch c&(pan, hall be u pen!e! b, the C&((i i&ner i' uch e4a(inati&n i re'u e! an! uch c&(pan, hall n&t therea'ter be all&.e! t& tran act 'urther bu ine in the 1hilippine until it ha 'ull, c&(plie! .ith the pr&+i i&n &' thi ecti&n. B&+ern(ent-&.ne! &r c&ntr&lle! c&rp&rati&n &r entitie en%a%e! in &cial pri+ate in urance hall i(ilarl, be ub2ect t& uch e4a(inati&n b, the C&((i i&ner unle their re pecti+e charter &ther.i e pr&+i!e. Title 17 SUS1ENSION OR RE)OCATION OF AUT@ORITA Sec. 58;. I' the C&((i i&ner i &' the &pini&n up&n e4a(inati&n &' &ther e+i!ence that an, !&(e tic &r '&rei%n in urance c&(pan, i in an un &un! c&n!iti&n* &r that it ha 'aile! t& c&(pl, .ith the pr&+i i&n &' la. &r re%ulati&n &bli%at&r, up&n it* &r that it c&n!iti&n &r (eth&! &' bu ine i uch a t& ren!er it pr&cee!in% ha>ar!&u t& the public &r t& it p&lic,h&l!er * &r that it pai!-up capital t&c-* in the ca e &' a !&(e tic t&c- c&(pan,* &r it a+ailable ca h a et * in the

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ca e &' a !&(e tic (utual c&(pan,* &r it ecurit, !ep& it * in the ca e &' a '&rei%n c&(pan,* i i(paire! &r !e'icient* &r that the (ar%in &' &l+enc, re<uire! &' uch c&(pan, i !e'icient* the C&((i i&ner i auth&ri>e! t& u pen! &r re+&-e all certi'icate &' auth&rit, %rante! t& uch in urance c&(pan,* it &''icer an! a%ent * an! n& ne. bu ine hall therea'ter be !&ne b, uch c&(pan, &r '&r uch c&(pan, b, it a%ent in the 1hilippine .hile uch u pen i&n* re+&cati&n &r !i abilit, c&ntinue &r until it auth&rit, t& !& bu ine i re t&re! b, the C&((i i&ner. 3e'&re re t&rin% uch auth&rit,* the C&((i i&ner hall re<uire the c&(pan, c&ncerne! t& ub(it t& hi( a bu ine plan h&.in% the c&(pan,/ e ti(ate! receipt an! !i bur e(ent * a .ell a the ba i there'&r* '&r the ne4t uccee!in% three ,ear . #A a(en!e! b, 1re i!ential Decree N&. 1899$. Title 18 A11OINTMENT OF CONSER)ATOR Sec. 58=. I' at an, ti(e be'&re* &r a'ter* the u pen i&n &r re+&cati&n &' the certi'icate &' auth&rit, &' an in urance c&(pan, a pr&+i!e! in the prece!in% title* the C&((i i&ner 'in! that uch c&(pan, i in a tate &' c&ntinuin% inabilit, &r un.illin%ne t& (aintain a c&n!iti&n &' &l+enc, &r li<ui!it, !ee(e! a!e<uate t& pr&tect the intere t &' p&lic, h&l!er an! cre!it&r * he (a, app&int a c&n er+at&r t& ta-e char%e the a et * liabilitie * an! the (ana%e(ent &' uch c&(pan,* c&llect all (&ne, an! !ebt !ue ai! c&(pan, an! e4erci e all p&.er nece ar, t& pre er+e the a et &' ai! c&(pan,* re&r%ani>e the (ana%e(ent there&'* an! re t&re it +iabilit,. The ai! c&n er+at&r hall ha+e the p&.er t& &+errule &r re+&-e the acti&n &' the pre+i&u (ana%e(ent an! b&ar! &' !irect&r &' the ai! c&(pan,* an, pr&+i i&n &' la.* &r &' the article &' inc&rp&rati&n &r b,-la. &' the c&(pan,* t& the c&ntrar, n&t.ith tan!in%* an! uch &ther p&.er a the C&((i i&ner hall !ee( nece ar,. The c&n er+at&r (a, be an&ther in urance c&(pan, !&in% bu ine in the 1hilippine * b, &''icer &r &''icer &' uch c&(pan,* &r an, &ther c&(petent an! <uali'ie! per &n* 'ir( &r c&rp&rati&n. The re(unerati&n &' the c&n er+at&r an! &ther e4pen e atten!ant t& the c&n er+ati&n hall be b&rne b, the in urance c&(pan, c&ncerne!. The c&n er+at&r hall n&t be ub2ect t& an, acti&n* clai( &r !e(an! b,* &r liabilit, t&* an, per &n in re pect &' an,thin% !&ne &r &(itte! t& be !&ne in %&&! 'aith in the e4erci e* &r in c&nnecti&n .ith the e4erci e* &' the p&.er c&n'erre! &n the c&n er+at&r. The c&n er+at&r app&inte! hall rep&rt an! be re p&n ible t& the C&((i i&ner until uch ti(e a the C&((i i&ner i ati 'ie! that the in urance c&(pan, can c&ntinue t& &perate &n it &.n an! the c&n er+at&r hip hall li-e.i e be ter(inate! h&ul! be C&((i i&ner* &n the ba i &' the rep&rt &' the c&n er+at&r &r &' hi &.n 'in!in% * !eter(ine that the c&ntinuance in bu ine &' the in urance c&(pan, .&ul! be ha>ar!&u t& p&lic, h&l!er an! cre!it&r * in .hich ca e the pr&+i i&n &' Title 19 hall appl,. Title 19 1ROCEEDINBS U1ON INSOL)ENCA Sec. 589. ?hene+er* up&n e4a(inati&n &r &ther e+i!ence* it hall be !i cl& e! that the c&n!iti&n &' an, in urance c&(pan, !&in% bu ine in the 1hilippine i &ne &' in &l+enc,* &r that it c&ntinuance in bu ine .&ul! be ha>ar!&u t& it p&lic,h&l!er an! cre!it&r * the C&((i i&ner hall '&rth.ith &r!er the c&(pan, t& cea e an! !e i t 'r&( tran actin% bu ine in the 1hilippine an! hall !e i%nate a recei+er t& i((e!iatel, ta-e char%e &' it a et an! liabilitie * a e4pe!iti&u l, a p& ible c&llect an! %ather all the a et an! a!(ini ter the a(e '&r the bene'it &' it p&lic,h&l!er an! cre!it&r * an! e4erci e all the p&.er nece ar, '&r the e purp& e inclu!in%* but n&t li(ite! t&* brin%in% uit an! '&recl& in% (&rt%a%e in the na(e &' the in urance c&(pan,.

The C&((i i&ner hall thereup&n !eter(ine .ithin thirt, !a, .hether the in urance c&(pan, (a, be re&r%ani>e! &r &ther.i e place! in uch c&n!iti&n & that it (a, be per(itte! t& re u(e bu ine .ith a'et, t& it p&lic,h&l!er an! cre!it&r an! hall pre cribe the c&n!iti&n un!er .hich uch re u(pti&n &' bu ine hall ta-e place a .ell a the ti(e '&r 'ul'ill(ent &' uch c&n!iti&n . In uch ca e* the e4pen e an! 'ee in the c&llecti&n an! a!(ini trati&n &' the in urance c&(pan, hall be !eter(ine! b, the C&((i i&ner an! hall be pai! &ut &' the a et &' uch c&(pan,. I' the C&((i i&ner hall !eter(ine an! c&n'ir( .ithin the ai! peri&! that the in urance c&(pan, i &l+ent* a !e'ine! hereun!er* &r cann&t re u(e bu ine .ith a'et, t& it p&lic,h&l!er an! cre!it&r * he hall* i' the public intere t re<uire * &r!er it li<ui!ati&n* in!icate the (anner &' it li<ui!ati&n an! appr&+e a li<ui!ati&n plan an! i(ple(ent it i((e!iatel,. The C&((i i&ner hall !e i%nate a c&(petent an! <uali'ie! per &n a li<ui!at&r .h& hall ta-e &+er the 'uncti&n &' the recei+er pre+i&u l, !e i%nate! an!* .ith all c&n+enient pee!* rein ure all it &ut tan!in% p&licie * c&n+ert the a et &' the in urance c&(pan, t& ca h* &r ell* a i%n &r &ther.i e !i p& e &' the a(e t& the p&lic,h&l!er * cre!it&r an! &ther partie '&r the purp& e &' ettlin% the liabilitie &r pa,in% the !ebt &' uch c&(pan, an! he (a,* in the na(e &' the c&(pan,* in titute uch acti&n a (a, be nece ar, in the appr&priate C&urt t& c&llect an! rec&+er acc&unt an! a et &' the in urance c&(pan,* an! t& !& uch &ther act a (a, be nece ar, t& c&(plete the li<ui!ati&n a &r!ere! b, the C&((i i&ner. The pr&+i i&n &' an, la. t& the c&ntrar, n&t.ith tan!in%* the acti&n &' the C&((i i&ner un!er thi Secti&n hall be 'inal an! e4ecut&r,* an! can be et a i!e b, the C&urt up&n petiti&n b, the c&(pan, an! &nl, i' there i c&n+incin% pr&&' that the acti&n i plainl, arbitrar, an! (a!e in ba! 'aith. The C&((i i&ner* thr&u%h the S&licit&r Beneral* hall then 'ile the c&rre p&n!in% an .er recitin% the pr&cee!in% ta-en an! pra,in% the a i tance &' the C&urt in the li<ui!ati&n &' the c&(pan,. N& re trainin% &r!er &r in2uncti&n hall be i ue! b, the C&urt en2&inin% the C&((i i&ner 'r&( i(ple(entin% hi acti&n un!er thi Secti&n* unle there i c&n+incin% pr&&' that the acti&n &' the C&((i i&ner i plainl, arbitrar, an! (a!e in ba! 'aith an! the petiti&ner &r plainti'' 'ile .ith the Cler- &r Eu!%e &' the C&urt in .hich the acti&n i pen!in% a b&n! e4ecute! in 'a+&r &' the C&((i i&ner in an a(&unt t& be 'i4e! b, the C&urt. The re trainin% &r!er &r in2uncti&n hall be re'u e! &r* i' %rante!* hall be !i &l+e! up&n 'ilin% b, the C&((i i&ner* i' he & !e ire * &' a b&n! in an a(&unt t.ice the a(&unt &' the b&n! &' the petiti&ner &r plainti'' c&n!iti&ne! that it .ill pa, the !a(a%e .hich the petiti&n &r plainti'' (a, u''er b, the re'u al &r the !i &luti&n &' the in2uncti&n. The pr&+i i&n &' Rule 9= &' the Ne. Rule &' C&urt in &'ar a the, are applicable hall %&+ern the i uance an! !i &luti&n &' the re trainin% &r!er &r in2uncti&n c&nte(plate! in thi Secti&n. All pr&cee!in% un!er thi Title hall be %i+en pre'erence in the C&urt . The C&((i i&ner hall n&t be re<uire! t& pa, an, 'ee t& an, public &''icer '&r 'ilin%* rec&r!in%* &r in an, (anner authenticatin% an, paper &r in tru(ent relatin% t& the pr&cee!in% . A u e! in thi Title* the ter( "!nsolvency" hall (ean the inabilit, &' an in urance c&(pan, t& pa, it la.'ul &bli%ati&n a the, 'all !ue in the u ual an! &r!inar, c&ur e &' bu ine a (a, be h&.n b, it 'ailure t& (aintain the (ar%in &' &l+enc, re<uire! un!er Secti&n 198 &' thi C&!e. #A a(en!e! b, 1re i!ential Decree N&. 1181 an! 'urther a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 596. In ca e &' li<ui!ati&n &' an in urance c&(pan,* a'ter pa,(ent &' the c& t &' the pr&cee!in% * inclu!in% rea &nable e4pen e an! 'ee incurre! in the li<ui!ati&n t& be all&.e! b, the C&urt* the C&((i i&ner hall pa, all all&.e! clai( a%ain t uch c&(pan,* un!er &r!er &' the C&urt* in acc&r!ance .ith

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their le%al pri&rit,. Sec. 591. The recei+er &r the li<ui!at&r* a the ca e (a, be* !e i%nate! un!er the pr&+i i&n &' thi title hall n&t be ub2ect t& an, acti&n* clai( &r !e(an! b,* &r liabilit, t&* an, per &n in re pect &' an,thin% !&ne &r &(itte! t& be !&ne in %&&! 'aith in the e4erci e* &r in c&nnecti&n .ith the e4erci e* &' the p&.er c&n'erre! &n uch recei+er &r li<ui!at&r. Title 1: CONSOLIDATION AND MERBER OF INSURANCE COM1ANIES Sec. 595. Up&n pri&r n&tice t& the C&((i i&ner* t.& &r (&re !&(e tic in urance c&(panie * actin% thr&u%h their re pecti+e b&ar! &' !irect&r * (a, ne%&tiate t& (er%e int& a in%le c&rp&rati&n .hich hall be &ne &' the c&n tituent c&rp&rati&n * &r c&n &li!ate int& a in%le c&rp&rati&n .hich hall be a ne. c&rp&rati&n t& be '&r(e! b, the c&n &li!ati&n. A c&((&n a%ree(ent &' the pr&p& e! (er%er &r c&n &li!ati&n hall be !ra.n up '&r ub(i i&n t& the t&c-h&l!er &r (e(ber &' the c&n tituent c&(panie '&r a!&pti&n an! appr&+e! in acc&r!ance .ith the pr&+i i&n &' the re pecti+e b,-la. &' the c&n tituent c&(panie an! all e4i tin% la. that (a, be pertinent. Sec. 597. Such a%ree(ent hall inclu!e* a i!e 'r&( the pr&p& e! (er%er &r c&n &li!ati&n* pr&+i i&n relati+e t& the (anner &' tran 'er &' a et t& an! a u(pti&n &' liabilitie b, the ab &rbin% &r ac<uirin% c&(pan, 'r&( the ab &rbe! &r !i &l+e! c&(pan, &r c&(panie 0 the pr&p& e! article &' (er%er &r c&n &li!ati&n an! b,-la. &' the ur+i+in% &r ac<uirin% c&(pan,0 the c&rp&rate na(e t& be a!&pte! .hich h&ul! n&t be that &' an, &ther e4i tin% c&(pan, tran actin% i(ilar bu ine &r &ne & i(ilar a t& be calculate! t& (i lea! the public0 the ri%ht &' the t&c-h&l!er &r (e(ber &' the ab &rbe! &r !i &l+e! c&(panie 0 !ate &' e''ecti+it, &' the (er%er &r c&n &li!ati&n0 an! uch particular a (a, be nece ar, t& e4plain an! (a-e (ani'e t the &b2ect an! purp& e &' the ab &rbin% &r ac<uirin% c&(pan,. Sec. 598. Up&n e4ecuti&n &' uch a%ree(ent t& (er%e &r c&n &li!ate b, an! bet.een &r a(&n% the b&ar! &' !irect&r &' the c&n tituent c&(panie * n&tice there&' hall be (aile! i((e!iatel, t& their p&lic,h&l!er an! cre!it&r . The c&(pan, &r c&(panie t& be ab &rbe! &r !i &l+e! hall !i char%e all it accrue! liabilitie 0 &ther.i e* uch liabilitie hall* .ith the c&n ent &' it cre!it&r * be tran 'erre! t& an! a u(e! b, the ab &rbin% &r ac<uirin% c&(pan,* &r uch liabilitie be rein ure! b, the latter. In the ca e &' uch p&licie a are ub2ect t& cancellati&n b, the c&(pan, &r c&(panie t& be ab &rbe! &r !i &l+e!* a(e (a, be cancelle! pur uant t& the ter( there&' in lieu &' uch tran 'er* a u(pti&n* &r rein urance. Sec. 599. Up&n appr&+al &r a!&pti&n in the (eetin% &' the t&c-h&l!er &r (e(ber calle! '&r the purp& e in each &' the c&n tituent c&(panie &' the a%ree(ent t& (er%e &r c&n &li!ate* all t&c-h&l!er &r (e(ber !i entin% &r &b2ectin% t& (er%er &r c&n &li!ati&n hall be pai! the +alue &' their hare b, the c&(pan, c&ncerne! in acc&r!ance .ith the b,-la. there&'. Sec. 59:. Up&n the appr&+al &r a!&pti&n &' the a%ree(ent t& (er%e &r c&n &li!ate b, the t&c-h&l!er &r (e(ber &' the c&n tituent c&(panie * the c&rre p&n!in% article &' (er%er &r &' c&n &li!ati&n hall be !ul, e4ecute! b, the pre i!ent an! atte te! b, the c&rp&rate ecretarie an! hall bear the c&rp&rate eal &' the (er%in% &r c&n &li!atin% c&(panie ettin% '&rth" #1$ The plan &' (er%er &r the plan &' c&n &li!ati&n0 #5$ A t& each c&rp&rati&n* the nu(ber &' hare &ut tan!in%* &r in ca e &' (utual c&rp&rati&n * the nu(ber &' (e(ber 0 an! #7$ A t& each c&rp&rati&n* the nu(ber &' hare &r (e(ber +&te! '&r an! a%ain t uch plan re pecti+el,. Therea'ter* a certi'ie! c&p, &' uch article &' (er%er &r

c&n &li!ati&n* t&%ether .ith a certi'icate &' appr&+al &r a!&pti&n b, the t&c-h&l!er &r (e(ber &' uch article &' (er%er &r c&n &li!ati&n* +eri'ie! b, a''i!a+it &' uch &''icer an! un!er the eal &' the c&n tituent c&(panie * hall be ub(itte! t& the C&((i i&ner* t&%ether .ith uch &ther paper &r !&cu(ent .hich the C&((i i&ner (a, re<uire* '&r hi c&n i!erati&n. Sec. 59;. The article &' (er%er &r &' c&n &li!ati&n* i%ne! an! +eri'ie! a hereinab&+e re<uire!* hall be 'ile! .ith the Securitie an! E4chan%e C&((i i&n '&r it e4a(inati&n an! appr&+al. Sec. 59=. Up&n receipt 'r&( the Securitie an! E4chan%e C&((i i&n &' the certi'icate &' (er%er &r &' c&n &li!ati&n* the c&n tituent c&(panie hall urren!er t& the C&((i i&ner their re pecti+e certi'icate &' auth&rit, t& tran act in urance bu ine . The ab &rbin% &r ur+i+in% c&(pan, in ca e &' (er%er* &r the ne.l, '&r(e! c&(pan, in ca e &' c&n &li!ati&n* hall i((e!iatel, 'ile .ith the c&((i i&ner the c&rre p&n!in% applicati&n '&r i uance &' a ne. certi'icate &' auth&rit, t& tran act in urance bu ine * t&%ether .ith a certi'ie! c&p, &' the certi'icate &' (er%er &r &' c&n &li!ati&n* an! &' the certi'icate &' increa e &' t&c- * i' there i an,* i ue! b, the Securitie an! E4chan%e C&((i i&n. Sec. 599. N&thin% in thi title hall be c&n true! t& enlar%e the p&.er &' the ab &rbin% &r ur+i+in% c&(pan, in ca e &' (er%er* &r the ne.l, '&r(e! c&(pan, in ca e &' c&n &li!ati&n* e4cept th& e c&n'erre! b, the certi'icate &' (er%er &r &' c&n &li!ati&n an! the article &' (er%er &' c&n &li!ati&n* &r the a(en!e! article &' inc&rp&rati&n* a re%i tere! .ith the Securitie an! E4chan%e C&((i i&n. Sec. 5:6. N& !irect&r* &''icer* &r t&c-h&l!er &' an, uch c&n tituent c&(panie hall recei+e an, 'ee* c&((i i&n* c&(pen ati&n* &r &ther +aluable c&n i!erati&n .hat &e+er* !irectl, &r in!irectl,* &r in an, (anner ai!in%* pr&(&tin% &r a i tin% in uch (er%er &r c&n &li!ati&n. Sec. 5:1. The (er%er &' c&n &li!ati&n &' c&(panie un!er* thi C&!e hall be ub2ect t& the pr&+i i&n &' the C&rp&rati&n La.* an!* in th& e ca e peci'ie! in Republic Act N&. 9899* a a(en!e!* be 'urther ub2ect t& the pr&+i i&n &' ai! la.. Title 1; MUTUALICATION OF STOCF LIFE INSURANCE COM1ANIES Sec. 5:5. An, !&(e tic t&c- li'e in urance c&(pan, !&in% bu ine in the 1hilippine (a, c&n+ert it el' int& an inc&rp&rate! (utual li'e in urer. T& that en! it (a, pr&+i!e an! carr, &ut a plan '&r the ac<ui iti&n &' the &ut tan!in% hare &' it capital t&c- '&r the bene'it &' it p&lic,h&l!er * &r an, cla &r cla e &' it p&lic,h&l!er * b, c&(pl,in% .ith the re<uire(ent &' thi chapter. Sec. 5:7. Such plan hall inclu!e appr&priate pr&cee!in% '&r a(en!in% the in urer/ article &' inc&rp&rati&n t& %i+e e''ect t& the ac<ui iti&n* b, ai! in urer* '&r the bene'it &' it p&lic,h&l!er &r an, cla &r cla e there&'* &' the &ut tan!in% hare &' it capital t&c- an! the c&n+er i&n &' the in urer 'r&( a t&c- c&rp&rati&n int& a n&n- t&c- c&rp&rati&n '&r the bene'it &' it (e(ber . The (e(ber &' uch n&n- t&c- c&rp&rati&n hall be the p&lic,h&l!er 'r&( ti(e t& ti(e &' the cla &r cla e '&r .h& e bene'it the t&c- &' the in urer .a ac<uire!* an! the p&lic,h&l!er &' uch &ther cla &r cla e a (a, be peci'ie! in uch c&rp&rati&n/ article &' inc&rp&rati&n a the, (a, be a(en!e! 'r&( ti(e t& ti(e. Such plan hall be" #1$ A!&pte! b, a +&te &' a (a2&rit, &' the !irect&r 0 #5$ Appr&+e! b, the +&te &' the h&l!er &' at lea t a (a2&rit, &' the &ut tan!in% hare at a pecial (eetin% &' hareh&l!er calle! '&r that purp& e* &r b, the .ritten c&n ent &' uch hareh&l!er 0 #7$ Sub(itte! t& the C&((i i&ner an! appr&+e! b, hi( in .ritin%0

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#8$ Appr&+e! b, a (a2&rit, +&te &' all the p&lic,h&l!er &' the cla &r cla e '&r .h& e bene'it the t&c- i t& be ac<uire! +&tin% at an electi&n b, the p&lic,h&l!er calle! '&r that purp& e* ub2ect t& the pr&+i i&n &' ecti&n t.& hun!re! i4t,-'i+e. The ter( "policyholder" &r"policyholders" a u e! in thi chapter hall be !ee(e! t& (ean the per &n &r per &n in ure! un!er an in!i+i!ual p&lic, &' li'e in urance* &r &' health an! acci!ent in urance* &r &' an, c&(binati&n &' li'e* health an! acci!ent in urance. The, hall al & inclu!e the per &n &r per &n t& .h&( an, annuit, &r pure en!&.(ent i pre entl, &r pr& pecti+el, pa,able b, the ter( &' an in!i+i!ual annuit, &r pure en!&.(ent c&ntract* e4cept .here the p&lic, &r c&ntract !eclare &(e &ther per &n t& be the &.ner &r h&l!er there&'* in .hich ca e uch &ther per &n hall be !ee(e! p&lic,h&l!er. In an, ca e .here a p&lic, &r c&ntract na(e t.& &r (&re per &n a 2&int in ure!* pa,ee * &.ner &r h&l!er there&'* the per &n & na(e! hall be !ee(e! c&llecti+el, t& be &ne p&lic,h&l!er '&r the purp& e &' thi chapter. In an, ca e .here a p&lic, &r c&ntract hall ha+e been a i%ne! b, a i%n(ent ab &lute &n it 'ace t& an a i%nee &ther than the in urer* an! uch a i%n(ent hall ha+e been 'ile! at the principal &''ice &' the in urer at lea t thirt, !a, pri&r t& the !ate &' an, electi&n &r (eetin% re'erre! t& in thi chapter* then uch a i%nee hall be !ee(e! at uch electi&n &r (eetin% t& be the p&lic,h&l!er. F&r the purp& e &' thi chapter the ter( "policyholder" an! "policyholders" inclu!e the e(pl&,er t& .h&(* &r a pre i!ent* ecretar, &r &ther e4ecuti+e &''icer &' an, c&rp&rati&n &r a &ciati&n t& .hich a (a ter %r&up p&lic, ha been i ue!* but e4clu!e the h&l!er &' certi'icate &r p&licie i ue! un!er &r in c&nnecti&n .ith a (a ter %r&up p&lic,. 3ene'iciarie un!er un(ature!c&ntract hall n&t a uch be !ee(e! t& be p&lic,h&l!er 0 #9$ File! .ith the C&((i i&ner a'ter ha+in% been appr&+e! a pr&+i!e! in thi ecti&n. Sec. 5:8. The C&((i i&ner hall e4a(ine the plan ub(itte! t& hi( un!er the pr&+i i&n &' ub-para%raph three &' ecti&n t.& hun!re! i4t,-three. @e hall n&t appr&+e uch plan unle in hi &pini&n the ri%ht an! intere t &' the in urer* it p&lic,h&l!er an! hareh&l!er are pr&tecte! n&r unle he i ati 'ie! that the plan .ill be 'air an! e<uitable in it &perati&n. Sec. 5:9. The electi&n pre cribe! b, ub-para%raph '&ur &' ecti&n t.& hun!re! i4t,-three hall be calle! b, the b&ar! &' !irect&r &r the pre i!ent* an! e+er, p&lic,h&l!er &' the cla &r cla e '&r .h& e bene'it the t&c- i t& be ac<uire!* .h& e in urance hall ha+e been in '&rce '&r at lea t &ne ,ear pri&r t& uch electi&n hall ha+e &ne +&te* re%ar!le &' the nu(ber &' p&licie &r a(&unt &' in urance he h&l! * an! re%ar!le &' .hether uch p&licie are p&licie &' li'e in urance &r p&licie &' health an! acci!ent in urance &r annuit, c&ntract . N&tice &' uch electi&n hall be %i+en t& p&lic,h&l!er entitle! t& +&te b, (ail 'r&( the principal &''ice &' uch in urer at lea t thirt, !a, pri&r t& the !ate et '&r uch electi&n* in a eale! en+el&pe* p& ta%e prepai!* a!!re e! t& each uch p&lic,h&l!er at hi la t -n&.n a!!re . )&tin% hall be b, &ne &' the '&ll&.in% (eth&! " #1$ At a (eetin% &' uch p&lic,h&l!er * hel! pur uant t& uch n&tice* b, ball&t in per &n &r b, pr&4,. #5$ I' n&t b, the (eth&! !e cribe! in the prece!in% ubpara%raph* then b, (ail pur uant t& a pr&ce!ure an! &n '&r( t& be pre cribe! b, uch plan. Such electi&n hall be c&n!ucte! un!er the !irecti&n an! uper+i i&n &' three i(partial an! !i intere te! in pect&r app&inte! b, the in urer an! appr&+e! b, the C&((i i&ner. In ca e an, per &n app&inte! a in pect&r 'ail t& appear at uch

(eetin% &r 'ail &r re'u e t& act at uch electi&n* the +acanc,* i' &ccurrin% in a!+ance &' the c&n+enin% &' the (eetin% &r in a!+ance &' the &penin% &' the (ail +&te* (a, be 'ille! in the (anner pre cribe! '&r the app&int(ent &' in pect&r an!* i' &ccurrin% at the (eetin% &r !urin% the can+a &' the (ail +&te* (a, be 'ille! b, the per &n actin% a chair(an &' ai! (eetin% &r !e i%nate! '&r that purp& e in uch plan. The !eci i&n* act &r certi'icate &' a (a2&rit, &' the in pect&r hall be e''ecti+e in all re pect a the !eci i&n* act &r certi'icate &' all. The in pect&r &' electi&n hall !eter(ine the nu(ber &' p&lic,h&l!er * the +&tin% p&.er &' each* the p&lic,h&l!er repre ente! at the (eetin% &r +&tin% b, (ail* the e4i tence &' a <u&ru( an! the authenticit,* +ali!it, an! e''ect &' pr&4ie . The, hall recei+e +&te * hear an! !eter(ine all challen%e an! <ue ti&n in an, .a, ari in% in c&nnecti&n .ith the ri%ht t& +&te* c&unt an! tabulate all +&te * !eter(ine the re ult* an! !& uch &ther act a are pr&per t& c&n!uct the +&te .ith 'airne t& all p&lic,h&l!er . The in pect&r &' electi&n hall* be'&re c&((encin% per'&r(ance &' their !utie * ub cribe t& an! 'ile .ith the in urer an! .ith the C&((i i&ner &n &ath that the,* an! each &' the(* .ill per'&r( their !utie i(partiall,* in %&&! 'aith* t& the be t &' their abilit, an! a e4pe!iti&u l, a in practicable. On the re<ue t &' the in urer* the C&((i i&ner* a p&lic,h&l!er &r hi pr&4,* the in pect&r hall (a-e a rep&rt in .ritin% &' an, challen%e &r <ue ti&n &r (atter !eter(ine! b, the( an! e4ecute a certi'icate &' an, 'act '&un! b, the(. The, hall al & certi', the re ult &' uch +&te t& the in urer an! t& the C&((i i&ner. An, rep&rt &r certi'icate (a!e b, the( hall be prima facie e+i!ence &' 'act tate! therein. All nece ar, e4pen e incurre! in c&nnecti&n .ith uch electi&n hall be pai! b, the in urer. F&r the purp& e &' thi ecti&n* a <u&ru( hall c&n i t &' 'i+e per centum &' the p&lic,h&l!er &' uch in urer entitle! t& +&te at uch electi&n. Sec. 5::. In carr,in% &ut an, uch plan* the in urer (a, ac<uire an, hare &' it &.n t&c- b, %i't* be<ue t &r purcha e. An, hare & ac<uire! hall* unle a a re ult &' uch ac<ui iti&n all &' the hare &' the in urer hall ha+e been ac<uire!* be ac<uire! in tru t '&r the p&lic,h&l!er &' the cla &r cla e '&r .h& e bene'it the plan pr&+i!e that the t&c- &' the in urer hall be ac<uire! a hereina'ter pr&+i!e!. Such hare hall be a i%ne! an! tran 'erre! &n the b&&- &' uch in urer an! appr&+e! b, the C&((i i&ner. Such tru tee hall h&l! uch t&c- in tru t until all &' the &ut tan!in% hare &' capital t&c- &' uch in urer ha+e been ac<uire!* but '&r n&t l&n%er than thirt, ,ear .ith uch e4ten i&n &' n&t (&re than 'i+e ,ear each a (a, be %rante! b, the C&((i i&ner. Such e4ten i&n (a, be %rante! b, the C&((i i&ner i' the plan & pr&+i!e an! i' in hi &pini&n the plan &' ac<ui iti&n &' all &' uch t&c- can be c&(plete! .ithin a rea &nable peri&!. Such tru tee hall +&te uch t&c- at all c&rp&rate (eetin% at .hich t&c-h&l!er ha+e the ri%ht t& +&te. ?hen all the &ut tan!in% hare &' capital t&c- &' uch in urer ha+e been ac<uire!* all ai! hare hall be cancelle!* the certi'icate &' a(en!(ent &' the in urer/ article &' inc&rp&rati&n %i+in% e''ect theret& hall be 'ile! in acc&r!ance .ith the pr&+i i&n &' the C&rp&rati&n La.* an! the in urer hall bec&(e a n&n- t&c- c&rp&rati&n '&r the pr&'it &' it (e(ber an! uch tru t hall thereup&n ter(inate. Therea'ter uch c&rp&rati&n hall be c&n!ucte! '&r the (utual bene'it* ratabl,* &' it p&lic,h&l!er &' the cla &r cla e '&r .h& e bene'it the t&c- .a ac<uire! an! hall ha+e p&.er t& i ue n&n-a e able p&licie &n a re er+e ba i ub2ect t& all pr&+i i&n &' la. applicable t& inc&rp&rate! li'e in urer i uin% n&n-a e able p&licie &n a re er+e ba i . 1&licie & i ue! (a, be up&n the ba i &' 'ull &r partial participati&n therein a a%ree! bet.een the in urer an! the in ure!. Up&n the ter(inati&n &' an, uch +&tin% tru t* either in acc&r!ance .ith it ter( &r a hereinab&+e pr&+i!e!* uch plan &' (utuali>ati&n hall ter(inate* unle theret&'&re c&(plete!. Up&n uch ter(inati&n* unle the plan &' (utuali>ati&n pr&+i!e '&r the !i p& iti&n &' the hare ac<uire! b, the in urer un!er uch plan &r '&r the !i p& iti&n &'

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the pr&cee! there&'* the hare hel! b, uch tru tee hall be !i p& e! &' in acc&r!ance .ith an &r!er &' the c&urt &' c&(petent 2uri !icti&n in the 2u!icial !i trict in .hich i l&cate! the principal &''ice &' uch in urer* (a!e up&n a +eri'ie! petiti&n &' the C&((i i&ner. Sec. 5:;. An, uch plan &' (utuali>ati&n (a, pr&+i!e '&r the creati&n &' a +&tin% tru t un!er a tru t a%ree(ent '&r the h&l!in% an! +&tin% b, three &r (&re tru tee &' an, p&rti&n &r all &' the hare &' the in urer n&t re<uire! up&n the a!&pti&n &' uch plan. The +&tin% tru tee hall be na(e! in acc&r!ance .ith uch plan &r* i' n& pr&+i i&n i (a!e therein '&r the na(in% &' uch tru tee * then b, the in urer. The +&tin% tru t a%ree(ent an! +&tin% tru tee hall be ub2ect t& the appr&+al &' the C&((i i&ner. An, &r all &' the tru tee un!er uch +&tin% tru t a%ree(ent (a, be the a(e per &n &r per &n a an, &r all &' the tru tee re'erre! t& in ecti&n t.& hun!re! i4t,- i4. Such +&tin% tru t a%ree(ent hall pr&+i!e that in the e+ent &' ac<ui iti&n b, the in urer &' an, &' the hare &' t&chel! thereun!er in acc&r!ance .ith the pr&+i i&n &' the plan* uch hare & ac<uire! t&%ether .ith the +&tin% ri%ht there&' hall be tran 'erre! b, the tru tee na(e! un!er the pr&+i i&n &' thi ecti&n t& the tru tee na(e! un!er the pr&+i i&n &' ecti&n t.& hun!re! i4t,- i4. An, +&tin% tru t a%ree(ent create! pur uant t& the pr&+i i&n &' thi ecti&n (a, be (a!e irre+&cable '&r n&t l&n%er than thirt, ,ear an! therea'ter until the ter(inati&n &' the tru t pr&+i!e! '&r in ecti&n t.& hun!re! i4t,- i4. The tru t create! pur uant t& the pr&+i i&n &' thi ecti&n hall ter(inate in an, e+ent up&n ter(inati&n &' the tru t pr&+i!e! '&r in ecti&n t.& hun!re! i4t,- i4. Up&n the ter(inati&n &' the tru t create! pur uant t& the pr&+i i&n &' thi ecti&n* an, hare hel! in uch tru t hall re+ert t& the per &n entitle! theret& b, la.. Sec. 5:=. E+er, pa,(ent '&r the ac<ui iti&n &' an, hare &' the capital t&c- &' uch in urer* the purcha e price &' .hich i n&t 'i4e! b, uch plan* hall be ub2ect t& the pri&r appr&+al &' the C&((i i&ner. Neither uch plan* n&r an, uch pa,(ent* (a, be appr&+e! b, the C&((i i&ner unle he 'in! that the ri%ht an! intere t &' the in urer* it p&lic,h&l!er * an! hareh&l!er are pr&tecte!. Sec. 5:9. The tru tee re'erre! t& in ecti&n t.& hun!re! i4t,i4 hall 'ile .ith uch in urer an! .ith the C&((i i&ner a +eri'ie! acceptance &' their app&int(ent an! +eri'ie! !eclarati&n that the, .ill 'aith'ull, !i char%e their !utie a uch tru tee . All !i+i!en! an! &ther u( recei+e! b, ai! tru tee &n the hare hel! b, the(* a'ter pa,in% the nece ar, e4pen e &' e4ecutin% their tru t* hall be i((e!iatel, repai! t& uch in urer '&r the bene'it &' all .h& are* &r (a, bec&(e* p&lic,h&l!er &' uch in urance &' the cla &r cla e '&r .h& e bene'it the t&c- &' uch in urer .a ac<uire! an! entitle! t& participate in the pr&'it there&' an! hall be a!!e! t& an! bec&(e part &' the a et &' uch in urer. Sec. 5:9-A. I'* at an, ti(e .ithin the peri&! pr&+i!e! in the plan '&r the ac<ui iti&n &' the &ut tan!in% hare &' t&c- &' the in urer* ninet, percent there&' ha alrea!, been ac<uire! an! tran 'erre! t& the tru tee un!er the plan* the in urer b, a +&te &' a (a2&rit, &' the !irect&r (a, !eter(ine t& (a-e an &''er* .ith the per(i i&n &' the C&((i i&ner an! ub2ect t& uch re<uire(ent a he (a, peci',* t& ac<uire b, purcha e all &' the hare n&t theret&'&re ac<uire! un!er the plan* at a peci'ie! price .hich the in urer c&n i!er t& be their 'air +alue a &' the !ate &' (a-in% uch &''er. I' the &''er t& ac<uire i per(itte! b, the C&((i i&ner* the in urer hall (a-e a .ritten &''er b, re%i tere! (ail t& each hareh&l!er .h& e hare ha+e n&t theret&'&re been ac<uire! un!er the plan &r &ther.i e* &''erin% t& ac<uire all hi hare at uch price i' accepte! in .ritin% .ithin thirt, !a, a'ter the (ailin% &' uch &''er. An, hareh&l!er acceptin% uch &''er* .ithin the ti(e there'&re hall* .ithin i4t, !a, a'ter hi acceptance* tran 'er t& the in urer the certi'icate repre entin% uch hare an!* up&n !&in% &* hall be pai! b, the in urer the

a(&unt &' uch &''er '&r hi hare . An, hare & ac<uire! hall be a i%ne! an! tran 'erre! t& the tru tee un!er the plan an! hel! b, the( a hare ac<uire! pur uant t& the plan. Each hareh&l!er .h& !&e n&t accept uch &''er t& ac<uire hi hare .ithin the ti(e tate! in uch &''er '&r acceptance there&' hall .ithin 'i'teen !a, a'ter the e4pirati&n &' uch &''er appl, t& the Secretar, &' Finance '&r !eter(inati&n &' the 'air +alue &' hi hare a &' the !ate &' (a-in% uch &''er. The Secretar, &' Finance (a, hi( el'* a'ter !ue n&tice an! hearin%* !eter(ine up&n the e+i!ence recei+e! the 'air +alue &' the hare a &' the !ate &' (a-in% uch &''er* &r app&int three i(partial an! !i intere te! per &n t& apprai e the 'air +alue &' uch hare .ith uch !irecti&n a he hall !ee( pr&per an! nece ar, t& e4pe!ite the pr&cee!in% . Up&n c&(pleti&n &' the apprai al pr&cee!in% * the apprai er hall 'ile .ith the Secretar, &' Finance their rep&rt in .ritin% tatin% the 'air +alue &' uch hare a &' the !ate &' the (a-in% &' uch &''er an! ettin% '&rth their 'in!in% in upp&rt &' uch tate(ent. The apprai er hall 'urni h each part, t& the pr&cee!in% a c&p, &' their apprai al rep&rt* an! .ithin ten !a, a'ter receipt there&' an, uch part, (a, i%ni', hi &b2ecti&n* i' an,* t& the rep&rt &r (&+e '&r the appr&+al there&'. Up&n the e4pirati&n &' the peri&! &' ten !a, re'erre! t& ab&+e* the rep&rt hall be et '&r hearin%* a'ter .hich the Secretar, &' Finance hall i ue an &r!er a!&ptin%* (&!i',in% &r re2ectin% the rep&rt in .h&le &r in part &r he (a, recei+e 'urther e+i!ence &r (a, rec&((it it .ith in tructi&n . ?hene+er the Secretar, &' Finance hall !eter(ine in an, (anner* a a'&re ai!* the 'air +alue &' uch hare * he (a, al & !eter(ine the ter( &' pa,(ent there&' b, the in urer. The e4pen e inci!ental t& the pr&cee!in% inclu!in% char%e &' the apprai er * i' an,* hall be pai! e<uall, b, the in urer an! the hareh&l!er. The 'in!in% &' the Secretar, &' Finance &n all <ue ti&n &' 'act rai e! at the hearin% &' the applicati&n '&r !eter(inati&n &' the 'air +alue &' uch hare hall be c&nclu i+e up&n all partie t& the pr&cee!in% . The &r!er &' the Secretar, &' Finance !eter(inin% the 'air +alue &' the hare an! the ter( &' pa,(ent there&' hall ha+e the '&rce an! e''ect &' a 2u!%(ent .hich hall be appealable &n an, <ue ti&n &' la.. Such &r!er hall bec&(e 'inal an!e4ecut&r, 'i'teen !a, a'ter receipt there&' b, the partie t& the pr&cee!in% . Up&n an, uch &r!er bec&(in% 'inal an! 'r&( .hich n& appeal i pen!in%* &r .hen the ti(e t& appeal there'r&( ha e4pire!* each hareh&l!er part, t& the pr&cee!in% hall tran 'er hi hare t& the in urer an! urren!er t& the ai! in urer the certi'icate repre entin% uch hare an! the in urer hall (a-e pa,(ent there'&re a pr&+i!e! in uch &r!er. An, hare & ac<uire! b, the in urer hall be a i%ne! an! tran 'erre! t& the tru tee an! hel! b, the( a hare ac<uire! pur uant t& the plan. An, hareh&l!er .h& !&e n&t appl, t& the Secretar, &' Finance in the (anner an! .ithin the ti(e hereinbe'&re pre cribe! hall be !ee(e! t& ha+e accepte! the &''er re'erre! t& ab&+e* e''ecti+e* h&.e+er* up&n the e4pirati&n &' the ti(e hereinab&+e pre cribe! '&r (a-in% uch applicati&n* an! uch hareh&l!er/ ti(e '&r acceptin% uch &''er hall* '&r that purp& e &nl,* be !ee(e! t& ha+e been e4ten!e! acc&r!in%l,. An, &''er t& ac<uire hare (a!e pur uant t& thi ecti&n hall* e4cept a &ther.i e pr&+i!e! herein* be irre+&cable until all pr&cee!in% up&n uch &''er ha+e been c&(plete! &r all hare ha+e &ther.i e been earlier ac<uire! b, the in urer. An, hareh&l!er .h& ha e4pre l, &r i(plie!l, accepte! the plan &r the &''er t& ac<uire hi hare n&t theret&'&re ac<uire! un!er the plan* an! an, hareh&l!er .h& ha re2ecte! uch plan &r uch &''er an! ha applie!* a a'&re ai!* t& the Secretar, &' Finance '&r a !eter(inati&n &' the 'air +alue &' hi hare ub e<uent t& .hich an a%ree(ent ha been reache! &r a 'inal &r!er i ue! 'i4in% uch 'air +alue but .h& 'ail t& urren!er hi certi'icate '&r cancellati&n up&n pa,(ent &' the a(&unt t& .hich he i entitle!* (a, be c&(pelle! t& !& & b, an &r!er &'

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the Secretar, &' Finance '&r that purp& e an! uch &r!er (a, pr&+i!e that up&n 'ailure &' uch hareh&l!er t& urren!er uch certi'icate '&r cancellati&n uch &r!er hall tan! in lieu &' uch urren!er an! cancellati&n. #A a(en!e! b, 1re i!ential Decree N&. 15=6$. Sec. 5;6. Such in urer* a'ter (utuali>ati&n* hall be a c&ntinuati&n &' the &ri%inal in urer* an! uch (utuali>ati&n hall n&t a''ect uch in urer/ certi'icate &' auth&rit, n&r e4i tin% uit * ri%ht &r c&ntract e4cept a pr&+i!e! in ai! plan '&r the ac<ui iti&n &' the &ut tan!in% hare &' the capital t&c- &' uch in urer* appr&+e! a pr&+i!e! in thi chapter. Such in urer* a'ter (utuali>ati&n* hall e4erci e all the ri%ht an! p&.er an! hall per'&r( all the !utie c&n'erre! &r i(p& e! b, la. up&n in urer .ritin% the cla e &' in urance .ritten b, it* an! t& pr&tect ri%ht an! c&ntract e4i tin% pri&r t& (utuali>ati&n* ub2ect t& the e''ect &' ai! plan. The b&ar! &' !irect&r &' uch in urer* pri&r t& (utuali>ati&n* (a, a!&pt a(en!(ent t& it b,la. t& ta-e e''ect up&n (utuali>ati&n. Sec. 5;1. #1$ An annual (eetin% &' (e(ber hall be hel! at ten &/cl&c- in the (&rnin% &' the '&urth Tue !a, &' March &' each ,ear at the principal &''ice &' the in urer* unle a !i''erent ti(e &r place be pr&+i!e! in the b,-la. . #5$ Special (eetin% &' the (e(ber * '&r an, purp& e &r purp& e .hat &e+er* (a, be calle! at an, ti(e b, the pre i!ent* &r b, the b&ar! &' !irect&r * &r b, &ne &r (&re (e(ber h&l!in% n&t le than &ne-'i'th &' the +&tin% p&.er &' uch in urer* &r b, uch &ther &''icer &r per &n a the b,-la. auth&ri>e. #7$ N&tice &' all (eetin% &' (e(ber .hether annual &r pecial hall be %i+en in .ritin% t& the (e(ber entitle! t& +&te b, the ecretar,* &r an a i tant ecretar,* &r &ther per &n char%e! .ith that !ut,* &r i' there be n& uch &''icer* &r in ca e &' hi ne%lect &r re'u al* b, an, !irect&r &r (e(ber. At the &pti&n &' the in urer uch n&tice (a, be i(printe! &n pre(iu( n&tice &' receipt &r &n b&th. A n&tice (a, be %i+en b, uch in urer t& an, (e(ber either per &nall,* &r b, (ail* &r &ther (ean &' .ritten c&((unicati&n* char%e prepai!* a!!re e! t& uch (e(ber at hi a!!re appearin% &n the b&&- &' the in urer* &r %i+en b, hi( t& the in urer '&r the purp& e &' n&tice. I' a (e(ber %i+e n& a!!re * n&tice hall be !ee(e! t& ha+e been %i+en hi( i' ent b, (ail &r &ther (ean &' .ritten c&((unicati&n a!!re e! t& the place .here the principal &''ice &' the in urer i ituate!* &r i' publi he! at lea t &nce in &(e ne. paper &' %eneral circulati&n in the place in .hich ai! &''ice i l&cate!. N&tice &' an, (eetin% &' (e(ber hall be ent t& each (e(ber entitle! theret& n&t le than e+en !a, be'&re uch (eetin%* unle the b,-la. pr&+i!e &ther.i e. N&tice &' an, (eetin% &' (e(ber hall peci', the place* the !a, an! the h&ur &' the (eetin% an! the %eneral nature &' the bu ine t& be tran acte!. N&tice &' an annual (eetin% t& be hel! at the ti(e an! place peci'ie! in ub-para%raph &ne &' thi ecti&n hall be u''icientl, %i+en i' publi he! at lea t &nce in each &' '&ur ucce i+e .ee- in a ne. paper &' %eneral circulati&n in the place in .hich the principal &''ice &' uch in urer i l&cate!* an! i' & publi he! n& &ther n&tice &' uch (eetin% hall be re<uire!. #8$ The pre ence in per &n &r b, pr&4, &' 'i+e per centum &' the (e(ber entitle! t& +&te at an, (eetin% hall c&n titute a <u&ru( '&r the tran acti&n &' bu ine * unle &ther.i e pr&+i!e! b, the b,-la. . #9$ Each uch (e(ber hall ha+e &ne +&te at an, (eetin% &' (e(ber re%ar!le &' the nu(ber &' p&licie &r the a(&unt &' in urance that uch (e(ber h&l! an! re%ar!le &' .hether uch p&licie are p&licie &' li'e in urance* &r &' health an! acci!ent in urance* &r b&th. An, (e(ber entitle! t& +&te hall ha+e the ri%ht t& !& & either in per &n &r b, an a%ent &r a%ent

auth&ri>e! b, a .ritten pr&4, e4ecute! b, uch per &n &r hi !ul, auth&ri>e! a%ent an! 'ile! .ith the ecretar, &' uch in urer. #:$ The !irect&r &' the in urer in &''ice at the ti(e the in urer i (utuali>e! a pr&+i!e! in thi chapter hall c&ntinue in &''ice until the 'ir t annual (eetin% &' (e(ber . At the 'ir t annual (eetin% &' (e(ber an! at each annual (eetin% therea'ter !irect&r hall be electe! b, the (e(ber '&r the ter( &r ter( auth&ri>e! b, thi chapter. #;$ The article &' inc&rp&rati&n &r the ba,-la. (a, pr&+i!e that the !irect&r (a, be !i+i!e! int& t.& &r (&re cla e .h& e ter( &' &''ice hall e4pire at !i''erent ti(e * but n& ter( hall c&ntinue l&n%er than i4 ,ear . In the ab ence &' uch pr&+i i&n * each !irect&r* e4cept (e(ber &' the b&ar! &' !irect&r at the ti(e the in urer i (utuali>e!* hall be electe! '&r a ter( &' &ne ,ear. All !irect&r hall h&l! &''ice '&r a ter( '&r .hich the, are electe! an! until their ucce &r are electe! an! <uali'ie!. A !irect&r (a,* but nee! n&t be a (e(ber &r p&lic,h&l!er &' the in urer &' .hich he i actin% a !irect&r. )acancie in the b&ar! &' !irect&r (a, be 'ille! b, a (a2&rit, &' the re(ainin% !irect&r * th&u%h le than a <u&ru(* an! each !irect&r & electe! hall h&l! &''ice until the ne4t annual (eetin%. #=$ All in urer (utuali>e! un!er the pr&+i i&n &' thi chapter hall be ub2ect t& all &ther applicable pr&+i i&n &' thi C&!e an! &' the C&rp&rati&n La.. Sec. 5;5. The pr&+i i&n &' C&((&n.ealth Act N&. =7* &ther.i e -n&.n a the (ecurities $ct* a a(en!e!* hall n&t appl, t& an, &' the '&ll&.in%" #a$ Share &' the capital t&c- &' uch in urer ac<uire! a pr&+i!e! in ecti&n t.& hun!re! i4t,- i4 an! a i%ne! an! tran 'erre! t& the tru tee a i pr&+i!e! in ai! ecti&n* an! the a i%n(ent an! tran 'er &' ai! hare a & pr&+i!e!0 #b$ An, certi'icate &r &ther in tru(ent i ue! t& a p&lic,h&l!er &' uch (utuali>e! in urer c&n'errin% &r e+i!encin% (e(ber hip in uch(utuali>e! in urer &r c&n'errin% &r e+i!encin% uch (e(ber/ ri%ht t& participate in the pr&'it &r hare in the a et &' uch (utuali>e! in urer b, the +irtue &' hi (e(ber hip therein* an! the i uance &' uch certi'icate &r &ther in tru(ent0 #c$ The plan '&r the ac<ui iti&n &' the &ut tan!in% hare &' the capital t&c- &' uch in urer auth&ri>e! b, the pr&+i i&n &' thi chapter* the ub(i i&n &' ai! plan t& the C&((i i&ner an! t& the p&lic,h&l!er &' uch in urer a pr&+i!e! in thi chapter* an! the appr&+al an! carr,in% &ut &' ai! plan &r an, part there&' in acc&r!ance .ith the pr&+i i&n &' thi chapter. Title 1= ?IT@DRA?AL OF FOREIBN INSURANCE COM1ANIES Sec. 5;7. A '&rei%n in urance c&(pan, !&in% bu ine in the 1hilippine * up&n pa,(ent &' the 'ee hereina'ter pre cribe! an! urren!er t& the C&((i i&ner &' it certi'icate &' auth&rit,* (a, appl, t& .ith!ra. 'r&( the 1hilippine . Such applicati&n hall be !ul, e4ecute! in .ritin%* acc&(panie! b, e+i!ence &' !ue auth&rit, '&r uch e4ecuti&n* pr&perl, ac-n&.le!%e!. Sec. 5;8. The C&((i i&ner hall publi h the applicati&n '&r .ith!ra.al !ail, '&r a peri&! &' &ne .ee- in t.& ne. paper &' %eneral circulati&n in the Cit, &' Manila* &ne in En%li h an! the &ther in 1ilipin&. The e4pen e &' uch publicati&n hall be pai! b, the in urance c&(pan, 'ilin% uch applicati&n. Sec. 5;9. E+er, '&rei%n in urance c&(pan, !e irin% t& .ith!ra. 'r&( the 1hilippine hall* pri&r t& uch .ith!ra.al* !i char%e it liabilitie t& p&lic,h&l!er an! cre!it&r in thi c&untr,. In ca e &' it p&licie in urin% re i!ent &' the 1hilippine * it hall cau e the pri(ar, liabilitie un!er uch p&licie t& be rein ure! an! a u(e! b, an&ther in urance c&(pan, auth&ri>e! t& tran act

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bu ine in the 1hilippine . In the ca e &' uch p&licie a are ub2ect t& cancellati&n b, the .ith!ra.in% c&(pan,* it (a, cancel uch p&licie pur uant t& the ter( there&' in lieu &' uch rein urance an! a u(pti&n &' liabilitie . Sec. 5;:. The C&((i i&ner hall (a-e an e4a(inati&n &' the b&&- an! rec&r! &' the .ith!ra.in% c&(pan,* an! i'* up&n uch e4a(inati&n* the C&((i i&ner 'in! that the in urer ha n& &ut tan!in% liabilitie t& re i!ent &' the 1hilippine * it hall cancel the .ith!ra.in% c&(pan,/ certi'icate &' auth&rit,* i' une4pire!* an! hall per(it the in urer t& .ith!ra.. The c& t an! e4pen e &' all uch e4a(inati&n hall be pai! a pre cribe! in ecti&n '&ur hun!re! e+enteen. Sec. 5;;. Up&n the 'ailure &' uch .ith!ra.in% in urance c&(pan, &r it a%ent in the 1hilippine t& pa, the e4pen e &' uch publicati&n .ithin thirt, !a, a'ter the pre entati&n &' the bill there'&re* the C&((i i&ner hall c&llect uch 'ee 'r&( the !ep& it 'urni he! in acc&r!ance .ith the pr&+i i&n &' ecti&n &ne hun!re! ninet,-&ne. Sec. 5;=. A '&rei%n li'e in urance c&(pan, that .ith!ra. 'r&( the 1hilippine hall be c&n i!ere! a "servicing insurance company" i' it bu ine tran acti&n are c&n'ine! t& acceptin% peri&!ic pre(iu( pa,(ent 'r&(* &r %rantin% p&lic, l&an an! pa,in% ca h urren!er +alue &' &ut tan!in% p&licie t&* &r re+i+in% lap e! p&licie &'* 1hilippine p&lic,h&l!er * an! uch &ther relate! er+ice . Sec. 5;9. N& c&(pan, hall act a a er+icin% in urance c&(pan, until a'ter it hall ha+e &btaine! a pecial certi'icati&n &' auth&rit, t& act a uch 'r&( the C&((i i&ner up&n applicati&n there'&re an! pa,(ent b, the c&(pan, &' the 'ee hereina'ter pre cribe!. Such certi'icate hall e4pire &n the la t !a, &' Eune &' each ,ear an! hall be rene.e! annuall,* .hile the c&(pan, c&ntinue t& er+ice it p&lic,h&l!er * an! t& c&(pl, .ith all the applicable pr&+i i&n &' la. an! re%ulati&n . Title 19 1ROFESSIONAL REINSURERS Sec. 5=6. E4cept a &ther.i e pr&+i!e! in thi C&!e* n& per &n* partner hip* a &ciati&n &r c&rp&rati&n hall tran act an, bu ine in the 1hilippine a a pr&'e i&nal rein urer until it hall ha+e &btaine! a certi'icate &' auth&rit, '&r that purp& e 'r&( the C&((i i&ner up&n the applicati&n there'&re an! pa,(ent b, uch per &n* partner hip* a &ciati&n &r c&rp&rati&n &' the 'ee hereina'ter pre cribe!. A u e! in thi C&!e* the ter( "professionalreinsurer" hall (ean an, per &n* partner hip* a &ciati&n &r c&rp&rati&n that tran act &lel, an! e4clu i+el, rein urance bu ine in the 1hilippine . The C&((i i&ner (a, re'u e t& i ue a certi'icate &' auth&rit, t& an, uch per &n* partner hip* a &ciati&n &r c&rp&rati&n i'* in hi 2u!%(ent* uch re'u al .ill be t pr&(&te public intere t. N& uch certi'icate &' auth&rit, hall be %rante! t& an, uch per &n* partner hip* a &ciati&n &r c&rp&rati&n unle an! until the C&((i i&ner hall ha+e ati 'ie! hi( el' b, uch e4a(inati&n a he (a, (a-e an! uch e+i!ence a he (a, re<uire that uch per &n* partner hip* a &ciati&n &r c&rp&rati&n i <uali'ie! b, the la. &' the 1hilippine t& tran act bu ine therein a a pr&'e i&nal rein urer. 3e'&re i uin% uch certi'icate &' auth&rit, &' the C&((i i&ner (u t be ati 'ie! that the na(e &' the applicant i n&t that &' an, &ther -n&.n c&(pan, tran actin% in urance &r rein urance bu ine in the 1hilippine * &r a na(e & i(ilar a t& be calculate! t& (i lea! the public. Such certi'icate &' auth&rit, hall e4pire &n the la t !a, &' Eune &' each ,ear an! hall be rene.e! annuall, i' uch per &n* partner hip* a &ciati&n* &r c&rp&rati&n i c&ntinuin% t& c&(pl, .ith pr&+i i&n &' thi C&!e* &r the circular * in tructi&n * rulin% * &r !eci i&n &' the C&((i i&ner an! uch &ther pertinent la.* rule an! re%ulati&n . E+er, uch per &n* partner hip* a &ciati&n* &r c&rp&rati&n recei+in% uch certi'icate &' auth&rit, hall be ub2ect t& the

pr&+i i&n &' thi C&!e an! &ther relate! la. * an! t& the 2uri !icti&n an! uper+i i&n &' the C&((i i&ner. Sec. 5=1. An, per &n* partner hip* a &ciati&n* &r c&rp&rati&n auth&ri>e! t& tran act &lel, rein urance bu ine (u t ha+e a pai!-up capital t&c- &' at lea t ten (illi&n pe & * t.ent,-'i+e per centu( &' .hich (u t be in+e te! in ecuritie ati 'act&r, t& the C&((i i&ner* c&n i tin% &' b&n! &r &ther e+i!ence &' !ebt &' the B&+ern(ent &' the 1hilippine &r it p&litical ub!i+i i&n &r in tru(entalitie * &r &' %&+ern(ent-&.ne! &r c&ntr&lle! c&rp&rati&n an! entitie * inclu!in% the Central 3an&' the 1hilippine * an! !ep& ite! .ith the C&((i i&ner* an! the re(ainin% e+ent,-'i+e per centum in uch &ther ecuritie a (a, be all&.e! an! per(itte! b, the C&((i i&ner* .hich ecuritie hall at all ti(e be (aintaine! 'ree 'r&( an, lien &r encu(brance" Provided* That rein urer alrea!, !&in% bu ine a uch in the 1hilippine hall c&(pl, .ith the re<uire(ent &' thi ecti&n b, increa in% their re pecti+e capital a herein pr&+i!e! n&t later than Dece(ber thirt,-&ne* nineteen hun!re! ei%ht," Provided, Further* That the pr&+i i&n &' thi chapter applicable t& in urance c&(panie hall & 'ar a practicable be li-e.i e applicable t& pr&'e i&nal rein urer . #A a(en!e! b, 1re i!ential Decree N&. 1899$. Title 56 @OLDINB COM1ANIES Sec. 5=5. A u e! in thi title* the '&ll&.in% ter( hall ha+e the re pecti+e (eanin% hereina'ter et '&rth unle the c&nte4t hall &ther.i e re<uire" #a$ "Person" (ean an in!i+i!ual* partner hip* 'ir(* a &ciati&n* c&rp&rati&n* tru t* an, i(ilar entit, &r an, c&(binati&n &' the '&re%&in% actin% in c&ncert0 #b$ ""ontrol"* inclu!in% the ter( "controlling"* "controlled y" an! "under common control with"* (ean the p& e i&n !irectl, &r in!irectl, &' the p&.er t& !irect &r cau e the !irecti&n &' the (ana%e(ent an! p&licie &' a per &n* .hether thr&u%h the &.ner hip &' +&tin% ecuritie b, a c&ntract &ther than a c&((ercial c&ntract '&r %&&! &r n&n(ana%e(ent er+ice &r &ther.i e. Sub2ect t& ecti&n t.& hun!re! ei%ht-'&ur* c&ntr&l hall be pre u(e! t& e4i t i' an, per &n !irectl, &r in!irectl, &.n * c&ntr&l &r h&l! .ith the p&.er t& +&te '&rt, per centu( &r (&re &' the +&tin% ecuritie &' an, &ther per &n" Provided* That n& per &n hall be !ee(e! t& c&ntr&l an&ther per &n &lel, b, rea &n &' hi bein% an &''icer &r !irect&r &' uch &ther per &n0 #c$ ")olding company" (ean an, per &n .h& !irectl, &r in!irectl, c&ntr&l an, auth&ri>e! in urer0 #!$ ""ontrolled insurer" (ean an auth&ri>e! in urer c&ntr&lle! !irectl, &r in!irectl, b, a h&l!in% c&(pan,0 #e$ ""ontrolled person" (ean an, per &n* &ther than a c&ntr&lle! in urer* .h& i c&ntr&lle! !irectl, &r in!irectl, b, a h&l!in% c&(pan,0 #'$ ")olding company system" (ean a h&l!in% c&(pan, t&%ether .ith it c&ntr&lle! in urer an! c&ntr&lle! per &n . Sec. 5=7. N&t.ith tan!in% para%raph #b$ &' ecti&n t.& hun!re! ei%ht,-t.&* the C&((i i&ner (a, !eter(ine a'ter n&tice an! &pp&rtunit, t& be hear!* that a per &n e4erci e !irectl, &r in!irectl, either al&ne &r pur uant t& an a%ree(ent .ith &ne &r (&re &ther per &n uch a c&ntr&llin% in'luence &+er the (ana%e(ent &r p&licie &' an auth&ri>e! in urer a t& (a-e it nece ar, &r appr&priate in the public intere t &r '&r the pr&tecti&n &' p&lic,h&l!er &r t&c-h&l!er &' the in urer that the per &n be !ee(e! t& c&ntr&l the in urer. Sec. 5=8. The C&((i i&ner (a, !eter(ine up&n applicati&n that an, per &n* either al&ne &r pur uant t& a%ree(ent .ith &ne &r (&re &ther per &n * !&e n&t &r .ill n&t up&n the ta-in% &' &(e pr&p& e! acti&n c&ntr&l an&ther per &n. The 'ilin% &' an

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applicati&n hereun!er in %&&! 'aith b, an, per &n hall relie+e the applicant 'r&( an, &bli%ati&n &r liabilit, i(p& e! b, thi title .ith re pect t& the ub2ect &' the applicati&n* e4cept a c&ntaine! in ecti&n t.& hun!re! ninet,-'&ur* until the C&((i i&ner ha acte! up&n the applicati&n. ?ithin thirt, !a, &r uch 'urther peri&! a he (a, pre cribe* the C&((i i&ner (a, pr& pecti+el, re+&-e &r (&!i', hi !eter(inati&n* a'ter n&tice an! &pp&rtunit, t& be hear!* .hene+er in hi 2u!%(ent re+&cati&n &r (&!i'icati&n i c&n i tent .ith hi title. Sec. 5=9. N&t.ith tan!in% an, &ther pr&+i i&n &' thi title* the '&ll&.in% hall n&t be !ee(e! h&l!in% c&(panie " #a$ auth&ri>e! in urer &r rein urer &r their ub i!iarie 0 #b$ the B&+ern(ent &' the 1hilippine * &r an, p&litical ub!i+i i&n* a%enc, &r in tru(entalit, there&'* &r an, c&rp&rati&n .hich i .h&ll, &.ne! !irectl, &r in!irectl, b, &ne &r (&re &' the '&re%&in%. The C&((i i&ner (a, c&n!iti&nall, &r unc&n!iti&nall, e4e(pt an, peci'ie! per &n &r cla &' per &n 'r&( an, &' the &bli%ati&n &r liabilitie i(p& e! un!er thi title* i' an! t& the e4tent he 'in! the e4e(pti&n nece ar, t& appr&priate in the public intere t &r n&t a!+er e t& the intere t &' p&lic,h&l!er &r t&c-h&l!er an! c&n i tent .ith the purp& e &' thi title. Sec. 5=:. #1$ E+er, per &n .h& &n the !ate thi C&!e ta-e e''ect i a c&ntr&lle! in urer an! e+er, per &n .h& therea'ter bec&(e a c&ntr&lle! in urer* hall* .ithin i4t, !a, therea'ter* &r .ithin thirt, !a, a'ter bec&(in% a c&ntr&lle! in urer* .hiche+er i later* re%i ter .ith the C&((i i&ner. Such re%i trati&n hall be a(en!e! .ithin thirt, !a, '&ll&.in% an, chan%e in the i!entit, &' it h&l!in% c&(pan,. The C&((i i&ner (a, %rant &ne &r (&re rea &nable e4ten i&n &' the ti(e t& re%i ter. #5$ E+er, re%i trant hall 'urni h the C&((i i&ner .ith the '&ll&.in% in'&r(ati&n c&ncernin% it h&l!in% c&(pan," #a$ a c&p, &' it charter &r article &' inc&rp&rati&n an! it b,-la. * #b$ the i!entitie &' it principal hareh&l!er * &''icer * !irect&r an! c&ntr&lle! per &n * an! #c$ in'&r(ati&n a t& it capital tructure an! 'inancial c&n!iti&n* an! a !e cripti&n &' it principal bu ine acti+itie . Sec. 5=;. E+er, c&ntr&lle! in urer hall 'ile .ith the C&((i i&ner uch rep&rt &r (aterial a he (a, !irect '&r the purp& e &' !i cl& in% in'&r(ati&n c&ncernin% the &perati&n &' per &n .ithin the h&l!in% c&(pan, , te( .hich (a, (ateriall, a''ect the &perati&n * (ana%e(ent &r 'inancial c&n!iti&n &' the in urer. Sec. 5==. E+er, h&l!in% c&(pan, an! e+er, c&ntr&lle! per &n .ithin a h&l!in% c&(pan, , te( hall be ub2ect t& e4a(inati&n b, &r!er &' the C&((i i&ner i' he ha cau e t& belie+e that the &perati&n &' uch per &n (a, (ateriall, a''ect the &perati&n * (ana%e(ent &r 'inancial c&n!iti&n &' an, c&ntr&lle! in urer .ith the , te( an! that he i unable t& &btain rele+ant in'&r(ati&n 'r&( uch c&ntr&lle! in urer. The %r&un! relie! up&n b, the C&((i i&ner '&r uch e4a(inati&n hall be tate! in hi &r!er* .hich &r!er hall be ub2ect t& 2u!icial re+ie. &nl, at the in tance &' the per &n &u%ht t& be e4a(ine!. Such e4a(inati&n hall be c&n'ine! t& (atter peci'ie! in the &r!er. The c& t &' uch e4a(inati&n hall be a e e! a%ain t the per &n e4a(ine! an! n& p&rti&n there&' hall therea'ter be rei(bur e! t& it !irectl, &r in!irectl, b, the c&ntr&lle! in urer. Sec. 5=9. The C&((i i&ner hall -eep the c&ntent &' each rep&rt (a!e pur uant t& thi title an! an, in'&r(ati&n &btaine! b, hi( in c&nnecti&n there.ith c&n'i!ential an! hall n&t (a-e the a(e public .ith&ut the pri&r .ritten c&n ent &' the c&ntr&lle! in urer t& .hich it pertain unle the C&((i i&ner a'ter n&tice an! an &pp&rtunit, t& be hear! hall !eter(ine that the intere t &' p&lic,h&l!er * t&c-h&l!er &r the public .ill be er+e! b, the publicati&n there&'. In an, acti&n &r pr&cee!in% b, the C&((i i&ner a%ain t the per &n e4a(ine! &r an, &ther per &n .ithin the a(e h&l!in% c&(pan, , te( a rep&rt &' uch e4a(inati&n publi he! b, hi( hall be a!(i ible a

e+i!ence &' the 'act

tate! therein.

Sec. 596. Tran acti&n .ithin a h&l!in% c&(pan, , te( t& .hich a c&ntr&lle! in urer i a part, hall be ub2ect t& the '&ll&.in%" #a$ The ter( hall be 'air an! e<uitable0 '&r er+ice per'&r(e! hall be #b$ char%e &r 'ee rea &nable0

#c$ e4pen e incurre! an! pa,(ent recei+e! hall be all&cate! t& the in urer &n an e<uitable ba i in c&n'&r(it, .ith cu t&(ar, in urance acc&untin% practice c&n i tentl, applie!. The b&&- * acc&unt an! rec&r! &' each part, t& all uch tran acti&n hall be (aintaine! a t& clearl, an! accuratel, !i cl& e the nature an! !etail &' the tran acti&n inclu!in% uch acc&untin% in'&r(ati&n a i nece ar, t& upp&rt the rea &nablene &' the char%e &r 'ee t& the re pecti+e partie . Sec. 591. The pri&r .ritten appr&+al &' the C&((i i&ner hall be re<uire! '&r the '&ll&.in% tran acti&n bet.een a c&ntr&lle! in urer an! an, per &n in it h&l!in% c&(pan, , te(" ale * purcha e * e4chan%e * l&an &r e4ten i&n &' cre!it* &r in+e t(ent * in+&l+in% 'i+e per centu( &r (&re &' the in urer/ a!(itte! a et a &' the thirt,-'ir t !a, &' Dece(ber ne4t prece!in%. Sec. 595. The '&ll&.in% tran acti&n bet.een a c&ntr&lle! in urer an! an, per &n in it h&l!in% c&(pan, , te( (a, n&t be entere! int& unle the in urer ha n&ti'ie! the C&((i i&ner in .ritin% &' it intenti&n t& enter int& an, uch tran acti&n at lea t thirt, !a, pri&r theret&* &r uch h&rter peri&! a he (a, per(it* an! he ha n&t !i appr&+e! it .ithin uch peri&!" #a$ ale * purcha e * e4chan%e * l&an &r e4ten i&n &' cre!it* &r in+e t(ent * in+&l+in% (&re than &ne-hal' &' &ne per centu( but le than 'i+e per centu( &' the in urer/ a!(itte! a et a &' the thirt,-'ir t !a, &' Dece(ber ne4t prece!in%0 #b$ rein urance treatie &r a%ree(ent 0 #c$ ren!erin% &' ba i 0 &r er+ice &n a re%ular &r , te(atic

#!$ an, (aterial tran acti&n* peci'ie! b, re%ulati&n* .hich the C&((i i&ner !eter(ine (a, a!+er el, a''ect the intere t &' the in urer/ p&lic,h&l!er &r t&c-h&l!er &r &' the public. N&thin% herein c&ntaine! hall be !ee(e! t& auth&ri>e &r per(it an, tran acti&n .hich* in the ca e &' a n&n-c&ntr&lle! in urer* .&ul! be &ther.i e c&ntrar, t& la.. Sec. 597. The C&((i i&ner* in re+ie.in% tran acti&n pur uant t& ecti&n t.& hun!re! ninet,-&ne an! t.& hun!re! ninet,-t.&* hall c&n i!er .hether the tran acti&n c&(pl, .ith the tan!ar! et '&rth in ecti&n t.& hun!re! ninet, an! .hether the, (a, a!+er el, a''ect the intere t &' p&lic,h&l!er . Thi ecti&n hall n&t appl, t& tran acti&n ub2ect t& &ther ecti&n &' thi C&!e .hich i(p& e n&tice &r appr&+al re<uire(ent %reater than th& e pre cribe! b, thi title. Sec. 598. #1$ N& per &n* &ther than an auth&ri>e! in urer* hall ac<uire c&ntr&l &' an, !&(e tic in urer* .hether b, purcha e &' it ecuritie &r &ther.i e* e4cept #a$ a'ter t.ent, !a, .ritten n&tice t& it in urer &r uch h&rter peri&! a the C&((i i&ner (a, per(it* &' it intenti&n t& ac<uire c&ntr&l* an! #b$ .ith the pri&r .ritten appr&+al &' the C&((i i&ner. #5$ The C&((i i&ner hall !i appr&+e the ac<ui iti&n &' c&ntr&l &' a !&(e tic in urer i' he !eter(ine * a'ter n&tice an! an &pp&rtunit, t& be hear!* that uch acti&n i rea &nabl, nece ar, t& pr&tect the intere t &' the pe&ple &' thi c&untr,. The '&ll&.in% hall be the &nl, 'act&r t& be c&n i!ere! b, hi( in reachin% the '&re%&in% !eter(inati&n" #a$ the 'inancial c&n!iti&n &' the ac<uirin% per &n &r an!

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the in urer0 #b$ the tru t.&rthine &' the ac<uirin% per &n &r an, &' it &''icer &r !irect&r 0 #c$ a plan '&r the pr&per an! e''ecti+e c&n!uct &' the in urer/ &perati&n 0 #!$ the &urce &' the 'un! &r a et '&r the ac<ui iti&n0 #e$ the 'airne &' an, e4chan%e &' t&c-* a et * ca h &r &ther c&n i!erati&n '&r the t&c- &r a et t& be recei+e!0 #'$ .hether the e''ect &' the ac<ui iti&n (a, be ub tantiall, t& le en c&(petiti&n in an, line &' c&((erce in in urance &r t& ten! t& create a (&n&p&l, therein0 an! #%$ .hether the ac<ui iti&n i li-el, t& be ha>ar!&u &r pre2u!icial t& the in urer/ p&lic,h&l!er &r t&c-h&l!er . #7$ The '&ll&.in% c&n!iti&n a''ectin% an, c&ntr&lle! in urer* re%ar!le &' .hen uch c&ntr&l ha been ac<uire!* are +i&lati&n &' thi title" #a$ the c&ntr&llin% per &n &r an, &' it &''icer &r !irect&r ha+e !e(&n trate! untru t.&rthine 0 an! #b$ the e''ect &' retenti&n &' c&ntr&l (a, be ub tantiall, t& le en c&(petiti&n in an, line &' c&((erce in in urance in thi c&untr, &r t& ten! t& create a (&n&p&l, therein. I'* a'ter n&tice an! an &pp&rtunit, t& be hear!* the C&((i i&ner !eter(ine that an, &' the '&re%&in% +i&lati&n e4i t * he hall re!uce hi 'in!in% t& .ritin% an! hall i ue an &r!er ba e! there&n an! cau e the a(e t& be er+e! up&n the in urer an! up&n all per &n a''ecte! thereb, !irectin% an, per &n '&un! t& be in +i&lati&n there&' t& ta-e appr&priate acti&n t& cure uch +i&lati&n. Up&n the 'ailure &' an, uch per &n t& c&(pl, .ith uch &r!er* ecti&n t.& hun!re! ninet,-ei%ht hall bec&(e applicable. #8$ The C&((i i&ner (a, re<uire the ub(i i&n &' uch in'&r(ati&n a he !ee( nece ar, t& !eter(ine .hether an, ac<ui iti&n &r retenti&n &' c&ntr&l c&(plie .ith thi title an! (a, re<uire* a a c&n!iti&n &' appr&+al &' uch ac<ui iti&n &r retenti&n &' c&ntr&l* that all &r an, p&rti&n &' uch in'&r(ati&n be !i cl& e! t& the in urer/ t&c-h&l!er . #9$ Unle ub2ect t& re%i trati&n un!er ecti&n t.& hun!re! ei%ht,- i4 &r unle ac<ui iti&n &' it c&ntr&l i ub2ect t& para%raph &ne an! t.& here&'* e+er, auth&ri>e! in urer hall* &n &r be'&re the 'ir t !a, &' Eul,* nineteen hun!re! e+ent,-'i+e* &r .ithin thirt, !a, a'ter an, e+ent re<uirin% n&tice hereun!er* .hiche+er i later* n&ti', the C&((i i&ner in .ritin% &' the i!entit, &' an, per &n .h&( the in urer then -n&. &r ha rea &n t& belie+e c&ntr&l &r ha ta-en an, acti&n* &ther than preli(inar, ne%&tiati&n &r !i cu i&n* t& ac<uire c&ntr&l &' the in urer. Sec. 599. #1$ N&t.ith tan!in% the c&ntr&l &' an auth&ri>e! in urer b, an, per &n* the &''icer an! !irect&r &' the in urer hall n&t thereb, be relie+e! &' an, &bli%ati&n &r liabilit, t& .hich the, .&ul! &ther.i e be ub2ect b, la.* an! the in urer hall be (ana%e! & a t& a ure it eparate &peratin% i!entit, c&n i tent .ith thi title. #5$ N&thin% herein hall preclu!e an auth&ri>e! in urer 'r&( ha+in% &r harin% a c&((&n (ana%e(ent &r c&&perati+e &r 2&int u e &' per &nnel* pr&pert, &r er+ice .ith &ne &r (&re &ther per &n un!er arran%e(ent (eetin% the tan!ar! &' ecti&n t.& hun!re! ninet,. Sec. 59:. T& the e4tent that an, in'&r(ati&n &r (aterial i et '&rth in '&r( &r &ther (atter &n 'ile .ith an, %&+ern(ent a%enc, &r in a re%i trati&n '&r( 'ile! .ith the C&((i i&ner b, an&ther per &n .ithin the a(e h&l!in% c&(pan, , te(* the c&ntr&lle! in urer (a, c&(pl, .ith the re%i trati&n &r rep&rtin% re<uire(ent &' thi title b, re'errin% in it re%i trati&n '&r( &r rep&rt t& uch &ther 'ile! (atter an! attachin% a c&p, there&' certi'ie! b, the in urer a a true an! c&(plete c&p,* t& uch re%i trati&n '&r( &r rep&rt &r* i' uch &ther 'ile! (atter i &n 'ile

.ith the C&((i i&ner* inc&rp&ratin% uch (atter b, re'erence. Sec. 59;. N& h&l!in% c&(pan, &r c&ntr&lle! per &n hall !irectl, &r in!irectl, &r thr&u%h an&ther per &n !& &r cau e t& be !&ne '&r &r in behal' &' the c&ntr&lle! in urer an, act inten!e! t& a''ect the in urance &perati&n &' the in urer .hich* i' !&ne b, the in urer* .&ul! +i&late an, pr&+i i&n &' thi C&!e. Sec. 59=. In a!!iti&n t& an, &ther penalt, pr&+i!e! b, la.* the C&((i i&ner (a,* up&n the .ill'ul 'ailure &' an, per &n .ithin a h&l!in% c&(pan, , te( t& c&(pl, .ith thi title &r an, re%ulati&n &r &r!er pr&(ul%ate! hereun!er" #a$ pr&cee! un!er title '&urteen &r title 'i'teen* Chapter III* &' thi C&!e .ith re pect t& in urer .ithin the h&l!in% c&(pan, , te(0 &r #b$ re+&-e &r re'u e t& rene. the auth&rit, t& !& bu ine in thi c&untr, &' an in urer .ithin the h&l!in% c&(pan, , te( &r re'u e t& i ue uch auth&rit, t& an, &ther in urer in the , te(0 &r #c$ !irect that* in a!!iti&n t& an, &ther penalt, pr&+i!e! b, la.* uch per &n '&r'eit t& the pe&ple &' thi c&untr, a u( n&t e4cee!in% 'i+e hun!re! pe & '&r a 'ir t +i&lati&n an! t.& th&u an! 'i+e hun!re! pe & '&r an, ub e<uent +i&lati&n. An a!!iti&nal u( n&t e4cee!in% t.& th&u an! 'i+e hun!re! pe & hall be i(p& e! '&r each (&nth !urin% .hich an, uch +i&lati&n hall c&ntinue. Chapter SALES ABENCIES AND TEC@NICAL SER)ICES Title INSURANCE ABENTS AND INSURANCE 3ROFERS I) 1

Sec. 599. N& in urance c&(pan, !&in% bu ine in the 1hilippine * n&r an, a%ent there&'* hall pa, an, c&((i i&n &r &ther c&(pen ati&n t& an, per &n '&r er+ice in &btainin% in urance* unle uch per &n hall ha+e 'ir t pr&cure! 'r&( the C&((i i&ner a licen e t& act a an in urance a%ent &' uch c&(pan, &r a an in urance br&-er a hereina'ter pr&+i!e!. N& per &n hall act a an in urance a%ent &r a an in urance br&-er in the &licitati&n &r pr&cure(ent &' applicati&n '&r in urance* &r recei+e '&r er+ice in &btainin% in urance* an, c&((i i&n &r &ther c&(pen ati&n 'r&( an, in urance c&(pan, !&in% bu ine in the 1hilippine * &r an, a%ent there&'* .ith&ut 'ir t pr&curin% a licen e t& act 'r&( the C&((i i&ner* .hich (u t be rene.e! annuall, &n the 'ir t !a, &' Eanuar,* &r .ithin i4 (&nth therea'ter. Such licen e hall be i ue! b, the C&((i i&ner &nl, up&n the .ritten applicati&n &' the per &n !e irin% it* uch applicati&n i' '&r a licen e t& act a in urance a%ent* bein% appr&+e! an! c&unter i%ne! b, the c&(pan, uch per &n !e ire t& repre ent* an! hall be up&n a '&r( pre cribe! b, the C&((i i&ner %i+in% uch in'&r(ati&n a he (a, re<uire* an! up&n pa,(ent &' the c&rre p&n!in% 'ee hereina'ter pre cribe!. The C&((i i&ner hall ati ', hi( el' a t& c&(petence an! tru t.&rthine &' the applicant an! hall ha+e the ri%ht t& re'u e t& i ue &r rene. an! t& u pen! &r re+&-e an, uch licen e in hi !i creti&n. N& uch licen e hall be +ali! a'ter the thirtieth !a, &' Eune &' the ,ear '&ll&.in% it i uance unle it i rene.e!. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 766. An, per &n .h& '&r c&(pen ati&n &licit &r &btain in urance &n behal' &' an, in urance c&(pan, &r tran (it '&r a per &n &ther than hi( el' an applicati&n '&r a p&lic, &r c&ntract &' in urance t& &r 'r&( uch c&(pan, &r &''er &r a u(e t& act in the ne%&tiatin% &' uch in urance hall be an in urance a%ent .ithin the intent &' thi ecti&n an! hall thereb, bec&(e liable t& all the !utie * re<uire(ent * liabilitie an! penaltie t& .hich an in urance a%ent i ub2ect. Sec. 761. An, per &n .h& '&r an, c&(pen ati&n* c&((i i&n &r &ther thin% &' +alue act &r ai! in an, (anner in &licitin%* ne%&tiatin% &r pr&curin% the (a-in% &' an, in urance c&ntract &r in placin% ri - &r ta-in% &ut in urance* &n behal' &' an in ure!

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&ther than hi( el'* hall be an in urance br&-er .ithin the intent &' thi C&!e* an! hall thereb, bec&(e liable t& all the !utie * re<uire(ent * liabilitie an! penaltie t& .hich an in urance br&-er i ub2ect. Sec. 765. E+er, applicant '&r an in urance br&-er/ licen e hall 'ile .ith the applicati&n an! hall therea'ter (aintain in '&rce .hile & licen e!* a b&n! in 'a+&r &' the pe&ple &' the Republic &' the 1hilippine e4ecute! b, a c&(pan, auth&ri>e! t& bec&(e uret, up&n &''icial rec&%ni>ance * tipulati&n * b&n! an! un!erta-in% . The b&n! hall be in uch a(&unt a (a, be 'i4e! b, the C&((i i&ner* but in n& ca e le than &ne hun!re! th&u an! pe & * an! hall be c&n!iti&ne! up&n 'ull acc&untin% an! !ue pa,(ent t& the per &n entitle! theret& &' 'un! c&(in% int& the br&-er/ p& e i&n thr&u%h in urance tran acti&n un!er licen e. The b&n! hall re(ain in '&rce until relea e! b, the C&((i i&ner* &r until cancelle! b, the uret,. ?ith&ut pre2u!ice t& an, liabilit, pre+i&u l, incurre! thereun!er* the uret, (a, cancel the b&n! &n thirt, !a, a!+ance .ritten n&tice t& b&th the br&-er an! the C&((i i&ner. Up&n appr&+al &' the applicati&n* the applicant (u t al & 'ile t.& err&r an! &(i i&n #pr&'e i&nal liabilit, &r pr&'e i&nal in!e(nit,$ p&licie i ue! eparatel, b, t.& in urance c&(panie auth&ri>e! t& !& bu ine in the 1hilippine * ati 'act&r, t& the C&((i i&ner t& in!e(ni', the applicant a%ain t an, clai( &r clai( '&r breach &' !ut, a in urance br&-er .hich (a, be (a!e a%ain t hi( b, rea &n &' an, ne%li%ent act* err&r &r &(i i&n* .hene+er &r .here+er c&((itte! &r alle%e! t& ha+e been c&((itte!* &n the part &' the applicant &r an, per &n .h& ha been* i n&.* &r (a, herea'ter !urin% the ub i tence &' the p&licie be e(pl&,e! b, the ai! applicant in hi capacit, a in urance br&-er* pr&+i!e! that the 'ilin% &' an, clai( &r clai( un!er &ne &' uch p&licie hall preclu!e the 'ilin% &' the ai! clai( &r clai( un!er the &ther p&lic,. The ai! p&licie hall be in uch a(&unt a (a, be pre cribe! b, the In urance C&((i i&ner* !epen!in% up&n the i>e &r a(&unt &' the br&-in% bu ine &' the applicant* but in n& ca e hall the a(&unt &' each &' uch p&licie be le than 'i+e hun!re! th&u an! pe & . #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 767. The C&((i i&ner hall* in &r!er t& !eter(ine the c&(petence &' e+er, applicant t& ha+e the -in! &' licen e applie! '&r* re<uire uch applicant t& ub(it t& a .ritten e4a(inati&n an! t& pa the a(e t& the ati 'acti&n &' the C&((i i&ner. Such e4a(inati&n hall be hel! at uch ti(e an! place a the C&((i i&ner hall 'r&( ti(e t& ti(e !eter(ine. Sec. 768. An applicant '&r the .ritten e4a(inati&n (enti&ne! in the prece!in% ecti&n (u t be &' %&&! (&ral character an! (u t n&t ha+e been c&n+icte! &' an, cri(e in+&l+in% (&ral turpitu!e. @e (u t ati 'act&ril, h&. t& the C&((i i&ner that he ha been traine! in the -in! &' in urance c&nte(plate! in the licen e applie! '&r. Such e4a(inati&n (a, be .ai+e! i' it i h&.n t& the ati 'acti&n &' the C&((i i&ner that the applicant ha un!er%&ne e4ten i+e e!ucati&n an!D&r trainin% in in urance. Sec. 769. An applicati&n '&r the i uance &r rene.al &' a licen e t& act a an in urance a%ent &r in urance br&-er (a, be re'u e!* &r uch licen e* i' alrea!, i ue! &r rene.e!* hall be u pen!e! &r re+&-e! i' the C&((i i&ner 'in! that the applicant '&r* &r h&l!er &'* uch licen e" #a$ ha .ill'ull, +i&late! an, pr&+i i&n &' thi C&!e0 &r #b$ ha intenti&nall, (a!e a (aterial (i tate(ent in the applicati&n t& <uali', '&r uch licen e0 &r #c$ ha &btaine! &r atte(pte! t& &btain a licen e b, 'rau! &r (i repre entati&n0 &r #!$ ha been %uilt, &' 'rau!ulent &r !i h&ne t practice 0 &r #e$ ha (i appr&priate! &r c&n+erte! t& hi &.n u e &r

ille%all, .ithhel! (&ne, 'i!uciar, capacit,0

re<uire! t& be hel! in a

#'$ ha n&t !e(&n trate! tru t.&rthine an! c&(petence t& tran act bu ine a an in urance a%ent &r in urance br&-er in uch (anner a t& a'e%uar! the public0 &r #%$ ha (ateriall, (i repre ente! the ter( an! c&n!iti&n &' p&licie &r c&ntract &' in urance .hich he ee- t& ell &r ha &l!0 &r #h$ ha 'aile! t& pa the .ritten e4a(inati&n pre cribe!* i' n&t &ther.i e e4e(pt 'r&( ta-in% the a(e. In a!!iti&n t& the '&re%&in% cau e * n& licen e t& act a in urance a%ent &r in urance br&-er hall be rene.e! i' the h&l!er there&' ha n&t been acti+el, en%a%e! a uch a%ent &r br&-er in acc&r!ance .ith uch rule a the C&((i i&ner (a, pre cribe. #A a(en!e! b, 1re i!ential Decree N&. 1=18$. Sec. 76:. The pre(iu(* &r an, p&rti&n there&'* .hich an in urance a%ent &r in urance br&-er c&llect 'r&( an in ure! an! .hich i t& be pai! t& an in urance c&(pan, becau e &' the a u(pti&n &' liabilit, thr&u%h the i uance &' p&licie &r c&ntract &' in urance* hall be hel! b, the a%ent &r br&-er in a 'i!uciar, capacit, an! hall n&t be (i appr&priate! &r c&n+erte! t& hi &.n u e &r ille%all, .ithhel! b, the a%ent &r br&-er. An, in urance c&(pan, .hich !eli+er t& an in urance a%ent &r in urance br&-er a p&lic, &r c&ntract &' in urance hall be !ee(e! t& ha+e auth&ri>e! uch a%ent &r br&-er t& recei+e &n it behal' pa,(ent &' an, pre(iu( .hich i !ue &n uch p&lic, &r c&ntract &' in urance at the ti(e &' it i uance &r !eli+er, &r .hich bec&(e !ue there&n. Sec. 76;. An, pr&+i i&n &' e4i tin% la. t& the c&ntrar, n&t.ith tan!in%* n& per &n hall* .ithin the 1hilippine * ell &r &''er '&r ale a +ariable c&ntract &r !& &r per'&r( an, act &r thin% in the ale* ne%&tiati&n* (a-in% &r c&n u((atin% &' an, +ariable c&ntract &ther than '&r hi( el' unle uch per &n hall ha+e a +ali! an! current licen e 'r&( the C&((i i&ner auth&ri>in% uch per &n t& act a a +ariable c&ntract a%ent. N& uch licen e hall be i ue! unle an! until the C&((i i&ner i ati 'ie!* a'ter e4a(inati&n that uch per &n i b, trainin%* -n&.le!%e* abilit, an! character <uali'ie! t& act a uch a%ent. An, uch licen e (a, be .ith!ra.n an! cancelle! b, the C&((i i&ner a'ter n&tice an! hearin%* i' he hall 'in! that the h&l!er there&' !&e n&t then ha+e the <uali'icati&n re<uire! '&r the i uance &' uch licen e. Sec. 76=. It hall be unla.'ul '&r an, per &n* c&(pan, &r c&rp&rati&n in the 1hilippine t& act a %eneral a%ent &' an, in urance c&(pan, unle he i e(p&.ere! b, a .ritten p&.er &' att&rne, !ul, e4ecute! b, uch in urance c&(pan,* an! re%i tere! .ith the C&((i i&ner t& recei+e n&tice * u((&n an! le%al pr&ce e '&r an! in behal' &' the in urance c&(pan, c&ncerne! in c&nnecti&n .ith acti&n &r &ther le%al pr&cee!in% a%ain t ai! in urance c&(pan,. It hall be the !ut, &' ai! %eneral a%ent t& n&ti', the C&((i i&ner &' hi p& t &''ice a!!re in the 1hilippine * &r an, chan%e there&'. N&tice * u((&n * &r pr&ce e &' an, -in! ent b, re%i tere! (ail t& the la t re%i tere! a!!re &' uch %eneral a%ent &' the c&(pan, c&ncerne! &r t& the C&((i i&ner hall be u''icient er+ice an! !ee(e! a i' er+e! &n the in urance c&(pan, it el'. Sec. 769. E4cept a &ther.i e pr&+i!e! b, la. &r treat,* it hall be unla.'ul '&r an, per &n* partner hip* a &ciati&n &r c&rp&rati&n in the 1hilippine * '&r hi( el' &r it el'* &r '&r &(e &ther per &n* partner hip* a &ciati&n &r c&rp&rati&n* either t& pr&cure* recei+e &r '&r.ar! applicati&n &' in urance in* &r t& i ue &r t& !eli+er &r accept p&licie &r c&ntract &' in urance &' &r '&r* an, in urance c&(pan, &r c&(panie n&t auth&ri>e! t& tran act bu ine in the 1hilippine * c&+erin% ri - * li'e &r n&nli'e* ituate! in the 1hilippine 0 an! an, uch per &n* partner hip* a &ciati&n &r c&rp&rati&n +i&latin% the pr&+i i&n &' thi ecti&n hall be !ee(e! %uilt, &' a penal &''en e* an! up&n

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c&n+icti&n there&'* hall '&r each uch &''en e be puni he! b, a 'ine &' ten th&u an! pe & * &r i(pri &n(ent &' i4 (&nth * &r b&th at the !i creti&n &' the c&urt" Provided, That the pr&+i i&n &' thi ecti&n hall n&t appl, t& rein urance. Title REINSURANCE 3ROFERS 5

3&ar! &' In+e t(ent a re<uire! un!er Secti&n 8 &' Republic Act N&. 9899* i' uch '&rei%n in urer &r br&-er i n&t &ther.i e e4e(pt 'r&( uch re<uire(ent. Sec. 71:. It hall be the !ut, &' uch re i!ent a%ent t& n&ti', i((e!iatel, the C&((i i&ner &' an, chan%e &' hi &''ice a!!re . Sec. 71;. A certi'icate &' re%i trati&n i ue! t& a re i!ent a%ent hall e4pire &n the thirtieth !a, &' Eune &' the ,ear '&ll&.in% it i uance unle it i rene.e!. The C&((i i&ner (a,* a'ter !ue n&tice an! hearin%* recall &r cancel the certi'icate &' re%i trati&n i ue! t& a re i!ent a%ent '&r +i&lati&n &' an, e4i tin% la.* rule &r re%ulati&n* &r an, pr&+i i&n &' thi C&!e. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Title NON-LIFE COM1ANA UNDER?RITER 8

Sec. 716. E4cept a pr&+i!e! in the ne4t uccee!in% title* n& per &n hall act a rein urance br&-er in the 1hilippine unle he i auth&ri>e! a uch b, the C&((i i&ner. A rein urance br&-er i &ne .h&* '&r c&(pen ati&n* n&t bein% a !ul, auth&ri>e! a%ent* e(pl&,ee &r &''icer &' an in urer in .hich an, rein urance i e''ecte!* act &r ai! in an, (anner in ne%&tiatin% c&ntract &' rein urance* &r placin% ri - &' e''ectin% rein urance* '&r an, in urance c&(pan, auth&ri>e! t& !& bu ine in the 1hilippine . Sec. 711. Up&n applicati&n an! pa,(ent &' the c&rre p&n!in% 'ee hereina'ter pre cribe!* an! the 'ilin% &' t.& err&r an! &(i i&n #pr&'e i&nal liabilit, &r pr&'e i&nal in!e(nit,$ p&licie hereina'ter !e cribe!* a per &n (a,* i' '&un! <uali'ie!* be i ue! a licen e t& act a rein urance br&-er b, the C&((i i&ner. N& uch licen e hall be +ali! a'ter the thirtieth !a, &' Eune &' the ,ear '&ll&.in% it i uance unle it i rene.e!. #A a(en!e! b, 1re i!ential Decree N&. 1899$. The err&r an! &(i i&n #pr&'e i&nal liabilit, &r pr&'e i&nal in!e(nit,$ p&licie (enti&ne! ab&+e hall in!e(ni', the applicant a%ain t an, clai( &r clai( '&r breach &' !ut, a rein urance br&-er .hich (a, be (a!e a%ain t hi( b, rea &n &' an, ne%li%ent act* err&r &r &(i i&n* .hene+er &r .here+er c&((itte! &r alle%e! t& ha+e been c&((itte!* &n the part &' the applicant &r an, per &n .h& ha been* i n&.* &r (a, herea'ter !urin% the ub i tence &' the p&licie be e(pl&,e! b, the ai! applicant in hi capacit, a rein urance br&-er0 1r&+i!e!* That the 'ilin% &' an, clai( &r clai( un!er &ne &' uch p&licie hall preclu!e the 'ilin% &' the ai! clai( &r clai( un!er the &ther p&lic,. The ai! p&licie hall be i ue! eparatel, b, t.& in urance c&(panie auth&ri>e! t& !& bu ine in the 1hilippine an! hall be in uch a(&unt a (a, be pre cribe! b, the In urance C&((i i&ner* !epen!in% up&n the i>e &r a(&unt &' the br&-in% bu ine &' the applicant* but in n& ca e hall the a(&unt &' each &' uch p&licie be le than 'i+e hun!re! th&u an! pe & . #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 715. The C&((i i&ner (a, recall* u pen! &r re+&-e the licen e %rante! t& a rein urance br&-er '&r +i&lati&n &' an, e4i tin% la.* rule an! re%ulati&n* &r an, pr&+i i&n &' thi C&!e a'ter !ue n&tice an! hearin%. Title RESIDENT ABENTS 7

Sec. 71=. N& per &n hall act* an! n& c&(pan, hall e(pl&, an, per &n* a n&n-li'e c&(pan, un!er.riter* .h& e !ut, an! re p&n ibilit, it hall be t& elect* e+aluate an! accept ri - '&r* an! t& !eter(ine the ter( an! c&n!iti&n * inclu!in% th& e pertainin% t& a(&unt &' retenti&n * un!er .hich uch ri - are t& be accepte! b, the c&(pan,* unle uch un!er.riter i re%i tere! a uch .ith the C&((i i&ner. Sec. 719. E+er, n&n-li'e in urance c&(pan, !&in% bu ine in the 1hilippine (u t (aintain at all ti(e a re%i ter &' ri accepte! an! a clai( re%i ter '&r each line &' ri - en%a%e! in b, uch n&n-li'e in urance c&(pan, .ith uch entrie therein a are n&. &r a (a, herea'ter be re<uire! b, the C&((i i&ner* an! it hall be the re p&n ibilit, &' the un!er.riter &n the particular line &r ri - in+&l+e! t& ee t& it that the ai! re%i ter are .ell (aintaine! an! -ept* an! that all entrie therein are pr&perl, an! c&rrectl, rec&r!e!. Such re%i ter hall be &pen t& in pecti&n an! e4a(inati&n &' !ul, auth&ri>e! repre entati+e &' the C&((i i&ner at all ti(e !urin% bu ine h&ur . Sec. 756. N& per &n hall be re%i tere! .ith the C&((i i&ner* unle uch per &n hall be at lea t t.ent,-&ne ,ear &' a%e &n the !ate &' uch re%i trati&n0 a re i!ent &' the 1hilippine 0 &' %&&! (&ral character an! .ith n& c&n+icti&n &' an, cri(e in+&l+in% (&ral turpitu!e0 ha ha! at the ti(e uch re%i trati&n i (a!e at lea t t.& ,ear &' un!er.ritin% .&r- in the particular line &r ri - in+&l+e!0 an! ha pa e! uch <uali',in% .ritten e4a(inati&n that the C&((i i&ner hall c&n!uct at uch ti(e an! in uch place a he (a, !eci!e t& h&l! '&r applicant !e irin% t& act a un!er.riter . Such e4a(inati&n hall n&t be re<uire! &' an, per &n .h& ha er+e! a n&n-li'e c&(pan, un!er.riter '&r a peri&! &' at lea t 'i+e ,ear * i' the C&((i i&ner i ati 'ie! &' the applicant/ c&(petence a h&.n b, the re ult &' hi un!er.ritin% .&r- in the n&n-li'e in urance c&(pan, &r c&(panie that e(pl&,e! hi( in that capacit,. The (ini(u( un!er.ritin% e4perience herein re<uire! (a, be re!uce! &r .ai+e! i' it i h&.n t& the ati 'acti&n &' the C&((i i&ner that the n&n-li'e c&(pan, un!er.riter ha un!er%&ne e4ten i+e e!ucati&n an!D&r trainin% in in urance. Sec. 751. An, applicant .h& (i repre ent &r &(it an, (aterial 'act in hi applicati&n '&r re%i trati&n a a n&n-li'e c&(pan, un!er.riter* &r c&((it an, !i h&ne t act in ta-in% &r in c&nnecti&n .ith the <uali',in% .ritten e4a(inati&n '&r un!er.riter * hall be barre! 'r&( bein% re%i tere! a uch n&nli'e c&(pan, un!er.riter an!* i' alrea!, re%i tere!* hi re%i trati&n hall be cancelle! an! the certi'icate &' re%i trati&n i ue! in hi 'a+&r hall be recalle! i((e!iatel, b, the C&((i i&ner. In the e+ent that the certi'icate &' auth&rit, &' a n&n-li'e in urance c&(pan, t& tran act bu ine i u pen!e! &r re+&-e! !ue t& bu ine 'ailure ari in% lar%el, 'r&( the i(pru!ent an! in2u!ici&u acceptance &' ri - b, the un!er.riter c&ncerne!* the re%i trati&n &' uch un!er.riter hall li-e.i e be cancelle! an! hi certi'icate &' re%i trati&n hall be recalle! b,

Sec. 717. N& per &n hall act a re i!ent a%ent* a hereina'ter !e'ine!* unle he i re%i tere! a uch .ith the C&((i i&ner. Sec. 718. The ter( "resident agent"* a u e! in thi title* i &ne !ul, app&inte! b, a '&rei%n in urer &r br&-er n&t auth&ri>e! t& !& bu ine in the 1hilippine t& recei+e in it behal' n&tice * u((&n an! le%al pr&ce e in c&nnecti&n .ith acti&n &r &ther le%al pr&cee!in% a%ain t uch '&rei%n in urer &r br&-er. Sec. 719. The applicati&n '&r a certi'icate &' re%i trati&n a re i!ent a%ent 'ile! .ith the C&((i i&ner (u t be acc&(panie! .ith" #a$ a c&p, &' the p&.er &' att&rne,* !ul, n&tari>e! an! authenticate! b, the 1hilippine C&n ul in the place .here uch '&rei%n in urer &r br&-er i !&(icile!* e(p&.erin% the applicant t& act a re i!ent a%ent an! t& recei+e n&tice * u((&n an! le%al pr&ce e '&r an! in behal' &' uch '&rei%n in urer &r br&-er in c&nnecti&n .ith an, acti&n &r le%al pr&cee!in% a%ain t uch '&rei%n in urer &r br&-er0 an! #b$ a c&p, &' the c&rre p&n!in% certi'icate i ue! b, the

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the C&((i i&ner* an! n& i(ilar certi'icate hall therea'ter be i ue! in hi 'a+&r. Sec. 755. N& certi'icate &' re%i trati&n i ue! t& an un!er.riter hall be +ali! a'ter the thirtieth !a, &' Eune &' the ,ear '&ll&.in% it i uance unle it i rene.e!. The C&((i i&ner (a,* a'ter !ue n&tice an! hearin%* al & u pen! &r cancel uch certi'icate '&r +i&lati&n &' e4i tin% la. * rule an! re%ulati&n &r &' an, pr&+i i&n &' thi C&!e. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Title ADEUSTERS 9

a!2u ter" #1$ ha +i&late! an, pr&+i i&n &' thi C&!e an! &' the circular * rulin% an! in tructi&n &' the C&((i i&ner &r ha +i&late! an, la. in the c&ur e &' hi !ealin% a an a!2u ter0 &r #5$ ha (a!e a (aterial (i tate(ent in the applicati&n '&r uch licen e0 &r #7$ ha been %uilt, &' 'rau!ulent &r !i h&ne t practice 0 &r #8$ ha !e(&n trate! hi inc&(petence untru t.&rthine t& act a a!2u ter0 &r #9$ ha (a!e patentl, un2u t +aluati&n &' l& 0 &r #:$ ha 'aile! t& (a-e a rep&rt &' the a!2u t(ent he pr&p& e! .ithin i4t, !a, 'r&( the !ate &' the 'ilin% &' the clai( b, the in ure! .ith the in urer* unle pre+ente! & t& !& b, rea &n be,&n! hi c&ntr&l0 &r #;$ ha re'u e! t& all&. an e4a(inati&n int& hi a''air &r (eth&! &' !&in% bu ine a hereina'ter pr&+i!e!. Sec. 771. E+er, a!2u ter hall ub(it t& the C&((i i&ner a <uarterl, rep&rt &' all l& e .hich are the ub2ect &' a!2u t(ent e''ecte! b, hi( !urin% each (&nth in the '&r( pre cribe! b, the C&((i i&ner. The rep&rt hall be 'ile! .ithin &ne (&nth a'ter the en! &' each <uarter. Sec. 775. E+er, a!2u ter hall -eep hi &r it b&&- * rec&r! * rep&rt * acc&unt * an! +&ucher in uch (anner that the C&((i i&ner &r hi !ul, auth&ri>e! repre entati+e (a, rea!il, +eri', the <uarterl, rep&rt &' the ai! a!2u ter an! a certain .hether the ai! a!2u ter ha c&(plie! .ith the pr&+i i&n &' la. &r re%ulati&n &bli%at&r, up&n hi( &r .hether the (eth&! &' !&in% bu ine &' the ai! a!2u ter ha been 'air* 2u t an! h&ne t. Sec. 777. The C&((i i&ner hall* at lea t &nce a ,ear an! .hene+er he c&n i!er the public intere t & !e(an! * cau e an e4a(inati&n t& be (a!e int& the a''air an! (eth&! &' !&in% bu ine &' e+er, a!2u ter. Sec. 778. An, +i&lati&n &' an, pr&+i i&n &' thi title hall be puni he! b, a 'ine &' n&t (&re than ten th&u an! pe & * &r b, i(pri &n(ent in the !i creti&n &' the c&urt0 1r&+i!e!* That* in ca e &' a partner hip* a &ciati&n &r c&rp&rati&n* the ai! penalt, hall be i(p& e! up&n the partner* pre i!ent* (ana%er* (ana%in% !irect&r* !irect&r &r per &n in char%e &' it bu ine &r re p&n ible '&r the +i&lati&n. Title ACTUARIES : &r

Sec. 757. N& per &n* partner hip* a &ciati&n* &r c&rp&rati&n hall act a an a!2u ter* a hereina'ter !e'ine!* unle auth&ri>e! & t& act b, +irtue &' a licen e i ue! &r rene.e! b, the C&((i i&ner pur uant t& the pr&+i i&n &' thi C&!e" Provided, That in the ca e &' a natural per &n* he (u t be a Filipin& citi>en an! in the ca e &' a partner hip* a &ciati&n &r c&rp&rati&n* at lea t i4t, per centu( &' it capital (u t be &.ne! b, citi>en &' the 1hilippine . Sec. 758. An a!2u ter (a, be an in!epen!ent a!2u ter &r a public a!2u ter. The ter( "independent ad&uster" (ean an, per &n* partner hip* a &ciati&n &r c&rp&rati&n .hich* '&r (&ne,* c&((i i&n &r an, &ther thin% &' +alue* act '&r &r &n behal' &' an in urer in the a!2u tin% &' clai( ari in% un!er in urance c&ntract &r p&licie i ue! b, uch in urer. The ter( "pu lic ad&uster" (ean an, per &n* partner hip* a &ciati&n &r c&rp&rati&n .hich* '&r (&ne,* c&((i i&n &r an, &ther thin% &' +alue* act &n behal' &' an in ure! in ne%&tiatin% '&r* &r e''ectin%* the ettle(ent &' a clai( &r clai( &' the ai! in ure! ari in% un!er in urance c&ntract &r p&licie * &r .hich a!+erti e '&r &r &licit e(pl&,(ent a an a!2u ter &' uch clai( . Sec. 759. F&r e+er, line &' in urance clai( a!2u t(ent* a!2u ter hall be licen e! either a in!epen!ent a!2u ter &r a public a!2u ter . N& a!2u ter hall act &n behal' &' an in urer unle ai! a!2u ter i licen e! a an in!epen!ent a!2u ter0 an! n& a!2u ter hall act &n behal' &' an in ure! unle ai! a!2u ter i licen e! a a public a!2u ter" Provided, however, That .hen a 'ir( &r per &n ha been licen e! a public a!2u ter* he hall n&t be %rante! an&ther licen e a in!epen!ent a!2u ter an! vice versa. N& licen e* h&.e+er* hall be re<uire! &' an, c&(pan, a!2u ter .h& i a alarie! e(pl&,ee &' an in urance c&(pan, '&r the a!2u t(ent &' clai( 'ile! un!er p&licie i ue! b, uch in urance c&(pan,. Sec. 75:. Such licen e &r an, rene.al there&' (a, be i ue! b, the C&((i i&ner up&n .ritten applicati&n 'ile! b, the per &n intere te! &n the '&r( &r '&r( pre cribe! b, the C&((i i&ner* .hich hall c&ntain uch in'&r(ati&n a he (a, re<uire* an! up&n pa,(ent &' the c&rre p&n!in% 'ee hereina'ter pre cribe!. Sec. 75;. The C&((i i&ner hall c&n!uct* at uch ti(e * an! in uch place a he (a, !eci!e t& h&l!* .ritten e4a(inati&n t& !eter(ine the c&(petence an! abilit, &' applicant !e irin% t& act a a!2u ter &' in urance clai( . Sec. 75=. E+er, a!2u ter/ licen e i ue! hereun!er hall be +ali! until a'ter the thirtieth !a, &' Eune &' the ,ear '&ll&.in% the i uance &' uch licen e unle it i rene.e!. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 759. N&thin% c&ntaine! in thi title hall appl, t& an, !ul, licen e! att&rne,-at-la. .h& act &r ai! in a!2u tin% in urance clai( a an inci!ent t& the practice &' hi pr&'e i&n an! .h& !&e n&t a!+erti e hi( el' a an a!2u ter. Sec. 776. The C&((i i&ner (a, u pen! &r re+&-e an, a!2u ter/ licen e i'* a'ter %i+in% n&tice an! hearin% t& the a!2u ter c&ncerne!* the C&((i i&ner 'in! that the ai!

Sec. 779. N& li'e in urance c&(pan, hall be licen e! t& !& bu ine in the 1hilippine n&r hall an, li'e in urance c&(pan, !&in% bu ine in the 1hilippine be all&.e! t& c&ntinue !&in% uch bu ine unle the, hall en%a%e the er+ice &' an actuar, !ul, accre!ite! .ith the C&((i i&ner .h& hall* !urin% hi tenure &' &''ice* be !irectl, re p&n ible '&r the !irecti&n an! uper+i i&n &' all actuarial .&r- c&nnecte! .ith &r that (a, be in+&l+e! in the bu ine &' the in urance c&(pan,. Sec. 77:. An, per &n (a, be &''iciall, accre!ite! b, the C&((i i&ner t& act a an, actuar, in an, li'e in urance c&(pan, &r in an, (utual bene'it a &ciati&n auth&ri>e! t& !& bu ine in the 1hilippine up&n applicati&n there'&r7 an! the pa,(ent &' the c&rre p&n!in% 'ee hereina'ter pre cribe!"Provided, That" #1$ he i a 'ell&. &' %&&! tan!in% &' the Actuarial S&ciet, &' the 1hilippine at the ti(e &' hi app&int(ent an! re(ain in uch %&&! tan!in% !urin% the tenure &' hi en%a%e(ent0 &r #5$ in the ca e &' &ne .h& i n&t a 'ell&. &' the Actuarial S&ciet, &' the 1hilippine * he (eet all the re<uire(ent &' the ai! S&ciet, '&r accre!itati&n a a 'ell&. &' the S&ciet,* an! ha been %i+en per(i i&n b, the pertinent %&+ern(ent auth&ritie in the 1hilippine t& ren!er er+ice in the 1hilippine * in the e+ent that he i n&t a citi>en &' the 1hilippine .

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N& certi'icate &' re%i trati&n i ue! un!er thi title hall be +ali! a'ter the thirtieth !a, &' Eune &' the ,ear '&ll&.in% it i uance unle it i rene.e!.#A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 77;. The '&ll&.in% !&cu(ent * .hich are 'r&( ti(e t& ti(e ub(itte! t& the C&((i i&ner b, a li'e in urance c&(pan, auth&ri>e! t& !& bu ine in the 1hilippine * hall be !ul, certi'ie! b, an accre!ite! actuar, e(pl&,e! b, uch c&(pan," 1. 1&lic, re er+e an! net !ue an! !e'erre! pre(iu( . 5. State(ent &' ba e an! net pre(iu( * l&a!in% '&r %r& pre(iu( * an! &n n&n-'&r'eiture +alue an! re er+e * .hen appl,in% '&r appr&+al &' %r& pre(iu( * re er+e an! n&n-'&r'eiture +alue . 7. 1&licie &' in urance un!er an, plan ub(itte! t& the C&((i i&ner a re<uire! b, la.. 8. Annual tate(ent an! +aluati&n rep&rt the C&((i i&ner a re<uire! b, la.. ub(itte! t&

licen e. N& licen e i ue! t& a ratin% &r%ani>ati&n hall be +ali! a'ter the thirtieth !a, &' Eune &' the ,ear '&ll&.in% it i uance unle it i rene.e!. N& ratin% &r%ani>ati&n .hich n&. e4i t an! i n&t licen e! pur uant t& thi ecti&n hall c&ntinue rate(a-in% &perati&n until it hall ha+e &btaine! 'r&( the C&((i i&ner a licen e .hich he (a, i ue i' ati 'ie! that uch &r%ani>ati&n i c&(pl,in% .ith the pr&+i i&n &' thi title. E+er, ratin% &r%ani>ati&n hall n&ti', the C&((i i&ner pr&(ptl, &' e+er, chan%e in #1$ it c&n tituti&n* it article &' a%ree(ent &r a &ciati&n &r it certi'icate &' inc&rp&rati&n* an! it b,-la. rule an! re%ulati&n %&+ernin% the c&n!uct &' it bu ine * an! #5$ it li t &' (e(ber an! ub criber . A "mem er" (ean an in urer .h& participate in &r i entitle! t& participate in the (ana%e(ent &' a ratin% &r%ani>ati&n. A "su scri er" (ean an in urer .hich i 'urni he! at it re<ue t .ith rate an! ratin% (anual b, a ratin% &r%ani>ati&n &' .hich it i n&t a (e(ber. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 785. Each ratin% &r%ani>ati&n hall 'urni h it ratin% er+ice .ith&ut !i cri(inati&n t& all &' it (e(ber an! ub criber * an! hall* ub2ect t& rea &nable rule an! re%ulati&n * per(it an, in urance c&(pan, !&in% bu ine in the 1hilippine * n&t a!(itte! t& (e(ber hip* t& bec&(e a ub criber t& it ratin% er+ice '&r an, -in! &' in urance &r ub!i+i i&n there&'. N&tice &' pr&p& e! chan%e in uch rule an! re%ulati&n hall be %i+en t& ub criber . The rea &nablene &' an, rule &r re%ulati&n in it applicati&n t& ub criber * &r the re'u al &' an, ratin% &r%ani>ati&n t& a!(it an in urance c&(pan, a a ub criber* hall* at the re<ue t &' an, ub criber &r an, uch in urance c&(pan,* be re+ie.e! b, the C&((i i&ner at a hearin% hel! up&n at lea t ten !a, / .ritten n&tice t& uch ratin% &r%ani>ati&n an! t& uch ub criber &r in urance c&(pan,. The C&((i i&ner (a,* a'ter uch hearin%* i ue an appr&priate &r!er. Sec. 787. N& ratin% &r%ani>ati&n &r an, &ther a &ciati&n hall re'u e t& !& bu ine .ith* &r pr&hibit &r pre+ent the pa,(ent &' c&((i i&n t&* an, per &n licen e! a an in urance br&-er pur uant t& the pr&+i i&n &' title &ne &' thi chapter. Sec. 788. Ratin% &r%ani>ati&n hall be ub2ect t& e4a(inati&n b, the C&((i i&ner* a &'ten a he (a, !ee( uch e4a(inati&n e4pe!ient* pur uant t& the pr&+i i&n &' thi C&!e applicable t& the e4a(inati&n &' in urance c&(panie . @e hall cau e uch an e4a(inati&n &' each ratin% &r%ani>ati&n t& be (a!e at lea t &nce in e+er, 'i+e ,ear . Sec. 789. The C&((i i&ner (a, u pen! &r re+&-e the licen e &' an, ratin% &r%ani>ati&n .hich 'ail t& c&(pl, .ith hi &r!er .ithin the ti(e li(ite! b, uch &r!er* &r an, e4ten i&n there&' .hich he (a, %rant. The C&((i i&ner (a, !eter(ine .hen a u pen i&n &' licen e hall bec&(e e''ecti+e an! it hall re(ain in e''ect '&r the peri&! 'i4e! b, hi(* unle he (&!i'ie &r re cin! uch u pen i&n. Sec. 78:. An, ratin% &r%ani>ati&n (a, ub cribe '&r &r purcha e actuarial* technical &r &ther er+ice * an! uch er+ice hall be a+ailable t& all (e(ber an! ub criber .ith&ut !i cri(inati&n. Sec. 78;. An, ratin% &r%ani>ati&n (a, pr&+i!e '&r the e4a(inati&n &' p&licie * !ail, rep&rt * bin!er * rene.al certi'icate * en!&r e(ent &r &ther e+i!ence &' in urance* &r the cancellati&n there&'* an! (a, (a-e rea &nable rule %&+ernin% their ub(i i&n. Such rule hall c&ntain a pr&+i i&n that in the e+ent an in urance c&(pan, !&e n&t .ithin i4t, !a, 'urni h ati 'act&r, e+i!ence t& the ratin% &r%ani>ati&n &' the c&rrecti&n &' an, err&r &r &(i i&n pre+i&u l, calle! t& it attenti&n b, the ratin% &r%ani>ati&n* it hall be the !ut, &' the ratin% &r%ani>ati&n t& n&ti', the C&((i i&ner there&'. All in'&r(ati&n & ub(itte! '&r e4a(inati&n hall be c&n'i!ential. Sec. 78=. C&&perati&n a(&n% ratin% &r%ani>ati&n &r a(&n% ratin% &r%ani>ati&n an! in urer in rate (a-in% &r in &ther (atter .ithin the c&pe &' thi title i hereb, auth&ri>e!* pr&+i!e! the 'ilin% re ultin% 'r&( uch c&&perati&n are ub2ect

9. Financial pr&2ecti&n h&.in% the pr&bable inc&(e an! &ut%& an! re er+e re<uire(ent * enu(eratin% the actuarial a u(pti&n an! ba e &' pr&2ecti&n . :. )aluati&n &' annuit, 'un! &r retire(ent plan . An, li'e in urance c&(pan, auth&ri>e! t& !& bu ine in the 1hilippine (a, e(pl&, an, per &n .h& i n&t &''iciall, accre!ite! un!er either &' the <uali'icati&n '&r an, -in! &' actuarial .&r-* pr&+i!e! that he hall n&t* at an, ti(e* ha+e the auth&rit, t& certi', t& the c&rrectne &' the '&re%&in% !&cu(ent . Sec. 77=. N& accre!ite! actuar, hall er+e (&re than &ne client &r e(pl&,er at the a(e ti(e. @&.e+er* &ne alrea!, in the e(pl&, &' an in urance c&(pan, (a, be all&.e! b, the C&((i i&ner t& er+e a (utual bene'it a &ciati&n &r an, &ther in urance c&(pan,* pr&+i!e! the '&ll&.in% c&n!iti&n are 'ir t c&(plie! .ith" #a$ that the re<ue t t& en%a%e hi er+ice b, the &ther e(pl&,er i in .ritin%0 #b$ that hi pre ent e(pl&,er ac<uie ce! t& it in .ritin%0 an! #c$ that he 'urni he the C&((i i&ner .ith c&pie &' ai! re<ue t an! ac<uie cence. Title RATINB ORBANICATION AND RATE MAFINB ;

Sec. 779. E+er, &r%ani>ati&n .hich n&. e4i t &r .hich (a, herea'ter be '&r(e! '&r the purp& e &' (a-in% rate t& be u e! b, (&re than &ne in urance c&(pan, auth&ri>e! t& !& bu ine in the 1hilippine hall be -n&.n a a "rating organi*ation#" The ter( "rate" a u e! in thi title hall %enerall, (ean the rati& &' the pre(iu( t& the a(&unt in ure! an! hall inclu!e* a the c&nte4t (a, re<uire* either the c&n i!erati&n t& be pai! &r char%e! '&r in urance c&ntract * inclu!in% uret, b&n! * &r the ele(ent an! 'act&r '&r(in% the ba i '&r the !eter(inati&n &r applicati&n &' the a(e* &r b&th. Sec. 786. E+er, ratin% &r%ani>ati&n .hich n&. e4i t &r .hich (a, herea'ter be '&r(e! hall be ub2ect t& the pr&+i i&n &' thi title. Sec. 781. N& ratin% &r%ani>ati&n herea'ter '&r(e! hall c&((ence rate-(a-in% &perati&n until it hall ha+e &btaine! a licen e 'r&( the C&((i i&ner. 3e'&re &btainin% uch licen e* uch ratin% &r%ani>ati&n hall 'ile .ith the C&((i i&ner a n&tice &' it intenti&n t& c&((ence rate-(a-in% &perati&n * a c&p, &' it c&n tituti&n* article &' a%ree(ent &r a &ciati&n* &r &' inc&rp&rati&n* an! it b,-la. * a li t &' in urance c&(panie that ha+e a%ree! t& bec&(e (e(ber &r ub criber * an! uch &ther in'&r(ati&n c&ncernin% uch ratin% &r%ani>ati&n an! it &perati&n a (a, be re<uire! b, the C&((i i&ner. I' the C&((i i&ner 'in! that the &r%ani>ati&n ha c&(plie! .ith the pr&+i i&n &' la. an! that it ha a u''icient nu(ber &' (e(ber &r ub criber an! i &ther.i e <uali'ie! t& 'uncti&n a a ratin% &r%ani>ati&n* the C&((i i&ner (a, i ue a licen e t& uch ratin% &r%ani>ati&n auth&ri>in% it t& (a-e rate '&r the -in! &' in urance &r ub!i+i i&n there&' a (a, be peci'ie! in uch

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t& all pr&+i i&n &' thi title .hich are applicable t& 'ilin% %enerall,. The C&((i i&ner (a, re+ie. uch c&&perati+e acti+itie an! practice an! i' he 'in! that an, uch acti+it, &r practice i un'air &r unrea &nable &r &ther.i e inc&n i tent .ith the pr&+i i&n &' thi title* he (a, i ue a .ritten &r!er peci',in% in .hat re pect uch acti+it, &r practice i un'air &r unrea &nable &r &ther.i e inc&n i tent .ith the pr&+i i&n &' thi title* an! re<uirin% the !i c&ntinuance &' uch acti+it, &r practice. Sec. 789. E+er, ratin% &r%ani>ati&n an! e+er, in urance c&(pan, .hich (a-e an! 'ile it &.n rate * hall (a-e rate '&r all ri - rate! b, uch &r%ani>ati&n &r in urance c&(pan, in acc&r!ance .ith the '&ll&.in% pr&+i i&n " #a$ 3a ic cla i'icati&n* (anual* (ini(u(* cla * &r che!ule rate &r ratin% plan * hall be (a!e an! a!&pte! '&r all uch ri - . An, !eparture 'r&( uch rate hall be in acc&r!ance .ith che!ule * ratin% plan an! rule 'ile! .ith the C&((i i&ner0 #b$ Rate hall be rea &nable an! a!e<uate '&r the cla &' ri - t& .hich the, appl,0 #c$ N& rate hall !i cri(inate un'airl, bet.een ri in+&l+in% e entiall, the a(e ha>ar! an! e4pen e ele(ent &r bet.een ri - in the applicati&n &' li-e char%e an! cre!it 0 #!$ C&n i!erati&n hall be %i+en t& the pa t an! pr& pecti+e l& e4perience* inclu!in% the c&n'la%rati&n an! cata tr&phe ha>ar! * i' an,* t& all 'act&r rea &nabl, attributable t& the cla &' ri - * t& a rea &nable pr&'it* t& c&((i i&n pai! !urin% the (& t recent annual peri&! an! t& pa t an! pr& pecti+e &ther e4pen e . In ca e &' 'ire in urance rate * c&n i!erati&n hall be %i+en t& the e4perience &' the 'ire in urance bu ine !urin% a peri&! &' n&t le than 'i+e ,ear ne4t prece!in% the ,ear in .hich the re+ie. i (a!e0 #e$ Ri - (a, be %r&upe! b, cla i'icati&n '&r the e tabli h(ent &' rate an! (ini(u( pre(iu( . Cla i'icati&n rate (a, be (&!i'ie! t& pr&!uce rate '&r in!i+i!ual ri - in acc&r!ance .ith ratin% plan .hich e tabli h tan!ar! '&r (ea urin% +ariati&n in ha>ar! &r e4pen e pr&+i i&n * &r b&th. Such tan!ar! (a, (ea ure an, !i''erence a(&n% ri - that can be !e(&n trate! t& ha+e a pr&bable e''ect up&n l& e &r e4pen e . Sec. 796. N& ratin% &r%ani>ati&n an! n& in urance c&(pan, .hich (a-e an! 'ile it &.n rate hall (a-e &r pr&(ul%ate an, rate &r che!ule &' rate .hich i t& be applie! t& an, 'ire ri - &n the c&n!iti&n that the .h&le a(&unt &' in urance &n an, ri - &r an, peci'ie! part there&' hall be place! .ith the (e(ber &' &r ub criber t& uch ratin% &r%ani>ati&n &r .ith uch in urer. Sec. 791. E+er, in urance c&(pan, !&in% bu ine in the 1hilippine hall annuall, 'ile .ith the ratin% &r%ani>ati&n &' .hich it i a (e(ber &r ub criber* &r .ith uch &ther a%enc, a the C&((i i&ner (a, !e i%nate* a tati tical rep&rt h&.in% a cla i'icati&n che!ule &' it pre(iu( an! l& e &n all -in! &r t,pe &' in urance bu ine t& .hich ecti&n three hun!re! '&rt,-nine i applicable* an! uch &ther in'&r(ati&n a the C&((i i&ner (a, !ee( nece ar, &r e4pe!ient '&r the a!(ini trati&n &' the pr&+i i&n &' thi title. Sec. 795. E+er, n&n-li'e ratin% &r%ani>ati&n an! e+er, n&n-li'e in urance c&(pan, !&in% bu ine in the 1hilippine hall 'ile .ith the C&((i i&ner* e4cept a t& ri - .hich b, %eneral cu t&( &' the bu ine are n&t .ritten acc&r!in% t& (anual rate &r ratin% plan * e+er, rate (anual* che!ule &' rate * cla i'icati&n &' ri - * ratin% plan* an! e+er, &ther ratin% rule an! e+er, (&!i'icati&n &' an, &' the '&re%&in% .hich it pr&p& e t& u e. An in urance c&(pan, (a, ati ', it &bli%ati&n t& (a-e uch 'ilin% '&r an, -in! &r t,pe &' in urance b, bec&(in% a (e(ber &' &r ub criber t& a ratin% &r%ani>ati&n .hich (a-e

uch 'ilin% '&r uch -in! &r t,pe &' in urance* an! b, auth&ri>in% the C&((i i&ner t& accept uch 'ilin% &' the ratin% &r%ani>ati&n &n behal' &' uch in urance c&(pan,. Sec. 797. E+er, (anual &r che!ule &' rate an! e+er, ratin% plan 'ile! a pr&+i!e! in the prece!in% ecti&n hall tate &r clearl, in!icate the character an! e4tent &' the c&+era%e t& .hich an, uch rate &r an, (&!i'icati&n there&' .ill be applie!. Sec. 798. The C&((i i&ner hall re+ie. 'ilin% a &&n a rea &nabl, p& ible a'ter the, ha+e been (a!e in &r!er t& !eter(ine .hether the, (eet the re<uire(ent &' thi title. ?hen a 'ilin% i n&t acc&(panie! b, the in'&r(ati&n up&n .hich the in urance c&(pan, upp&rt uch 'ilin%* an! the C&((i i&ner !&e n&t ha+e u''icient in'&r(ati&n t& !eter(ine .hether uch 'ilin% (eet the re<uire(ent &' thi title* he hall re<uire uch in urance c&(pan, t& 'urni h the in'&r(ati&n up&n .hich it upp&rt uch 'ilin%. The in'&r(ati&n 'urni he! in upp&rt &' a 'ilin% (a, inclu!e" #1$ the e4perience &r 2u!%(ent &' the in urance c&(pan, &r ratin% &r%ani>ati&n (a-in% the 'ilin%0 #5$ it interpretati&n &' an, tati tical !ata it relie up&n0 #7$ the e4perience &' &ther in urance c&(panie &r ratin% &r%ani>ati&n0 &r #8$ an, &ther rele+ant 'act&r . Sec. 799. I' the C&((i i&ner 'in! that an, rate 'ilin% theret&'&re 'ile! .ith hi( !& n&t c&(pl, .ith the pr&+i i&n &' thi title &r that the, pr&+i!e rate &r rule .hich are ina!e<uate* e4ce i+e* un'airl, !i cri(inat&r, &r &ther.i e unrea &nable* he (a, &r!er the a(e .ith!ra.n an! at the e4pirati&n &' i4t, !a, therea'ter the a(e hall be !ee(e! n& l&n%er &n 'ile. 3e'&re (a-in% an, uch 'in!in% an! &r!er* the C&((i i&ner hall %i+e n&tice* n&t le than ten !a, in a!+ance* an! a hearin%* t& the ratin% &r%ani>ati&n* &r t& the in urer* .hich 'ile! the a(e. Such &r!er hall n&t a''ect an, c&ntract &r p&lic, (a!e &r i ue! pri&r t& the e4pirati&n &' uch i4t, !a, peri&!. Sec. 79:. N& (e(ber &r ub criber &' a ratin% &r%ani>ati&n* an! n& in urance c&(pan, !&in% bu ine in the 1hilippine * &r a%ent* e(pl&,ee &r &ther repre entati+e &' uch c&(pan,* an! n& in urance br&-er hall char%e &r !e(an! a rate &r recei+e a pre(iu( .hich !e+iate 'r&( the rate * ratin% plan * cla i'icati&n * che!ule * rule an! tan!ar! * (a!e an! la t 'ile! b, a ratin% &r%ani>ati&n &r b, &r &n behal' &' the in urance c&(pan,* &r hall i ue &r (a-e an, p&lic, &r c&ntract in+&l+in% +i&lati&n &' uch rate 'ilin% . Sec. 79;. N&t.ith tan!in% an, &ther pr&+i i&n &' thi title* up&n the .ritten applicati&n &' the in urer* tatin% hi rea &n there'&re* 'ile! .ith an! appr&+e! b, the C&((i i&ner* a rate in e4ce &' that pr&+i!e! b, a 'ilin% &ther.i e applicable (a, be u e! &n an, peci'ic ri -. Sec. 79=. ?hene+er the C&((i i&ner hall !eter(ine* a'ter n&tice an! a hearin%* that the rate char%e! &r 'ile! &n an, cla &' ri - are e4ce i+e* !i cri(inat&r,* ina!e<uate &r unrea &nable* he hall &r!er that uch rate be appr&priatel, a!2u te!. F&r the purp& e &' appl,in% the pr&+i i&n &' thi ecti&n* the C&((i i&ner (a, 'r&( ti(e t& ti(e appr&+e rea &nable cla i'icati&n &' ri - '&r an, &r all uch cla e * ha+in% !ue re%ar! t& the pa t an! pr& pecti+e l& e4perience* inclu!in% c&n'la%rati&n &r cata tr&phe ha>ar! * i' an,* t& all &ther rele+ant 'act&r an! t& a rea &nable pr&'it. Sec. 799. N&thin% c&ntaine! in thi title hall be c&n true! a re<uirin% an, in urer t& bec&(e a (e(ber &' &r ub criber t& an, ratin% &r%ani>ati&n. Sec. 7:6. A%ree(ent (a, be (a!e a(&n% in urance c&(panie .ith re pect t& the e<uitable app&rti&n(ent a(&n% the( &' in urance .hich (a, be a''&r!e! applicant .h& are in %&&! 'aith entitle! t& but are unable t& pr&cure uch in urance thr&u%h &r!inar, (eth&! an! uch in urance c&(panie (a, a%ree a(&n% the( el+e &n the u e &' rea &nable rate an! (&!i'icati&n '&r uch in urance* uch a%ree(ent an! rate (&!i'icati&n t& be ub2ect t& the appr&+al &' the C&((i i&ner0 Provided, however, That the pr&+i i&n &' thi ecti&n hall n&t be !ee(e! t& appl, t& .&r-(en/

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c&(pen ati&n in urance. Sec. 7:1. N& in urance c&(pan, !&in% bu ine in the 1hilippine &r an, a%ent there&'* n& in urance br&-er* an! n& e(pl&,ee &r &ther repre entati+e &' an, uch in urance c&(pan,* a%ent* &r br&-er* hall (a-e* pr&cure &r ne%&tiate an, c&ntract &' in urance &r a%ree(ent a t& p&lic, c&ntract* &ther than i plainl, e4pre e! in the p&lic, &r &ther .ritten c&ntract i ue! &r t& be i ue! a e+i!ence there&'* &r hall !irectl, &r in!irectl,* b, %i+in% &r harin% a c&((i i&n &r in an, (anner .hat &e+er* pa, &r all&. &r &''er t& pa, &r all&. t& the in ure! &r t& an, e(pl&,ee &' uch in ure!* either a an in!uce(ent t& the (a-in% &' uch in urance &r a'ter uch in urance ha been e''ecte!* an, rebate 'r&( the pre(iu( .hich i peci'ie! in the p&lic,* &r an, pecial 'a+&r &r a!+anta%e in the !i+i!en! &r &ther bene'it t& accrue there&n* &r hall %i+e &r &''er t& %i+e an, +aluable c&n i!erati&n &r in!uce(ent &' an, -in!* !irectl, &r in!irectl,* .hich i n&t peci'ie! in uch p&lic, &r c&ntract &' in urance0 n&r hall an, uch c&(pan,* &r an, a%ent there&'* a t& an, p&lic, &r c&ntract &' in urance i ue!* (a-e an, !i cri(inati&n a%ain t an, Filipin& in the en e that he i %i+en le a!+anta%e&u rate * !i+i!en! &r &ther p&lic, c&n!iti&n &r pri+ile%e than are acc&r!e! t& &ther nati&nal becau e &' hi race. Sec. 7:5. N& in urance c&(pan, !&in% bu ine in the 1hilippine * an! n& &''icer* !irect&r* &r a%ent there&'* an! n& in urance br&-er &r an, &ther per &n* partner hip &r c&rp&rati&n hall i ue &r circulate &r cau e &r per(it t& be i ue! &r circulate! an, literature* illu trati&n* circular &r tate(ent &' an, &rt (i repre entin% the ter( &' an, p&lic, i ue! b, an, in urance c&(pan, &' the bene'it &r a!+anta%e pr&(i e! thereb,* &r an, (i lea!in% e ti(ate &' the !i+i!en! &r hare &' urplu t& be recei+e! there&n* &r hall u e an, na(e &r title &' an, p&lic, &r cla &' p&licie (i repre entin% the true nature there&'0 n&r hall an, uch c&(pan, &r a%ent there&'* &r an, &ther per &n* partner hip &r c&rp&rati&n (a-e an, (i lea!in% repre entati&n &r inc&(plete c&(pari &n &' p&licie t& an, per &n in ure! in uch c&(pan, '&r the purp& e &' in!ucin% &r ten!in% t& in!uce uch per &n t& lap e* '&r'eit* &r urren!er hi ai! in urance. Sec. 7:7. I' the C&((i i&ner* a'ter n&tice an! hearin%* 'in! that an, in urance c&(pan,* ratin% &r%ani>ati&n* a%ent* br&-er &r &ther per &n ha +i&late! an, &' the pr&+i i&n &' thi title* it hall &r!er the pa,(ent &' a 'ine n&t t& e4cee! 'i+e hun!re! pe & '&r each uch &''en e* an! hall i((e!iatel, re+&-e the licen e i ue! t& uch in urance c&(pan,* ratin% &r%ani>ati&n* a%ent* &r br&-er. The i uance* pr&cure(ent &r ne%&tiati&n &' a in%le p&lic, &r c&ntract &' in urance hall be !ee(e! a eparate &''en e. Title 1RO)ISION COMMON AND ADEUSTERS TO ABENTS* = 3ROFERS*

tran act bu ine in the 1hilippine re(ainin% unpai! b, rea &n &' the &l+enc, &' uch c&(pan,. The ai! Fun! (a, al & be u e! t& rein ure the p&lic, &' the in &l+ent in urer in an, &l+ent in urer auth&ri>e! t& !& bu ine in the 1hilippine a pr&+i!e! in ecti&n t.& hun!re! '&rt,-nine. In the e+ent &' nati&nal e(er%enc, &r cala(it,* the Fun! (a, li-e.i e be u e! t& pa, in ure! clai( .hich &ther.i e .&ul! n&t be c&(pen able un!er the pr&+i i&n &' the p&lic,. N& pa,(ent 'r&( the Securit, Fun! hall* h&.e+er* be (a!e t& an, per &n .h& &.n &r c&ntr&l ten per centu( &r (&re &' the +&tin% hare &' t&c- &' the in &l+ent in urer an! n& pa,(ent &n an, &ne clai( hall e4cee! t.ent, th&u an! pe & . Sec. 7::. Such Fun! hall c&n i t &' all pa,(ent (a!e t& the Fun! b, in urance c&(panie auth&ri>e! t& !& bu ine in the 1hilippine . 1a,(ent (a!e b, li'e in urance c&(panie hall be treate! eparatel, 'r&( th& e (a!e b, n&n-li'e in urance c&(panie an! the c&rre p&n!in% 'un! hall be calle! "+ife $ccount" an! ",on-+ife $ccount"* re pecti+el,* an! hall be hel! an! a!(ini tere! a uch b, the C&((i i&ner in acc&r!ance .ith the pr&+i i&n &' thi title. The "+ife $ccount" hall be utili>e! e4clu i+el, '&r !i bur e(ent that re'er t& li'e in urance c&(panie * .hile the ",on-+ife $ccount" hall be utili>e! e4clu i+el, '&r !i bur e(ent that re'er t& n&n-li'e in urance c&(panie . Sec. 7:;. All in urance c&(panie !&in% bu ine in the 1hilippine hall c&ntribute t& the Securit, Fun!* Li'e &r N&n-Li'e Acc&unt* a the ca e (a, be* &n &r be'&re the 'i'teenth !a, &' Eune* nineteen hun!re! an! e+ent,-'i+e* the a%%re%ate a(&unt &' 'i+e (illi&n pe & '&r each Acc&unt. The c&ntributi&n &' the li'e in urance c&(panie an! &' the n&n-li'e in urance c&(panie hall be in !irect pr&p&rti&n t& the rati& bet.een a particular li'e in urance c&(pan, &r a particular n&n-li'e in urance c&(pan,/ net .&rth an! the a%%re%ate net .&rth &' all li'e in urance c&(panie &r all n&n-li'e in urance c&(panie * a the ca e (a, be* a h&.n in their late t 'inancial tate(ent appr&+e! b, the C&((i i&ner. Thi pr&p&rti&n applie! t& the 'i+e (illi&n pe & hall be the c&ntributi&n &' a particular c&(pan, t& the c&rre p&n!in% Acc&unt &' the Securit, Fun!. The a(&unt &' 'i+e (illi&n pe & in each Acc&unt hall be in the '&r( &' a re+&l+in% tru t 'un!. The re pecti+e c&ntributi&n &' the c&(panie hall re(ain a a!(itte! a et in their b&&- an! an, !i bur e(ent there'r&( hall be !e!ucte! pr&p&rti&natel, 'r&( the c&ntributi&n &' each c&(pan, .hich .ill be all&.e! a !e!ucti&n '&r inc&(e ta4 purp& e . An, earnin% &' the Fun! hall be turne! &+er t& the c&ntributin% c&(panie in pr&p&rti&n t& their c&ntributi&n . In the ca e &' !i bur e(ent &' 'un! 'r&( the Fun! a pr&+i!e! in the '&re%&in% para%raph* the li'e an! n&n-li'e c&(panie * a the ca e (a, be* hall repleni h the a(&unt !i bur e! in !irect pr&p&rti&n t& the in!i+i!ual c&(pan,/ net .&rth an! the a%%re%ate net .&rth &' the li'e &r n&n-li'e c&(panie * a the ca e (a, be. @&.e+er* in n& ca e hall the Fun! e4cee! the a%%re%ate a(&unt &' ten (illi&n pe & * &r 'i+e (illi&n pe & '&r each Acc&unt. Sh&ul! the Fun!* Li'e &' N&n-Li'e Acc&unt* a the ca e (a, be* be ina!e<uate '&r a !i bur e(ent a pr&+i!e! '&r* then the Li'e &r N&n-Li'e c&(panie * a the ca e (a, be* hall c&ntribute t& the Fun! their re pecti+e hare in the pr&p&rti&n pre+i&u l, (enti&ne!. Sec. 7:=. The C&((i i&ner (a, a!&pt* a(en!* an! en'&rce all rea &nable rule an! re%ulati&n nece ar, '&r the pr&per a!(ini trati&n &' the Fun! an! &' the Acc&unt . In the e+ent an, in urer hall 'ail t& (a-e an, pa,(ent re<uire! b, thi title* &r that an, pa,(ent (a!e i inc&rrect* he hall ha+e 'ull auth&rit, t& e4a(ine all the b&&- an! rec&r! &' the in urer '&r the purp& e &' a certainin% the 'act an! hall !eter(ine the c&rrect a(&unt t& be pai! an! (a, pr&cee! in an, c&urt &' c&(petent 2uri !icti&n t& rec&+er '&r the bene'it &' the Fun! &r &' the Acc&unt c&ncerne! an, u( h&.n t& be !ue up&n uch e4a(inati&n an! !eter(inati&n. An, in urer .hich 'ail t& (a-e

Sec. 7:8. A licen e i ue! t& a partner hip* a &ciati&n &r c&rp&rati&n t& act a an in urance a%ent* %eneral a%ent* in urance br&-er* rein urance br&-er* &r a!2u ter hall auth&ri>e &nl, the in!i+i!ual na(e! in the licen e .h& hall <uali', there'&r a th&u%h an in!i+i!ual licen ee. The C&((i i&ner hall char%e* an! the licen ee hall pa,* a 'ull a!!iti&nal licen e 'ee a t& each re pecti+e in!i+i!ual & na(e! in uch licen e in e4ce &' &ne. Licen e an! certi'icate &' re%i trati&n i ue! un!er the pr&+i i&n &' thi chapter (a, be rene.e! b, the 'ilin% &' n&tice &' intenti&n &n '&r( t& be pre cribe! b, the C&((i i&ner an! pa,(ent &' the 'ee there'&re. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Chapter SECURITA FUND )

Sec. 7:9. There i hereb, create! a 'un! t& be -n&.n a the "(ecurity Fund" .hich hall be u e! in the pa,(ent &' all&.e! clai( a%ain t an in urance c&(pan, auth&ri>e! t&

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an, pa,(ent t& the Fun! &r t& the Acc&unt c&ncerne! .hen !ue* hall thereb, '&r'eit t& ai! Fun! &r Acc&unt c&ncerne! a penalt, &' 'i+e per centu( &' the a(&unt !eter(ine! t& be !ue a pr&+i!e! b, thi title* plu &ne per centu( &' uch a(&unt '&r each (&nth &' !ela, &r 'racti&n there&'* a'ter the e4pirati&n &' the 'ir t (&nth &' uch !ela,* but the C&((i i&ner* i' ati 'ie! that the !ela, .a e4cu able* (a, re(it all &r an, part &' uch penalt,. The C&((i i&ner* in hi !i creti&n* (a, u pen! &r re+&-e the certi'icate &' auth&rit, t& !& bu ine in the 1hilippine &' an, in urance c&(pan, .hich hall 'ail t& c&(pl, .ith thi title &r t& pa, an, penalt, i(p& e! in acc&r!ance there.ith. Sec. 7:9. The Acc&unt create! b, thi title hall be eparate an! apart 'r&( each &ther an! 'r&( an, &ther 'un!. The Trea urer &' the 1hilippine hall be the cu t&!ian &' the Li'e Acc&unt an! N&n-Li'e Acc&unt &' the Securit, Fun!0 an! all !i bur e(ent 'r&( an, Acc&unt hall be (a!e b, the Trea urer &' the 1hilippine up&n +&ucher i%ne! b, the C&((i i&ner &r hi !eput,* a hereina'ter pr&+i!e!. The (&ne, &' ai! Acc&unt (a, be in+e te! b, the C&((i i&ner &nl, in b&n! &r &ther e+i!ence &' !ebt &' the %&+ern(ent &' the 1hilippine &r it p&litical ub!i+i i&n &r in tru(entalitie . The C&((i i&ner (a, ell an, &' the ecuritie in .hich an Acc&unt i in +e te!* i' a!+i able* '&r it pr&per a!(ini trati&n &r in the be t intere t &' uch Acc&unt. Sec. 7;6. 1a,(ent 'r&( either the Li'e In urance Acc&unt &r N&n-Li'e Acc&unt* a the ca e (a, be* hall be (a!e b, the Trea urer &' the 1hilippine t& the C&((i i&ner* up&n the auth&rit, &' appr&priate certi'icate 'ile! .ith hi( b, the C&((i i&ner actin% in uch capacit,. Sec. 7;1. The C&((i i&ner (a,* in hi !i creti&n* !e i%nate &r app&int a !ul, auth&ri>e! repre entati+e &r repre entati+e t& appear an! !e'en! be'&re an, c&urt &r &ther b&!, &r &''icial ha+in% 2uri !icti&n an, &r all acti&n &r pr&cee!in% a%ain t principal &r a ure! &n in urance p&licie &r c&ntract i ue! t& the( .here the in urer ha bec&(e in &l+ent &r unable t& (eet it in urance &bli%ati&n . The C&((i i&ner hall ha+e* a &' the !ate &' in &l+enc, &' uch in urer &r a &' the !ate &' it inabilit, (eet it in urance &bli%ati&n * &nl, the ri%ht .hich uch in urer .&ul! ha+e ha! i' it ha! n&t bec&(e in &l+ent &r unable t& (eet it in urance &bli%ati&n . F&r the purp& e &' thi title the C&((i i&ner hall ha+e p&.er t& e(pl&, uch c&un el* cler- an! a i tant a he (a, !ee( nece ar,. Sec. 7;5. The e4pen e &' a!(ini terin% an Acc&unt hall be pai! &ut &' the Acc&unt c&ncerne!. The C&((i i&ner hall er+e a a!(ini trat&r &' the Fun! an! &' the Acc&unt .ith&ut a!!iti&nal c&(pen ati&n* but (a, be all&.e! an! pai! 'r&( the Acc&unt c&ncerne! e4pen e incurre! in the per'&r(ance &' hi !utie in c&nnecti&n .ith ai! Acc&unt. The c&(pen ati&n &' th& e per &n e(pl&,e! pa,able 'r&( the Acc&unt c&ncerne!. The C&((i i&ner hall inclu!e in hi annual rep&rt t& the Secretar, &' Finance a tate(ent &' the e4pen e &' a!(ini trati&n &' the Fun! an! &' the Li'e Acc&unt an! N&n-Li'e Acc&unt '&r the prece!in% ,ear. Chapter COM1ULSORA LIA3ILITAINSURANCE MOTOR )I )E@ICLE

h&u eh&l!* &r a (e(ber &' the 'a(il, .ithin the ec&n! !e%ree &' c&n an%uinit, &r a''init,* &' a (&t&r +ehicle &.ner &r lan! tran p&rtati&n &perat&r* a li-e.i e !e'ine! herein* &r hi e(pl&,ee in re pect &' !eath* b&!il, in2ur,* &r !a(a%e t& pr&pert, ari in% &ut &' an! in the c&ur e &' e(pl&,(ent. #A a(en!e! b, 1re i!ential Decree N&. 1=18 an! 19=1$. #!$ ".wner" &r "motor vehicle owner" (ean the actual le%al &.ner &' a (&t&r +ehicle* in .h& e na(e uch +ehicle i !ul, re%i tere! .ith the Lan! Tran p&rtati&n C&((i i&n0 #e$ "+and transportation operator" (ean the &.ner &r &.ner &' (&t&r +ehicle '&r tran p&rtati&n &' pa en%er '&r c&(pen ati&n* inclu!in% ch&&l bu e 0 #'$ "!nsurance policy" &r "Policy" re'er t& a c&ntract &' in urance a%ain t pa en%er an! thirt,-part, liabilit, '&r !eath &r b&!il, in2urie an! !a(a%e! t& pr&pert, ari in% 'r&( (&t&r +ehicle acci!ent . #A a(en!e! b, 1re i!ential Decree N&. 1899 an! 1=18$. Sec. 7;8. It hall be unla.'ul '&r an, lan! tran p&rtati&n &perat&r &r &.ner &' a (&t&r +ehicle t& &perate the a(e in the public hi%h.a, unle there i in '&rce in relati&n theret& a p&lic, &' in urance &r %uarant, in ca h &r uret, b&n! i ue! in acc&r!ance .ith the pr&+i i&n &' thi chapter t& in!e(ni', the !eath* b&!il, in2ur,* an!D&r !a(a%e t& pr&pert, &' a thir!-part, &r pa en%er* a the ca e (a, be* ari in% 'r&( the u e there&'. #A a(en!e! b, 1re i!ential Decree N&. 1899 an! 1=18$. Sec. 7;9. The C&((i i&ner hall 'urni h the Lan! Tran p&rtati&n C&((i i&ner .ith a li t &' in urance c&(panie auth&ri>e! t& i ue the p&lic, &' in urance &r uret, b&n! re<uire! b, thi chapter. #A a(en!e! b, 1re i!ential Decree N&. 1=18$. Sec. 7;:. The Lan! Tran p&rtati&n C&((i i&n hall n&t all&. the re%i trati&n &r rene.al &' re%i trati&n &' an, (&t&r +ehicle .ith&ut 'ir t re<uirin% 'r&( the lan! tran p&rtati&n &perat&r &r (&t&r +ehicle &.ner c&ncerne! the pre entati&n an! 'ilin% &' a ub tantiatin% !&cu(entati&n in a '&r( appr&+e! b, the C&((i i&ner e+i!encin% that the p&lic, &' in urance &r %uarant, in ca h &r uret, b&n! re<uire! b, thi chapter i in e''ect. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 7;;. E+er, lan! tran p&rtati&n &perat&r an! e+er, &.ner &' a (&t&r +ehicle hall* be'&re appl,in% '&r the re%i trati&n &r rene.al &' re%i trati&n &' an, (&t&r +ehicle* at hi &pti&n* either ecure an in urance p&lic, &r uret, b&n! i ue! b, an, in urance c&(pan, auth&ri>e! b, the C&((i i&ner &r (a-e a ca h !ep& it in uch a(&unt a herein re<uire! a li(it &' liabilit, '&r purp& e peci'ie! in ecti&n three hun!re! e+ent,'&ur. #1$ In the ca e &' a lan! tran p&rtati&n &perat&r* the in urance %uarant, in ca h &r uret, b&n! hall c&+er liabilit, '&r !eath &r b&!il, in2urie &' thir!-partie an!D&r pa en%er ari in% &ut &' the u e &' uch +ehicle in the a(&unt n&t le than t.el+e th&u an! pe & per pa en%er &r thir! part, an! an a(&unt* '&r each &' uch cate%&rie * in an, &ne acci!ent &' n&t le than that et '&rth in the '&ll&.in% cale" #a$ M&t&r +ehicle .ith an auth&ri>e! capacit, &' t.ent,i4 &r (&re pa en%er " Fi't, th&u an! pe & 0 #b$ M&t&r +ehicle .ith an auth&ri>e! capacit, &' 'r&( t.el+e t& t.ent,-'i+e pa en%er " F&rt, th&u an! pe & 0 #c$ M&t&r +ehicle .ith an auth&ri>e! capacit, &' 'r&( i4 t& ele+en pa en%er " Thirt, th&u an! pe & 0 #!$ M&t&r +ehicle .ith an auth&ri>e! capacit, &' 'i+e &r le pa en%er " Fi+e th&u an! pe & (ultiplie! b, the auth&ri>e! capacit,. Provided, however, That uch ca h !ep& it (a!e t&* &r uret, b&n! p& te! .ith* the C&((i i&ner hall be re &rte! t& b, hi( in ca e &' acci!ent the in!e(nitie '&r .hich t& thir!-partie an!D&r pa en%er are n&t ettle! acc&r!in%l, b, the lan!

Sec. 7;7. F&r purp& e &' thi chapter" #a$ "Motor -ehicle" i an, +ehicle a !e'ine! in ecti&n three* para%raph #a$ &' Republic Act Nu(bere! F&ur Th&u an! One @un!re! Thirt,-Si4* Other.i e -n&.n a the "+and Transportation and Traffic "ode#" #b$ "Passenger" i an, 'are pa,in% per &n bein% tran p&rte! an! c&n+e,e! in an! b, a (&t&r +ehicle '&r tran p&rtati&n &' pa en%er '&r c&(pen ati&n* inclu!in% per &n e4pre l, auth&ri>e! b, la. &r b, the +ehicle/ &perat&r &r hi a%ent t& ri!e .ith&ut 'are. #c$ "Third-Party" i an, per &n &ther than a pa en%er a !e'ine! in thi ecti&n an! hall al & e4clu!e a (e(ber &' the

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tran p&rtati&n &perat&r an!* in that e+ent* the ai! ca h !ep& it hall be repleni he! &r uch uret, b&n! hall be re t&re! .ith i4t, !a, a'ter i(pair(ent &r e4pir,* a the ca e (a, be* b, uch lan! tran p&rtati&n &perat&r* &ther.i e* he hall ecure the in urance p&lic, re<uire! b, thi chapter. The a'&re ai! ca h !ep& it (a, be in+e te! b, the C&((i i&ner in rea!il, (ar-etable %&+ern(ent b&n! an!D&r ecuritie . #5$ In the ca e &' an &.ner &' a (&t&r +ehicle* the in urance &r %uarant, in ca h &r uret, b&n! hall c&+er liabilit, '&r !eath &r in2ur, t& thir! partie in an a(&unt n&t le than that et '&rth in the '&ll&.in% cale in an, &ne acci!ent" I. 1ri+ate Car #a$ 3anta( " T.ent, th&u an! pe & 0 #b$ Li%ht " T.ent, th&u an! pe & 0 #c$ @ea+, " Thirt, th&u an! pe & 0 II. Other 1ri+ate )ehicle #a$ Tric,cle * (&t&rc,cle * an! c&&ter " T.el+e th&u an! pe & 0 #b$ )ehicle .ith an unla!en .ei%ht &' 5*:66 -il& &r le " T.ent, th&u an! pe & 0 #c$ )ehicle .ith an unla!en .ei%ht &' bet.een 5*:61 -il& an! 7*976 -il& " Thirt, th&u an! pe & 0 #!$ )ehicle .ith an unla!en .ei%ht &+er 7*976 -il& " Fi't, th&u an! pe & . The C&((i i&ner (a,* i' .arrante!* et '&rth che!ule &' in!e(nitie '&r the pa,(ent &' clai( '&r !eath &r b&!il, in2urie .ith the c&+era%e et '&rth herein. #A a(en!e! b, 1re i!ential Decree N&. 1899 an! 1=18$. Sec. 7;=. An, clai( '&r !eath &r in2ur, t& an, pa en%er &r thir! part, pur uant t& the pr&+i i&n &' thi chapter hall be pai! .ith&ut the nece it, &' pr&+in% 'ault &r ne%li%ence &' an, -in!0 1r&+i!e!* That '&r purp& e &' thi ecti&n" #i$ The t&tal in!e(nit, in re pect &' an, per &n hall n&t e4cee! 'i+e th&u an! pe & 0 #ii$ The '&ll&.in% pr&&' &' l& * .hen ub(itte! un!er &ath* hall be u''icient e+i!ence t& ub tantiate the clai(" #a$ 1&lice rep&rt &' acci!ent0 an! #b$ Death certi'icate an! e+i!ence e tabli h the pr&per pa,ee0 &r u''icient t&

N& in urance c&(pan, (a, i ue the p&lic, &' in urance &r uret, b&n! re<uire! un!er thi chapter unle & auth&ri>e! un!er e4i tin% la. . The auth&rit, t& en%a%e in the ca ualt, an!D&r uret, line &' bu ine &' an in urance c&(pan, that re'u e t& i ue &r rene.* .ith&ut 2u t cau e* the in urance p&lic, &r uret, b&n! therein re<uire! hall be .ith!ra.n i((e!iatel,. #A a(en!e! b, 1re i!ential Decree N&. 1899 an! 1=18$. Sec. 7=6. N& cancellati&n &' the p&lic, hall be +ali! unle .ritten n&tice there&' i %i+en t& the lan! tran p&rtati&n &perat&r &r &.ner &' the +ehicle an! t& the Lan! Tran p&rtati&n C&((i i&n at lea t 'i'teen !a, pri&r t& the inten!e! e''ecti+e !ate there&'. Up&n receipt &' uch n&tice* the Lan! Tran p&rtati&n C&((i i&n* unle it recei+e e+i!ence &' a ne. +ali! in urance &r %uarant, in ca h &r uret, b&n! a pre cribe! in thi chapter* &r an en!&r e(ent &' re+i+al &' the cancelle! &ne* hall &r!er the i((e!iate c&n'i cati&n &' the plate &' the (&t&r +ehicle c&+ere! b, uch cancelle! p&lic,. The a(e (a, be rei ue! &nl, up&n pre entati&n &' a ne. in urance p&lic, &r that a %uarant, in ca h &r uret, ban! ha been (a!e &r p& te! .ith the C&((i i&ner an! .hich (eet the re<uire(ent &' thi chapter* &r an en!&r e(ent &r re+i+al &' the cancelle! &ne. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 7=1. I' the cancellati&n &' the p&lic, &r uret, b&n! i c&nte(plate! b, the lan! tran p&rtati&n &perat&r &r &.ner &' the +ehicle* he hall* be'&re the p&lic, &r uret, b&n! cea e t& be e''ecti+e* ecure a i(ilar p&lic, &' in urance &r uret, b&n! t& replace the p&lic, &r uret, b&n! t& be cancelle! &r (a-e a ca h !ep& it in u''icient a(&unt .ith the C&((i i&ner an! .ith&ut an, %ap* 'ile the re<uire! !&cu(entati&n .ith the Lan! Tran p&rtati&n C&((i i&n* an! n&ti', the in urance c&(pan, c&ncerne! &' the cancellati&n &' it p&lic, &r uret, b&n!. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 7=5. In ca e &' chan%e &' &.ner hip &' a (&t&r +ehicle* &r chan%e &' the en%ine &' an in ure! +ehicle* there hall be n& nee! &' i uin% a ne. p&lic, until the ne4t !ate &' re%i trati&n &r rene.al &' re%i trati&n &' uch +ehicle* an! pr&+i!e! that the in urance c&(pan, hall a%ree t& c&ntinue the p&lic,* uch chan%e &' &.ner hip &r uch chan%e &' the en%ine hall be in!icate! in a c&rre p&n!in% en!&r e(ent b, the in urance c&(pan, c&ncerne!* an! a i%ne! !uplicate &' uch en!&r e(ent hall* .ithin a rea &nable ti(e* be 'ile! .ith the Lan! Tran p&rtati&n C&((i i&n. Sec. 7=7. In the ettle(ent an! pa,(ent &' clai( * the in!e(nit, hall n&t be a+aile! &' b, an, acci!ent +icti( &r clai(ant a an in tru(ent &' enrich(ent b, rea &n &' an acci!ent* but a an a i tance &r re tituti&n in &'ar a can 'airl, be a certaine!. Sec. 7=8. An, per &n ha+in% an, clai( up&n the p&lic, i ue! pur uant t& thi Chapter hall* .ith&ut an, unnece ar, !ela,* pre ent t& the in urance c&(pan, c&ncerne! a .ritten n&tice &' clai( ettin% '&rth the nature* e4tent an! !urati&n &' the in2urie u taine! a certi'ie! b, a !ul, licen e! ph, ician. N&tice &' clai( (u t be 'ile! .ithin i4 (&nth 'r&( !ate &' acci!ent* &ther.i e* the clai( hall be !ee(e! .ai+e!. Acti&n &r uit '&r rec&+er, &' !a(a%e !ue t& l& &r in2ur, (u t be br&u%ht* in pr&per ca e * .ith the C&((i i&ner &r the C&urt .ithin &ne ,ear 'r&( !enial &' the clai(* &ther.i e* the clai(ant/ ri%ht &' acti&n hall pre cribe. #A a(en!e! b, 1re i!ential Decree 1=18 an! 3ata 1a(ban a 3l%. =;8$. Sec. 7=9. The in urance c&(pan, c&ncerne! hall '&rth.ith a certain the truth an! e4tent &' the clai( an! (a-e pa,(ent .ithin 'i+e .&r-in% !a, a'ter reachin% an a%ree(ent. I' n& a%ree(ent i reache!* the in urance c&(pan, hall pa, &nl, the "no-fault" in!e(nit, pr&+i!e! in ecti&n three hun!re! e+ent,-ei%ht .ith&ut pre2u!ice t& the clai(ant 'r&( pur uin% hi clai( 'urther* in .hich ca e* he hall n&t be re<uire! &r c&(pelle! b, the in urance c&(pan, t& e4ecute an, <uit clai(

#c$ Me!ical rep&rt an! e+i!ence &' (e!ical &r h& pital !i bur e(ent in re pect &' .hich re'un! i clai(e!0 #iii$ Clai( (a, be (a!e a%ain t &ne (&t&r +ehicle &nl,. In the ca e &' an &ccupant &' a +ehicle* clai( hall lie a%ain t the in urer &' the +ehicle in .hich the &ccupant i ri!in%* (&untin% &r !i (&untin% 'r&(. In an, &ther ca e* clai( hall lie a%ain t the in urer &' the !irectl, &''en!in% +ehicle. In all ca e * the ri%ht &' the part, pa,in% the clai( t& rec&+er a%ain t the &.ner &' the +ehicle re p&n ible '&r the acci!ent hall be (aintaine!. Sec. 7;9. N& lan! tran p&rtati&n &perat&r &r &.ner &' (&t&r +ehicle hall be unrea &nabl, !enie! the p&lic, &' in urance &r uret, b&n! re<uire! b, thi chapter b, the in urance c&(panie auth&ri>e! t& i ue the a(e* &ther.i e* the Lan! Tran p&rtati&n C&((i i&n hall re<uire 'r&( ai! lan! tran p&rtati&n &perat&r &r &.ner &' the +ehicle* in lieu &' a p&lic, &' in urance &r uret, b&n!* a certi'icate that a ca h !ep& it ha been (a!e .ith the C&((i i&ner in uch a(&unt re<uire! a li(it &' in!e(nit, in ecti&n three hun!re! e+ent,- e+en t& an .er '&r the pa en%er an!D&r thir!-part, liabilit, &' uch lan! tran p&rtati&n &perat&r &r &.ner &' the +ehicle.

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&r !&cu(ent relea in% it 'r&( liabilit, un!er the p&lic, &' in urance &r uret, b&n! i ue!. #A a(en!e! b, 1re i!ential Decree N&. 1899$. In ca e &' an, !i pute in the en'&rce(ent &' the pr&+i i&n &' an, p&lic, i ue! pur uant t& thi chapter* the a!2u!icati&n &' uch !i pute hall be .ithin the &ri%inal an! e4clu i+e 2uri !icti&n &' the C&((i i&ner* ub2ect t& the li(itati&n pr&+i!e! in ecti&n '&ur hun!re! i4teen. Sec. 7=:. It hall be unla.'ul '&r a lan! tran p&rtati&n &perat&r &r &.ner &' (&t&r +ehicle t& re<uire hi &r it !ri+er &r &ther e(pl&,ee t& c&ntribute in the pa,(ent &' pre(iu( . Sec. 7=;. N& %&+ern(ent &''ice &r a%enc, ha+in% the !ut, &' i(ple(entin% the pr&+i i&n &' thi chapter n&r an, &''icial &r e(pl&,ee there&' hall act a a%ent in pr&curin% the in urance p&lic, &r uret, b&n! pr&+i!e! '&r herein. The c&((i i&n &' an a%ent pr&curin% the ai! p&lic, &r b&n! hall in n& ca e e4cee! ten per centu( &' the a(&unt &' the pre(iu( there'&re. Sec. 7==. An, lan! tran p&rtati&n &perat&r &r &.ner &' (&t&r +ehicle &r an, &ther per &n +i&latin% an, &' the pr&+i i&n &' the prece!in% ecti&n hall be puni he! b, a 'ine &' n&t le than 'i+e hun!re! pe & but n&t (&re than &ne th&u an! pe & an!D&r i(pri &n(ent '&r n&t (&re than i4 (&nth . The +i&lati&n &' ecti&n three hun!re! e+ent,- e+en b, a lan! tran p&rtati&n &perat&r hall be a u''icient cau e '&r the re+&cati&n &' the certi'icate &' public c&n+enience i ue! b, the 3&ar! &' Tran p&rtati&n c&+erin% the +ehicle c&ncerne!. Sec. 7=9. ?hene+er an, +i&lati&n &' the pr&+i i&n &' thi chapter i c&((itte! b, a c&rp&rati&n &r a &ciati&n* &r b, a %&+ern(ent &''ice &r entit,* the e4ecuti+e &''icer &r &''icer &' ai! c&rp&rati&n* a &ciati&n &r %&+ern(ent &''ice &r entit, .h& hall ha+e -n&.in%l, per(itte!* &r 'aile! t& pre+ent* ai! +i&lati&n hall be hel! liable a principal . Chapter MUTUAL 3ENEFIT ASSOCIATIONS TRUSTS FOR C@ARITA3LE USES Title MUTUAL 3ENEFIT ASSOCIATIONS )II AND 1

Sec. 791. A (utual bene'it a &ciati&n* be'&re it (a, tran act a uch* (u t 'ir t ecure a licen e 'r&( the C&((i i&ner. The applicati&n '&r uch licen e hall be 'ile! .ith the C&((i i&ner t&%ether .ith certi'ie! true c&pie &' the article &' inc&rp&rati&n &r the c&n tituti&n an! b,-la. &' the a &ciati&n* an! all a(en!(ent theret&* an! uch &ther !&cu(ent &r te ti(&nie a the C&((i i&ner (a, re<uire. N& licen e hall be %rante! t& a (utual bene'it a &ciati&n until the C&((i i&ner hall ha+e been ati 'ie! b, uch e4a(inati&n a (a, (a-e an! uch e+i!ence a he (a, re<uire that the a &ciati&n i <uali'ie! un!er e4i tin% la. t& &perate an! tran act bu ine a uch. The C&((i i&ner (a, re'u e t& i ue a licen e t& an, (utual bene'it a &ciati&n i'* in hi 2u!%(ent* uch re'u al .ill be t pr&(&te the intere t &' the (e(ber &' uch a &ciati&n an! &' the pe&ple &' thi c&untr,. An, licen e i ue! hall e4pire &n the la t !a, &' Eune &' the ,ear '&ll&.in% it i uance an!* up&n pr&per applicati&n* (a, be rene.e! i' the a &ciati&n i c&ntinuin% t& c&(pl, .ith e4i tin% la. * rule an! re%ulati&n * &r!er * in tructi&n * rulin% an! !eci i&n &' the C&((i i&ner. E+er, a &ciati&n recei+in% an, uch licen e hall be ub2ect t& the uper+i i&n &' the C&((i i&ner" Provided* That n& uch licen e hall be %rante! t& an, uch a &ciati&n i' uch a &ciati&n ha n& actuar,. All (utual bene'it a &ciati&n e4i tin% an! licen e! a uch un!er the pr&+i i&n &' Article Ei%ht* Chapter F&rt,-One &' the Re+i e! A!(ini trati+e C&!e* a a(en!e! b, Act N&. 7:15* hall* up&n e''ecti+it, &' thi C&!e* urren!er their re pecti+e licen e t& the C&((i i&ner an! appl, '&r ne. licen e un!er the pr&+i i&n &' thi c&!e i' the, till !e ire t& c&ntinue &peratin% a uch (utual bene'it a &ciati&n . Sec. 795. N& (utual bene'it a &ciati&n hall be i ue! a licen e t& &perate a uch unle it ha c&n titute! an! e tabli he! a Buarant, Fun! b, !ep& itin% .ith the C&((i i&ner an initial (ini(u( a(&unt &' ten th&u an! pe & in ca h* &r in %&+ern(ent ecuritie .ith a t&tal +alue e<ual t& uch a(&unt* t& an .er '&r an, +ali! bene'it clai( &' an, &' it (e(ber . All (&ne, recei+e! b, the C&((i i&ner '&r thi purp& e (u t be !ep& ite! b, hi( in intere t-bearin% !ep& it .ith an, ban&r ban- auth&ri>e! t& tran act bu ine in the 1hilippine '&r the acc&unt &' the particular a &ciati&n c&n titutin% the Buarant, Fun!. An, accrual t& uch 'un!* be it intere t earne! &r !i+i!en! a!!iti&n &n (&ne, &r ecuritie & !ep& ite!* (a,* .ith the pri&r appr&+al &' the C&((i i&ner* be .ith!ra.n b, the a &ciati&n i' there i n& pen!in% bene'it clai( a%ain t it* inclu!in% intere t there&n &r !i+i!en! a!!iti&n theret&. The C&((i i&ner* pri&r t& &r a'ter licen in% a (utual bene'it a &ciati&n* (a, re<uire uch a &ciati&n t& increa e it Buarant, Fun! 'r&( the initial (ini(u( a(&unt re<uire! t& an a(&unt e<ual t& at lea t ten per centu( &' it a et * i' uch a et e4cee! &ne hun!re! th&u an! pe & * but in n& ca e hall uch increa e e4cee! the (a4i(u( a(&unt &' capital in+e t(ent re<uire! &' a !&(e tic in urance c&(pan, un!er ecti&n t.& hun!re! an! three &' thi C&!e. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 797. E+er, (utual bene'it a &ciati&n licen e! t& !& bu ine a uch hall i ue (e(ber hip certi'icate t& it (e(ber peci',in% the bene'it t& .hich uch (e(ber are entitle!. Such certi'icate * t&%ether .ith the article &' inc&rp&rati&n &' the a &ciati&n &r it c&n tituti&n an! b,-la. * an! all e4i tin% la. a (a, be pertinent hall c&n titute the a%ree(ent* a &' the !ate &' it i uance* bet.een the a &ciati&n an! the (e(ber. The (e(ber hip certi'icate hall be in a '&r( pre+i&u l, appr&+e! b, the C&((i i&ner. Sec. 798. A (utual bene'it a &ciati&n (a,* b, rein urance a%ree(ent* ce!e in .h&le &r in part an, in!i+i!ual ri - &r ri un!er certi'icate &' in urance i ue! b, it* &nl, t& a li'e

Sec. 796. An, &ciet,* a &ciati&n &r c&rp&rati&n* .ith&ut capital t&c-* '&r(e! &r &r%ani>e! n&t '&r pr&'it but (ainl, '&r the purp& e &' pa,in% ic- bene'it t& (e(ber * &r &' 'urni hin% 'inancial upp&rt t& (e(ber .hile &ut &' e(pl&,(ent* &r &' pa,in% t& relati+e &' !ecea e! (e(ber &' 'i4e! &r an, u( &' (&ne,* irre pecti+e &' .hether uch ai( &r purp& e i carrie! &ut b, (ean &' 'i4e! !ue &r a e (ent c&llecte! re%ularl, 'r&( the (e(ber * &r &' pr&+i!in%* b, the i uance &' certi'icate &' in urance* pa,(ent &' it (e(ber &' acci!ent &r li'e in urance bene'it &ut &' uch 'i4e! an! re%ular !ue &r a e (ent * but in n& ca e hall inclu!e an, &ciet,* a &ciati&n* &r c&rp&rati&n .ith uch (utual bene'it 'eature an! .hich hall be carrie! &ut purel, 'r&( +&luntar, c&ntributi&n c&llecte! n&t re%ularl, an! &r n& 'i4e! a(&unt 'r&( .h&( &e+er (a, c&ntribute* hall be -n&.n a a (utual bene'it a &ciati&n .ithin the intent &' thi C&!e. An, &ciet,* a &ciati&n* &r c&rp&rati&n principall, &r%ani>e! a lab&r uni&n hall be %&+erne! b, the Lab&r C&!e n&t.ith tan!in% an, (utual bene'it 'eature pr&+i i&n in it charter a inci!ent t& it &r%ani>ati&n. In n& ca e hall a (utual bene'it a &ciati&n be &r%ani>e! an! auth&ri>e! t& tran act bu ine a a charitable &r bene+&lent &r%ani>ati&n* an! .hene+er it ha thi 'eature a inci!ent t& it e4i tence* the c&rre p&n!in% charter pr&+i i&n hall be re+i e! t& c&n'&r( .ith the pr&+i i&n &' thi ecti&n. Mutual bene'it a &ciati&n* alrea!, licen e! t& tran act bu ine a uch &n the !ate thi C&!e bec&(e e''ecti+e* ha+in% charitable &r bene+&lent 'eature hall aban!&n uch inci!ental purp& e up&n e''ecti+it, &' thi C&!e i' the, !e ire t& c&ntinue &peratin% a uch (utual bene'it a &ciati&n . #A a(en!e! b, 1re i!ential Decree N&. 1899$.

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in urance c&(pan, auth&ri>e! t& tran act bu ine &r t& a pr&'e i&nal rein urer auth&ri>e! t& accept li'e ri - in the 1hilippine " Provided* That c&p, &' the !ra't &' uch rein urance a%ree(ent hall be ub(itte! t& the C&((i i&ner '&r hi appr&+al. The a &ciati&n (a, ta-e cre!it '&r the re er+e &n uch ce!e! ri - t& the e4tent rein ure!. Sec. 799. The c&n tituti&n &r b,-la. &' a (utual bene'it a &ciati&n (u t !i tinctl, tate the purp& e '&r .hich !ue an!D&r a e (ent are (a!e an! c&llecte! an! the p&rti&n there&' .hich (a, be u e! '&r e4pen e . Death bene'it an! &ther relie' 'un! hall be create! an! u e! e4clu i+el, '&r pa,in% bene'it !ue the (e(ber un!er their re pecti+e (e(ber hip certi'icate . A %eneral 'un! hall li-e.i e be create! an! u e! '&r e4pen e &' a!(ini trati&n &' the a &ciati&n. Sec. 79:. E+er, &ut tan!in% (e(ber hip certi'icate (u t ha+e* a'ter three 'ull ,ear &' bein% c&ntinu&u l, in '&rce* an e<uit, +alue e<ui+alent t& at lea t 'i't, per centum &' the t&tal (e(ber hip !ue c&llecte! there&n. Sec. 79;. E+er, (utual bene'it a &ciati&n (u t accu(ulate an! (aintain* &ut &' the peri&!ic !ue c&llecte! 'r&( it (e(ber * u''icient re er+e '&r the pa,(ent &' clai( &r &bli%ati&n '&r .hich it hall h&l! 'un! in ecuritie ati 'act&r, t& the C&((i i&ner c&n i tin% &' b&n! &' the B&+ern(ent &' the 1hilippine * &r an, &' it p&litical ub!i+i i&n an! in tru(entalitie * &r in uch &ther %&&! ecuritie a (a, be appr&+e! b, the C&((i i&ner. The re er+e liabilit, hall be e tabli he! in acc&r!ance .ith actuarial pr&ce!ure an! hall be appr&+e! b, the C&((i i&ner. The article &' inc&rp&rati&n &r the c&n tituti&n an! b,-la. &' a (utual bene'it a &ciati&n (u t pr&+i!e that i' it re er+e a t& all &r an, cla &' certi'icate bec&(e i(paire!* it b&ar! &' !irect&r &r tru tee (a, re<uire that there hall be pai! b, the (e(ber t& the a &ciati&n the a(&unt &' the (e(ber / e<uitable pr&p&rti&n &' uch !e'icienc, a a certaine! b, ai! b&ar! an! that i' the pa,(ent be n&t (a!e it hall tan! a an in!ebte!ne a%ain t the (e(ber hip certi'icate &' the !e'aultin% (e(ber an! !ra. intere t n&t t& e4cee! 'i+e per centu( per annu( c&(p&un!e! annuall,. Sec. 79=. A (utual bene'it a &ciati&n (a, in+e t uch p&rti&n &' it 'un! a hall n&t be re<uire! t& (eet pen!in% clai( an! &ther &bli%ati&n in an, &' the cla e &' in+e t(ent &r t,pe &' ecuritie in .hich li'e in urance c&(panie !&in% bu ine in the 1hilippine (a, in+e t. It (a, al & %rant l&an t& (e(ber &n the ecurit, &' a ple!%e &r chattel (&rt%a%e &' per &nal pr&pertie &' the b&rr&.er * &r in the ab ence there&'* &n the ecurit, &' the (e(ber hip certi'icate &' the b&rr&.in% (e(ber * in .hich e+ent uch l&an hall bec&(e a 'ir t lien &n the pr&cee! there&'. Sec. 799. The C&((i i&ner &r an, &' hi !ul, !e i%nate! repre entati+e * hall ha+e the p&.er &' +i itati&n* au!it an! e4a(inati&n int& the a''air * 'inancial c&n!iti&n* an! (eth&! &' !&in% bu ine &' all (utual bene'it a &ciati&n * an! he hall cau e uch e4a(inati&n t& be (a!e at lea t &nce e+er, t.& ,ear &r .hene+er it (a, be !ee(e! pr&per an! nece ar,. Free acce t& the b&&- * rec&r! an! !&cu(ent &' the a &ciati&n hall be acc&r!e! t& the C&((i i&ner* t& hi repre entati+e * in uch (anner that the C&((i i&ner &r hi repre entati+e (a, rea!il, +eri', &r !eter(ine the true a''air * 'inancial c&n!iti&n* an! (eth&! &' !&in% bu ine &' uch a &ciati&n. In the c&ur e &' uch e4a(inati&n* the C&((i i&ner &r hi !ul, !e i%nate! repre entati+e hall ha+e auth&rit, t& a!(ini ter &ath an! ta-e te ti(&n, &r &ther e+i!ence &n an, (atter relatin% t& the a''air &' the a &ciati&n. All (inute &' the pr&cee!in% &' the b&ar! &' !irect&r &r tru tee &' the a &ciati&n* an! th& e &' the re%ular &r pecial (eetin% &' the (e(ber * hall be ta-e* an! a c&p, there&'* in

En%li h &r in 1ilipin&* hall be ub(itte! t& the C&((i i&ner/ repre entati+e &r e4a(iner in the c&ur e &' uch e4a(inati&n. A c&p, &' the 'in!in% &' uch e4a(inati&n* t&%ether .ith the rec&((en!ati&n &' the C&((i i&ner* hall be 'urni he! the a &ciati&n '&r it in'&r(ati&n an! c&(pliance* an! the a(e hall be ta-en up i((e!iatel, in the (eetin% &' the b&ar! &' !irect&r &r tru tee an! &' the (e(ber &' the a &ciati&n. Sec. 866. E+er, (utual bene'it a &ciati&n hall* annuall, &n &r be'&re the thirtieth !a, &' April &' each ,ear* ren!er t& the C&((i i&ner an annual tate(ent in uch '&r( an! !etail a (a, be pre cribe! b, the C&((i i&ner* i%ne! an! .&rn t& b, the pre i!ent* ecretar,* trea urer* an! actuar, &' the a &ciati&n* h&.in% the e4act c&n!iti&n &' it a''air &n the prece!in% thirt,-'ir t !a, &' Dece(ber. Sec. 861. N& (&ne,* ai! &r bene'it t& be pai!* pr&+i!e! &r ten!ere! b, an, (utual bene'it a &ciati&n* hall be liable t& attach(ent* %arni h(ent* &r &ther pr&ce * &r be ei>e!* ta-en* appr&priate!* &r applie! b, an, le%al &r e<uitable pr&ce t& pa, an, !ebt &' liabilit, &' a (e(ber &r bene'iciar,* &r an, &ther per &n .h& (a, ha+e a ri%ht thereun!er* either be'&re &r a'ter pa,(ent. Sec. 865. An, (e(ber &' a (utual bene'it a &ciati&n hall ha+e the ri%ht at all ti(e t& chan%e the bene'iciar, &r bene'iciarie &r a!! an&ther bene'iciar, &r &ther bene'iciarie in acc&r!ance .ith the rule an! re%ulati&n &' the a &ciati&n unle he ha e4pre l, .ai+e! thi ri%ht in the (e(ber hip certi'icate. E+er, a &ciati&n (a,* un!er uch rule a it (a, a!&pt* li(it the c&pe &' bene'iciarie an! pr&+i!e that n& bene'iciar, hall ha+e &r &btain an, +e te! intere t in the pr&cee! &' an, certi'icate until the certi'icate ha bec&(e !ue an! pa,able un!er the ter( &' the (e(ber hip certi'icate. Sec. 867. An, chapter a''iliate in!epen!entl, licen e! a a (utual bene'it a &ciati&n (a, c&n &li!ate &r (er%e .ith an, &ther i(ilar chapter a''iliate &r .ith the (&ther a &ciati&n. Sec. 868. An, (utual bene'it a &ciati&n (a, be c&n+erte! int& an! licen e! a a (utual li'e in urance c&(pan, b, c&(pl,in% .ith the re<uire(ent &' the pertinent pr&+i i&n &' thi C&!e an! ub(ittin% the peci'ic plan '&r uch c&n+er i&n t& the C&((i i&ner '&r hi appr&+al. Such plan* a appr&+e!* hall then be ub(itte! t& the (e(ber either in the re%ular (eetin% &r in a pecial (eetin% calle! '&r the purp& e '&r their a!&pti&n. The a''ir(ati+e +&te &' at lea t t.&-thir! &' all the (e(ber hall be nece ar, in &r!er t& c&n i!er uch plan a a!&pte!. N& uch c&n+er i&n hall ta-e e''ect unle b, the C&((i i&ner. an! until appr&+e!

Sec. 869. N& (utual bene'it a &ciati&n hall be !i &l+e! .ith&ut 'ir t n&ti',in% the C&((i i&ner an! 'urni hin% hi( .ith a certi'ie! c&p, &' the re &luti&n auth&ri>in% the !i &luti&n* !ul, a!&pte! b, the a''ir(ati+e +&te &' t.&-thir! &' the (e(ber at a (eetin% calle! '&r that purp& e* the 'inancial tate(ent a &' the !ate &' the re &luti&n* an! uch &ther paper &r !&cu(ent a (a, be re<uire! b, the C&((i i&ner. N& !i &luti&n hall pr&cee! until an! unle appr&+e! b, the C&((i i&ner an! all pr&cee!in% in c&nnecti&n there.ith hall be .itne e! an! atte te! b, hi !ul, !e i%nate! repre entati+e. N& (utual bene'it a &ciati&n hall be &''iciall, !eclare! a !i &l+e! until a'ter the C&((i i&ner & certi'ie that all &ut tan!in% clai( a%ain t the a &ciati&n ha+e been !ul, ettle! an! li<ui!ate!. Sec. 86:. The C&((i i&ner hall a'ter n&tice an! hearin%* ha+e the p&.er either t& u pen! &r re+&-e the licen e! i ue! t& a (utual bene'it a &ciati&n i' he 'in! that the a &ciati&n ha " #a$ 'aile! t& c&(pl, .ith an, pr&+i i&n &' thi C&!e0 #b$ 'aile! t& c&(pl, .ith an, &ther la. &r re%ulati&n &bli%at&r, up&n it0

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#c$ 'aile! t& c&(pl, .ith an, &r!er* rulin%* in tructi&n* re<uire(ent* &r rec&((en!ati&n &' the C&((i i&ner0 #!$ e4cee!e! it p&.er t& the pre2u!ice &' it (e(ber 0 #e$ c&n!ucte! it bu ine 'rau!ulentl, &r ha>ar!&u l,0 #'$ ren!ere! it a''air an! c&n!iti&n t& &ne &' in &l+enc,0 &r #%$ 'aile! t& carr, &ut it ai( an! purp& e '&r .hich it .a &r%ani>e! !ue t& an, cau e. A'ter receipt &' the &r!er 'r&( the C&((i i&ner u pen!in% &r re+&-in% the licen e* the a &ciati&n (u t i((e!iatel, e4ert e''&rt t& re(&+e uch cau e &r cau e .hich br&u%ht ab&ut the &r!er* an!* up&n pr&per h&.in%* (a, appl, .ith the C&((i i&ner '&r the li'tin% &' the &r!er an! re t&rati&n &r re+i+al &' the licen e & re+&-e! &r u pen!e!. Sec. 86;. F&r 'ailure t& re(&+e uch cau e &r cau e .hich br&u%ht ab&ut the u pen i&n &r re+&cati&n &' the licen e &' a (utual bene'it a &ciati&n* the C&((i i&ner hall appl, un!er thi C&!e '&r an &r!er 'r&( the pr&per c&urt t& li<ui!ate uch a &ciati&n. The pr&+i i&n &' title '&urteen an! 'i'teen* chapter three* pertainin% t& the app&int(ent &' a c&n er+at&r an! pr&cee!in% up&n in &l+enc, &' an in urance c&(pan,* hall* in &'ar a practicable* appl, t& (utual bene'it a &ciati&n . Sec. 86=. T& ecure the en'&rce(ent &' an, pr&+i i&n un!er thi title* the C&((i i&ner (a, i ue uch rule * rulin% * in tructi&n * &r!er an! circular * ub2ect t& the appr&+al &' the Secretar, &' Finance. Sec. 869. The +i&lati&n &' an, pr&+i i&n &' thi title hall ub2ect the per &n +i&latin% &r the &''icer &' the a &ciati&n re p&n ible there'&r t& a 'ine &' n&t e4cee!in% &ne th&u an! pe & * &r i(pri &n(ent &' n&t e4cee!in% three ,ear * &r b&th uch 'ine an! i(pri &n(ent* at the !i creti&n &' the c&urt. Title TRUSTS FOR C@ARITA3LE USES 5

Sec. 818. The In urance C&((i i&ner hall ha+e the !ut, t& ee that all la. relatin% t& in urance* in urance c&(panie an! &ther in urance (atter * (utual bene'it a &ciati&n * an! tru t '&r charitable u e are 'aith'ull, e4ecute! an! t& per'&r( the !utie i(p& e! up&n hi( b, thi C&!e* an! hall* n&t.ith tan!in% an, e4i tin% la. t& the c&ntrar,* ha+e &le an! e4clu i+e auth&rit, t& re%ulate the i uance an! ale &' +ariable c&ntract a !e'ine! in ecti&n t.& hun!re! thirt,-t.& an! t& pr&+i!e '&r the licen in% &' per &n ellin% uch c&ntract * an! t& i ue uch rea &nable rule an! re%ulati&n %&+ernin% the a(e. The C&((i i&ner (a, i ue uch rulin% * in tructi&n * circular * &r!er an! !eci i&n a he (a, !ee( nece ar, t& ecure the en'&rce(ent &' the pr&+i i&n &' thi C&!e* ub2ect t& the appr&+al &' the Secretar, &' Finance. E4cept a &ther.i e peci'ie!* !eci i&n (a!e b, the C&((i i&ner hall beappealable t& the Secretar, &' Finance. Sec. 819. In a!!iti&n t& the a!(ini trati+e ancti&n pr&+i!e! el e.here in thi C&!e* the In urance C&((i i&ner i hereb, auth&ri>e!* at hi !i creti&n* t& i(p& e up&n the in urance c&(panie * their !irect&r an!D&r &''icer an!D&r a%ent * '&r an, .ill'ul 'ailure &r re'u al t& c&(pl, .ith* &r +i&lati&n &' an, pr&+i i&n &' thi C&!e* &r an, &r!er* in tructi&n* re%ulati&n* &r rulin% &' the In urance C&((i i&ner* &r an, c&((i i&n &r irre%ularitie * an!D&r c&n!uctin% bu ine in an un a'e &r un &un! (anner a (a, be !eter(ine! b, the In urance C&((i i&ner* the '&ll&.in%" #a$ 'ine n&t in e4ce &' 'i+e hun!re! pe & a !a,0 an! #b$ u pen i&n* &r a'ter !ue hearin%* re(&+al &' !irect&r an!D&r &''icer an!D&r a%ent . Sec. 81:. The C&((i i&ner hall ha+e the p&.er t& a!2u!icate clai( an! c&(plaint in+&l+in% an, l& * !a(a%e &r liabilit, '&r .hich in in urer (a, be an .erable un!er an, -in! &' p&lic, &r c&ntract &' in urance* &r '&r .hich uch in urer (a, be liable un!er a c&ntract &' uret, hip* &r '&r .hich arein urer (a, be ue! un!er an, c&ntract &' rein urance it (a, ha+e entere! int&0 &r '&r .hich a (utual bene'it a &ciati&n (a, be hel! liable un!er the (e(ber hip certi'icate it ha i ue! t& it (e(ber * .here the a(&unt &' an, uch l& * !a(a%e &r liabilit,* e4clu!in% intere t* c& t an! att&rne,/ 'ee * bein% clai(e! &r ue! up&n an, -in! &' in urance* b&n!* rein urance c&ntract* &r (e(ber hip certi'icate !&e n&t e4cee! in an, in%le clai( &ne hun!re! th&u an! pe & . The in urer &r uret, (a,* in the a(e acti&n 'ile a c&unterclai( a%ain t the in ure! &r the &bli%ee. The in urer &r uret, (a, al & 'ile a cr& -clai( a%ain t a part, '&r an, clai( ari in% &ut &' the tran acti&n &r &ccurrence that i the ub2ect (atter &' the &ri%inal acti&n &r &' a c&unterclai( therein. ?ith lea+e &' the C&((i i&ner* an in urer &r uret, (a, 'ile a thir!-part, c&(plaint a%ain t it rein urer '&r in!e(ni'icati&n* c&ntributi&n* ubr&%ati&n &r an, &ther relie'* in re pect &' the tran acti&n that i the ub2ect (atter &' the &ri%inal acti&n 'ile! .ith the C&((i i&ner. The part, 'ilin% an acti&n pur uant t& the pr&+i i&n &' thi ecti&n thereb, ub(it hi per &n t& the 2uri !icti&n &' the C&((i i&ner. The C&((i i&ner hall ac<uire 2uri !icti&n &+er the per &n &' the i(plea!e! part, &r partie in acc&r!ance .ith an! pur uant t& the pr&+i i&n &' the Rule &' C&urt. The auth&rit, t& a!2u!icate %rante! t& the C&((i i&ner un!er thi ecti&n hall be c&ncurrent .ith that &' the ci+il c&urt * but the 'ilin% &' a c&(plaint .ith the C&((i i&ner hall preclu!e the ci+il c&urt 'r&( ta-in% c&%ni>ance &' a uit in+&l+in% the a(e ub2ect (atter. An, !eci i&n* &r!er &r rulin% ren!ere! b, the C&((i i&ner a'ter a hearin% hall ha+e the '&rce an! e''ect &' a 2u!%(ent. An, part, (a, appeal 'r&( a 'inal &r!er* rulin% &r !eci i&n &' the C&((i i&ner b, 'ilin% .ith the C&((i i&ner .ithin thirt, !a, 'r&( receipt &' c&p, &' uch &r!er* rulin% &r !eci i&n a n&tice &'

Sec. 816. The ter( "trust for charita le uses"* .ithin the intent &' thi C&!e* hall inclu!e* all the real &r per &nal pr&pertie &r 'un! * a .ell a th& e ac<uire! .ith the 'ruit &r inc&(e there'r&( &r in e4chan%e &r ub tituti&n there&'* %i+en t& &r recei+e! b, an, per &n* c&rp&rati&n* a &ciati&n* '&un!ati&n* &r entit,* e4cept the Nati&nal B&+ern(ent* it in tru(entalitie &r p&litical ub!i+i i&n * '&r charitable* bene+&lent* e!ucati&nal* pi&u * reli%i&u * &r &ther u e '&r the bene'it &' the public at lar%e &r a particular p&rti&n there&' &r '&r the bene'it &' an in!e'inite nu(ber &' per &n . Sec. 811. The ter( "trustee" hall inclu!e an, in!i+i!ual* c&rp&rati&n* a &ciati&n* '&un!ati&n* &r entit,* e4cept the Nati&nal B&+ern(ent* it in tru(entalitie &r p&litical ub!i+i i&n * in char%e &'* &r actin% '&r* &r c&ncerne! .ith the a!(ini trati&n &'* the tru t re'erre! t& in the ecti&n i((e!iatel, prece!in% an! .ith the pr&per applicati&n &' tru t pr&pert,. Sec. 815. The ter( "trust property" hall inclu!e all real &r per &nal pr&pertie &r 'un! pertainin% t& the tru t a .ell a th& e ac<uire! .ith the 'ruit &r inc&(e there'r&( &r in e4chan%e &r ub tituti&n there&'. Sec. 817. All tru tee hall* be'&re enterin% in the per'&r(ance &' the !utie &' their tru t* &btain a certi'icate &' re%i trati&n 'r&( the C&((i i&ner. Tru tee .h& are alrea!, !i char%in% the !utie &' their tru t &n the !ate thi C&!e bec&(e e''ecti+e (a, c&ntinue a uch* ub2ect t& the pr&+i i&n &' thi C&!e. All pr&+i i&n &' thi C&!e %&+ernin% (utual bene'it a &ciati&n an! uch &ther pr&+i i&n herein* .hene+er practicable an! nece ar,* hall be applicable t& tru t '&r charitable u e . Chapter T@E INSURANCE COMMISSIONER Title ADMINISTRATI)E AND ADEUDICATORA 1O?ERS )III 1

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appeal t& the Inter(e!iate Appellate C&urt in the (anner pr&+i!e! '&r in the Rule &' C&urt '&r appeal 'r&( the Re%i&nal Trial C&urt t& the Inter(e!iate Appellate C&urt. #A a(en!e! b, 3ata 1a(ban a 3l%. =;8$. A &&n a a !eci i&n* &r!er &r rulin% ha bec&(e 'inal an! e4ecut&r,* the C&((i i&ner hall motu proprio &r &n (&ti&n &' the intere te! part,* i ue a .rit &' e4ecuti&n re<uirin% the heri'' &r the pr&per &''icer t& .h&( it i !irecte! t& e4ecute ai! !eci i&n* &r!er &r a.ar!* pur uant t& Rule thirt,-nine &' the Rule &' C&urt. F&r the purp& e &' an, pr&cee!in% un!er thi ecti&n* the C&((i i&ner* &r an, &''icer there&' !e i%nate! b, hi(* e(p&.ere! t& a!(ini ter &ath an! a''ir(ati&n* ubp&ena .itne e * c&(pel their atten!ance* ta-e e+i!ence* an! re<uire the pr&!ucti&n &' an, b&&- * paper * !&cu(ent * &r c&ntract &r &ther rec&r! .hich are rele+ant &r (aterial t& the in<uir,. In ca e &' c&ntu(ac, b,* &r re'u al t& &be, a ubp&ena i ue! t& an, per &n* the C&((i i&ner (a, in+&-e the ai! &' an, c&urt &' 'ir t in tance .ithin the 2uri !icti&n &' .hich uch pr&cee!in% i carrie! &n* .here uch per &n re i!e &r carrie &n hi &.n bu ine * in re<uirin% the atten!ance an! te ti(&n, &' .itne e an! the pr&!ucti&n &' b&&- * paper * !&cu(ent * c&ntract &r &ther rec&r! . An! uch c&urt (a, i ue an &r!er re<uirin% uch per &n t& appear be'&re the C&((i i&ner* &r &''icer !e i%nate! b, the C&((i i&ner* there t& pr&!uce rec&r! * i' & &r!ere! &r t& %i+e te ti(&n, t&uchin% the (atter in <ue ti&n. An, 'ailure t& &be, uch &r!er &' the c&urt (a, be publi he! b, uch c&urt a a c&nte(pt there&'. A 'ull an! c&(plete rec&r! hall be -ept &' all pr&cee!in% ha! be'&re the c&((i i&ner* &r the &''icer there&' !e i%nate! b, hi(* an! all te ti(&n, hall be ta-en !&.n an! tran cribe! b, a ten&%rapher app&inte! b, the C&((i i&ner. A tran cribe! c&p, &' the e+i!ence an! pr&cee!in%* &r an, peci'ic part there&'* &' an, hearin% ta-en b, a ten&%rapher app&inte! b, the C&((i i&ner* bein% certi'ie! b, uch ten&%rapher t& be a true an! c&rrect tran cript &' the te ti(&n, &n thi hearin% &' a particular .itne * &r &' a peci'ic pr&&' there&'* care'ull, c&(pare! b, hi( 'r&( hi &ri%inal n&te * an! t& be a c&rrect tate(ent &' e+i!ence an! pr&cee!in% ha! in uch hearin% & purp&rtin% t& be ta-en an! ub cribe!* (a, be recei+e! a e+i!ence b, the C&((i i&ner an! b, an, c&urt .ith the a(e e''ect a i' uch ten&%rapher .ere pre ent an! te ti'ie! t& the 'act & certi'ie!. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Title FEES AND OT@ER SOURCES OF FUNDS 5

F&r each certi'icate &' re%i trati&n i ue! t& an actuar,* 'i't, pe & . F&r each certi'icate &' re%i trati&n i ue! t& a re i!ent a%ent* 'i't, pe & . F&r each licen e i ue! t& a ratin% &r%ani>ati&n* &ne hun!re! pe & . F&r each certi'icate &' re%i trati&n i ue! t& a n&n-li'e c&(pan, un!er.riter* 'i't, pe & . F&r each licen e i ue! t& a (utual bene'it a &ciati&n* ten pe & . F&r each certi'icate &' re%i trati&n i ue! t& a tru t '&r charitable u e * ten pe & . All certi'icate &' auth&rit, an! all &ther licen e * a .ell a all certi'icate &' re%i trati&n* i ue! t& an, per &n* partner hip* a &ciati&n &r c&rp&rati&n un!er the pertinent pr&+i i&n &' thi C&!e '&r .hich n& e4pirati&n !ate ha been pre cribe!* hall e4pire &n the la t !a, &' Eune &' each ,ear an! hall be rene.e! annuall, up&n applicati&n there'&re an! pa,(ent &' the c&rre p&n!in% 'ee* i' the licen ee &r h&l!er &' uch licen e &r certi'icate i c&ntinuin% t& c&(pl, .ith all the applicable pr&+i i&n &' e4i tin% la. * an! &' rule * in tructi&n * &r!er an! !eci i&n &' the C&((i i&ner. #5$ F&r the 'ilin% &' the annual tate(ent re'erre! t& in ecti&n t.& hun!re! t.ent,-three* the C&((i i&ner hall c&llect an! recei+e 'r&( the in urance c&(pan, & 'ilin% a 'ee &' 'i+e hun!re! pe & " Provided* That a 'ine &' &ne hun!re! pe & hall be i(p& e! an! c&llecte! b, the C&((i i&ner '&r each .ee- &' !ela,* &r an, 'racti&n there&'* in the 'ilin% &' the annual tate(ent. F&r the 'ilin% &' annual tate(ent re'erre! t& in ecti&n '&ur hun!re!* the C&((i i&ner hall c&llect an! recei+e 'r&( the (utual bene'it a &ciati&n & 'ilin% a 'ee &' ten pe & " Provided* That a 'ine &' ten pe & hall be i(p& e! an! c&llecte! b, the C&((i i&ner '&r each .ee- &' !ela,* &r an, 'racti&n there&'* in the 'ilin% &' the annual tate(ent. #7$ F&r the e4a(inati&n pre cribe! in ecti&n t.& hun!re! '&rt,i4* the C&((i i&ner hall c&llect an! recei+e 'ee acc&r!in% t& the a(&unt &' it t&tal a et * in the ca e &' a !&(e tic c&(pan,* &r &' it a et in the 1hilippine * in the ca e &' a '&rei%n c&(pan,* a '&ll&. " #a$ T.& (illi&n pe & &r (&re but le pe & * F&ur hun!re! pe & 0 #b$ F&ur (illi&n pe & &r (&re but le pe & * Ei%ht hun!re! pe & 0 than '&ur (illi&n than i4 (illi&n

Sec. 81;. #1$ F&r the i uance &r rene.al &' certi'icate &' auth&rit,* licen e an! certi'icate &' re%i trati&n* pur uant t& pertinent pr&+i i&n &' thi C&!e* the C&((i i&ner hall c&llect an! recei+e 'ee .hich hall be n&t le than the '&ll&.in%" F&r each certi'icate &' auth&rit, i ue! t& an in urance c&(pan, !&in% bu ine in the 1hilippine * t.& hun!re! pe & . F&r each pecial certi'icate &' auth&rit, i ue! t& a er+icin% in urance c&(pan,* &ne hun!re! pe & . F&r each licen e i ue! t& a %eneral a%ent &' an in urance c&(pan,* 'i't, pe & . F&r each licen e i ue! t& an in urance a%ent* t.ent,'i+e pe & . F&r each licen e i ue! t& an a%ent &' +ariable c&ntract p&lic,* t.ent,-'i+e pe & . F&r each licen e i ue! t& an in urance br&-er* &ne hun!re! pe & . F&r each licen e i ue! t& an rein urance br&-er* &ne hun!re! pe & . F&r each licen e i ue! t& an in urance a!2u ter* &ne hun!re! pe & .

#c$ Si4 (illi&n pe & &r (&re but le than ei%ht (illi&n pe & * One th&u an! t.& hun!re! pe & 0 #!$ Ei%ht (illi&n pe & &r (&re but le than ten (illi&n pe & * One th&u an! i4 hun!re! pe & 0 #e$ Ten (illi&n pe & &r (&re* T.& th&u an! pe & 0 Provided* That i' the ai! e4a(inati&n i (a!e in place &ut i!e the Metr&p&litan Manila area* be i!e the e 'ee * the C&((i i&ner hall re<uire &' the c&(pan, e4a(ine! the pa,(ent &' the actual an! nece ar, tra+elin% an! ub i tence e4pen e &' the e4a(iner &r e4a(iner c&ncerne!. F&r the e4a(inati&n pre cribe! in ecti&n three hun!re! ninet,nine* the C&((i i&ner hall c&llect an! recei+e a (ini(u( 'ee &' &ne hun!re! pe & 'r&( the (utual bene'it a &ciati&n e4a(ine!" Provided, That i' uch a &ciati&n ha t&tal a et &' (&re than &ne hun!re! th&u an! pe & * an a!!iti&nal 'ee &' ten pe & '&r e+er, 'i't, th&u an! pe & in e4ce there&' hall be i(p& e!" Provided, further, That uch 'ee hall n&t e4cee! t.& th&u an! pe & . #8$ F&r the 'ilin% &' an applicati&n t& .ith!ra. 'r&( the 1hilippine un!er title ei%hteen* the C&((i i&ner hall c&llect an! recei+e 'r&( the '&rei%n c&(pan, & .ith!ra.in% a

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'ee &' &ne th&u an! pe & . #9$ The C&((i i&ner (a, 'i4 an! c&llect 'ee &r char%e '&r !&cu(ent * tran cript * &r &ther (aterial .hich (a, be 'urni he! b, hi( n&t in e4ce &' rea &nable c& t. #A a(en!e! b, 1re i!ential Decree N&. 1899$. Sec. 81=. I' the t&tal e4pen e &' the In urance C&((i i&ner '&r e+er, 'i cal ,ear e4cee! the a%%re%ate a(&unt &' the 'ee c&llecte! un!er the pertinent pr&+i i&n &' thi C&!e* the e4ce hall be char%e! a%ain t the In urance Fun!* .hich hall herea'ter be create! &ut &' the pr&cee! &' ta4e &n in urance pre(iu( (enti&ne! in ecti&n t.& hun!re! 'i't,-'i+e &' the Nati&nal Internal Re+enue C&!e* a a(en!e!" Provided, however* That pen!in% the creati&n &' ai! In urance Fun!* the pr&+i i&n &' ecti&n t.&* three an! '&ur &' Republic Act Nu(bere! T.& @un!re! Se+ent,-Fi+e* hall c&ntinue t& re(ain in '&rce an! e''ect. MISCELLANEOUS 1RO)ISIONS Sec. 819. An, per &n* c&(pan, &r c&rp&rati&n ub2ect t& the uper+i i&n an! c&ntr&l &' the C&((i i&ner .h& +i&late an, pr&+i i&n &' thi C&!e* '&r .hich n& penalt, i pr&+i!e!* hall be !ee(e! %uilt, &' a penal &''en e* an! up&n c&n+icti&n be puni he! b, a 'ine n&t e4cee!in% ten th&u an! pe & &r i(pri &n(ent &' i4 (&nth * &r b&th* at the !i creti&n &' the c&urt. I' the &''en e i c&((itte! b, a c&(pan, &r c&rp&rati&n* the &''icer * !irect&r * &r &ther per &n re p&n ible '&r it &perati&n* (ana%e(ent* &r a!(ini trati&n* unle it can be pr&+e! that the, ha+e ta-en n& part in the c&((i i&n &' the &''en e* hall li-e.i e be %uilt, &' a penal &''en e* an! up&n c&n+icti&n be puni he! b, a 'ine n&t e4cee!in% ten th&u an! pe & &r i(pri &n(ent &' i4 (&nth * &r b&th* at the !i creti&n &' the c&urt. Sec. 856. All cri(inal acti&n '&r the +i&lati&n &' an, &' the pr&+i i&n &' thi C&!e hall pre cribe! a'ter three ,ear 'r&( the !i c&+er, &' uch +i&lati&n" Provided, That uch acti&n hall in an, e+ent pre cribe a'ter ten ,ear 'r&( the c&((i i&n &' uch +i&lati&n. Sec. 851. An, per &n* partner hip* a &ciati&n &r c&rp&rati&n heret&'&re auth&ri>e!* licen e! &r re%i tere! b, the In urance C&((i i&ner hall be !ee(e! t& ha+e been auth&ri>e!* licen e! &r re%i tere! un!er the pr&+i i&n &' thi C&!e an! hall be %&+erne! b, the pr&+i i&n there&'" Provided, however, That .here an, uch per &n* partner hip* a &ciati&n &r c&rp&rati&n i a''ecte! b, the ne. re<uire(ent &' thi C&!e* ai! per &n* partner hip a &ciati&n &r c&rp&rati&n hall* unle &ther.i e herein pr&+i!e!* be %i+en a peri&! &' &ne ,ear 'r&( the e''ecti+it, &' thi C&!e .ithin .hich t& c&(pl, .ith the a(e. Sec. 855. E4cept a e4pre l, pr&+i!e! b, thi C&!e* all la. &r part there&' inc&n i tent .ith an, pr&+i i&n &' thi C&!e hall be !ee(e! repeale!. Sec. 857. Sh&ul! an, pr&+i i&n &' thi C&!e &r an, part there&' be !eclare! in+ali!* the &ther pr&+i i&n * & 'ar a the, are eparable 'r&( the in+ali! &ne * hall re(ain in '&rce. Sec. 858. Thi C&!e hall ta-e e''ect i((e!iatel,.

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