Article 47p. 47

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

company by virtue of and under the provisions of Act No.

536 , as amended by Act No. 2206 .

SECTION 178. The liability of the surety or sureties

shall be joint and several with the obligor and shall be

limited to the amount of the bond. It is determined

strictly by the terms of the contract of suretyship in

relation to the principal contract between the obligor and

the obligee.

SECTION 179. The surety is entitled to payment of the

premium as soon as the contract of suretyship or bond is

perfected and delivered to the obligor. No contract of

suretyship or bonding shall be valid and binding unless

and until the premium therefor has been paid, except

where the obligee has accepted the bond, in which case

the bond becomes valid and enforceable irrespective of

whether or not the premium has been paid by the

obligor to the surety: Provided, That if the contract of

suretyship or bond is not accepted by, or filed with the

obligee, the surety shall collect only a reasonable amount,

not exceeding fifty percent (50%) of the premium due

thereon as service fee plus the cost of stamps or other

taxes imposed for the issuance of the contract or bond:

Provided, however , That if the non-acceptance of the

bond be due to the fault or negligence of the surety, no

such service fee, stamps or taxes shall be collected.

In the case of a continuing bond, the obligor shall pay

the subsequent annual premium as it falls due until the

contract of suretyship is cancelled by the obligee or by

the Commissioner or by a court of competent jurisdiction,

as the case may be.

SECTION 180. Pertinent provisions of the Civil Code of

the Philippines shall be applied in a suppletory character

whenever necessary in interpreting the provisions of a

contract of suretyship.

TITLE 5 Life Insurance

SECTION 181. Life insurance is insurance on human

lives and insurance appertaining thereto or connected

therewith.

Every contract or undertaking for the payment of

annuities including contracts for the payment of lump

sums under a retirement program where a life insurance

company

manages

or

acts

as

a

trustee

for

such

retirement program shall be considered a life insurance

contract for purposes of this Code.

SECTION 182. An insurance upon life may be made

payable on the death of the person, or on his surviving a

specified

period,

or

otherwise

contingently

on

the

continuance or cessation of life.

Every

contract

or

pledge

for

the

payment

of

endowments

or annuities shall be considered a life

insurance contract for purposes of this Code.

In the absence of a judicial guardian, the father, or in

the latter's absence or incapacity, the mother, of any

minor, who is an insured or a beneficiary under a contract

of life, health, or accident insurance, may exercise, in

behalf of said minor, any right under the policy, without

necessity of court authority or the giving of a bond, where

the interest of the minor in the particular act involved

does

not

exceed

Five

hundred

thousand

pesos

(P500,000.00) or in such reasonable amount as may be

determined

by

the

Commissioner.

Such

right

may

include, but shall not be limited to, obtaining a policy

loan, surrendering the policy, receiving the proceeds of

the

Policy,

and

giving

the

minor's

consent

to

any

transaction on the policy.

In the absence or in case of the incapacity of the

father or mother, the grandparent, the eldest brother or

sister at least eighteen (18) years of age, or any relative

who

has

actual

custody

of

the

minor

insured

or

beneficiary, shall act as a guardian without need of a

court order or judicial appointment as such guardian, as

long as such person is not otherwise disqualified or

incapacitated. Payment made by the insurer pursuant to

this section shall relieve such insurer of any liability under

the contract.

SECTION 183. The insurer in a life insurance contract

shall be liable in case of suicide only when it is committed

after the policy has been in force for a period of two (2)

years from the date of its issue or of its last reinstatement,

unless the policy provides a shorter period: Provided,

however , That suicide committed in the state of insanity

shall

be

compensable

regardless

of

the

date

of

commission.

SECTION 184. A policy of insurance upon life or health

may pass by transfer, will or succession to any person,

whether he has an insurable interest or not, and such

person may recover upon it whatever the insured might

have recovered.

SECTION 185. Notice to an insurer of a transfer or

bequest thereof is not necessary to preserve the validity

of a policy of insurance upon life or health, unless thereby

expressly required.

SECTION 186. Unless the interest of a person insured

is

susceptible

of exact pecuniary measurement, the

measure of indemnity under a policy of insurance upon

life or health is the sum fixed in the policy.

TITLE 6 Microinsurance

SECTION 187. Microinsurance is a financial product or

service that meets the risk protection needs of the poor

where:

(a) The amount of contributions, premiums, fees or

charges, computed on a daily basis, does not exceed

seven and a half percent (7.5%) of the current daily

minimum wage rate for nonagricultural workers in Metro

Manila; and

(b) The maximum sum of guaranteed benefits is not

more than one thousand (1,000) times of the current daily

minimum wage rate for nonagricultural workers in Metro

Manila.

SECTION

188.

No

insurance company or mutual

benefit

association

shall

engage in the business of

microinsurance unless it possesses all the requirements

as

may

be

prescribed

by

the

Commissioner.

The

Commissioner shall issue such rules and regulations

governing microinsurance.

CHAPTER II-A Financial Reporting Framework

SECTION

189.

All

companies

regulated

by

the

Commission, unless otherwise required by law, should

comply with the financial reporting frameworks adopted

by the Commission for purposes of creating the statutory

financial

reports

and

the

annual

statements

to

be

submitted

to

the

Commission.

Financial

reporting

framework means a set of accounting and reporting

principles,

standards,

interpretations

and

pronouncements

that

must

be

adopted

in

the

preparation and submission of the statutory financial

statements and reports required by the Commission. This

financial reporting framework is not the same as the

financial

reporting

framework

used

to

prepare

the

financial statements that the Securities and Exchange

Commission

may require. The main purpose of the

statutory statements is to present important information

about the level of risk and solvency situation of insurers.

In prescribing the applicable statutory financial reporting

framework, the Commissioner shall take into account

international

standards

concerning

solvency

and

insurance

company

reporting

as

well

as

generally

accepted

actuarial

principles

concerning

financial

reporting promulgated by the Actuarial Society of the

Philippines.

The assets and investments discussed in Sections 204

to 215 shall be accounted for in accordance with this

section.

© Compiled by RGL

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