Article 48p. 48

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

The valuation of reserves shall be accounted for in

accordance with Title 5 of this Code.

CHAPTER III The Business of Insurance

TITLE 1 Insurance Companies, Organization,

Capitalization and Authorization

SECTION 190. For purposes of this Code, the term

insurer

or

insurance

company

shall

include

all

partnerships, associations, cooperatives or corporations,

including government-owned or -controlled corporations

or

entities,

engaged

as

principals

in

the

insurance

business, excepting mutual benefit associations. Unless

the context otherwise requires, the term shall also include

professional reinsurers defined in Section 288. Domestic

company shall include companies formed, organized or

existing

under

the

laws

of

the Philippines. Foreign

company when used without limitation shall include

companies formed, organized, or existing under any laws

other than those of the Philippines.

SECTION 191. The provisions of the Corporation Code,

as amended, shall apply to all insurance corporations now

or hereafter engaged in business in the Philippines

insofar as they do not conflict with the provisions of this

chapter.

SECTION

192.

No

corporation,

partnership,

or

association

of

persons

shall

transact

any

insurance

business

in

the

Philippines

except

as

agent

of

a

corporation, partnership or association authorized to do

the business of insurance in the Philippines, unless

possessed

of

the capital and assets required of an

insurance corporation doing the same kind of business in

the Philippines and invested in the same manner; unless

the Commissioner shall have granted it a certificate to

the effect that it has complied with all the provisions of

this Code.

Every entity receiving any such certificate of authority

shall be subject to the insurance and other applicable

laws

of

the

Philippines and to the jurisdiction and

supervision of the Commissioner.

SECTION 193. No insurance company shall transact

any insurance business in the Philippines until after it

shall have obtained a certificate of authority for that

purpose

from

the

Commissioner

upon

application

therefor and payment by the company concerned of the

fees hereinafter prescribed.

The Commissioner may refuse to issue a certificate of

authority to any insurance company if, in his judgment,

such refusal will best promote the interest of the people

of this country. No such certificate of authority shall be

granted to any such company until the Commissioner

shall have satisfied himself by such examination as he

may make and such evidence as he may require that

such company is qualified by the laws of the Philippines

to transact business therein, that the grant of such

authority appears to be justified in the light of local

economic

requirements,

and that the direction and

administration, as well as the integrity and responsibility

of

the

organizers

and

administrators,

the

financial

organization

and

the

amount

of

capital, reasonably

assure the safety of the interests of the policyholders and

the public.

In order to maintain the quality of the management

of the insurance companies and afford better protection

to policyholders and the public in general, any person of

good

moral

character,

unquestioned

integrity

and

recognized competence may be elected or appointed

director or officer of insurance companies in accordance

with the pertinent provisions contained in the corporate

governance circulars prescribed by the Commissioner. In

addition hereto, the Commissioner shall prescribe the

qualifications of directors, executive officers and other

key officials of insurance companies for purposes of this

section.

No person shall concurrently be a Director and/or

Officer of an insurance company and an adjustment

company.

Before

issuing

such

certificate

of

authority,

the

Commissioner must be satisfied that the name of the

company is not that of any other known company

transacting a similar business in the Philippines, or a

name so similar as to be calculated to mislead the public.

The Commissioner may issue rules and regulations on the

use

of

names

of

insurance

companies

and

other

supervised persons or entities.

The

certificate

of

authority

issued

by

the

Commissioner shall expire on the last day of December,

three (3) years following its date of issuance, and shall be

renewable every three (3) years thereafter, subject to the

company's continuing compliance with the provisions of

this Code, circulars, instructions, rulings or decisions of

the Commission.

Every company receiving any such certificates of

authority shall be subject to the provisions of this Code

and

other

related

laws and to the jurisdiction and

supervision of the Commissioner.

No insurance company may be authorized to transact

in

the

Philippines

the

business of life and non-life

insurance concurrently, unless specifically authorized to

do so by the Commissioner: Provided, That the terms life

and non-life insurance shall be deemed to include health,

accident and disability insurance.

No

insurance

company

shall

have

equity

in an

adjustment company and neither shall an adjustment

company have equity in an insurance company.

No insurance company issued with a valid certificate

of authority to transact insurance business anywhere in

the Philippines by the Insurance Commissioner, shall be

barred, prevented, or disenfranchised from issuing any

insurance

policy

or

from

transacting

any

insurance

business within the scope or coverage of its certificate of

authority,

anywhere

in the Philippines, by any local

government unit or authority, for whatever guise or

reason

whatsoever,

including

under

any

kind

of

ordinance, accreditation system, or scheme. Any local

ordinance or local government unit regulatory issuance

imposing such restriction or disenfranchisement on any

insurance company shall be deemed null and void ab

initio.

SECTION 194. Except as provided in Section 289, no

new domestic life or non-life insurance company shall, in

a stock corporation, engage in business in the Philippines

unless possessed of a paid-up capital equal to at least

One billion pesos (P1,000,000,000.00): Provided, That a

domestic insurance company already doing business in

the Philippines shall have a net worth by June 30, 2013 of

Two

hundred

fifty

million

pesos

(P250,000,000.00).

Furthermore, said company must have by December 31,

2016,

an

additional

Three

hundred

million

pesos

(P300,000,000.00) in net worth; by December 31, 2019, an

additional

Three

hundred

fifty

million

pesos

(P350,000,000.00) in net worth; and by December 31,

2022,

an

additional

Four

hundred

million

pesos

(P400,000,000.00) in net worth.

The

Commissioner

may,

as

a

pre-licensing

requirement of a new insurance company, in addition to

the paid-up capital stock, require the stockholders to pay

in cash to the company in proportion to their subscription

interests a contributed surplus fund of not less than One

hundred million pesos (P100,000,000.00). He may also

require such company to submit to him a business plan

showing

the

company's

estimated

receipts

and

disbursements, as well as the basis therefor, for the next

succeeding three (3) years.

If organized as a mutual company, in lieu of such net

worth, it must have available total members equity in an

amount to be determined by the Insurance Commission

above all liabilities for losses reported; expenses, taxes,

legal reserve, and reinsurance of all outstanding risks, and

the contributed surplus fund equal to the amounts

© Compiled by RGL

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