Article 53p. 53

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

such insurer is required by the law of any country or

possession outside the Republic of the Philippines to be

invested in such country or possession, whichever shall be

greater.

SECTION 207. An insurance company may:

(1) Invest in equities of other financial institutions; and

(2) Engage in the buying and selling of long-term

debt instruments: Provided, That any or all of such

investments shall be with the prior approval of the

Commissioner.

Insurance

companies

may,

however,

invest in listed equities of other financial institutions

without need of prior approval by the Commissioner.

SECTION 208. Any life insurance company may:

(a) Acquire or construct housing projects and, in

connection with any such project, may acquire land or

any interest therein by purchase, lease or otherwise, or

use land acquired pursuant to any other provision of this

Code. Such company may thereafter own, maintain,

manage, collect or receive income from, or sell and

convey, any land or interest therein so acquired and any

improvements thereon. The aggregate book value of the

investments of any such company in all such projects

shall

not

exceed

at

the

time

of

such

investments

twenty-five percent (25%) of the total admitted assets of

such company on the thirty-first day of December next

preceding: Provided, That the funds of the company for

the payment of pending claims and obligations shall not

be used for such investments.

(b) Acquire real property, other than property to be

used primarily for providing housing and property for

accommodation of its own business, as an investment for

the production of income, or may acquire real property to

be improved or developed for such investment purpose

pursuant to a program therefor, subject to the condition

that the cost of each parcel of real property so acquired

under the authority of this paragraph (b), including the

estimated cost to the company of the improvement or

development thereof, when added to the book value of all

other real property held by it pursuant to this paragraph

(b), shall not exceed twenty-five percent (25%) of its

admitted assets as of the thirty-first day of December

next preceding.

SECTION 209. Every domestic insurance company

shall, to the extent of an amount equal in value to

twenty-five percent (25%) of the minimum net worth

required under Section 194, invest its funds only in

securities, satisfactory to the Commissioner, consisting of

bonds or other instruments of debt of the Government of

the

Philippines

or

its

political

subdivisions

or

instrumentalities, or of government-owned or -controlled

corporations and entities, including the Bangko Sentral

ng Pilipinas: Provided, That such investments shall at all

times be maintained free from any lien or encumbrance:

Provided, further , That such securities shall be deposited

with and held by the Commissioner for the faithful

performance

by

the

depositing

insurer

of

all

its

obligations under its insurance contracts. The provisions

of Section 198 shall, so far as practicable, apply to the

securities deposited under this section.

Except

as

otherwise

provided

in

this

Code,

no

judgment creditor or other claimant shall have the right

to levy upon any of the securities of the insurer held on

deposit under this section or held on deposit pursuant to

the requirement of the Commissioner.

SECTION

210.

After

satisfying

the

requirements

contained in the preceding section, any domestic non-life

insurance company, shall invest, to an amount prescribed

below, its funds in, or otherwise, acquire or loan upon,

only the classes of investments described in Section 206,

including securities issued by any registered enterprise,

as this term is defined in Executive Order No. 226 ,

otherwise known as ' The Omnibus Investments Code of

1987 ' and such other classes of investments as may be

authorized by the Commissioner for purposes of this

section: Provided, That:

(a) No more than twenty percent (20%) of the net

worth of such company as shown by its latest financial

statement

approved

by

the

Commissioner

shall

be

invested in the lot and building in which the insurance

company conducts its business; and

(b) The total investment of an insurance company in

any registered enterprise shall not exceed twenty percent

(20%) of the net worth of said insurance company as

shown by its aforesaid financial statement nor twenty

percent (20%) of the paid-up capital of the registered

enterprise excluding the intended investment, unless

previously authorized by the Commissioner: Provided,

further , That such investments, free from any lien or

encumbrance, shall be at least equal in amount to the

aggregate amount of: (1) its legal reserve, as provided in

Section 219, and (2) its reserve fund held for reinsurance

as provided for in the pertinent treaty provision in the

case of reinsurance ceded to authorized insurers.

SECTION

211.

After

satisfying

the

requirements

contained in Sections 197, 199, 209 and 210, any non-life

insurance company may invest any portion of its funds

representing earned surplus in any of the investments

described

in

Sections

204,

206 and 207, or in any

securities issued by a registered enterprise mentioned in

the preceding sections: Provided, That no investment in

stocks or bonds of any single entity shall in the aggregate,

exceed twenty percent (20%) of the net worth of the

insurance

company

as

shown

in

its latest financial

statement approved by the Commissioner or twenty

percent

(20%) of the paid-up capital of the issuing

company, whichever is lesser, unless otherwise approved

by the Commissioner.

SECTION 212. After satisfying the minimum capital

investment required in Section 209, any life insurance

company may invest its legal policy reserve, as provided

in Section 217 or in Section 218, in any of the classes of

securities or types of investments described in Sections

204, 206, 207 and 208, subject to the limitations therein

contained, and in any securities issued by any registered

enterprise mentioned in Section 210, free from any lien or

encumbrance, in such amounts as may be approved by

the Commissioner. Such company may likewise invest

any

portion

of

its

earned

surplus

in

the

aforesaid

securities

or

investments

subject

to

the

aforesaid

limitations.

SECTION 213. Any investment made in violation of the

applicable provisions of this title shall be considered

non-admitted assets.

SECTION 214. (a) All bonds or other instruments of

indebtedness having a fixed term and rate of interest and

held by any life insurance company authorized to do

business in this country, if amply secured and if not in

default as to principal or interest, shall be valued based on

their amortized cost using effective interest method less

impairment

and

unrecoverable

amount

based

on

appropriate measurement methods which are generally

accepted

in

the

industry

and

accepted

by

the

Commissioner. The Commissioner shall have the power to

determine the eligibility of any such investments for

valuation on the basis of amortization, and may by

regulation prescribe or limit the classes of securities so

eligible for amortization. All bonds or other instruments

of

indebtedness

which

in

the

judgment

of

the

Commissioner are not amply secured shall not be eligible

for amortization and shall be valued in accordance with

paragraph two. The Commissioner may, if he finds that

the interest of policyholders so permit or require, by

official regulation permit or require any class or classes of

insurers, other than life insurance companies authorized

to do business in this country, to value their bonds or

other instruments of indebtedness in accordance with

the foregoing rule.

(b) The investments of all insurers authorized to do

business in this country, except securities subject to

amortization and except as otherwise provided in this

chapter,

shall

be

valued,

in

the

discretion

of

the

Commissioner, at their amortized cost using effective

© Compiled by RGL

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