Article 55p. 55

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

the same was accumulated, and no company or any of its

officers shall be permitted to use any part of such

apportioned surplus fund for any purpose whatsoever

other than for the express purpose for which the same

was accumulated.

SECTION 219. Every insurance company, other than

life, shall maintain a reserve for unearned premiums on

its policies in force, which shall be charged as a liability in

any determination of its financial condition. Such reserve

shall be calculated based on the twenty-fourth (24th)

method.

SECTION 220. In addition to its liabilities and reserves

on contracts of insurance issued by it, every insurance

company shall be charged with the estimated amount of

all of its other liabilities, including taxes, expenses and

other

obligations

due

or

accrued

at

the

date

of

statement, and including any special reserves required by

the Commissioner pursuant to the provisions of this Code.

TITLE 6 Limit of Single Risk

SECTION 221. No insurance company other than life,

whether foreign or domestic, shall retain any risk on any

one subject of insurance in an amount exceeding twenty

percent (20%) of its net worth. For purposes of this

section, the term subject of insurance shall include all

properties or risks insured by the same insurer that

customarily

are

considered

by

non-life

company

underwriters to be subject to loss or damage from the

same occurrence of any hazard insured against.

The Commissioner may issue regulations providing

for a maximum limit on the overall retained risks of

insurers to serve as a catastrophe cover requirement for

the same.

Reinsurance

ceded

as

authorized

under

the

succeeding title shall be deducted in determining the risk

retained. As to surety risk, deduction shall also be made of

the amount assumed by any other company authorized

to transact surety business and the value of any security

mortgaged, pledged, or held subject to the surety's

control and for the surety's protection.

TITLE 7 Reinsurance Transactions

SECTION 222. An insurance company doing business

in the Philippines may accept reinsurances only of such

risks, and retain risk thereon within such limits, as it is

otherwise authorized to insure.

SECTION 223. No insurance company doing business

in the Philippines shall cede all or part of any risks

situated in the Philippines by way of reinsurance directly

to any foreign insurer not authorized to do business in the

Philippines unless such foreign insurer or, if the services

of a nonresident broker are utilized, such nonresident

broker is represented in the Philippines by a resident

agent duly registered with the Commissioner as required

in this Code.

The resident agent of such unauthorized foreign

insurer or nonresident broker shall immediately upon

registration furnish the Commissioner with the annual

statement

of

such

insurer,

or

of such company or

companies where such broker may place Philippine

business as of the year preceding such registration, and

annually thereafter as soon as available.

SECTION 224. All insurance companies, both life and

non-life, authorized to do business in the Philippines shall

cede their excess risks to other companies similarly

authorized to do business in the Philippines in such

amounts and under such arrangements as would be

consistent with sound underwriting practices before they

enter into reinsurance arrangements with unauthorized

foreign insurers.

SECTION 225. Any insurance company doing business

in the Philippines desiring to cede their excess risks to

foreign

insurance

or

reinsurance

companies

not

authorized to transact business in the Philippines may do

so

under

such

terms

and

conditions

which

the

Commissioner may prescribe.

Should any reinsurance agreement be for any reason

cancelled or terminated, the ceding company concerned

shall

inform

the

Commissioner

in

writing

of

such

cancellation or termination within thirty (30) days from

the date of such cancellation or termination or from the

date

notice

or

information

of

such

cancellation

or

termination is received by such company as the case may

be.

SECTION 226. Every insurance company authorized to

do

business

in

the

Philippines

shall

report

to

the

Commissioner on forms prescribed by him the particulars

of reinsurance treaties or any new treaties or changes in

existing

treaties within three (3) months from their

effectivity.

SECTION

227.

No

credit

shall be allowed as an

admitted asset or as a deduction from liability, to any

ceding insurer for reinsurance made, ceded, renewed, or

otherwise becoming effective after January 1, 1975, unless

the reinsurance shall be payable by the assuming insurer

on the basis of the liability of the ceding insurer under the

contract

or

contracts

reinsured

without

diminution

because of the insolvency of the ceding insurer nor unless

under the contract or contracts of reinsurance the liability

for such reinsurance is assumed by the assuming insurer

or insurers as of the same effective date; nor unless the

reinsurance agreement provides that payments by the

assuming insurer shall be made directly to the ceding

insurer or to its liquidator, receiver, or statutory successor

except:

(a) Where the contract specifically provides another

payee of such reinsurance in the event of the insolvency

of the ceding insurer; and

(b) Where the assuming insurer with the consent of

the direct insured or insureds has assumed such policy

obligations of the ceding insurer as direct obligations of

the assuming insurer to the payees under such policies

and in substitution for the obligations of the ceding

insurer to such payees.

SECTION

228.

No

life

insurance

company doing

business in the Philippines shall reinsure its whole risk on

any individual life or joint lives, or substantially all of its

insurance in force, without having first obtained the

written permission of the Commissioner.

TITLE 8 Annual Statement

SECTION

229.

Every

insurance

company

doing

business in the Philippines shall terminate its fiscal period

on the thirty-first day of December every year, and shall

annually on or before the thirtieth day of April of each

year render to the Commissioner a statement signed and

sworn to by the chief officer of such company showing, in

such form and details as may be prescribed by the

Commissioner, the exact condition of its affairs on the

preceding thirty-first day of December.

The

annual

statement

shall

be

prepared

in

accordance with the financial reporting framework as

determined

by

the

Commissioner.

In

addition,

the

Commissioner may require other relevant information.

The form and details of such other relevant information

shall be prescribed by the Commissioner and shall form

part of the supplementary schedules to the annual

statement.

Any entry in the statement which is found to be false

shall constitute a misdemeanor and the officer signing

such statement shall be subject to the penalty provided

for under Section 442.

SECTION 230. Every insurance company authorized

under Title 10 of this chapter to issue, deliver or use

variable

contracts

shall

annually

file

with

the

Commissioner separate annual statement of its separate

variable accounts. Such statement shall be on a form

prescribed or approved by the Commissioner and shall

include details as to all of the income, disbursements,

© Compiled by RGL

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