Article 62p. 62

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

institute

such

actions

as

may

be

necessary in the

appropriate court to collect and recover accounts and

assets of the insurance company, and to do such other

acts as may be necessary to complete the liquidation as

ordered by the Commissioner.

The

provisions

of

any

law

to

the

contrary

notwithstanding, the actions of the Commissioner under

this section shall be final and executory, and can be set

aside by the court upon petition by the company and

only if there is convincing proof that the action is plainly

arbitrary and made in bad faith. The Commissioner,

through

the

Solicitor

General,

shall

then

file

the

corresponding answer reciting the proceeding taken and

praying the assistance of the court in the liquidation of

the company. No restraining order or injunction shall be

issued by the court enjoining the Commissioner from

implementing his actions under this section, unless there

is convincing proof that the action of the Commissioner is

plainly arbitrary and made in bad faith and the petitioner

or plaintiff files with the Clerk or Judge of the Court in

which the action is pending a bond executed in favor of

the Commissioner in an amount to be fixed by the court.

The restraining order or injunction shall be refused or, if

granted,

shall

be

dissolved

upon

filing

by

the

Commissioner, if he so desires, of a bond in an amount

twice the amount of the bond of the petitioner or plaintiff

conditioned that it will pay the damages which the

petition or plaintiff may suffer by the refusal or the

dissolution of the injunction. The provisions of Rule 58 of

the New Rules of Court insofar as they are applicable shall

govern the issuance and dissolution of the restraining

order or injunction contemplated in this section.

All

proceedings

under

this

title

shall

be

given

preference in the courts. The Commissioner shall not be

required to pay any fee to any public officer for filing,

recording, or in any manner authenticating any paper or

instrument relating to the proceedings.

As used in this title, the term Insolvency shall mean

the inability of an insurance company to pay its lawful

obligations as they fall due in the usual and ordinary

course of business as may be shown by its failure to

maintain the solvency requirements under Section 200 of

this Code.

SECTION 257. The receiver or the liquidator, as the

case may be, designated under the provisions of this title,

shall not be subject to any action, claim or demand by, or

liability to, any person in respect of anything done or

omitted to be done in good faith in the exercise, or in

connection with the exercise, of the powers conferred on

such receiver or liquidator.

TITLE 16 Consolidation and Merger of Insurance

Companies

SECTION 258. Upon prior notice to the Commissioner,

two (2) or more domestic insurance companies, acting

through

their

respective

boards

of

directors,

may

negotiate to merge into a single corporation which shall

be one of the constituent corporations, or consolidate

into a single corporation which shall be a new corporation

to be formed by the consolidation. A common agreement

of the proposed merger or consolidation shall be drawn

up for submission to the stockholders or members of the

constituent companies for adoption and approval in

accordance with the provisions of the respective bylaws

of the constituent companies and all existing laws that

may be pertinent.

SECTION 259. Such agreement shall include, aside

from the proposed merger or consolidation, provisions

relative to the manner of transfer of assets to and

assumption of liabilities by the absorbing or acquiring

company from the absorbed or dissolved company or

companies;

the

proposed

articles

of

merger

or

consolidation and bylaws of the surviving or acquiring

company; the corporate name to be adopted which

should

not

be

that of any other existing company

transacting similar business or one so similar as to be

calculated

to

mislead

the

public;

the rights of the

stockholders or members of the absorbed or dissolved

companies;

date

of

effectivity

of

the

merger

or

consolidation; and such particulars as may be necessary

to explain and make manifest the objects and purposes

of the absorbing or acquiring company.

SECTION 260. Upon execution of such agreement to

merge or consolidate by and between or among the

boards of directors of the constituent companies, notice

thereof shall be mailed immediately to their policyholders

and creditors. The company or companies to be absorbed

or dissolved shall discharge all its accrued liabilities;

otherwise, such liabilities shall, with the consent of its

creditors,

be

transferred

to

and

assumed

by

the

absorbing or acquiring company, or such liabilities be

reinsured by the latter. In the case of such policies as are

subject to cancellation by the company or companies to

be

absorbed

or

dissolved,

same

may

be

cancelled

pursuant to the terms thereof in lieu of such transfer,

assumption, or reinsurance.

SECTION

261. Upon approval or adoption in the

meetings of the stockholders or members or members

called

for

the

purpose

in

each

of

the

constituent

companies of the agreement to merge or consolidate, all

stockholders or members dissenting or objecting to the

merger or consolidation shall be paid the value of their

shares by the company concerned in accordance with the

bylaws thereof.

SECTION 262. Upon approval or adoption of the

agreement to merge or consolidate by the stockholders

or

members

of

the

constituent

companies,

the

corresponding articles of merger or of consolidation shall

be duly executed by the presidents and attested by the

corporate secretaries and shall bear the corporate seals of

the merging or consolidating companies setting forth:

(a) The plan of merger or the plan of consolidation;

(b) As to each corporation, the number of shares

outstanding,

or

in case of mutual corporations, the

number of members; and

(c) As to each corporation, the number of shares or

members voted for and against such plan, respectively.

Thereafter, a certified copy of such articles of merger or

consolidation, together with a certificate of approval or

adoption by the stockholders or members of such articles

of merger or consolidation, verified by affidavits of such

officers and under the seal of the constituent companies,

shall be submitted to the Commissioner, together with

such

other

papers

or

documents

which

the

Commissioner may require, for his consideration.

SECTION

263.

The

articles

of

merger

or

of

consolidation,

signed

and

verified

as

hereinabove

required, shall be filed with the Securities and Exchange

Commission for its examination and approval.

SECTION 264. Upon receipt from the Securities and

Exchange Commission of the certificate of merger or of

consolidation, the constituent companies shall surrender

to

the

Commissioner

their

respective

certificates of

authority to transact insurance business. The absorbing

or surviving company in case of merger, or the newly

formed

company

in

case

of

consolidation,

shall

immediately

file

with

the

Commissioner

the

corresponding

application

for

issuance

of

a

new

certificate of authority to transact insurance business,

together with a certified copy of the certificate of merger

or of consolidation, and of the certificate of increase of

stocks, if there is any, issued by the Securities and

Exchange Commission.

SECTION 265. Nothing in this title shall be construed

to enlarge the powers of the absorbing or surviving

company

in

case

of

merger,

or

the

newly

formed

company in case of consolidation, except those conferred

by the certificate of merger or of consolidation and the

articles of merger or of consolidation, or the amended

articles of incorporation, as registered with the Securities

and Exchange Commission.

© Compiled by RGL

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