Article 66p. 66

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

(a) Shares of the capital stock of such insurer acquired

as provided in Section 272 and assigned and transferred

to the trustees as is provided in said section, and the

assignment and transfer of said shares as so provided;

(b) Any certificate or other instrument issued to a

policyholder of such mutualized insurer conferring or

evidencing membership in such mutualized insurer or

conferring

or

evidencing

such

member's

right

to

participate in the profits or share in the assets of such

mutualized insurer by virtue of his membership therein

and the issuance of such certificate or other instrument;

(c) The plan for the acquisition of the outstanding

shares of the capital stock of such insurer authorized by

the provisions of this chapter, the submission of said plan

to the Commissioner and to the policyholders of such

insurer as provided in this chapter, and the approval and

carrying out of said plan or any part thereof in accordance

with the provisions of this chapter.

SECTION

280.

A

domestic

mutual life insurance

company doing business in the Philippines may convert

itself into an incorporated stock life insurance company

by demutualization. To that end, it may provide and carry

out a plan for the conversion by complying with the

requirements of this title.

The conversion of a domestic mutual life insurance

company

to

an

incorporated

stock

life

insurance

company shall be carried out pursuant to a conversion

plan duly approved by the Commissioner.

The Commissioner shall promulgate such rules and

regulations as he or she may deem necessary to carry out

the provisions of this title, after due consultation with

representatives of the insurance industry.

All converted insurers under the provisions of this title

shall be subject to all other applicable provisions of this

Code. The provisions of the Corporation Code shall apply

in a suppletory manner.

TITLE 18 Withdrawal of Foreign Insurance

Companies

SECTION 281. A foreign insurance company doing

business in the Philippines, upon payment of the fee

hereinafter

prescribed

and

surrender

to

the

Commissioner of its certificate of authority, may apply to

withdraw from the Philippines. Such application shall be

duly executed in writing, accompanied by evidence of

due authority for such execution, properly acknowledged.

SECTION 282. The Commissioner shall publish the

application for withdrawal once a week for three (3)

consecutive weeks in a newspaper of general circulation

in the Philippines. The expenses of such publication shall

be paid by the insurance company filing such application.

SECTION

283.

Every

foreign

insurance

company

desiring to withdraw from the Philippines shall, prior to

such withdrawal, discharge its liabilities to policyholders

and creditors in this country. In case of its policies

insuring residents of the Philippines, it shall cause the

primary liabilities under such policies to be reinsured and

assumed by another insurance company authorized to

transact business in the Philippines. In the case of such

policies as are subject to cancellation by the withdrawing

company, it may cancel such policies pursuant to the

terms thereof in lieu of such reinsurance and assumption

of liabilities.

SECTION

284.

The Commissioner shall cause an

examination of the books and records of the withdrawing

company,

and

if,

upon

such

examination,

the

Commissioner finds that the insurer has no outstanding

liabilities to policyholders and creditors in the Philippines,

and no policies uncancelled; or its primary liabilities have

been

reinsured

or

assumed

by

another

insurance

company

authorized

to

transact

business

in

the

Philippines, as required in the preceding section, it shall

cancel

the

withdrawing

company's

certificate

of

authority, if unexpired, and shall permit the insurer to

withdraw. The cost and expenses of all such examination

shall be paid as prescribed in Section 440.

SECTION 285. Upon the failure of such withdrawing

insurance company or its agents in the Philippines to pay

time expenses of such publication within thirty (30) days

after

the

presentation

of

the

bill

therefor,

the

Commissioner shall collect such fee from the deposit

furnished in accordance with the provisions of Section

197.

SECTION 286. A foreign life insurance company that

withdraws from the Philippines shall be considered a

servicing insurance company if its business transactions

are confined to accepting periodic premium payments

from, or granting policy loans and paying cash surrender

values

of outstanding policies to, or reviving lapsed

policies

of,

Philippine

policyholders,

and

such other

related services.

SECTION 287. No company shall act as a servicing

insurance company until after it shall have obtained a

special certificate of authority to act as such from the

Commissioner upon application therefor and payment by

the company of the fees hereinafter prescribed. Such

certificate shall expire on the last day of December of the

third year and shall be renewed, while the company

continues to service its policyholders, and to comply with

all the applicable provisions of law and regulations.

TITLE 19 Professional Reinsurers

SECTION 288. Except as otherwise provided in this

Code, no partnership, association or corporation shall

transact any business in the Philippines as a professional

reinsurer until it shall have obtained a certificate of

authority for that purpose from the Commissioner upon

application therefor and payment by such entity of the

fees hereinafter prescribed. As used in this Code, the term

'professional

reinsurer'

shall

mean

any

entity

that

transacts solely and exclusively reinsurance business in

the Philippines.

The Commissioner may refuse to issue a certificate of

authority to any such entity when such refusal will best

promote public interest. No such certificate of a authority

shall be granted to any such entity unless and until the

Commissioner is satisfied by such examination and such

evidence as may be required that such entity is qualified

by the laws of the Philippines to transact business therein

as professional reinsurer.

Before

issuing

such

certificate

of

authority,

the

Commissioner must be satisfied that the name of the

applicant is not that of any other known company

transacting insurance or reinsurance business in the

Philippines, or a name so similar as to be calculated to

mislead the public.

Such certificate of authority shall expire on the last

day of December the third year following its issuance

unless it is renewed.

Every such partnership, association, or corporation

receiving such certificate of authority shall be subject to

the provisions of this Code and other related laws, and to

the jurisdiction and supervision of the Commissioner.

SECTION

289.

Any

partnership,

association,

or

corporation authorized to transact solely reinsurance

business must have a capitalization of at least Three

billion pesos (P3,000,000,000.00) paid in cash of which at

least fifty percent (50%) is paid-up and the remaining

portion thereof is contributed surplus, which in no case

shall

be

less

than

Four

hundred

million

pesos

(P400,000,000.00)

or

such

capitalization

as

may

be

determined

by

the

Secretary

of

Finance,

upon the

recommendation of the Commissioner: Provided, That

twenty-five percent (25%) of the paid-up capital must be

invested 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

© Compiled by RGL

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