Article 70p. 70

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

the applicant has undergone extensive education and/or

training in insurance.

SECTION 314. An application for the issuance or

renewal of a license to act as an insurance agent or

insurance broker may be refused, or such license, if

already issued or renewed, shall be suspended or revoked

if the Commissioner finds that the applicant for, or holder

of, such license:

(a) Has willfully violated any provision of this Code; or

(b) Has intentionally made a material misstatement in

the application to qualify for such license; or

(c) Has obtained or attempted to obtain a license by

fraud or misrepresentation; or

(d)

Has

been

guilty

of

fraudulent

or

dishonest

practices; or

(e) Has misappropriated or converted to his own use

or illegally withheld moneys required to be held in a

fiduciary capacity; or

(f)

Has

not

demonstrated

trustworthiness

and

competence to transact business as an insurance agent

or insurance broker in such manner as to safeguard the

public; or

(g) Has materially misrepresented the terms and

conditions of policies or contracts of insurance which he

seeks to sell or has sold; or

(h)

Has

failed

to

pass

the

written

examination

prescribed, if not otherwise exempt from taking the

same.

In addition to the foregoing causes, no license to act

as insurance agent or insurance broker shall be renewed

if the holder thereof has not been actively engaged as

such agent or broker in accordance with such rules as the

Commissioner may prescribe.

SECTION 315. The premium, or any portion thereof,

which an insurance agent or insurance broker collects

from an insured and which is to be paid to an insurance

company because of the assumption of liability through

the issuance of policies or contracts of insurance, shall be

held by the agent or broker in a fiduciary capacity and

shall not be misappropriated or converted to his own use

or illegally withheld by the agent or broker.

Any

insurance

company

which

delivers

to

an

insurance agent or insurance broker a policy or contract

of insurance shall be deemed to have authorized such

agent or broker to receive on its behalf payment of any

premium which is due on such policy or contract of

insurance at the time of its issuance or delivery or which

becomes due thereon.

In

order

to

ensure

faithful

performance

by the

insurance agent or insurance broker of these fiduciary

responsibilities,

the

Insurance

Commissioner

shall

prescribe the minimum terms and conditions on such

matters in the standard agency or brokers agreement

between the agents and/or the broker with the insurance

companies.

SECTION 316. Any provision of existing laws to the

contrary notwithstanding, no person shall, within the

Philippines, sell or offer for sale a variable contract or do

or perform any act or thing in the sale, negotiation,

making or consummating of any variable contract other

than for himself unless such person shall have a valid and

current license from the Commissioner authorizing such

person to act as a variable contract agent. No such license

shall be issued unless and until the Commissioner is

satisfied,

after

examination

that

such

person

is

by

training, knowledge, ability and character qualified to act

as such agent. Any such license may be withdrawn and

cancelled by the Commissioner after notice and hearing,

if he shall find that the holder thereof does not then have

the

qualifications required for the issuance of such

license.

SECTION 317. It shall be unlawful for any person,

company or corporation in the Philippines to act as

general agent of any insurance company unless he is

empowered by a written power of attorney duly executed

by such insurance company, and registered with the

Commissioner to receive notices, summons and legal

processes for and in behalf of the insurance company

concerned in connection with actions or other legal

proceedings against said insurance company. It shall be

the duty of said general agent to notify the Commissioner

of his post office address in the Philippines, or any

change thereof. Notices, summons, or processes of any

kind sent by registered mail to the last registered address

of such general agent of the company concerned or to

the Commissioner shall be sufficient service and deemed

as if served on the insurance company itself.

SECTION 318. Except as otherwise provided by law or

treaty, it shall be unlawful for any person, partnership,

association or corporation in the Philippines, for himself

or itself, or for some other person, partnership, association

or corporation, either to procure, receive or forward

applications of insurance in, or to issue or to deliver or

accept policies or contracts of insurance of or for, any

insurance company or companies not authorized to

transact business in the Philippines, covering risks, life or

non-life, situated in the Philippines; and any such person,

partnership,

association

or

corporation

violating

the

provisions of this section shall be deemed guilty of a

penal offense, and upon conviction thereof, shall for each

such offense be punished by a fine of Two hundred fifty

thousand pesos (P250,000.00), or imprisonment of six (6)

months, or both, at the discretion of the court: Provided,

That the provisions of this section shall not apply to

reinsurance.

TITLE 2 Reinsurance Brokers

SECTION

319.

Except

as

provided

in

the

next

succeeding title, no person shall act as reinsurance broker

in the Philippines unless he is authorized as such by the

Commissioner.

A reinsurance broker is one who, for compensation,

not being a duly authorized agent, employee or officer of

an insurer in which any reinsurance is effected, acts or

aids

in

any

manner

in

negotiating

contracts

of

reinsurance, or placing risks of effecting reinsurance, for

any insurance company authorized to do business in the

Philippines.

SECTION 320. Upon application and payment of the

corresponding fee hereinafter prescribed, and the filing

of two (2) errors and omissions (professional liability or

professional indemnity) policies hereinafter described, a

person may, if found qualified, be issued a license to act

as reinsurance broker by the Commissioner. No such

license shall be valid after December 31 of the third year

following its issuance unless it is renewed.

The errors and omissions (professional liability or

professional indemnity) policies mentioned above shall

indemnify the applicant against any claim or claims for

breach of duty as reinsurance broker which may be made

against him by reason of any negligent act, error or

omission, whenever or wherever committed or alleged to

have been committed, on the part of the applicant or any

person who has been, is now, or may hereafter during the

subsistence of the policies be employed by the said

applicant in his capacity as reinsurance broker: Provided,

That the filing of any claim or claims under one of such

policies shall preclude the filing of the said claim or

claims under the other policy. The said policies shall be

issued

separately

by

two

(2)

insurance

companies

authorized to do business in the Philippines and shall be

in such amounts as may be prescribed by the Insurance

Commissioner, depending upon the size or amount of

the broking business of the applicant, but in no case shall

the amount of each of such policies be less than Five

hundred thousand pesos (P500,000.00).

SECTION 321. The Commissioner may recall, suspend

or revoke the license granted to a reinsurance broker for

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