Article 75p. 75

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

such insurance company, agent, or broker, shall make,

procure

or

negotiate

any

contract

of

insurance

or

agreement as to policy contract, other than is plainly

expressed in the policy or other written contract issued or

to be issued as evidence thereof, or shall directly or

indirectly, by giving or sharing a commission or in any

manner whatsoever, pay or allow or offer to pay or allow

to the insured or to any employee of such insured, either

as an inducement to the making of such insurance or

after such insurance has been effected, any rebate from

the premium which is specified in the policy, or any

special favor or advantage in the dividends or other

benefits to accrue thereon, or shall give or offer to give

any valuable consideration or inducement of any kind,

directly or indirectly, which is not specified in such policy

or contract of insurance; nor shall any such company, or

any

agent

thereof,

as

to

any policy or contract of

insurance issued, make any discrimination against any

Filipino in the sense that he is given less advantageous

rates, dividends or other policy conditions or privileges

than are accorded to other nationals because of his race.

SECTION 371. No insurance company doing business

in the Philippines, and no officer, director, or agent

thereof, and no insurance broker or any other person,

partnership or corporation shall issue or circulate or cause

or

permit

to

be

issued or circulated any literature,

illustration,

circular

or

statement

of

any

sort

misrepresenting the terms of any policy issued by any

insurance

company

of

the

benefits

or

advantages

promised thereby, or any misleading estimate of the

dividends or share of surplus to be received thereon, or

shall use any name or title of any policy or class of policies

misrepresenting the true nature thereof; nor shall any

such company or agent thereof, or any other person,

partnership

or

corporation

make

any

misleading

representation or incomplete comparison of policies to

any person insured in such company for the purpose of

inducing or tending to induce such person to lapse,

forfeit, or surrender his said insurance.

SECTION 372. If the Commissioner, after notice and

hearing,

finds

that

any

insurance

company,

rating

organization, agent, broker or other person has violated

any of the provisions of this title, it shall order the

payment of a fine not to exceed Twenty-five thousand

pesos

(P25,000.00)

for

each such offense, and shall

immediately suspend or revoke the license issued to such

insurance company, rating organization, agent, or broker.

The issuance, procurement or negotiation of a single

policy

or

contract

of

insurance

shall be deemed a

separate offense.

TITLE 8 Provision Common to Agents, Brokers

and Adjusters

SECTION

373.

A license issued to a partnership,

association or corporation to act as an insurance agent,

general agent, insurance broker, reinsurance broker, or

adjuster shall authorize only the individual named in the

license who shall qualify therefor as though an individual

licensee. The Commissioner shall charge, and the licensee

shall pay, a full additional license fee as to each respective

individual so named in such license in excess of one.

Licenses and certificates of registration issued under

the provisions of this chapter may be renewed by the

filing of notices of intention on forms to be prescribed by

the Commissioner and payment of the fees therefor.

SECTION 374. The Commissioner, in consultation with

the

duly

accredited

associations

representing

the

insurance industry, shall adopt and promulgate acode of

conduct

to

promote

integrity,

honesty

and

ethical

business practices among insurance agents, distributors

and other intermediaries.

TITLE 9 Bancassurance

SECTION 375. The term bancassurance shall mean

the presentation and sale to bank customers by an

insurance company of its insurance products within the

premises of the head office of such bank duly licensed by

the Bangko Sentral ng Pilipinas or any of its branches

under

such

rules

and

regulations

which

the

Commissioner and the Bangko Sentral ng Pilipinas may

promulgate. To engage in bancassurance arrangement, a

bank is not required to have equity ownership of the

insurance company. No insurance company shall enter

into a bancassurance arrangement unless it possesses all

the

requirements

as

may

be

prescribed

by

the

Commissioner and the Bangko Sentral ng Pilipinas.

No insurance product under this section, whether life

or non-life, shall be issued or delivered unless in the form

previously approved by the Commissioner.

SECTION 376. Personnel tasked to present and sell

insurance products within the bank premises shall be

duly licensed by the Commissioner and shall be subject

to the rules and regulations of this Act.

SECTION 377. The Commissioner and the Bangko

Sentral

ng

Pilipinas

shall

promulgate

rules

and

regulations

to

effectively

supervise

the

business

of

bancassurance.

CHAPTER V Security Fund

SECTION 378. There is hereby created a fund to be

known as the Security Fund which shall be used in the

payment

of

allowed

claims

against

an

insurance

company

authorized

to

transact

business

in

the

Philippines remaining unpaid by reason of the insolvency

of such company. The said Fund may also be used to

reinsure the policy of the insolvent insurer in any solvent

insurer authorized to do business in the Philippines as

provided in Section 256. The Fund may likewise be used

to pay insured claims which otherwise would not be

compensable under the provisions of the policy. No

payment from the Security Fund shall, however, be made

to any person who owns or controls ten percent (10%) or

more of the voting shares of stock of the insolvent insurer

and no payment on any one claim shall exceed Twenty

thousand pesos (P20,000.00).

SECTION 379. Such Fund shall consist of all payments

made to the Fund by insurance companies authorized to

do business in the Philippines. Payments made by life

insurance companies shall be treated separately from

those made by non-life insurance companies and the

corresponding fund shall be called Life Account and

Non-Life Account, respectively, and shall be held and

administered as such by the Commissioner in accordance

with the provisions of this title. The Life Account shall be

utilized exclusively for disbursements that refer to life

insurance companies, while the Non-Life Account shall be

utilized exclusively for disbursements that refer to non-life

insurance companies.

SECTION

380.

All

insurance

companies

doing

business

in

the

Philippines

shall

contribute

to

the

Security Fund, Life or Non-Life Account, as the case may

be,

the

aggregate

amount

of

Five

million

pesos

(P5,000,000.00) for each Account. The contributions of

the

life

insurance

companies

and

of

the

non-life

insurance companies shall be in direct proportion to the

ratio between a particular life insurance company or a

particular non-life insurance company's net worth and

the aggregate net worth of all life insurance companies

or all non-life insurance companies, as the case may be,

as shown in their latest financial statements approved by

the Commissioner. This proportion applied to the Five

million pesos (P5,000,000.00) shall be the contribution of

a particular company to the corresponding Account of

the Security Fund.

The amount of Five million pesos (P5,000,000.00) in

each Account shall be in the form of a revolving trust

fund. The respective contributions of the companies shall

remain

as

admitted

assets

in

their books and any

disbursement

therefrom

shall

be

deducted

proportionately from the contributions of each company

which will be allowed as deductions for income tax

purposes. Any earnings of the Fund shall be turned over

© Compiled by RGL

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