Article 76p. 76

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

to the contributing companies in proportion to their

contributions.

In the case of disbursements of funds from the Fund

as provided in the foregoing paragraph, the life and

non-life companies, as the case may be, shall replenish

the

amount

disbursed

in

direct

proportion

to

the

individual company's net worth and the aggregate net

worth of the life or non-life companies, as the case may

be. However, in no case shall the Fund exceed the

aggregate amount of Ten million pesos (P10,000,000.00),

or Five million pesos (P5,000,000.00) for each Account.

Should the Fund, Life or Non-Life Account, as the case

may be, be inadequate for a disbursement as provided

for, then the Life or Non-Life companies, as the case may

be, shall contribute to the Fund their respective shares in

the proportion previously mentioned.

SECTION 381. The Commissioner may adopt, amend,

and

enforce

all

reasonable

rules

and

regulations

necessary for the proper administration of the Fund and

of the Accounts. In the event any insurer shall fail to make

any payment required by this title, or that any payment

made is incorrect, he shall have full authority to examine

all the books and records of the insurer for the purpose of

ascertaining the facts and shall determine the correct

amount to be paid and may proceed in any court of

competent jurisdiction to recover for the benefit of the

Fund or of the Account concerned any sum shown to be

due upon such examination and determination. Any

insurer which fails to make any payment to the Fund or to

the Account concerned when due, shall thereby forfeit to

said Fund or Account concerned a penalty of five percent

(5%) of the amount determined to be due as provided by

this title, plus one percent (1%) of such amount for each

month of delay or fraction thereof, after the expiration of

the first month of such delay, but the Commissioner, if

satisfied that the delay was excusable, may remit all or

any part of such penalty. The Commissioner, in his

discretion, may suspend or revoke the certificate of

authority

to

do

business

in

the

Philippines

of any

insurance company which shall fail to comply with this

title

or

to

pay

any penalty imposed in accordance

therewith.

SECTION 382. The Accounts created by this title shall

be separate and apart from each other and from any

other fund. The Treasurer of the Philippines shall be the

custodian of the Life Account and Non-Life Account of

the

Security

Fund; and all disbursements from any

Account shall be made by the Treasurer of the Philippines

upon

vouchers

signed

by

the

Commissioner or his

deputy, as hereinafter provided. The moneys of said

Account may be invested by the Commissioner only in

bonds or other instruments of debt of the Government of

the

Philippines

or

its

political

subdivisions

or

instrumentalities. The Commissioner may sell any of the

securities in which an Account is invested, if advisable, for

its proper administration or in the best interest of such

Account.

SECTION

383.

Payments

from

either

the

Life

Insurance Account or Non-Life Account, as the case may

be, shall be made by the Treasurer of the Philippines to

the Commissioner, upon the authority of appropriate

certificate filed with him by the Commissioner acting in

such capacity.

SECTION

384.

The

Commissioner

may,

in

his

discretion,

designate

or

appoint

a

duly

authorized

representative or representatives to appear and defend

before

any

court

or

other

body

or

official

having

jurisdiction any or all actions or proceedings against

principals or assureds on insurance policies or contracts

issued to them where the insurer has become insolvent

or

unable

to

meet

its

insurance

obligations.

The

Commissioner shall have, as of the date of insolvency of

such insurer or as of the date of its inability to meet its

insurance obligations, only the rights which such insurer

would have had if it had not become insolvent or unable

to meet its insurance obligations. For the purpose of this

title, the Commissioner shall have power to employ such

counsel, clerks and assistants as he may deem necessary.

SECTION

385.

The

expense

of

administering

an

Account shall be paid out of the Account concerned. The

Commissioner shall serve as administrator of the Fund

and of the Accounts without additional compensation,

but

may

be

allowed

and

paid

from

the

Account

concerned expenses incurred in the performance of his

duties

in

connection

with

said

Account.

The

compensation

of

those

persons

employed

by

the

Commissioner shall be deemed administration expense

payable from the Account concerned. The Commissioner

shall include in his annual report to the Secretary of

Finance a statement of the expenses of administration of

the Fund and of the Life Account and Non-Life Account

for the preceding year.

CHAPTER VI Compulsory Motor Vehicle Liability

Insurance

SECTION 386. For purposes of this chapter:

(a) Motor Vehicle is any vehicle as defined in Section

3, paragraph (a) of Republic Act No. 4136 , otherwise

known as the ' Land Transportation and Traffic Code'.

(b)

Passenger

is

any

fare

paying

person

being

transported and conveyed in and by a motor vehicle for

transportation of passengers for compensation, including

persons expressly authorized by law or by the vehicle's

operator or his agents to ride without fare.

(c) Third party is any person other than a passenger

as defined in this section and shall also exclude a

member of the household, or a member of the family

within the second degree of consanguinity or affinity, of a

motor vehicle owner or land transportation operator, as

likewise defined herein, or his employee in respect of

death, bodily injury, or damage to property arising out of

and in the course of employment.

(d) Owner or motor vehicle owner means the actual

legal owner of a motor vehicle, in whose name such

vehicle is duly registered with the Land Transportation

Office;

(e) Land transportation operator means the owner or

owners of motor vehicles for transportation of passengers

for compensation, including school buses.

(f) Insurance policy or Policy refers to a contract of

insurance against passenger and third-party liability for

death or bodily injuries and damage to property arising

from motor vehicle accidents.

SECTION

387.

It

shall

be

unlawful for any land

transportation operator or owner of a motor vehicle to

operate the same in the public highways unless there is

in force in relation thereto a policy of insurance or

guaranty in cash or surety bond issued in accordance

with the provisions of this chapter to indemnify the death,

bodily injury, and/or damage to property of a third-party

or passenger, as the case may be, arising from the use

thereof.

SECTION 388. The Commissioner shall furnish the

Land

Transportation

Office

with

a

list

of insurance

companies authorized to issue the policy of insurance or

surety bond required by this chapter.

SECTION 389. The Land Transportation Office shall

not allow the registration or renewal of registration of any

motor

vehicle without first requiring from the land

transportation

operator

or

motor

vehicle

owner

concerned the presentation and filing of a substantiating

documentation in a form approved by the Commissioner

evidencing that the policy of insurance or guaranty in

cash or surety bond required by this chapter is in effect.

SECTION 390. Every land transportation operator and

every owner of a motor vehicle shall, before applying for

the registration or renewal of registration of any motor

vehicle, at his option, either secure an insurance policy or

surety bond issued by any insurance company authorized

© Compiled by RGL

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