Article 78p. 78

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

SECTION 397. Any person having any claim upon the

policy issued pursuant to this chapter shall, without any

unnecessary delay, present to the insurance company

concerned a written notice of claim setting forth the

nature, extent and duration of the injuries sustained as

certified by a duly licensed physician. Notice of claim

must be filed within six (6) months from the date of

accident, otherwise, the claim shall be deemed waived.

Action or suit for recovery of damage due to loss or injury

must be brought, in proper cases, with the Commissioner

or the courts within one (1) year from denial of the claim,

otherwise, the claimant's right of action shall prescribe.

SECTION 398. The insurance company concerned

shall forthwith ascertain the truth and extent of the claim

and make payment within five (5) working days after

reaching an agreement. If no agreement is reached, the

insurance company shall pay only the no-fault indemnity

provided in Section 391 without prejudice to the claimant

from pursuing his claim further, in which case, he shall

not be required or compelled by the insurance company

to execute any quit claim or document releasing it from

liability under the policy of insurance or surety bond

issued.

In case of any dispute in the enforcement of the

provisions of any policy issued pursuant to this chapter,

the adjudication of such dispute shall be within the

original and exclusive jurisdiction of the Commissioner,

subject to the limitations provided in Section 439.

SECTION

399.

It

shall

be

unlawful

for

a

land

transportation operator or owner of motor vehicle to

require his or its drivers or other employees to contribute

in the payment of premiums.

SECTION

400.

No

government

office

or

agency

having the duty of implementing the provisions of this

chapter nor any official or employee thereof shall act as

agent in procuring the insurance policy or surety bond

provided

for

herein.

The

commission

of

an

agent

procuring the said policy or bond shall in no case exceed

ten

percent

(10%)

of the amount of the premiums

therefor.

SECTION 401. Any land transportation operator or

owner of motor vehicle or any other person violating any

of the provisions of the preceding sections shall be

punished by a fine of not less than Five hundred pesos

(P500.00) and/or imprisonment for not more than six (6)

months.

The

violation

of

Section

390

by

a

land

transportation operator shall be a sufficient cause for the

revocation of the certificate of public convenience issued

by the Land Transportation Franchising and Regulatory

Board covering the vehicle concerned.

SECTION

402.

Whenever

any

violation

of

the

provisions of this chapter is committed by a corporation

or association, or by a government office or entity, the

executive

officer

or

officers

of

said

corporation,

association or government office or entity who shall have

knowingly permitted, or failed to prevent, said violation

shall be held liable as principals.

CHAPTER VII Mutual Benefit Associations and

Trusts for Charitable Uses

TITLE 1 Mutual Benefit Associations

SECTION 403. Any society, association or corporation,

without capital stock, formed or organized not for profit

but mainly for the purpose of paying sick benefits to

members, or of furnishing financial support to members

while out of employment, or of paying to relatives of

deceased members of fixed or any sum of money,

irrespective of whether such aim or purpose is carried out

by means of fixed dues or assessments collected regularly

from the members, or of providing, by the issuance of

certificates of insurance, payment of its members of

accident or life insurance benefits out of such fixed and

regular dues or assessments, but in no case shall include

any society, association, or corporation with such mutual

benefit features and which shall be carried out purely

from

voluntary

contributions

collected

not

regularly

and/or

no

fixed

amount

from

whomsoever

may

contribute,

shall

be

known

as

a

mutual

benefit

association within the intent of this Code.

Any society, association, or corporation principally

organized as a labor union shall be governed by the Labor

Code

notwithstanding

any

mutual

benefit

feature

provisions in its charter as incident to its organization.

In no case shall a mutual benefit association be

organized

and authorized to transact business as a

charitable or benevolent organization, and whenever it

has

this

feature

as

incident

to

its

existence,

the

corresponding

charter

provision

shall

be

revised

to

conform with the provision of this section. Mutual benefit

association, already licensed to transact business as such

on

the

date

this

Code

becomes

effective,

having

charitable or benevolent feature shall abandon such

incidental purpose upon effectivity of this Code if they

desire to continue operating as such mutual benefit

associations.

SECTION 404. A mutual benefit association, before it

may transact as such, must first secure a license from the

Commissioner. The application for such license shall be

filed with the Commissioner together with certified true

copies of the articles of incorporation or the constitution

and bylaws of the association, and all amendments

thereto, and such other documents or testimonies as the

Commissioner may require.

No license shall be granted to a mutual benefit

association

until

the

Commissioner

shall have been

satisfied by such examination as he may make and such

evidence

as he may require that the association is

qualified under existing laws to operate and transact

business as such. The Commissioner may refuse to issue a

license

to

any

mutual

benefit

association

if, in his

judgment, such refusal will best promote the interest of

the members of such association and of the people of

this country. Any license issued shall expire on the last

day of December of the third year following its issuance

and, upon proper application, may be renewed if the

association is continuing to comply with existing laws,

rules and regulations, orders, instructions, rulings and

decisions

of

the

Commissioner.

Every

association

receiving

any

such

license

shall

be

subject

to

the

supervision of the Commissioner: Provided, That no such

license shall be granted to any such association if such

association has no actuary.

SECTION 405. No mutual benefit association shall be

issued

a

license

to

operate

as

such

unless

it

has

constituted

and

established

a

Guaranty

Fund

by

depositing with the Commissioner an initial minimum

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

government securities with a total value equal to such

amount, to answer for any valid benefit claim of any of its

members.

All moneys received by the Commissioner for this

purpose must be deposited by him in interest-bearing

deposits with any bank or banks authorized to transact

business

in

the

Philippines

for

the

account of the

particular association constituting the Guaranty Fund.

Any accrual to such fund, be it interest earned or

dividend additions on moneys or securities so deposited,

may, with the prior approval of the Commissioner, be

withdrawn by the association if there is no pending

benefit claim against it, including interest thereon or

dividend additions thereto.

The Commissioner, prior to or after licensing a mutual

benefit

association,

may require such association to

increase its Guaranty Fund from the initial minimum

amount required to an amount equal to the capital

investment required of an existing domestic insurance

company under Section 209 of this Code.

SECTION

406.

Every

mutual

benefit

association

licensed to do business as such shall issue membership

© Compiled by RGL

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