Article 80p. 80

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

No such conversion shall take effect unless and until

approved by the Commissioner.

SECTION 418. No mutual benefit association shall be

dissolved without first notifying the Commissioner and

furnishing him with a certified copy of the resolution

authorizing

the

dissolution,

duly

adopted

by

the

affirmative vote of two-thirds (2/3) of the members at a

meeting called for that purpose, the financial statements

as of the date of the resolution, and such other papers or

documents as may be required by the Commissioner.

No

dissolution

shall

proceed

until

and

unless

approved by the Commissioner and all proceedings in

connection therewith shall be witnessed and attested by

his duly designated representative.

No

mutual

benefit

association

shall be officially

declared as dissolved until after the Commissioner so

certifies

that

all

outstanding

claims

against

the

association have been duly settled and liquidated.

SECTION 419. The Commissioner shall, after notice

and hearing, have the power either to suspend or revoke

the license issued to a mutual benefit association if he

finds that the association has:

(a) Failed to comply with any provision of this Code;

(b) Failed to comply with any other law or regulation

obligatory upon it;

(c) Failed to comply with any order, ruling, instruction,

requirement or recommendation of the Commissioner;

(d)

Exceeded

its

power

to

the

prejudice

of

its

members;

(e)

Conducted

its

business

fraudulently

or

hazardously;

(f)

Rendered its affairs and condition to one of

insolvency; or

(g) Failed to carry out its aims and purposes for which

it was organized due to any cause.

After receipt of the order from the Commissioner

suspending or revoking the license, the association must

immediately exert efforts to remove such cause or causes

which

brought

about

the

order

and,

upon

proper

showing, may apply with the Commissioner for the lifting

of the order and restoration or revival of the license so

revoked or suspended.

SECTION 420. For failure to remove such cause or

causes

which

brought

about

the

suspension

or

revocation of the license of a mutual benefit association,

the Commissioner shall apply under this Code for an

order from the proper court to liquidate such association.

The

provisions

of

Titles

14

and

15,

Chapter

III,

pertaining to the appointment of a conservator and

proceedings upon insolvency of an insurance company

shall, insofar as practicable, apply to mutual benefit

associations.

SECTION 421. To secure the enforcement of any

provision under this title, the Commissioner may issue

such rules, rulings, instructions, orders and circulars.

SECTION 422. The violation of any provision of this

title shall subject the person violating or the officer of the

association responsible therefor to a fine of not less than

Ten thousand pesos (P10,000.00), or imprisonment of not

exceeding

three

(3)

years,

or

both

such

fine

and

imprisonment, at the discretion of the court.

SECTION 423. All provisions of this Code governing life

insurance

companies

and

such

other

provisions

whenever practicable and necessary, shall be applicable

to mutual benefit associations.

TITLE 2 Trusts for Charitable Uses

SECTION 424. The term trust for charitable uses ,

within the intent of this Code, shall include, all the real or

personal properties or funds, as well as those acquired

with the fruits or income therefrom or in exchange or

substitution thereof, given to or received by any person,

corporation, association, foundation, or entity, except the

National Government, its instrumentalities or political

subdivisions,

for

charitable,

benevolent,

educational,

pious, religious, or other uses for the benefit of the public

at large or a particular portion thereof or for the benefit of

an indefinite number of persons.

SECTION 425. The term trustee shall include any

individual, corporation, association, foundation, or entity,

except the National Government, its instrumentalities or

political

subdivisions,

in charge of, or acting for, or

concerned with the administration of, the trust referred

to in the section immediately preceding and with the

proper application of trust property.

SECTION 426. The term trust property shall include all

real or personal properties or funds pertaining to the trust

as well as those acquired with the fruits or income

therefrom or in exchange or substitution thereof.

SECTION 427. All trustees shall, before entering in the

performance

of

the

duties

of

their

trust,

obtain

a

certificate of registration from the Commissioner. The

registration shall expire on December 31 of the third year

following its issuance unless it is renewed.

All provisions of this Code governing mutual benefit

associations and such other provisions herein, whenever

practicable and necessary, shall be applicable to trusts for

charitable uses.

SECTION 428. The treasurer of a charitable trust shall

file a fidelity bond in the amount commensurate with the

value of the trust property in his custody, as may be

determined by the Commissioner.

CHAPTER VIII Trust Business in General

SECTION 429. An insurance company may engage in

limited trust business, consisting of managing funds

pertaining

only

to

retirement

and

pre-need

plans,

provided it has secured a license to do so from the

Bangko Sentral ng Pilipinas. This trust business shall be

separate and distinct from the general business of the

insurance company and shall be subject to rules and

regulations as may be promulgated by the Bangko

Sentral

ng

Pilipinas

in

consultation

with

the

Commissioner.

CHAPTER IX Registration, Responsibilities and

Oversight of Self-Regulatory Organizations

SECTION

430.

The

Commissioner

shall have the

power to register as a self-regulatory organization, or

otherwise

grant

licenses, and to regulate, supervise,

examine,

suspend

or

otherwise

discontinue,

as

a

condition

for

the

operation

of

organizations

whose

operations are related to or connected with the insurance

market

such

as,

but not limited to, associations of

insurance companies, whether life or non-life, reinsurers,

actuaries,

agents,

brokers,

dealers,

mutual

benefit

associations, trusts, rating agencies, and other persons

regulated by the Commissioner, which are engaged in

the business regulated by this Code.

The

Commissioner

may

prescribe

rules

and

regulations which are necessary or appropriate in the

public interest or for the protection of investors to govern

self-regulatory

organizations

and

other

organizations

licensed or regulated pursuant to the authority granted

hereunder including, but not limited to, the requirement

of cooperation within and among all participants in the

insurance market to ensure transparency and facilitate

exchange of information.

SECTION 431. An association cannot be registered as a

self-regulatory

organization

unless the Commissioner

determines that:

(a) The association is so organized and has the

capacity to be able to carry out the purposes of this Code

© Compiled by RGL

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