FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S,No. 
2432 
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Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
One of the investigations conducted by the committee on Accountability of Public 
Officers and'Investigations, otherwise known as the Blue Ribbon Committee was the modus 
operandi of syndicates specializing in fraudulent registration and titling of land, 
At the end of the investigation, the Committee concluded that the whole system of the 
land registration and tiding of land is institutionally and intrinsically flawed, The syndicates, in 
cahoots with some government agencies, engage in this revolting scheme. This could be traced, 
among other things, from the fact that the records' management of the Land Registration 
Authority is seriously defective in that some people there had allowed the switching or tampering 
of important land documents, including land titles, 
This bill seeks to create a land title insurance system that will protect owners of real 
estate against defects in their land titles and help maintain the integrity of the Torrens Title 
system, which is the foundation of ownership to real property. 
This piece of legislation seeks to create a land title insurance system that will protect 
owners of real estate against defects in their land titles and help maintain the integrity of the 
Torrens Title system, which stabilizes the ownership of real property. It is the aim of this bill to 
restore the faith and reliance of the people on the integrity of land titles. 
1 
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It is hoped that the title insurance system would help crush a growing cancer that has 
infected our system of land registration bringing back the public's lost faith and confidence in 
the Torrens System. 
Hence the passage of this bill is earnestly requested. 
This bill was originally filed by Sen. Aquilino Q. Pimentel, Jr. during the Fourteenth 
Congress. 
2 


FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S. No. 2432 
Intrqduced by Senator Miriam Defensor Santiago 
1 
AN ACT 
2 
CREATING THE FIELD OF LAND TITLE INSURANCE 
3 
AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 612, 
4 
OTHERWISE KNOWN AS THE INSURANCE CODE OF 1978, AS AMENDED BY 
5 
PRESIDENTIAL DECREES NOS. 1455 AND 1460 AND BATAS PAMBANSA BLG. 874 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
6 
SECTION 1. Chapter 11, on Classes of Insurance, of Presidential Decree No. 612, as 
7 
amended, otherwise known as the Insurance Code of 1978, is hereby amended to include a 
8 
distinct class of insurance to be known as Land Title Insurance, which shall read as follows: 
9 
TITLE VI 
10 
LAND TITLE INSURANCE 
11 
Sub-Title VI-A 
12 
DEFINITIONS OF TERMS 
13 
SECTION 184. a) LAND TITLE INSURANCE POLICY PROTECTS THE INSURED 
14 
AGAINST TITLE DEFECTS, FORGERY, FALSIFICATION, DOUBLE TITLING AND 
15 
SIMILAR UNLAWFUL ACTS THAT AFFECT TITLE TO, OR THE USE OF REAL 
16 
PROPERTY. 
17 
b) A TITLE INSURER REFERS TO A COMPANY ORGANIZED AND 
18 
AUTHORIZED TO DO THE BUSINESS UNDER THIS CODE FOR THE PURPOSE OF 
19 
ISSUING TITLE INSURANCE POLICIES. 
20 
c) RELATED TITLE SERVICES MEANS SERVICES PROVIDED BY A TITLE 
21 
INSUXER OR THE TITLE INSURANCE AGENT INCLUDING, BUT NOT LIMITED TO, 
22 
PREPARING OR OBTAINING TITLE INFORMATION, PREPARING DOCUMENTS 
1 


I 
NECESSARY TO CLOSE A TRANSACTION, CONDUCTING THE CLOSING OR 
2 
HANDLING THE DISBURSEMENT OF FUNDS RELATED TO THE CLOSING OF A REAL 
3 
ESTATE TRANSACTION IN WHICH A TITLE INSURANCE POLICY IS TOBE ISSUED. 
4 
d) RISK PREMIUM REFERS TO THE CHARGE THAT IS MADE BY A TITLE 
5 
INSURER FOR THE ASSUMPTION OF RISK UNDER A TITLE INSURANCE CONTRACT. 
6 
Sub-Title VI-B 
7 
THE TITLE POLICY 
8 
SECTION 185. A TITLE INSURER SHALL NOT ISSUE NOR AGREE TO ISSUE 
9 
ANY FORM OF TITLE BINDER, TITLE INSURANCE COMMITMENT, PRELIMINARY 
10 
REPORT, INSURANCE POLICY, OTHER CONTRACTS OF TITLE INSURANCE OR 
II 
RELATED FORM UNTIL IT IS FILED WITH AND APPROVED BY THE INSURANCE 
12 
COMMISSION. 
13 
SECTION 186. A TITLE INSURER SHALL NOT ISSUE ANY CONTRACT OF 
14 
TITLE INSURANCE EITHER AS PRELIMINARY INSURER, CO-INSURER OR RE-
15 
INSURER UPON AN ESTATE, LIEN OR INTEREST IN PROPERTY UNLESS THE 
16 
AMOUNT OF THE RISK ASSUMED IS REFLECTED ON THE FACE OF THE 
17 
CONTRACT. A TITLE INSURER SHALL NOT ISSUE TWO OR MORE POLICIES UPON 
18 
THE SAME ESTATES, LIEN OR INTEREST: PROVIDED, THAT NOTHING IN THIS 
19 
SECTION SHALL PROHIBIT THE SIMULTANEOUS ISSUANCE OF POLICIES 
20 
INSURING DIFFERENT ESTATES, LIENS OR INTERESTS IN THE SAME PROPERTY, IF 
21 
EACH OF THE SIMULTANEOUS POLICIES EXCEPTS THE PAMOUNT ESTATES, LIENS 
22 
OR INTERESTS TO WHICH THE INSURED ESTATE, LIEN OR INTERESTS IS SUBJECT, 
23 
AND IF EACH OF THE SIMULTANEOUS POLICIES CONFORMS TO THIS SECTION. 
24 
PROVIDED, FURTHER THAT NOTHING IN THIS SECTION PROHIBITS THE CEDING 
25 
OF A PORTION OF THE TOTAL RISK TO AUTHORIZED INSURERS. INSURANCE 
26 
CEDED, INCLUDING CO-INSURANCE EFFECTED, IS A RETENTION OF RISK BY THE 
27 
INSURER ASSUMING THE CEDED RISK, AND NOT BY THE INSURER CEDING THE 
28 
RISK. 
2 


1 
Sub-Title VI-C 
2 
RISK PREMIUM 
3 
SECTION 187. THE INSURANCE COMMISSION SHALL ADOPT AND ISSUE 
4 
GUIDELINES SPECIFYING THE RISK PREMIUM TO BE CHARGED BY INSURERS FOR 
, 
5 
THE RESPECTIVE TYPES OF TITLE INSURANCE CONTRACTS AND SERVICES 
6 
INCIDENT 
THERETO. 
THE 
INSURANCE 
COMMISSION 
MAY 
ESTABLISH 
7 
LIMITATIONS AS TO THE REASONABLE CHARGES MADE IN ADDITION TO THE 
8 
RISK PREMIUM BASED UPON THE EXPENSES ASSOCIATED WITH THE SERVICES 
9 
RENDERED AND OTHER RELEVANT FACTORS. 
10 
SECTION 
188. 
IN 
ADOIYTING 
PREMIUM 
RATES, 
THE 
INSURANCE 
11 
COMMISSION MUST GIVE DUE CONSIDERATION TO THE FOLLOWING 
12 
A) 
THE 
INSURERS' 
LOSS 
EXPERIENCE 
AND 
PROSPECTIVE 
LOSS 
13 
EXPERIENCE UNDER INSURED CLOSING SERVICE LETTERS, SEARCH AND 
14 
EXAMINATION SERVICES, AND POLICY LIABILITIES. 
15 
B) 
A 
REASONABLE 
MARGIN 
FOR 
UNDERWRITING 
PROFIT 
AND 
16 
CONTINGENCIE, SUFFICIENT TO ALLOW INSURERS AND AGENTS TO EARN 
17 
A RATE OF RETURN ON THEIR CAPITAL THAT WILL ATTRACT AND RETAIN 
18 
ADEQUATE CAPITAL INVESTMENT IN THE TITLE INSURANCE BUSINESS. 
19 
C) PAST EXPENSES AND PROSPECTIVE EXPENSES FOR ADMINISTRATION 
20 
AND HANDLING OF RISKS. 
21 
D) LIABILITY FOR DEFALCATION. DEFALCATION IS THE CONVERSION OR 
22 
MISAPPROPRIATION BY A LICENSED TITLE INSURANCE AGENT OF FUNDS 
23 
HELD IN TRUST BY THE AGENT, FOR WHICH THE TITLE INSURER SHALL BE 
24 
HELD LIABLE. 
25 
E} OTHER RELEV ANT FACTORS AS MAY BE APPLIED BY THE INSURANCE 
26 
COMMISION. 
27 
SECTION 
189. RATES MAY BE GROUPED BY CLASSIFICATION OR 
28 
SCHEDULE, AND MAY DIFFER AS TO THE CLASS OF RISK ASSUMED. RATES 
29 
SHALL NOT BE EXCESSIVE, INADEQUATE OR UNFAIRLY DISCRIMINATORY. 
3 


1 
SECTION 190. THE INSURANCE COMMISSION SHALL REVIEW THE RISK 
2 
PREMIUM AND THE RELATED TITLE SERVICES RATES AS NEEDED, BUT NOT LESS 
3 
FREQUENTLY THAN ONCE EVERY FIVE (5) YEARS, AND SHALL, BASED UPON THE 
4 
R E W REQUIRED BY THIS SUBSECTION, REVISE THE RISK PREMIUM AND THE 
5 
RELATED TITLE SERVICES RATE IF THE RESULTS OF THE REVIEW SO WARRANT. 
6 
SECTION 191. THE INSURANCE COMMISSION MAY REQUIRE INSURERS TO 
7 
SUBMIT STATISTICAL INFORMATION, INCLUDING LOSS AND EXPENSE DATA, IT 
8 
DEEMS NECESSARY TO ANALYZE THE SETTING OF RISK PREMIUM AND RELATED 
9 
TITLE SERVICE RATES, RETENTION RATES AND THE CONDITION OF THE TITLE 
10 
INSURANCE INDUSTRY. 
11 
SECTION 192. IN SETTING RISK PREMIUM AND RELATED TITLE SERVICE 
12 
RATES, THE INSURANCE COMMISSION SHALL HOLD CONSULTATIONS AND 
13 
PUBLIC HEARINGS, INVITING DULY LICENSED INSURERS, AGENTS, CONSUMER 
14 
GROUPS AND OTHER INTERESTED OR INFORMED BODES OR PERSONS TO GIVE 
15 
THEIR OPINIONS AS TO WHAT CONSTITUTES A FAIR RATE TO CHARGE THE 
16 
PUBLIC. 
17 
SECTION 193. IT SHALL BE UNLAWl'UL FOR ANY INSURER, AGENT OR 
18 
PERSON TO QUOTE, CHARGE, ACCEPT, COLLECT OR RECEIVE A RISK PREMIUM 
19 
FOR TITLE INSURANCE HIGHER THAN THE RISK PREMIUM ADOMED AND 
20 
AUTHORIZED BY THE INSURANCE COMMISSION. 
21 
SECTION 
194. A TITLE INSURER MAY PETITION THE INSURANCE 
22 
COMMISSION FOR AN ORDER AUTHORIZING AN INCREASE OF THE ADOPTED 
23 
RISK PREMIUM. THE PETITION SHALL BE IN WRITING SWORN TO AND SHALL SFX 
24 
FORTH ALLEGATIONS OF FACT UPON WHICH THE PETITIONER WILL RELY, 
25 
INCLUDING THE PETITIONER'S REASONS FOR REQUESTING THE INCREASE. AN 
26 
AUTHORIZED TITLE INSURER OR AGENT MAY JOIN THE PETITION FOR LIKE 
27 
AUTHORITY TO INCREASE OR MAY FILE A SEPARATE PETITION PRAYING FOR 
28 
LIKE AUTHORITY. THE PUBLIC OR ANY AUTHORIZED TITLE INSURER OR AGENT 
29 
MAY OPPOSE THE PETITION TO INCREASE THE ADOITED RISK PREMIUM. THE 
4 


1 
INSURANCE COMMISSION SHALL CONDUCT PUBLIC HEARINGS IN ACCORDANCE 
2 
WITH ITS INTERNAL RULES OF PROCEDURE TO DETERMINE THE MERIE OF EACH 
3 
PETITION. IF, IN THE JUDGMENT OF INSURANCE COMMISION, THE REQUESTED 
4 
DEVIATION IS NOT JUSTIFIED, THE INSURANCE COMMISSION SHALL ISSUE AN 
5 
ORDER DENYING THE PETITION, SETTING FORTH ITS REASON FOR SUCH DENIAL. 
6 
AN ORDER GRANTING A PETITION CONSTITUTES AN AMENDMENT TO THE 
7 
ADOPTED RISK PREMIUM OF THE INSURANCE COMMISSION. 
8 
SECTION 195. WHEN A TITLE INSURANCE BINDER OR A COMMITMENT TO 
9 
INSURE A TITLE OR RISK IS ISUED AT THE REQUEST OF THE INSURED OR THE 
10 
INSURED'S REPRESENTATIVE OR AGENT, A PORTION OF THE RISK PREMIUM 
11 
MUST BE CHARGED FOR THE BINDER OR COMMITMENT WHEN ISSUED. niE 
12 
PORTION OF THE RISK PREMIUM CHARGED FOR THE BINDER OR COMMITMENT 
13 
MUST BE CREDITED TO THE RISK PREMIUM DUE UPON ISSUANCE OF THE TITLE 
14 
INSURANCE POLICY. 
15 
Sub-Title VI-D 
16 
THE TITLE INSURER 
17 
SECTION 196. TWE INSURANCE COMMISSION SHALL ALLOW COMPANIES 
18 
NOT OTHERWSE DISQUALIFIED BY LAW TO ENGAGE IN THE TITLE INSURANCE 
19 
BUSINESS BY ISSUING THE APPROPRIATE LICENSE IN ACCORDANCE WITH ITS 
20 
INTERNAL 
RULES 
OF 
PROCEDURE, 
PROVIDED 
THAT 
THE 
INSURANCE 
21 
COMMISSIbN 
SHALL 
DETERMINE 
THE 
MINIMUM 
PAID-UP 
CAPITAL 
22 
REQUIREMENT FOR COMPANIES THAT WILL BE ALLOWED TO ENGAGE IN THE 
23 
TITLE INSURANCE BUSINESS. 
24 
SECTION 197. A FOREIGN INSURANCE OR REINSURANCE COMPANY OR 
25 
INTERMEDIARY IS ALLOWED ONE ENTRY TO DO BUSINESS IN THE PHILIPPINES, 
26 
UNDER ANY OF THE FOLLOWING MODES 
27 
A) OWNERSHIP OF THE VOTING STOCK OF AN EXISTING DOMESTIC 
28 
INSURANCE OR REINSURANCE COMPANY OR INTERMEDIARY; 
5 


1 
B) INVESTMENT IN A NEW INSURANCE OR REINSURANCE COW ANY OR 
2 
INTERMEDIARY INCORPORATED IN THE PHILIPPINES; OR THE 
3 
C) EXCEPT FOR AN INTERMEDIARY, ESTABLISHMENT OF A BRANCH. 
4 
SECTION 198. TO QUALIFY AS A NEW COMPANY INCORPORATED IN THE 
5 
PHILIPPINES OR AS A BRANCH UNDER ITEMS "B" AND "c" RESPECTIVELY IN THE 
6 
"T PRECEDING SECTION, IN ADDITION TO THE REQUIREMENT STATED IN 
7 
SECTION 197 ABOVE, THE FOREIGN APPLICANT MUST BE WIDELY OWNED AND 
8 
PUBLICLY LISTED IN ITS COUNTRY OF ORIGIN, UNLESS IT IS MAJORITY-OWNED 
9 
BY THE GOVERNMENT. THE TERM WIDELY-OWNED MEANS THAT NOT A SINGLE 
10 
STOCKHOLbER OF THE APPLICANT OWNS MORE THAN TWENTY PERCENT (20%) 
11 
OF ITS VOTING STOCK, WHILE "PUBLICLY LISTED" MEANS THAT ITS SHARES OF 
12 
STOCK ARE LISTED IN THE STOCK EXCHANGES: IT IS FURTHER REQUIRED THAT 
13 
AT LEAST TWENTY PERCENT (20%) OF THE OUTSTANDING SHARES OF STOCK OF 
14 
THE NEW INSURANCE OR REINSURANCE COMPANY OR INTERMEDIARY 
15 
INCORPORATED IN THE PHILIPPINES UNDER ITEM "B" ABOVE IS HELD BY 
16 
FILIPINOS. THE FOREIGN APPLICANT MUST LIKEWISE HAVE A SENIOR OFFICER 
17 
WITH THE RANK OF VICE-PRESIDENT OR HIGHER IN TITLE OPERATIONS WITH 
18 
TITLE UNDERWRITING EXPERTISE WHO IS A FILIPINO. 
19 
SECTION 199. THE HEAD OFFICE OF A FOREIGN INSURANCE OR 
20 
REINSURANCE COMPANY SHALL GUARANTEE PROMPT PAYMENT OF 
21 
ALL LIABILITIES OF ITS PHILIPPINE BRANCH. 
22 
SECTION 200. SUBJECT TO EXISTING LAWS, NON-FILIPINO NATIONALS MAY 
23 
BECOME MEMBERS OF THE BOARD OF DIRECTORS OF AN INSURANCE OR 
24 
REINSURANCE COMPANY TO THE EXTENT OF THE FOREIGN PARTICIPATION IN 
25 
THE EQUITY OF SUCH COMPANY. EXPATRIATES WILL ALSO BE ALLOWED TO 
26 
OCCUPY MANAGERIAL POSITIONS SUBJECT TO EXISTING LAWS, RULES AND 
27 
REGULATIONS. 
6 


Sub-Title VI-E 
2 
COVERAGE 
3 
SECTION 201. A TITLE INSURER SHALL NOT ISSUE A TITLE INSURANCE 
4 
BINDER, 
COMMITMENT, 
ENDORSEMENT, 
TITLE 
INSURANCE 
POLICY, 
OR 
5 
GUARANTEE OF TITLE UNTIL THE TITLE INSURER HAS CAUSED TO BE 
6 
CONDUCTED A REASONABLE SEARCH AND EXAMINATION OF THE TITLE AND OF 
7 
SUCH OTHER INFORMATION AS MAY BE NECESSARY, AND HAS CAUSED TO BE 
8 
MADE A DETERMINATION OF THE INSURABILITY OF THE TITLE, INCLUDING 
9 
ENDORSEMENT COVERAGES, IN ACCORDANCE WITH SOUND UNDERWRITING 
10 
PRACTICES. 
11 
SECTION 202. THE TITLE INSURER SHALL CAUSE THE EVIDENCE OF THE 
12 
REASONABLE SEARCH AND EXAMINATION OF THE TITLE TO BE PRESERVED AND 
13 
RETAINED IN ITS FILES OR IN THE FILES OF ITS TITLE INSURANCE AGENT FOR A 
14 
PERIOD OF NOT LESS THAN TEN (10) YEARS AFTER THE TITLE INSURANCE 
15 
BINDER, COMMITMENT, TITLE INSURANCE POLICY, OR GUARANTEE OF ETLE 
16 
WAS ISSUED. TWE TITLE INSURER MUST FURNISH THE INSURANCE COMMISSION 
17 
AND THE LAND REGISTRATION AUTHOREY WITH A COpy OF THE RESULTS OF ITS 
18 
SEARCH AND EXAMINATION AND MUST PRODUCE THE EVIDENCE REQUIRED TO 
19 
BE MAINTAINED BY THIS SECTION AT ITS OFFICES UPON THE DEMAND BY 
20 
GOVERNMENT AGENCIES. INSTEAD OF RETAINING THE ORIGINAL EVIDENCE, 
21 
THE TITLE INSURER OR THE INSURANCE AGENT MAY, IN THE REGULAR COURSE 
22 
OF BUSINESS, ESTABLISH A SYSTEM UNDER WHICH ALL OR PART OF THE 
23 
EVIDENCE IS RECORDED, COPIED OR REPRODUCED BY ANY PHOTOGRAPHIC, 
24 
PHOTOSTATIC MICROFILM MICRO CARD MINIATURE PHOTOGRAPHIC, OR OTHER 
25 
PROCES'S WHICH ACCURATELY REPRODUCES OR FORMS A DURABLE MEDIUM 
26 
FOR REPRODUCING THE ORIGINAL. 
7 


SECTION 2. Section 184 and all succeeding Sections of Presidential Decree No. 612 
2 
shall be renumbered accordingly. 
3 
SECTION 3. Implementing Rules and Regulations. - Within three (3) months from the 
4 
passage of this Act, the Insurance Commission shall draw and adopt the required rules and 
5 
regulations to govem Land Title Insurance. 
6 
SJ;\CTION 4. Separability Clause. - If any provision or part hereof, is held invalid or 
7 
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
8 
valid and subsisting. 
9 
SECTION 5. Repealing Clause. - Any law, presidential decree or issuance, executive 
10 
order, letter of instruction, administrative order, rule or regulation contrary to or is inconsistent 
11 
with the provision of this Act is hereby repealed, modified, or amended accordingly. 
12 
SECTION 6. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
13 
publication in at least two (2) newspapers of general circulation. 
14 
Approved, 
8