FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
SENATE 
S.B. NO. 
806 
Introduced by Senator Ramon Bong Revilla, Jr. 
EXPLANATORY NOTE 
Because man is an imperfect being and does not have the faculty to divine the 
future, risk and uncertainty is a real part of every life. By allowing individuals to pool 
resources for an unforeseen exigency, insurance is one of the most popularly accepted 
institutions of our age. With insurance coverage, death, accidents and illness need not be 
a major disaster to an individual and his family. The compulsory insurance coverage that 
is required for motor vehicle registration is but one testimony to the wide acceptance of 
insurance as one of the mainstays of civilized society. 
Reports of non-settlement of insurance claims is a non-trivial threat to the image 
of stability and reliability associated with the insurance industry. And yet, such practices 
are apparently perpetuated especially because the existing Insurance Code of the 
Philippines imposes no criminal liability on insurance companies for failure to 
compensate beneficiary claimants under the terms and conditions provided for in the 
insurance policy within the period prescribed by the code. 
A claimant with limited resources stands no chance of pursuing the case to a 
favorable conclusion. Without the immediacy of the sanctions associated with a criminal 
complaint, an insurance company can cause the case to drag on, until the resources of the 
complainant run out. 
This bill seeks to remedy the situation by the imposition of criminal liability to 
erring insurance companies who fail to pay or settle benefits due to claimants. 
In view of the foregoing, early passage of this bill is earnestly urged. 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
7 &I. -3 F;?:d6 
OF THE PHILIPPINES 
) 
First Regulur Session 
1 
Introduced by Senator Ramon Bong Revilla, Jr. 
AN ACT 
AMENDING SOME PROVISIONS OF THE PRESIDENTIAL DECREE NO. 
1460, AS AMENDED, OTHERWISE KNOWN AS THE INSURANCE CODE 
OF 1978 BY PRESCRIBING A CRIMJNAL PENALTY UPON ANY PERSON 
FOR REFUSING TO SETTLE ANY CLAIM FOR LOSS OR DAMAGE FOR 
WHICH AN INSURER MAY BE LIABLE WITHIN THE PERIOD PRESCRIBED 
BY THE CODE. 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 242 of Presidential Decree No. 1460, otherwise known as the 
Insurance Code of 1978 is hereby amended to read as follows: 
“SEC 242. The proceeds of a life insurance policy shall be paid 
immediately upon maturity of the policy, unless such proceeds 
are 5 made payable in installments, or as an annuity, in which 
case the installments or annuities shall be paid as they become 
due: Provided, however, That in the case of a policy maturing by 
the death of the insured, the proceeds thereof shall be paid within 
sixty (60) days after presentation of the claim and filing of the 
proof of the death of the insured. Rehsal or failure to pay the 
claim within the time prescribed herein will entitle the 
beneficiary to collect interest on the proceeds of 
12 the policy for the duration of the delay at the rate of twice the 
ceiling prescribed by the Monetary Board, unless such failure or 
rehsal to pay is based on the ground that the claim is fraudulent: 
PROVIDED, 
FURTHER, 
TFfAT 
IN 
CASE 
THE 
INSURANCE COMPANY CONCERNED FAILS OR 
REFUSES TO SETTLE THE PROCEEDS OF THE 
POLICY, INCLUDING THE ACCRUED INTERESTS 
HEREIN WITHIN FIFTEEN (15) DAYS FROM FILING 
THE DEMAND FOR PAYMENT, SAID INSURANCE 
COMPANY IS LIABLE FOR ESTAFA AND THE 
PENALTY PRESCRTBED BY THE REVISED PENAL 
CODE SHALL BE IMPOSED UPON IT§ PRESIDENT 
AND 
OR GENERAL MANAGER, UNLESS 
SUCH 


FAILURE OR REFUSAL TO PAY IS BASED ON THE 
GROUND THAT THE CLAIM IS FRAUDULENT.” 
“The proceeds of the policy maturing by the death of the insured 
payable to the beneficiary shall include the discounted valued of 
all premiums paid in advance of their due dates, but are not due 
and payable at maturity.” 
SECTION 2. Section 243 ofPresidentid Decree No. l46U, as amended otherwise how-n 
as the Insurance Code of 1978 is hereby amended to read as follows: 
“SEC. 243. The amount of any loss or damage for which an 
insurer may be liable, under any policy other than life insurance 
policy shall be paid within thirty (30) days after proof of loss is 
received by the insurer and ascertainment of the loss of damage 
is made either by agreement between the insured and the insurer 
or by arbitration; hut if such ascertainment is not had or made 
within sixty (60) days after such receipt by the insurer of the 
proof of loss, then the loss or damage shall he paid within ninety 
(90) days aRer such receipt. Rehsal or failure to pay the loss or 
damage within the time prescribed herein will entitle the assured 
to collect interest on the proceeds of the policy for the duration 
of the delay at the rate of twice (2) the ceiling prescribed by the 
Monetary Board, unless such failure or refusal to pay is based on 
the ground that the claim is fraudulent: PROVIDED, 
HOWEVER, 
THAT 
IN 
CASE 
THE 
INSURANCE 
COMPANY CONCERNED FAILS TO SETTLE THE 
PROCEEDS OF THE POLICY INCLUDIBG THE 
ACCRUED INTERESTS THEREIN WITHIN FIFTEEN 
(15) DAYS FROM THE FILING OF THE DEMAND FOR 
PAYMENT, SAID MSURANCE COMPANY IS LIABLE 
FOR ESTAFA, AND THE PENALTY PRESCRIBED BY 
THE REVISED PENAL CODE, SHALL BE IMPOSED 
UPON ITS PRESIDENT AND/OR GENERAL 
MANAGER UNLESS SUCH FAILURE OR REFUSAL TO 
FRAUDULENT.” 
PAY IS BASED ON THE GROUND n w r  THE CLAIM IS 
SECTION 3. This act shall take effect upon its approval. 
Approved,