NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
SENATE
S. No. 425
of tljf ,€-vnTi<n'i?
‘22 JUL 12 P5.11
Received b\.
Introduced by Senator Christopher Lawrence nBong"T. Go
AN ACT
STRENGTHENING THE INSURANCE COMMISSION AND REORGANIZING IT 
INTO A COLLEGIAL BODY, AMENDING PRESIDENTIAL DECREE NO. 612, AS 
AMENDED, OTHERWISE KNOWN AS "THE INSURANCE CODE"
EXPLANATORY NOTE
The Insurance Commission (IC) is an attached agency of the Department of 
Finance (DOF), pursuant to Executive Order No. 292 (1987), or the "Administrative 
Code of 1987. The law mandates the IC to regulate and supervise the insurance, pre­
need, and health maintenance organization (FIMO) industries in accordance with the 
provisions of Presidential Decree No. 612, or The Insurance Code, as amended, Pre- 
Need Code of the Philippines, and Executive Order No. 192 (s., 2015).
Statistics show that the insurance, pre-need, and FIMO regulated entities 
continue to grow and significantly contribute to the Philippine economy. The Insurance 
Commission records in 2021 that the insurance industry’s contribution to the economy 
was at its highest at 1.93% during the fourth quarter of the preceding year. The 
insurance industry's total premiums earned also grew an impressive 61.03%, from 
Php232.67 billion at the end of 2016 to Php374.67 billion at the end of 2021, with a 
compounded annual growth rate of 10.00%.
On the other hand, the insurance industry's net income more than doubled from 
2016 to 2021, from P23.79 billion to P48.29 billion, or a growth rate of 102.97% with


a compound annual growth rate of 15.21%. Finally, the aggregate assets of the 
insurance industry breached Php2 trillion pesos by the end of 2021 at Php2.09 trillion, 
from Phpl.31 trillion in 2016. In 2021, close to 80% of the industry's total assets are 
from the life insurance industry. The insurance industry's total assets grew by 59.96% 
from 2016 to 2021, with a compound annual growth rate of 9.85% for the said period.
In light of the present situation, there is a strong need to enhance the regulation 
and supervision of the insurance, pre-need, and HMO industries to fully protect the 
public and create an environment that is conducive to these industries' continuous 
robust growth. Thus, the Bangko Sentral ng Pilipinas (BSP), as an independent and 
accountable body corporate, shall be equipped to discharge the foregoing function by 
exercising an oversight function over the IC pursuant to the BSP's maintenance of price 
stability and promotion of financial stability mandates.
This proposed measure seeks to convert the IC into a collegial body composed 
of five (5) Commissioners competent in relevant fields. In addition, to align with the 
best practices adopted by other Asian nation states where a single authority regulates 
all financial services, the IC will also be placed under the supervision of the Monetary 
Board (MB) of the BSP.
In view of the foregoing, the approval of this bill is earnestly sought.
SENATOR CHRISTOPHEhTLAWRENCE "BONG" T. GO


NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
s. No. 425
-"(fiffir? of iiif S',, rn„rri
■22 JUL 12 P5:l1
RECEI'.cDBl.
Introduced by Senator Christopher Lawrence "Bong" T. Go
AN ACT
STRENGTHENING THE INSURANCE COMMISSION AND REORGANIZING IT 
INTO A COLLEGIAL BODY, AMENDING PRESIDENTIAL DECREE NO. 612, AS 
AMENDED, OTHERWISE KNOWN AS "THE INSURANCE CODE"
EXPLANATORY NOTE
The Insurance Commission (IC) is an attached agency of the Department of 
Finance (DOF), pursuant to Executive Order No. 292 (1987), or the "Administrative 
Code of 1987." The law mandates the IC to regulate and supervise the insurance, pre­
need, and health maintenance organization (HMO) industries in accordance with the 
provisions of Presidential Decree No. 612, or The Insurance Code, as amended, Pre- 
Need Code of the Philippines, and Executive Order No. 192 (s., 2015).
Statistics show that the insurance, pre-need, and HMO regulated entities 
continue to grow and significantly contribute to the Philippine economy. The Insurance 
Commission records In 2021 that the insurance industry's contribution to the economy 
was at its highest at 1.93% during the fourth quarter of the preceding year. The 
insurance industry's total premiums earned also grew an impressive 61.03%, from 
Php232.67 billion at the end of 2016 to Php374.67 billion at the end of 2021, with a 
compounded annual growth rate of 10.00%.
On the other hand, the insurance industry's net income more than doubled from 
2016 to 2021, from P23.79 billion to P48.29 billion, or a growth rate of 102.97% with


a compound annual growth rate of l5.21o/0. Finally; the 
e
«breached Php2 pesos b/ end of 20219<t
from Phpl.31 trillion in 2016. In 2021 close to 80o/ nf rh • . 
'
from rh« lif. ■ 
' 
8 0 0f the lndustrV's total assets are
1 :^:~ust"The insurance industrv's tota, assets bv 59.96% 
021, w,th a compound annual growth rate of 9.85% for the said period.
in light of the present situation, there is a strong need to enhance the reguiation 
supemsion of the insurance, pre-need, and HMD industries to fully protect the 
pu ,c and create an environment that is conducive to these industries' continuous
Tc otr: dThUS' the Ban9k0 Sentral n9 
- - independent and
accountable body corporate, shall be equipped to discharge the foregoing function by
srZna9ndn 0VeT fUnCti0n 0Ver the IC PUrSUant t0 the BSP'S maintenance price 
stability and promotion of financial stability mandates.
Of 
“ “n,M ,te IC lnte a “l,«lal
m Commissioners compaon, 
^.s. In addBo„, ,o „gn
b« pmch^s ,do„« h, other Asian na.on stams whom . sm.le ao.hoh^ regni.ms
iz: ~,c wi""ptod - ---
In view of the foregoing, the approval of this bili is earnestly sought.
SENATOR CHRISTOPHEI^pSwrENCE "BONG" T. GO
r


oi tijc 9
NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
72 JUL^2
)
SENATE
425
RECEIVED BV:
S. No.
introduced by Senator Christopher Lawrence "Bong" T. Go
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STRENGTHENING !rgQQY^^^5!jDiN<^pMHMNTT/^*DECREE N0^^12, AS
INSURANCE C0DE"
fle . 
.X the Senate and the House of Representat.es of the R^Pines fn
Congress assembled:
section. 1. section 194 of Presidential Decree No. 612, as amended, is hereby 
further amended to read as follows.
• j j ’ c/^z-Hnn 98Q no new domestic life or non 
"SEC 194 Except as provided in Section 28 ,
,fc 
a 5»ck 
-;n
Philippines eniess possessed „ » 
„ „„
^dy doiW business in .he Phiiippines she. have . ne.wohh by une dO, m
!nrhuLd m -0" PddbU (P250,000,000.00). Furthenno™, ».d
company must have by December 31, 2016, an add,b 
an addWonal
pesos (P300,000,000.00) in net worth; by Decern e , 
.
^ 
^ 
- /noco nno 000 OO) in net worth, and by
ri":—-- - (Mowooo'oo)
in net worth."


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"The Commissioner may, as a pre-licensing requirement of a new insurance 
company, in addition to the paid-up capital stock, require the stockholders to pay 
in cash to the company in proportion to their subscription interests a contributed 
surplus fund of not less than One hundred million pesos (P100,000,000.00). He 
may also require such company to submit to him a business plan showing the 
company's estimated receipts and disbursements, as well as the basis therefor, 
for the next succeeding three (3) years."
"If organized as a mutual company, in lieu of such net worth, it must have 
available total members equity in an amount to be determined by the Insurance 
Commission above all liabilities for losses reported; expenses, taxes, legal 
reserve, and reinsurance of all outstanding risks, and the contributed surplus 
fund equal to the amounts required of stock corporations. A stock insurance 
company doing business in the Philippines may, subject to the pertinent law and 
regulation which now or hereafter may be in force, alter Its organization and 
transform itself into a mutual insurance company."
"The [Secretary of Finance] MONETARY BOARD OF THE BANGKO
SENTRAL NG PILIPINAS may, upon recommendation of the COMMISSION 
[Commissioner, focrease] ADJUST such minimum paid-up capital stock or [cash 
assets ] NET WORTH requirement under such terms and conditions as THE
MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS be may 
impose, to an amount which, [ffl-his opinion his] IN THE OPINION OF THE 
MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS, would 
reasonably assure the safety of the interests of the policyholders and the public;
PROVIDED, THAT IN THE EXERCISE OF THIS AUTHORITY, THE 
MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS SHALL, 
TO THE EXTENT FEASIBLE, CONFORM TO INTERNATIONALLY 
ACCEPTED STANDARDS, INCLUDING THOSE OF THE INTERNATIONAL 
ASSOCIATION OF INSURANCE SUPERVISORS, RELATING TO (i) 
INSURANCE CORE PRINCIPLES AND (ii) INSURANCE CAPITAL 
STANDARD; PROVIDED, FURTHER, THAT IT MAY ALTER OR SUSPEND


COMPLIANCE WITH SUCH MINIMUM PAID-UP CAPITAL STOCK OR NET 
WORTH REQUIREMENT WHENEVER NECESSARY FOR A MAXIMUM 
PERIOD OF ONE (1) YEAR: PROVIDED, FINALLY, THAT SUCH 
REQUIREMENT SHALL BE APPLIED UNIFORMLY TO INSURANCE 
COMPANIES OF THE SAME CATEGORY. [The minimum pofd-up-copitQl and 
net worth requirement- mugt remain unimpaired for the continuance'Of the
ticense.] The COMMISSION Commissioner may require the adoption of the risk- 
based capital approach and other internationally accepted forms of capital 
framework."
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"THE MINIMUM PAID-UP CAPITAL AND NET WORTH 
REQUIREMENT MUST REMAIN UNIMPAIRED FOR THE CONTINUANCE 
OF THE LICENSE. IN CASE AN INSURANCE COMPANY DOES NOT 
COMPLY WITH THE FOREGOING REQUIREMENT, THE COMMISSION 
MAY LIMIT OR PROHIBIT THE DISTRIBUTION OF NET PROFITS OF 
SUCH INSURANCE COMPANY AND MAY REQUIRE THAT PART OR ALL 
OF THE NET PROFITS BE USED TO INCREASE ITS CAPITAL ACCOUNTS 
UNTIL THE MINIMUM REQUIREMENT HAS BEEN MET. FURTHERMORE, 
THE COMMISSION MAY RESTRICT OR PROHIBIT SUCH INSURANCE 
COMPANY FROM ACQUIRING MAJOR ASSETS AND MAKING NEW 
INVESTMENTS UNTIL THE MINIMUM REQUIRED CAPITAL RATIO HAS 
BEEN RESTORED.
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THE MINIMUM PAID-UP CAPITAL AND NET WORTH 
REQUIREMENT UNDER SECTION 194 OF REPUBLIC ACT NO. 10607, 
AND ALL PERTINENT RULES ISSUED PURSUANT THERETO, SHALL 
CONTINUE TO BE IN FORCE UNTIL THE MONETARY BOARD OF THE 
BANGKO 3ENTRAL NG PILIPINAS EXERCTSES ITS AUTHORITY TO 
ADJUST THE MINIMUM PAID-UP CAPITAL STOCK OR NET WORTH 
REQUIRMENT MENTIONED IN THIS SECTION.
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THE FOREGOING AUTHORITY OF THE MONETARY BOARD OF THE 
BANGKO SENTRAL NG PILIPINAS SHALL LIKEWISE APPLY TO MUTUAL


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BENEFIT ASSOCIATIONS, HEALTH MAINTENANCE ORGANIZATIONS, 
AND PRE-NEED COMPANIES FOR THEIR MINIMUM FUND, 
CAPITALIZATION, OR NET WORTH REQUIREMENT, AS MAY BE 
APPLICABLE, PURSUANT TO THIS ACT'S IMPLEMENTING RULES AND 
REGULATIONS."
"The [President of the Philippines] MONETARY BOARD OF THE 
BANGKO SENTRAL NG PILIPINAS may order a periodic review, every two 
(2) years OR WHEN IT DEEMS NECESSARY, the capital structure set out 
above to determine the capital adequacy of the local insurance industry from and 
after the integration and liberalization of the financial services, including 
insurance, in the ASEAN Region, [for this purpose, a review committee consisting 
of representatives from the Department of Finance (DOF), the Insurance
€ommi5sion (IC), the National Economic and DcvGlopmcnt-Authohty-(NEDA), the 
Securities and Exchange Commission (SEC) and other—agcncics-which the 
President may designate shall conduct the-review and may recommend to the 
President to adopt for implementation the necessary capital adjustment.]
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; Sec. 2. Section 253 of Presidential Decree No. 612, as amended, is hereby further
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amended to read as follows:
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Section 253. The [Commissioner] COMMISSION shall, at least once a 
year and whenever fhe} IT considers the public interest so demands, cause an 
examination to be made into the affairs, financial condition and method of 
business of every insurance company authorized to transact business in the 
Philippines and of any other person, firm or corporation managing the affairs 
and/or property of such insurance company. Such company, as well as such 
managing person, firm or corporation, shall submit to the examiner all such 
books, papers and securities as he may require and such examiner shall also 
have the power to examine the officers of such company under oath touching its 
business and financial condition, and the authority to transact business in the 
Philippines of any such company shall be suspended by the tGommissioncr]


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COMMISSION if such examination is refused and such company shall not 
thereafter be allowed to transact further business in the Philippines until it has 
fully complied with the provisions of this section."
"Government-owned or -controlled corporations (GOCC) or {entities] 
GOVERNMENT AGENCIES engaged in social fen-private]- insurance, SUCH AS 
GOVERNMENT SERVICE INSURANCE SYSTEM, SOCIAL SECURITY 
SYSTEM, PHILIPPINE HEALTH INSURANCE CORPORATION, AND 
PHILIPPINE DEPOSIT INSURANCE CORPORATION, shall similarly be 
subject to such examination by the fGommissionci^ COMMISSION {eniess their 
fespectivG charters otherwise provide]. THE COMMISSION, THROUGH ITS 
REPRESENTATIVES, SHALL MAKE AN EXAMINATION OF THE 
FINANCIAL CONDITION AND METHODS OF TRANSACTING BUSINESS 
OF THE FOREGOING AT LEAST ONCE EVERY TWO (2) YEARS AND THE 
REPORT OF SAID EXAMINATION SHALL BE SUBMITTED TO THEIR 
GOVERNING BOARD. COPIES OF THE REPORT SHALL ALSO BE 
FURNISHED TO THE MONETARY BOARD OF THE BANGKO SENTRAL NG 
PILIPINAS, THE OFFICE OF THE PRESIDENT OF THE PHILIPPINES, AND 
THE TWO (2) HOUSES OF THE CONGRESS OF THE PHILIPPINES 
WITHIN FIVE (5) DAYS AFTER THE CLOSE OF EXAMINATION. FOR 
EACH EXAMINATION, THE GOCC OR GOVERNMENT AGENCY SHALL PAY 
THE OFFICE OF THE COMMISSION AN AMOUNT EQUAL TO THE ACTUAL 
EXPENSES INCURRED BY THE SAID OFFICE IN THE CONDUCT OF 
EXAMINATION, INCLUDING THE SALARIES OF THE EXAMINERS AND 
ACTUARY OF SUCH EXAMINATION FOR THE ACTUAL TIME SPENT. THE 
FOREGOING SHALL IMPLEMENT THE FINDINGS OF THE COMMISSION 
BASED ON THE EXAMINATION."
Sec. 3. Section 437 of Presidential Decree No. 612, as amended, is hereby 
replaced with the following:


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"SECTION 437. THE COMMISSION. THIS CODE SHALL BE 
ADMINISTERED BY THE INSURANCE COMMISSION, HEREINAFTER 
REFERRED TO AS THE "COMMISSION" AS A COLLEGIAL BODY.
"THE COMMISSION SHALL BE UNDER THE SUPERVISION OF THE 
MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS."
"THE WORD "SUPERVISION" AS USED IN THIS SECTION SHALL 
INCLUDE THE AUTHORITY OF THE MONETARY BOARD OF THE BANGKO 
SENTRAL NG PILIPINAS TO REVIEW, APPROVE, REVERSE, OR MODIFY 
ACTS AND DECISIONS OF THE COMMISSION; TAKE ACTION AS MAY BE 
NECESSARY FOR THE PERFORMANCE OF OFFICIAL FUNCTIONS, 
INCLUDING RECTIFICATION OF VIOLATIONS, ABUSES AND OTHER 
FORMS OF MALADMINISTRATION; AND REVIEW, REVISE, OR MODIFY 
THE DECISION OF THE COMMISION IM THE EXERCISE OF ITS 
REGULATORY FUNCTIONS."
"IN THE EXERCISE OF ITS ADMINISTRATIVE AUTHORITY, THE 
COMMISSION SHALL HAVE THE POWER TO DIRECT ITS MANAGEMENT, 
OPERATION AND ADMINISTRATION, REORGANIZE ITS PERSONNEL, 
AND ESTABLISH A HUMAN RESOURCE MANAGEMENT SYSTEM THAT 
SHALL GOVERN ITS SELECTION, HIRING, APPOINTMENT, TRANSFER, 
PROMOTION, OR DISMISSAL OF ALL PERSONNEL: PROVIDED, THAT, 
THE APPOINTMENT OF DEPUTY COMMISSIONERS OR OFFICERS OF 
EQUIVALENT RANK, AND ITS REORGANIZATION SHALL BE SUBJECT TO 
THE CONFIRMATION OF THE MONETARY BOARD OF THE BANGKO 
SENTRAL NG PILIPINAS."
"THE COMMISSION SHALL HAVE THE DUTY TO SEE THAT ALL 
LAWS RELATING TO INSURANCE, INSURANCE COMPANIES AND 
OTHER INSURANCE MATTERS, MUTUAL BENEFIT ASSOCIATIONS, 
TRUSTS FOR CHARITABLE USES, HEALTH MAINTENANCE


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ORGANIZATIONS, AND PRE-NEED COMPANIES AS DEFINED UNDER 
REPUBLIC ACT NO. 9829, ARE FAITHFULLY EXECUTED AND TO 
PERFORM THE DUTIES IMPOSED UPON THE COMMISSION BY THIS 
CODE AND OTHER PERTINENT LAWS, AND SHALL, 
NOTWITHSTANDING ANY EXISTING LAWS TO THE CONTRARY, HAVE 
THE AUTHORITY TO REGULATE THE ISSUANCE AND SALE OF VARIABLE 
CONTRACTS AS DEFINED IN SECTION 238 HEREOF AND TO PROVIDE 
FOR THE LICENSING OF PERSONS SELLING SUCH CONTRACTS, AND TO 
ISSUE SUCH REASONABLE RULES AND REGULATIONS GOVERNING THE 
SAME."
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"THE COMMISSION MAY ISSUE SUCH RULINGS, INSTRUCTIONS, 
CIRCULARS, ORDERS AND DECISIONS AS MAY BE DEEMED NECESSARY 
TO SECURE THE ENFORCEMENT OF THE PROVISIONS OF THIS CODE 
AND OTHER PERTINENT LAWS, TO ENSURE THE EFFICIENT 
REGULATION OF THE INSURANCE INDUSTRY AND OTHER INDUSTRIES 
UNDER ITS JURISDICTION IN ACCORDANCE WITH GLOBAL BEST 
PRACTICES AND TO PROTECT THE PUBLIC.
"OTHER THAN THE EXERCISE OF ITS ADJUDICATORY POWERS 
OVER CLAIMS, ALL RULINGS, ORDERS, DECISIONS, INSTRUCTIONS, 
AND OTHER ISSUANCES OF THE COMMISSION IN THE EXERCISE OF 
ITS SUPERVISORY AND REGULATORY POWERS UNDER THIS CODE 
AND OTHER PERTINENT LAWS SHALL BE FORWARDED TO THE 
MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS FOR 
AUTOMATIC REVIEW WITHIN SEVEN (7) CALENDAR DAYS FROM 
APPROVAL OF THE COMMISSION. IF NO ACTION IS TAKEN BY THE 
MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS WITHIN 
THIRTY (30) CALENDAR DAYS FROM RECEIPT OF THE ISSUANCE, IT 
SHALL BE DEEMED CONFIRMED BY THE MONETARY BOARD."
"IN ADDITION TO THE FOREGOING, THE COMMISSION SHALL 
HAVE THE FOLLOWING POWERS AND FUNCTIONS:


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(A) FORMULATE POLICIES AND RECOMMENDATIONS ON ISSUES 
CONCERNING THE INSURANCE INDUSTRY, HEALTH MAINTENANCE 
ORGANIZATIONS, AND OTHER INDUSTRIES UNDER ITS 
JURISDICTION, ADVISE CONGRESS AND OTHER GOVERNMENT 
AGENCIES ON ALL ASPECTS OF THE INDUSTRIES UNDER ITS 
JURISDICTION AND PROPOSE LEGISLATION AND AMENDMENTS 
THERETO;
(B) APPROVE, REJECT, SUSPEND OR REVOKE LICENSES OR 
CERTIFICATES OF REGISTRATION PROVIDED FOR BY THIS CODE;
(C) IMPOSE SANCTIONS FOR THE VIOiJ^TION OF LAWS AND THE 
RULES, REGULATIONS AND ORDERS ISSUED PURSUANT THERETO;
(D) PREPARE, APPROVE, AMEND OR REPEAL RULES, REGULATIONS 
AND ORDERS, AND ISSUE OPINIONS AND PROVIDE GUIDANCE ON 
AND SUPERVISE COMPLIANCE WITH SUCH RULES, REGULATIONS 
AND ORDERS;
(E) ENLIST THE AID AND SUPPORT OF, AND/OR DEPUTIZE ANY 
AND ALL ENFORCEMENT AGENCIES OF THE GOVERNMENT IN THE 
IMPLEMENTATION OF ITS POWERS AND FUNCTIONS UNDER THIS 
CODE AND OTHER PERTINENT LAWS;
(F) ISSUE CEASE AND DESIST ORDERS TO PREVENT FRAUD OR 
INJURY TO THE INSURING PUBLIC;
(G) PUNISH FOR CONTEMPT OF THE COMMISSION, BOTH DIRECT 
AND INDIRECT, IN ACCORDANCE WITH THE PERTINENT 
PROVISIONS OF AND PENALTIES PRESCRIBED BY THE RULES OF 
COURT;


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(H) COMPEL THE OFFICERS OF ANY REGISTERED INSTITUTIONS 
UNDER ITS SUPERVISION TO CALL MEETINGS OF STOCKHOLDERS 
OR MEMBERS THEREOF UNDER ITS SUPERVISION;
(I) ISSUE SUBPOENA DUCES TECUM AND SUMMON WITNESSES TO 
APPEAR IN ANY PROCEEDING OF THE COMMISSION AND, IN 
APPROPRIATE CASES, ORDER THE EXAMINATION, SEARCH AND 
SEIZURE OF ALL DOCUMENTS, PAPERS, FILES AND RECORDS, TAX 
RETURNS, AND BOOKS OF ACCOUNTS OF ANY ENTITY OR PERSON 
UNDER INVESTIGATION AS MAY BE NECESSARY FOR THE PROPER 
DISPOSITION OF THE CASES BEFORE IT, SUBJECT TO THE 
PROVISIONS OF EXISTING LAWS;
(J) SUSPEND OR REVOKE, AFTER PROPER NOTICE AND HEARING, 
THE LICENSE OR CERTIFICATE OF AUTHORITY OF ANY ENTITY OR 
PERSON UNDER ITS REGULATION, UPON AMY OF THE GROUNDS 
PROVIDED BY LAW;
(K) CONDUCT AN EXAMINATION TO DETERMINE COMPLIANCE 
WITH LAWS AND REGULATIONS IF THE CIRCUMSTANCES SO 
WARRANT AS DETERMINED BY APPROPRIATE RULES AND 
REGULATIONS;
(L) INVESTIGATE NOT OFTENER THAN ONCE A YEAR FROM THE
LAST DATE OF EXAMINATION TO DETERMINE WHETHER AN 
INSTITUTION IS CONDUCTING ITS BUSINESS ON A SAFE AND 
SOUND 
BASIS: PROVIDED, 
THAT, 
THE
DEFICIENCIES/IRREGULARITIES FOUND BY OR DISCOVERED BY 
AN AUDIT SHALL BE IMMEDIATELY ADDRESSED;
(M) INQUIRE INTO THE SOLVENCY AND LIQUIDITY OF THE 
INSTITUTIONS UNDER ITS SUPERVISION AND ENFORCE PROMPT 
CORRECTIVE ACTION;


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(N) TO RETAIN AND UTILIZE, IN ADDITION TO ITS ANNUAL 
BUDGET, ALL FEES, CHARGES AND OTHER INCOME DERIVED FROM 
THE REGULATION OF INSURANCE COMPANIES AND OTHER 
SUPERVISED PERSONS OR ENTITIES;
(O) TO FIX AND ASSESS FEES, CHARGES AND PENALTIES AS THE 
COMMISSION MAY FIND REASONABLE IN THE EXERCISE OF 
REGULATION; AND
(P) EXERCISE SUCH OTHER POWERS AS MAY BE PROVIDED BY LAW 
AS WELL AS THOSE WHICH MAY BE IMPLIED FROM, OR WHICH ARE 
NECESSARY OR INCIDENTAL TO THE EXPRESS POWERS GRANTED 
THE COMMISSION TO ACHIEVE THE OBJECTIVES AND PURPOSES 
OF THIS CODE."
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"THE COMMISSION SHALL INDEMNIFY THE COMMISSIONERS, 
DEPUTY COMMISSIONERS, AND OTHER OFFICIALS OF THE 
COMMISSION, INCLUDING PERSONNEL PERFORMING SUPERVISION 
AND EXAMINATION FUNCTIONS, FOR ALL COSTS AND EXPENSES 
REASONABLY INCURRED BY SUCH PERSONS IN CONNECTION WITH 
ANY CIVIL OR CRIMINAL ACTIONS, SUITS OR PROCEEDINGS TO 
WHICH THEY MAY BE MADE A PARTY TO BY THE REASON OF THE 
PERFORMANCE OF THEIR DUTIES AND FUNCTIONS, UNLESS THEY ARE 
FINALLY ADJUDGED IN SUCH ACTIONS, SUITS OR PROCEEDINGS TO 
BE LIABLE FOR NEGLIGENCE OR MISCONDUCT."
"IN THE EVENT OF SETTLEMENT OR COMPROMISE, 
INDEMNIFICATION SHALL BE PROVIDED ONLY IN CONNECTION WITH 
SUCH MATTERS COVERED BY THE SETTLEMENT AS TO WHICH THE 
COMMISSION IS ADVISED BY EXTERNAL COUNSEL THAT THE PERSONS 
TO BE INDEMNIFIED DID NOT COMMIT ANY NEGLIGENCE OR 
MISCONDUCT."
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"THE COSTS AND EXPENSES INCURRED IN DEFENDING THE 
AFOREMENTIONED ACTION, SUIT OR PROCEEDING MAY BE PAID BY 
THE COMMISSION IN ADVANCE OF THE FINAL DISPOSITION OF SUCH 
ACTION, SUIT OR PROCEEDING UPON RECEIPT OF AN UNDERTAKING 
BY OR ON BEHALF OF THE COMMISSION, DEPUTY COMMISSIONER, 
OFFICER OR EMPLOYEE TO REPAY THE AMOUNT ADVANCED SHOULD 
IT ULTIMATELY BE DETERMINED BY THE COMMISSION THAT THE 
PERSON IS NOT ENTITLED TO BE INDEMNIFIED."
"THE COMMISSION MAY, FOR PURPOSES OF EFFICIENCY, 
DELEGATE TO THE CHAIRPERSON ANY OF ITS FUNCTIONS, EXCEPT 
FOR DISCRETIONARY POWERS VESTED IN THE COMMISSION."
Sec. 4. New Sections, Sections 437-A, 437-B, 437-Q 437-D/437-E/ AND 437-F, 
are hereby inserted to Presidential Decree No. 612, as amended, to read as follows:
"SEC 437-A - COMPOSITION. THE COMMISSION SHALL BE 
COMPOSED OF FIVE (5) COMMISSIONERS, AS FOLLOWS: A 
CHAIRPERSON AND THREE (3) MEMBERS APPOINTED BY THE 
PRESIDENT WHO SHALL SERVE FULL-TIME FOR A TERM OF (6) SIX 
YEARS EACH, AND ONE (1) SENIOR OFFICER OF THE BANGKO 
SENTRAL NG PILIPINAS TO BE DESIGNATED BY THE GOVERNOR OF 
THE BANGKO SENTRAL NG PILIPINAS AS EX-OFFICIO 
COMMISSIONER.
"THE CHAIRPERSON SHALL BE THE CHIEF EXECUTIVE OFFICER 
OF THE COMMISSION, WHO SHALL EXECUTE AND ADMINISTER THE 
POLICIES, DECISIONS, ORDERS, AND RESOLUTIONS APPROVED BY 
THE COMMISSION, AND SHALL HAVE THE GENERAL EXECUTIVE 
DIRECTION AND SUPERVISION OF THE WORK AND OPERATION OF 
THE COMMISSION AND ITS COMMISSIONERS, BODIES, BOARDS, 
OFFICES, PERSONNEL, AND ALL ITS ADMINISTRATIVE BUSINESS."
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"THE COMMISSIONERS APPOINTED BY THE PRESIDENT SHALL 
NOT BE REAPPOINTED MORE THAN ONCE."
"SEC. 437-B - QUALIFICATIONS. THE COMMISSIONERS MUST 
BE NATURAL-BORN CITIZENS OF THE PHILIPPINES, AT LEAST FORTY 
(40) YEARS OF AGE FOR THE CHAIRPERSON AND AT LEAST THIRTY- 
FIVE (35) YEARS OF AGE FOR THE MEMBERS, OF GOOD MORAL 
CHARACTER, OF UNQUESTIONABLE INTEGRITY, OF KNOWN PROBITY 
AND PATRIOTISM, AND WITH RECOGNIZED COMPETENCE IN THE 
INSURANCE, BANKING, ECONOMICS, OR FINANCE INDUSTRY: 
PROVIDED, THAT ONE (1) OF THE MEMBERS APPOINTED BY THE 
PRESIDENT MUST BE A LICENSED ACTUARY OR MUST HAVE AT LEAST 
FIVE (5) YEARS OF WORK EXPERIENCE IN THE FIELD OF ACTUARIAL 
DISCIPLINE."
"SEC. 437-C - DISQUALIFICATIONS. IN ADDITION TO THE 
DISQUALIFICATIONS IMPOSED BY REPUBLIC ACT NO. 6713, A 
COMMISSIONER IS DISQUALIFIED FROM BEING A DIRECTOR, 
OFFICER, EMPLOYEE, CONSULTANT, LAWYER, AGENT, OR 
STOCKHOLDER OF ANY INSTITUTION WHICH IS SUBJECT TO 
SUPERVISION OR EXAMINATION BY THE COMMISSION, IN WHICH 
CASE SUCH COMMISSIONER SHALL RESIGN FROM, AND DIVEST 
HIMSELF OF ANY AND ALL INTERESTS IN SUCH INSTITUTION BEFORE 
ASSUMPTION OF OFFICE AS COMMISSIONER."
"EXCEPT FOR THE OFFICER APPOINTED BY THE GOVERNOR OF 
BANGKO SENTRAL NG PILIPINAS AS EX-OFFICIO COMMISSIONER, 
COMMISSIONERS SHALL NOT HOLD ANY OTHER PUBLIC OFFICE OR 
PUBLIC EMPLOYMENT DURING THEIR TENURE."
"NO COMMISSIONER SHALL BE EMPLOYED IN ANY 
INSTITUTION WHICH IS SUBJECT TO SUPERVISION OR
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EXAMINATION BY THE COMMISSION WITHIN TWO (2) YEARS AFTER 
THE EXPIRATION OF HIS TERM EXCEPT WHEN HE SERVES AS AN 
OFFICIAL REPRESENTATIVE OF THE PHILIPPINE GOVERNMENT TO 
SUCH INSTITUTION.
"SECTION 437-D - VACANCY. ANY VACANCY IN THE 
COMMISSION CREATED BY DEATH, RESIGNATION, OR REMOVAL OF 
ANY COMMISSIONER SHALL BE FILLED BY THE APPOINTMENT OF A 
NEW COMMISSIONER TO COMPLETE THE UNEXPIRED PERIOD OF THE 
TERM OF THE COMMISSIONER CONCERNED."
"SECTION 437-E - REMOVAL. EXCEPT FOR THE EX-OFFICIO 
COMMISSIONER FROM THE BANGKO SENTRAL NG PILIPINAS, THE 
PRESIDENT MAY REMOVE ANY COMMISSIONER FOR ANY OF THE 
FOLLOWING REASONS:
(A) IF THE COMMISSIONER IS SUBSEQUENTLY DISQUALIFIED UNDER 
THE PROVISIONS OF SECTION 437-C OF THIS ACT; OR
(B) 
IF THE COMMISSIONER IS PHYSICALLY OR MENTALLY 
INCAPACITATED THAT HE CANNOT PROPERLY DISCHARGE HIS 
DUTIES AND RESPONSIBILITIES AND SUCH INCAPACITY HAS LASTED 
FOR MORE THAN SIX (6) MONTHS; OR
(C) IF THE COMMISSIONER IS GUILTY OF ACTS OR OPERATIONS 
WHICH ARE OF FRAUDULENT OR ILLEGAL CHARACTER OR WHICH 
ARE MANIFESTLY OPPOSED TO THE AIMS AND INTERESTS OF THE 
COMMISSION; OR
(D) 
IF THE COMMISSIONER NO LONGER POSSESSES THE 
QUALIFICATIONS SPECIFIED IN SECTION 437-B OF THIS ACT."
"SECTION 437-F - MEETINGS. THE COMMISSION SHALL HOLD 
MEETINGS AT LEAST ONCE A WEEK FOR THE CONDUCT OF BUSINESS
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OR AS OFTEN AS MAY BE NECESSARY UPON THE CALL OF THE 
CHAIRPERSON OR UPON THE REQUEST OF TWO (2) OTHER 
COMMISSIONERS. THE NOTICE OF THE MEETING SHALL BE GIVEN TO 
ALL COMMISSIONERS AND THE PRESENCE OF THREE (3) 
COMMISSIONERS SHALL CONSTITUTE A QUORUM. IN THE ABSENCE 
OF THE CHAIRPERSON, THE MOST SENIOR COMMISSIONER SHALL 
ACT AS PRESIDING OFFICER OF THE MEETING."
Sec. 5. Section 438 of Presidentia! Decree No. 612/ as amended/ is hereby 
further amended to read as follows:
Section 438. In eddition to the administrative sanctions provided 
elsewhere in this Code, the fJfwaiaee-CemmissloF^eF} COMMISSION is hereby 
authorized, at fhis} ITS discretion, to impose upon insurance companies, their 
directors and/or officers and/or agents, for any willful failure or refusal to comply 
with, or violation of any provision of this Code, or any order, instruction, 
regulation, or ruling of the {Insurance CommisGioner] COMMISSION, or any 
commission or irregularities, and/or conducting business in an unsafe or 
unsound manner as may be determined by the {Insurance Commissioner] 
COMMISSION, the following:
XXX
Sec. 6. Section 439 of Presidential Decree No. 612f as amended, is hereby 
further amended to read as follows:
"Section 439. The {Commissioner} COMMISSION shall have the 
PRIMARY AND EXCLUSIVE power to adjudicate claims and complaints 
involving any loss, damage or liability for which an insurer may be answerable 
under any kind of policy or contract of insurance, or for which such insurer may 
be liable under a contract of suretyship, or for which a reinsurer may be sued 
under any contract of reinsurance it may have entered into; or for which a 
mutual benefit association may be held liable under the membership certificates
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it has issued to its members, where the amount of any SINGLE CLAIM FOR 
such loss, damage or liability, excluding interest, cost and attorney's fees, being 
claimed or sued upon any kind of insurance, bond, reinsurance contract, or 
membership does not exceed [five million pGsos-fPSTOOOjQQQ.GQ)^. THE
AMOUNT AS MAY BE DETERMINED BY THE MONETARY BOARD OF THE 
BANGKO SENTRAL NG PILIPINAS."
"THE COMMISSION SHALL HAVE THE PRIMARY AND EXCLUSIVE 
POWER TO ADJUDICATE ANY AND ALL CLAIMS INVOLVING PRE-NEED 
PLANS AND HEALTH MAINTENANCE ORGANIZATION PRODUCTS OR 
SERVICES IF THE AMOUNT OF BENEFITS DOES NOT EXCEED THE 
AMOUNT AS MAY BE DETERMINED BY THE MONETARY BOARD OF THE 
BANGKO SENTRAL NG PILIPINAS."
"ANY PERSON AGGREVIED BY AN ORDER OR DECISION OF THE 
COMMISSION, WHETHER IN RELATION TO ITS SETTLEMENT OF 
CLAIM OF AN INSURED, PLANHOLDER, OR MEMBER, OR IN ANY 
OTHER MATTER INVOLVING ITS EXERCISE OF ADJUDICATORY 
POWER OVER CLAIMS, MAY APPEAL THE ORDER OR DECISION TO THE 
COURT OF APPEALS BY PETITION FOR REVIEW IN ACCORDANCE 
WITH THE PERTINENT PROVISIONS OF THE RULES OF COURT. NO 
ADMINISTRATIVE APPEAL OF THE DECISION OF THE COMMISSION 
EXERCISING ADJUDICATORY POWERS UNDER THIS SECTION SHALL 
BE MADE TO THE BANGKO SENTRAL NG PILIPINAS."
"THE COMMISSION MAY ORDER THE PAYMENT OR 
REIMBURSEMENT OF MONEY AND DAMAGES WHICH IS SUBJECT OF 
THE ACTION FILED BEFORE IT. THE COMMISSION, IN THE EXERCISE 
OF ITS ADJUDICATORY POWERS, SHALL HAVE THE POWER TO 
ADMINISTER OATHS AND AFFIRMATIONS, ISSUE SUBPOENA DUCES 
TECUM AND SUMMON WITNESSES TO APPEAR IN ITS PROCEEDINGS 
AND IN APPROPRIATE CASES, ORDER THE EXAMINATION, SEARCH
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AND SEIZURE OF ALL DOCUMENTS, AND BOOKS OF ACCOUNTS OF 
ANY ENTITY OR PERSON UNDER INVESTIGATION AS MAY BE 
NECESSARY FOR THE PROPER DISPOSITION OF THE CASES BEFORE 
IT. FURTHER, THE COMMISSION SHALL HAVE THE AUTHORITY TO 
PUNISH FOR CONTEMPT, BOTH DIRECT AND INDIRECT, PURSUANT 
TO THE RULES AND REGULATIONS AS MAY BE ISSUED BY THE 
COMMISSION. THE COMMISSION SHALL HAVE THE AUTHORITY TO 
ISSUE RULES ON PROVISIONAL REMEDIES. UPON ISSUANCE OF THE 
ENTRY OF JUDGMENT, THE COMMISSION MAY, MOW PROPRIO OR 
UPON MOTION BY THE PROPER PARTY, CAUSE THE EXECUTION OF 
THE JUDGMENT IN THE CASE FILED BEFORE IT."
"The power of the fCommisGioncr] COMMISSION does not cover the 
relationship between [the iftstirancc company] INSTITUTIONS OR ENTITIES 
UNDER ITS SUPERVISION and THEIR [its} agents OR brokers but is limited 
to adjudicating claims and complaints filed [by-the insured] against the 
insurance company, MUTUAL BENEFIT ASSOCIATIONS, PRE-NEED 
COMPANIES AND HEALTH MAINTENANCE ORGANIZATIONS.
"The fGommissioncr] COMMISSION may authorize any officer or group 
of officers under him to conduct investigation, inquiry and/or hearing and decide 
claims and he may issue rules governing the conduct of adjudication and 
resolution of cases. The Rules of Court shall have suppletory application.
"The party filing an action pursuant to the provisions of this section 
thereby submits his person to the jurisdiction of the [Commissioner] 
COMMISSION. The {Commissioner] COMMISSION shall acquire jurisdiction 
over the person of the impleaded party or parties in accordance with and 
pursuant to the provisions of the Rules of Court.
{The authority-to adjudicate granted to -the Commissioner under this 
sec-tion shall be concurrent with that of the civil courts, but-the filing of a
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compiaint with the CorrHnisGionGr Ghall preclude the civil- courts from taking 
eegnizancG of a suit involving thc-GQiriG subject matter.]
[Any dccicion, order or ruling rendered by the CommisstonGr-Qfter a
toring shall hove the force and effect of a
from Q final order, ruling or dedGion of the CommisGioner by filing with the 
€emmissioner within thirty (30) days from receipt of-copy of such order, ruling 
Qj^deciGion notice of appeal to the Court of Appealg in the manner provided for 
in the Rules of Court for appealG from the Regional Tr-iel-Court to thG-Court of 
Appeals.]
fFoFthe purpose of any-proceeding under this Gection, the CommiGGioner,
or any officer thereof deGignated [by him] is Gmpov^rf>Fed- to adminlGter oaths 
aftd affirmation, Gubpoena witnesGCG, compel Uietf-att-eBdance, take evidence, 
ond require the production of any books, papers, documentG, or contracts or 
other records which are relevant or moterial to the inquiry.]
"A full and complete record shall be kept of all proceedings had before 
the {GommiGGioner] COMMISSION, or the officers thereof designated by him, 
and all testimony shall be taken down and transcribed by a stenographer 
appointed by the tGommiGGioner] COMMISSION.
"In order to promote party autonomy in the resolution of cases, the 
fGommiGoioner] COMMISSION shall establish a system for resolving cases 
through the use of alternative dispute resolution.
Sec. 7. Amendments to the Insurance Code. All other references in Presidential 
Decree No. 612, as amended, referring to the "Insurance Commissioner" "and 
"Commissioner" shall be amended to "Commission." Moreover, all references in 
Presidential Decree No. 612, as amended, referring to the "Secretary of Finance" shall 
be amended to "the Monetary Board of the Bangko Sentral ng Pilipinas."
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Sec. 8. Transitory Provisions. - The Insurance Commission shall be made 
operational by the performance of the following acts:
(A) The President shall constitute the Commission by appointing the Chairperson 
and three (3) members of the Commission, within sixty (60) calendar days from 
the effectivity of this Act;
(B) The Governor of the Bangko Sentral ng Pilipinas shall designate an Ex-Officio 
Commissioner within sixty (60) calendar days from the effectivity of this Act;
(C) The Chairperson first appointed shall hold office for six (6) years. Of the 
members of the Commission first appointed by the President, one shall hold 
office for six (6) years and the other two (2) members shall hold office for three 
(3) years;
For purposes of implementing this Act, the Commission is hereby authorized to 
provide for its reorganization, to streamline its structure and operations, upgrade its 
human resource component to enable it to effectively and efficiently perform its 
functions and exercise its powers under this Act, subject to the approval of the 
Monetary Board of the Bangko Sentral ng Pilipinas. The Commission shall be 
accountable for the payment of separation benefits to the affected officials, including 
the existing Commissioner and Deputy Commissioners, and personnel, whether regular 
or casual/contractual, pursuant to existing laws.
Sec. 9. Separabiiity Clause. — If any provision of this Act shall be held 
unconstitutional or invalid, the other provisions not otherwise affected shall remain in 
full force and effect.
Sec. 10. Repealing Clause. — All laws, decrees, executive orders, rules and 
regulations or parts thereof which are contrary to or inconsistent with this Act are 
hereby repealed, amended or modified accordingly.
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Sec. 11. Effectivity. — This Act shall take effect fifteen (15) days after its
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complete publication either in the Official Gazette or in a newspaper of general
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circulation.
Approved,
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