EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
)
S. No.
SENATE 
2063
Introduced by Senator Manuel "Lito" M. Lapid
February
T W.iE
.SWIl
StI.tfi
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 creation of the Insurance Commission can be traced back in 1914 where 
the Insurance Division of the Bureau of Treasury was tasked to supervise insurance 
business, with the Insular Treasurer as the ex-officio Insurance Commissioner. In 
1947, the Insurance Division was merged with the Bureau of Banking under Republic 
(Rep.) Act No, 275 (s.l948). Thereafter, Presidential Decree (PD) No. 63 (s.l972) and 
PD No. 612 (1974), as amended, or "The Insurance Code," renamed the Office of the 
Insurance Commissioner as the Insurance Commission.
Currently, the Insurance Commission is an attached agency of the Department 
of Finance (DOF), pursuant to Executive Order (EO) No. 292 (1987), or the 
"Administrative Code of 1987." The Insurance Commission Is mandated to regulate 
and supervise the insurance, including state insurers, pre-need, and Health 
Maintenance Organization (HMO) industries (collectively, the Regulated Entities), in 
accordance with the provisions of The Insurance Code, Rep. Act No. 8929, or the "Pre- 
Need Code of the Philippines," EO No. 192 (s. 2015),1 and other applicable laws, rules, 
and regulations.
Statistics show that the foregoing Regulated Entities continue to grow and, 
hence, make significant contribution to the Philippine economy. In fact, as of second 
quarter of 2019, for life insurance, non-life insurance, and mutual benefit associations 
(MBA), the industry asset base grew by 11.79% to P1.72 trillion, from P1.54 trillion 
during the same period of its preceding year. Premiums generated from sale of 
variable life insurance was recorded at P20.54 billion, traditional life insurance at 
P31.17 billion, and MBA at P5.88 billion. On the other hand, for the pre-need industry, 
as of 2017, premiums generated were recorded at P17.56 billion. Rnally, for HMO, as
1 Transferring the Regulation and Supervision over Health Maintenance 
Organizations from the Department of Health to the Insurance Commission, 
Directing the Implementation thereof and for Other Puiposes.


of the end of 2018, the industry assets grew to P38.96 billion, from P32.91 billion of 
its preceding year. Moreover, HMO's total revenue grew by 15% to P45.30 billion, 
from P39.32 billion of its preceding year.
As the foregoing Regulated Entities continue to significantly grow, the need to 
strengthen the regulator, i.e., the Insurance Commission, becomes an obvious 
necessity. In response to this need, it is hereby proposed to further strengthen the 
Insurance Commission by expanding its power and clearly stating in the law its 
authority to regulate and supervise each of the Regulated Entities.
Moreover, since the Regulated Entities play a significant role in the financial 
stability of the Philippines, there is also a need to enhance the regulation and 
supervision of these entities In order not only to fully protect the public, but also to 
create an environment that is conducive for these industries' continuous robust 
growth.
Historically, the Regulated Entities have always been regulated by one person, 
the Insurance Commissioner. This is in contrast with the general corporate and 
banking industries that are regulated by collegial bodies — the Securities and 
Exchange Commission and the Monetary Board of the Bangko Sentra! ng Pilipinas 
(Bangko Sentrat), respectively.
Thus, in line with the need to enhance the regulation and supervision of the 
Regulated Entities and to align the Insurance Commission with the structure of other 
regulators, the creation of a collegial body that shall regulate and supervise the 
Regulated Entities is hereby proposed. Likewise, instead of an attachment with the 
DOF, it is recommended to place the Insurance Commission under the supervision of 
the Monetary Board of the Bangko Sentral, an independent and accountable body 
corporate, since the latter is equipped with technical expertise and adequate resources 
to discharge supervisory function over the Insurance Commission. The collegiality will 
bring stability in the Insurance Commission as its actions in the exercise of its 
administrative, regulatory, supervisory, and adjudicatory powers shall now require a 
majority vote of its members, and, except for the adjudicatory power over claims, the 
exercise of these powers shall be subject to the Monetary Boar:d's supervision.
In view of the foregoing, the approval of this bill is earnestly requested.
" M. LAPIP
mtor (\


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHIUPPINES 
Second Regular Session
SENATE
S. No. 2063
Introduced by Senator Manuel "Lapid" M. Lapid
February
BIbfcC
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"
Be it enacted by the Senate and House of Representatives of the 
Philippines in Congress assembled:
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SECTION 1. Section 194 of Presidential Decree No. 612, as amended,
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is hereby further amended to read as follows:
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"Section. 194.
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XXX.
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"The Secretary of Finoncc MONETARY BOARD OF THE BANGKO
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SENTRAL NG PILIPINAS may, upon recommendation of the
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COMMISSION Gommissioncr, increase ADJUST such minimum
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paid-up capital stock or cash assets requirement under such terms
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and conditions as THE MONETARY BOARD be may impose, to an
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amount which, in-hls opinion his IN THE OPINION OF THE
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MONETARY BOARD, would reasonably assure the safety of the
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interests of the policyholders and the public. The minimum paid-up
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capital and net worth requirement must remain unimpaired fqr the
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continuance of the license. The COMMISSION Gemmissioner may
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require the adoption of the risk-based capital approach and other
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internationally accepted forms of capital framework.
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XXX.
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"The Pfesidont of-the Philippines MONETARY BOARD OF THE
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BANGKO SENTRAL NG PILIPINAS may order a periodic review,
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every two (2) years OR WHEN IT DEEMS NECESSARY, the capital
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structure set out above to determine the capital adequacy of the local


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insurance industry from and after the integration and liberalization of 
the financial services, including Insurance, in the ASEAN Region. Per 
this-purpoGC,-a ■rcviGW-committcc consisting of reprosentotivcG from
the-Beportment of Finance (DQF),-thG-InsuronGo-CommlGsion (IG),-
tho National Economic and-Dcvclopmcnt-Atttherity-(NEDA),—the
SccuritiGs and Exchange Commission (SEC) and othor-ogondos-which
thG- President may designate shall-conduet-the-review-ond-may
recommend to the- President-to-adopt for-implcmentation-the
necessary-capital adjustment."
SEC. 2. Section 253 of Presidential Decree No. 612, as amended. Is 
hereby further amended to read as follows:
"Section 253. The {Commlsstonefj 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 {Commissioner} 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 [or-private] insurance
SUCH AS THE 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 [Commissioner] COMMISSION [unlcss-their 
respective chorters-etherwise—provide}. THE COMMISSION, 
THROUGH ITS REPRESENTATIVES, SHALL MAKE AN 
EXAMINATION OF THE FINANCIAL CONDIHON 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 THE 
GOVERNING BOARD AND COPIES THEREOF BE FURNISHED 
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


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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 OF THE 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 further amended to read as follows:
"SECnON 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 SECnON 
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 IN 
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


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CONFIRMATION OF THE MONETARY BOARD OF THE BANGKO
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SENTRAL NG PILIPINAS.
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"ThG-Insurance COMMISSION shall have the duty to see that all
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laws relating to insurance, insurance companies and other insurance
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matters, mutual benefit associations, trusts for charitable uses,
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HEALTH MAINTENANCE ORGANIZATIONS, AND PRE-NEED
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COMPANIES AS DEFINED UNDER REPUBLIC ACT NO. 9829,
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are faithfully executed and to perform the duties imposed upon THE
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COMMISSION him by this Code AND OTHER PERTINENT LAWS,
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and shall, notwithstanding any existing laws to the contrary, have the
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authority to regulate the Issuance and sale of variable contracts as
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defined in Section 238 hereof and to provide for the licensing of
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persons selling such contracts, and to issue such reasonable rules and
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regulations governing the same.
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"The COMMISSION may issue such rulings, instructions, circulars,
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orders and decisions as may be deemed necessary to secure the
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enforcement of the provisions of this Code AND OTHER
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PERTINENT LAWS, to ensure the efficient regulation of the
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insurance industry AND OTHER INDUSTRIES UNDER ITS
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JURISDICTION In accordance with global best practices and to
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protect the insuring public. Exccpt-as otherwise spccIfied-doeislonG
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made by the COMMISSION shall be appcoiabiG-to-the-Seeretary-of
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Finance.'
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"OTHER THAN THE EXERCISE OF ITS ADJUDICATORY
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POWERS, ALL RULINGS, ORDERS, DECISIONS,
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INSTRUCTIONS, AND OTHER ISSUANCES OF THE
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COMMISSION IN THE EXERCISE OF ITS SUPERVISORY AND
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REGULATORY POWERS UNDER THIS CODE AND OTHER
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PERTINENT LAWS SHALL BE FORWARDED TO THE
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MONETARY BOARD FOR AUTOMATIC REVIEW WITHIN
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SEVEN (7) CALENDAR DAYS FROM APPROVAL OF THE
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COMMISSION. IF NO ACTION IS TAKEN BY THE MONETARY
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BOARD WITHIN THIRTY (30) CALENDAR DAYS FROM
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RECEIPT OF THE ISSUANCE, IT SHALL BE DEEMED
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CONFIRMED BY THE MONETARY BOARD.
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"In addition to the foregoing, the COMMISSION shall have the
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following powers and functions:
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"(a) Formulate policies and recommendations on issues concerning
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the insurance industry, HEALTH MAINTENANCE
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ORGANIZATIONS, AND OTHER INDUSTRIES UNDER ITS
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JURISDICTION, advise Congress and other government agencies
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on all aspects of the insurance Industry INDUSTRIES UNDER ITS
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JURISDICTION and propose legislation and amendments thereto;


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"(b) Approve, reject, suspend or revoke licenses or certificates of
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registration provided for by this Code;
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"(c) Impose sanctions for the violation of laws and the rules,
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regulations and orders Issued pursuant thereto;
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"(d) Prepare, approve, amend or repeal rules, regulations and orders,
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and issue opinions and provide guidance on and supervise compliance
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with such rules, regulations and orders;
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"(e) Enlist the aid and support of, and/or deputize any and all
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enforcement agencies of the government in the implementation of its
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powers and functions under this Code AND OTHER PERTINENT
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LAWS;
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"(f) Issue cease and desist orders to prevent fraud or injury to the
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insuring public;
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"(g) Punish for contempt of the COMMISSION, both direct and
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indirect. In accordance with the pertinent provisions of and penalties
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prescribed by the Rules of Court;
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"(h) Compel the officers of any registered InsuroncG corporation- or
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asseciatlon INSTITUTIONS UNDER ITS SUPERVISION to call
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meetings of stockholders or members thereof under its supervision;
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"(i) Issue subpoena duces tecum and summon witnesses to appear in
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any proceeding of the Commission and, in appropriate cases, order
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the examination, search and seizure of all documents, papers, files
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and records, tax returns, and books of accounts of any entity or
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person under investigation as may be necessary for the proper
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disposition of the cases before it, subject to the provisions of existing
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laws;
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"0) Suspend or revoke, after proper notice and hearing, the license
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or certificate of authority of any entity or person under its regulation,
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upon any of the grounds provided by law;
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"(k) Conduct an examination to determine compliance with laws and
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regulations if the circumstances so warrant as determined by
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appropriate rules and regulations;
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"(I) Investigate not oftener than once a year from the last date of
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examination to determine whether an institution is conducting its
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business on a safe and sound basis: Provided, That, the
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deficiencies/irregularlties found by or discovered by an audit shall be
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Immediately addressed;
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"(m) Inquire into the solvency and liquidity of the institutions under
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its supervision and enforce prompt corrective action;


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"(n) To retain and utilize, In addition to its annual budget, all fees,
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charges and other income derived from the regulation of insurance
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companies and other supervised persons or entities;
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v(o) To fix and assess fees, charges and penalties as the
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COMMISSION may find reasonable in the exercise of regulation; and
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"(p) Exercise such other powers as may be provided by law as well as
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those which may be implied from, or which are necessary or Incidental
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to the express powers granted the Commission to achieve the
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objectives and purposes of this Code.
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"The Commission shall indemnify the COMMISSIONERS, Deputy
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Commissioners, and other officials of the Commission, including
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personnel performing supervision and examination functions, for all
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costs and expenses reasonably incurred by such persons in
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connection with any civil or criminal actions, suits or proceedings to
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which they may be made a party to by the reason of the performance
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of their duties and functions, unless they are finally adjudged in such
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actions, suits or proceedings to be liable for negligence or misconduct.
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"In the event of settlement or compromise, indemnification shall be
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provided only In connection with such matters covered by the
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settlement as to which the Commission is advised by external counsel
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that the persons to be indemnified did not commit any negligence or
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misconduct:
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"The costs and expenses incurred in defending the aforementioned
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action, suit or proceeding may be paid by the Commission in advance
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of the final disposition of such action, suit or proceeding upon receipt
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of an undertaking by or on behalf of the COMMISSION, Deputy
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Commissioner, officer or employee to repay the amount advanced
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should it ultimately be determined by the Commission that the person
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is not entitled to be indemnified.
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"THE COMMISSION MAY, FOR PURPOSES OF EFFICIENCY,
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DELEGATE TO THE CHAIRPERSON ANY OF ITS FUNCTIONS,
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EXCEPT FOR DISCRETIONARY POWERS VESTED IN THE
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COMMISSION.
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SEC. 4. New Sections, Sections 437-A, 437-B, 437-C, 437-D,437-E, AND 437-F,
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are hereby inserted to Presidential Decree No. 612, as amended, to read as follows:
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"SEC 437-A - COMPOSITION. THE COMMISSION SHALL BE
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COMPOSED OF A CHAIRPERSON AND THREE (3)
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COMMISSIONERS APPOINTED BY 
THE PRESIDENT 
WHO
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SHALL SERVE FULL-TIME FOR A TERM OF (6) SIX YEARS
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EACH, AND ONE (1) SENIOR OFFICER OF THE BANGKO


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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 DIRECnON AND 
SUPERVISION OF THE WORK AND OPERATION OF THE 
COMMISSION AND ITS COMMISSIONERS, BODIES, BOARDS, 
OFFICES, PERSONNEL, AND ALL ITS ADMINISTRATIVE 
BUSINESS.
"THE CHAIRPERSON AND ALL 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 
COMMISSIONS, OF GOOD MORAL CHARACTER, OR 
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 
COMMISSIONERS APPOINTED BY THE PRESIDENT OTHER 
THAN THE CHAIRPERSON 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


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OTHER PUBLIC OFFICE OR PUBLIC EMPLOYMENT DURING
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THEIR TENURE.
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"NO COMMISSIONER SHALL BE EMPLOYED IN ANY
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INSTITUTION WHICH IS SUBJECT TO SUPERVISION OR
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EXAMINATION BY THE COMMISSION WITHIN TWO (2)
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YEARS AFTER THE EXPIRATION OF HIS TERM EXCEPT WHEN
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HE SERVES AS AN OFFICIAL REPRESENTATIVE OF THE
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PHILIPPINE GOVERNMENT TO SUCH INSTITUTION
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"SECTION 437-D - VACANCY. ANY VACANCY IN THE
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COMMISSION CREATED BY DEATH, RESIGNATION, OR
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REMOVAL OF ANY COMMISSIONER SHALL BE FILLED BY THE
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APPOINTMENT OF A NEW COMMISSIONER TO COMPLETE
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THE UNEXPIRED PERIOD OF THE TERM OF THE
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COMMISSIONER CONCERNED.
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"SECTION 437-E - REMOVAL. EXCEPT FOR THE EX-OFFICIO
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COMMISSIONER FROM THE BANGKO SENTRAL NG
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PILIPINAS, THE PRESIDENT MAY REMOVE ANY
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COMMISSIONER FOR ANY OF THE FOLLOWING REASONS:
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"(A) IF THE COMMISSIONER IS SUBSEQUENTLY
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DISQUALIFIED UNDER THE PROVISIONS OF SECTION 437-C
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OF THIS ACT; OR
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"(B) IF THE COMMISSIONER IS PHYSICALLY OR MENTALLY
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INCAPACITATED THAT HE CANNOT PROPERLY DISCHARGE
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HIS DUTIES AND RESPONSIBILITIES AND SUCH
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INCAPACITY HAS LASTED FOR MORE THAN SIX (6) MONTHS;
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OR
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"(C) IF THE COMMISSIONER IS GUILTY OF ACTS OR
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OPERATIONS WHICH ARE OF FRAUDULENT OR ILLEGAL
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CHARACTER OR WHICH ARE MANIFESTLY OPPOSED TO THE
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AIMS AND INTERESTS OF THE COMMISSION; OR
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"(D) IF THE COMMISSIONER NO LONGER POSSESSES THE
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QUALIFICATIONS SPECIFIED IN SECTION 437-B OF THIS
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ACT.
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"SECTION 437-F ~ MEETINGS. THE COMMISSION SHALL
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HOLD MEETINGS AT LEAST ONCE A WEEK FOR THE CONDUCT
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OF BUSINESS OR AS OFTEN AS MAY BE. NECESSARY UPON
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THE CALL OF THE CHAIRPERSON OR UPON THE REQUEST OF
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(2) COMMISSIONERS. THE NOTICE OF THE MEETING SHALL
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BE GIVEN TO ALL COMMISSIONERS AND THE PRESENCE OF
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THREE (3) COMMISSIONERS SHALL CONSTITUTE A


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QUORUM. IN THE ABSENCE OF THE CHAIRPERSON, THE 
MOST SENIOR COMMISSIONER SHALL ACT AS PRESIDING 
OFFICER OF THE MEETING.
SEC. 5. Section 438 of Presidential Decree No. 612, as amended, is hereby 
further amended to read as follows:
"Section 438. In addition to the administrative sanctions provided 
elsewhere in this Code, the COMMISSION is hereby authorized, at 
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, reguiation, or ruiing of the COMMISSION, or any 
commission or Irregularities, and/or conducting business in an unsafe 
or unsound manner as may be determined by the COMMISSION, 
the following:
XXX."
SEC. 6. Section 439 of Presidential Decree No. 612, as amended, is hereby 
further amended to read as foiiows:
"Section 439. The COMMISSION shaii have the PRIMARY AND 
EXCLUSIVE power to adjudicate ciaims 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 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 RvG million pGso5-(P5,000,000.00):-THE 
AMOUNT AS MAY BE DETERMINED BY THE MONETARY BOARD.
"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.
"THE DECISION OF THE COMMISSION IN THE EXERCISE OF 
ITS ADJUDICATORY POWER SHALL BE FINAL AND


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EXECUTORY. ANY PERSON AGGREVIED BY AN ORDER OR 
DECISION OF THE COMMISSION, WHETHER IN RELATION TO 
ITS SETTLEMENT OF CLAIM OF AN INSURED AND 
PLANHOLDER, OR IN THE EXERCISE OF ITS REGULATORY 
AUTHORITY, 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 
ADJUDICATIVE 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 THEIR 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 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, MOTU PROPRIO OR UPON MOTION BY 
THE PROPER PARTY, CAUSE THE EXECUTION OF THE 
JUDGMENT IN THE CASE FILED BEFORE IT.
"The power of the COMMISSION does not cover the relationship 
between the Insurance-company-INSTnunONS/ENTmES UNDER 
ITS SUPERVISION and THEIR Its agents/brokers but is limited to 
adjudicating claims and complaints filed by-theHnsured-against the 
insurance company, MUTUAL BENEFIT ASSOCIATIONS, PRE­
NEED COMPANIES AND HEALTH MAINTENANCE 
ORGANIZATIONS.
"The 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.
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'The party filing an action pursuant to the provisions of this section 
thereby submits his person to the jurisdiction of the COMMISSION.
The 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-odjudieate-granted-to thG-Gemmtesionor under this
section Gholl bc-concurrent-with-that-of thc-civll-courtST-but-thc filing
of-o-complaint wIth-the-Commissioner-shall- preclude the civit-courts
fremtaking cognizance-of-a-suit-invelving the samc-subject-matter.-
J!Any decision, order or ruling-rondored-by-tNo-GommiGsioner-aftor-a
hearing shall have the force-and-effect-of a judgmentT-Any-party-may
appeoi-frem-a-fmaferder-rfolmg or dociGion of the Gommissioncr-by
filing-with the Gommlssloncr-wlthln-thlrty (30)-days from receipt of
copy-of-such-orderrruling or decision-notice of-oppeai-to the Court-of
Appeals-in the manner-provided-fer-in-thc Rules of-Gourt for appeals
from-the-Rcgional-Trial^uirt-t&-the-Gourt-ef-AppGolS7
"For -the purpose-of-any—proceeding-under this-section, -the
COMMISSION/-or—any—officcr -thcrcof- designated-[by hlm]-is
empewered-to-adminlster-oaths-and-offirmotionT-subpoena witnesses?
compeKheir attendance,-take-evidence, and require-the-production
ef-any-booksrpopGrsf-documontS7-or-€ontracts-or-otherrecord&^hich
are-relevant-er-material to the inquiry.-
"A full and complete record shall be kept of all proceedings had before 
the COMMISSION, or the officers thereof designated by him, and all 
testimony shall be taken down and transcribed by a stenographer 
appointed by the COMMISSION.
"In order to promote party autonomy in the resolution of cases, the 
COMMISSION shall establish a system for resolving cases through 
the use of alternative dispute resolution."
SEC. 7. Amendments to the Insurance Code. All 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 
Rnance" 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) Commissioners, one of whom must be a licensed actuary or 
must have at least five (5) years of work experience in the field of actuarial 
discipline, 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 
Commissioners first appointed by the President, one shall hold office for six 
(6) years and the other two (2) Commissioners shall hold office for three (3) 
years;
For purposes of impiementing 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 Deputy Commissioners, and 
personnel, whether regular or casual/contractual, pursuant to existing laws.
SEC. 7. Separability 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. 8. 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.
SEC. 9. Effectivity. — This Act shall take effect fifteen (15) days after its 
complete publication either in the Official Gazette or in a newspaper of general 
circulation.
Approved,
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