14s’ Congress of the Republic 
) 
of the PhiIippines 
1 
First Regular Session 
1 
S E N A T E  
Introduced by Senator Aquilino Q. Pimentel, Jr. 
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, m 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 titIes. 
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 TitIe 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. 
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. 
A 
/ 
A@JILINO Q. PIMENTEL, JR. 


14"' Congress of the Republic 
) 
of the Philippines 
) 
First Regular Session 
1 
S E N A T E  
S. No. = 
116 
- 
Intraduced by Seiiator Aquilino Q. Pimentel, Tu. 
AN ACT 
CREATING THE 
FIELD 
OF LAND TITLE INSURANCE 
AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 
612, OTHERWISE KNOWN AS THE INSURANCE CODE OF 1978, 
AS AMENDED BY PRESIDENTIAL DECREES NOS. 1455 AND 
1460 AND BATAS PAMBANSA BLG. 874 
Be it enacted hj fhe Senafe and HOMS~ 
of Representnfives of the Philippines in Congress 
assenzbied: 
SECTION 1. Chapter 11, on Classes of Insurance, of Presidential Decree No. 
612, as amended, otherwise h o r n  as the Insurance Code of 1978, is hereby 
amended to include a distinct class of insurance to be known as Land Title 
Insurance, which shall read as follows: 
TITLE VI 
LAND TITLE INSURANCE 
Sub-Title VI-A 
DEFINITIONS OF TERMS 
SECTION 184. a) LAND TITLE INSURANCE POLICY PROTECTS THE 
INSURED AGAINST TITLE DEFECTS, FORGERY, FALSIFICATION, DOUBLE 
TITLING AND SIMILAR UNLAWFUL ACTS THAT AFFECT TITLE TO, OR THE 
USE OF REAL PROPERTY. 
b) A TITLE INSURER REFERS TO A COMPANY ORGANIZED AND 
AUTHORIZED TO DO THE BUSINESS UNDER THIS CODE FOR THE 
PURPOSE OF ISSUING TITLE INSURANCE POLICIES. 


c) RELATED TITLE SERVICES MEANS SERVICES PROVIDED BY A 
TITLE INSUXER OR THE TITLE INSURANCE AGENT INCLUDING, 
BUT NOT LIMITED TO, PREPARING OR OBTAINING TITLE 
INFORMATION, PREPARING DOCUMENTS NECESSARY TO CLOSE 
A TRANSACTION, CONDUCTING THE CLOSING OR HANDLING 
THE DISBURSEMENT OF FUNDS RELATED TO THE CLOSING OF A 
REAL ESTATE TRANSACTION IN WHICH A TITLE INSURANCE 
POLICY IS TO BE ISSUED. 
d) RISK PREMIUM REFERS TO THE CHARGE THAT IS MADE BY A 
TITLE INSURER FOR THE ASSUMPTION OF RISK UNDER A TITLE 
INSURANCE CONTRACT. 
Sub-Title VI-B 
THE TITLE POLICY 
SECTION 185. A TITLE INSURER SHALL NOT ISSUE NOR AGREE TO 
ISSUE ANY FORM OF TITLE BINDER, TITLE INSURANCE COMMITMENT, 
PRELIMINARY REPORT, INSURANCE POLICY, OTHER CONTRACTS OF 
TITLE INSURANCE OR RELATED FORM UNTIL IT IS FILED WITH AND 
APPROVED BY THE INSURANCE COMMISSION. 
SECTION 186. A TITLE INSURER SHALL NOT ISSUE ANY CONTRACT 
OF TITLE INSURANCE EITHER A!3 PRELIMINARY INSURER, CO-INSURER OR 
RE-INSURER UPON AN ESTATE, LIEN OR INTEREST IN PROPERTY UNLESS 
THE AMOUNT OF mE RISK ASSUMED IS REFLECTED ON THE FACE OF 
THE CONTRACT. A TITLE INSURER SHALL NOT ISSUE TWO OR MORE 
POLICIES UPON THE SAME ESTATES, LIEN OR INTEREST: PROVIDED, THAT 
NOTHING IN THIS SECTION SHALL PROHIBIT THE SIMULTANEOUS 
ISSUANCE OF POLICIES INSURING DIFFERENT ESTATES, LIENS OR 
INTERESTS IN THE SAME PROPERTY, IF EACH OF THE SIMULTANEOUS 
POLICIES EXCEPTS TI-IE P A M O U N T  ESTATES, LIENS OR INTERESTS TO 
WHICH THE INSURED ESTATE, LIEN OR INTERESTS IS SUBJECT, AND IF 


EACH OF ?“fE SIMULTANEOUS POLICIES CONFORMS TO THIS SECTION. 
PROVIDED, FURTHER THAT NOTHING IN THIS SECTION PROHIBITS THE 
CEDING OF A PORTION OF THE TOTAL RISK TO AUTHORIZED INSURERS. 
INSURANCE CEDED, INCLUDING CO-INSURANCE EFFECTED, IS A 
RETENTION OF RISK BY “E INSURER ASSUMING THE CEDED RISK, AND 
NOT BY THE iNSURER CEDING THE RISK. 
Sub-Title VI-C 
RISK PREMIUM 
SECTION 187. THE INSURANCE COMMISSION SHALL ADOPT AND 
ISSUE GUIDELINES SPECIFYING THE RISK PREMIUM TO BE CHARGED BY 
INSURERS FOR THE RESPEmIVE TYPES OF TITLE INSURANCE CONTRACTS 
AND SERVICES INCIDENT THERETO. THE INSURANCE COMMISSION MAY 
ESTABLISH LIMITATIONS AS TO THE REASONABLE CHARGES MADE IN 
ADDITION TO THE RISK PREMIUM BASED UPON THE EXPENSES 
ASSOCIATED WITH THE SERVICES RENDERED AND OTHER RELEVANT 
FACTORS. 
SECTlON 188. IN ADOIYTING PREMIUM RATES, THE INSURANCE 
COMMISSION MUST GIVE DUE CONSIDERATION TO THE FOLLOWING 
A) THE INSURERS’ LOSS EXPERIENCE AND PROSPECTIVE LOSS 
EXPERIENCE UNDER INSURED CLOSING SERVICE LETTERS, 
SEARCH 
AND 
EXAMINATION 
SERVICES, 
AND 
POLICY 
LIABILITIES. 
B) A REASONABLE MARGIN FOR UNDERWRITING PROFIT AND 
CONTINGENCIE, SUFFICIENT TO ALLOW INSURERS AND 
AGENTS TO EARN A RATE OF RETURN ON THEIR CAPITAL THAT 
WILL ATTRACT AND RETAIN ADEQUATE CAPITAL INVESTMENT 
IN THE TITLE INSURANCE BUSINESS. 
C) 
PAST 
EXPENSES 
AND 
PROSPECTIVE 
EXPENSES 
FOR 
ADMINISTRATION AND HANDLING OF RISKS. 


D) 
LIABILITY 
FOR 
DEFALCATION. DEFALCATION IS 
THE 
CONVERSION OR MISAPPROPRIATION BY A LICENSED TITLE 
INSURANCE AGENT OF FUNDS HELD IN TRUST BY THE AGENT, 
FOR W C H  THE TITLE INSURER SHALL BE HELD LIABLE. 
E) DTFBR RELEVANT FACTORS AS MAY BE APPLIED BY THE 
iNSJRANCE COhlMIsSION. 
SECTION 189. RATES MAY BE GROUPED BY CLASSIFICATION OR 
SCHEDULE, AND MAY DIFFER AS TO THE CLASS OF RISK ASSUMED. 
RATES SHALL NOT BE EXCESSIVEi, INADEQUATE OR UNFAIRLY 
DISCRIMINATORY. 
SECTION 190. THE INSURANCE COMMISSION SHALL REVIEW THE 
RISK PREMIUM AND THE RELATED TITLE SERVICES RATES AS NEEDED, 
BUT NOT LESS FREQUENTLY THAN ONCE EVERY FIVE (5) YEARS, AND 
SHALL, BASED UPON THE R E W  REQUIRED BY THIS SUBSECTION, 
REVISE THE RISK PREMIUM AND THE RELATED TITLE SERVICES RATE IF 
THE RESULTS OF THE REVIEW SO WARRANT. 
SECTION 191. 
THE INSURANCE COMMISSION MAY REQUIRE 
INSURERS TO SUBMIT STATISTICAL INFORMATION, INCLUDING LOSS 
AND EXPENSE DATA, IT DEEMS NECESSARY TO ANALYZE THE SETTING 
OF RISK PREMIUM AND RELATED TITLE SERVICE RATES, RETENTION 
RATES AND THE CONDITfON OF THE TITLE INSURANCE INDUSTRY. 
SECTION 192. IN SETTING RISK PREMIUM AND RELATED TITLE 
SERVICE 
RATES, 
THE 
INSURANCE COMMISSION 
SHALL 
HOLD 
CONSULTATIONS AND PUBLIC HEARINGS, INVITING DULY LICENSED 
INSURERS, AGENTS, CONSUMER GROUPS AND OTHER INTERESTED OR 
INFORMED BODES OR PERSONS TO GIVE THEIR OPINIONS AS TO WHAT 
CONSTITUTES A FAIR RATE TO CHARGE THE PUBLIC. 
SECTION 193. IT SHALL BE UNLAWFUL FOR ANY INSURER, AGENT 
OR PERSON TO QUOTE, CHARGE, ACCEPT, COLLECT OR RECEIVE A RISK 


PREMIUM FOR TITLE INSURANCE HIGHER THAN THE RISK PREMIUM 
ADOMED AND AUTHORIZED BY THE INSURANCE COMMISSION. 
SECTION 194. A TITLE INSURER MAY PETITION THE INSURANCE 
COMMISSION FOR AN ORDER AUTHORIZING AN INCREASE OF THE 
ADOPTED RISK PREMIUM. THE PETITION SHALL BE IN WRITING SWORN 
TO AND SHALL SFX FORTH ALLEGATIONS OF FACT UPON WHICH THE 
PETITIONER WILL RELY, INCLUDING THE PETITIONER'S REASONS FOR 
REQUESTING THE INCREASE. 
AN AUTHORIZED TITLE INSURER OR 
AGENT MAY JOIN THE PEiTITION FOR LIKE AUTHORITY TO INCREASE OR 
MAY FILE A SEPARATE PETITION PRAYING FOR LIKE AUTHORITY. THE 
PUBLIC OR ANY AUTHORIZED TITLE INSURER OR AGENT MAY OPPOSE 
THE PETITION TO INCREASE THE ADOITED RISK PREMIUM. 
THE 
INSURANCE COMMISSION SHALL CONDUCT PUBLIC HEARINGS IN 
ACCORDANCE WITH ITS INTERNAL RULES OF PROCEDURE TO 
DETERMINE THE MERIE OF EACH PETITION. IF, IN THE JUDGMENT OF 
INSURANCE COMMISION, THE REQUESTED DEVIATION IS NOT 
JUSTIFIED, THE INSURANCE COMMISSION SHALL ISSUE AN ORDER 
DENYING THE PETITION, SETTING FORTH ITS REASON FOR SUCH DENIAL. 
AN ORDER GRANTING A PETITION CONSTITUTES AN AMENDMENT TO 
THE ADOPTED RISK PREMIUM OF THE INSURANCE COMMISSION. 
SECTION 195. 
WHEN A TITLE INSURANCE BINDER OR A 
COMMITMENT TO INSURE A TITLE OR RISK IS ISUED AT THE REQUEST OF 
THE INSURED OR THE INSURED'S REPRESENTATIVE OR AGENT, A 
PORTION OF THE RISK PREMIUM MUST BE CHARGED FOR THE BINDER OR 
COMMITMFlVT WHEN ISSUED. THE PORTION OF THE RISK PREMIUM 
CHARGED FOR THE BINDER OR COMMITMENT MUST BE CREDITED TO 
THE RISK PREMIUM DUE UPON ISSUANCE OF THE TITLE INSURANCE 
POLICY. 
Sub-Title VI-D 


THE TITLE INSURER 
SECTION 196. 
TWE INSURANCE COMMISSION SHALL ALLOW 
COMPANIES NOT OTHERWSE DISQUALIFIED BY LAW TO ENGAGE IN THE 
TITLE INSURANCE BUSINESS BY ISSUING THE APPROPRIATE LICENSE IN 
ACCORDANCE WITH ITS INTERNAL RULES OF PROCEDURE, PROVIDED 
THAT THE INSURANCE COMMISSION SHALL DETERMINE THE MINIMUM 
PAID-UP CAPITAL REQUIREMENT FOR COMPANIES THAT WILL BE 
ALLOWED TO ENGAGE IN THE TITLE INSURANCE BUSINESS. 
SECTION 197. 
A FOREIGN INSURANCE OR REINSURANCE 
COMPANY OR INTERMEDIARY IS ALLOWED ONE ENTRY TO DO BUSINESS 
IN THE PHILIPPINES, UNDER ANY OF THE FOLLOWING MODES 
A) OWNERSHIP OF THE VOTING STOCK OF AN EXISTING DOMESTIC 
INSURANCE OR REINSURANCE COMPANY OR INTERMEDIARY; 
B) INVESTMENT IN A NEW INSURANCE OR REINSURANCE 
COWANY OR 
INTERMEDIARY INCORPORATED IN THE 
PHILIPPINES; OR THE 
C) EXCEPr FOR AN INTERMEDIARY, ESTABLISHMENT OF A 
BRANCH. 
SECTION 198. TO QUALIFY AS A NEW COMPANY INCORPORATED 
IN THE PHILIPPINES OR AS A BRANCH UNDER ITEMS "B" AND "C" 
RESPECTIVELY IN THE "T PRECEDING SECTION, IN ADDITION TO THE 
REQUIREMENT STATED IN SECTION 197 ABOVE, THE FOREIGN 
APPLICANT MUST BE WIDELY OWNED AND PUBLICLY LISTED IN ITS 
COUNTRY OF ORIGIN, UNLESS IT IS MAJORITY-OWNED BY THE 
GOVERNMENT. THE TERM WIDELY-OWNED MEANS THAT NOT A SINGLE 
STOCKHOLDER OF THE APPLICANT OWNS MORE THAN TWENTY 
PERCENT (20%) OF ITS VOTING STOCK, WHILE "PUBLICLY LISTED" MEANS 
THAT ITS SHARES OF STOCK ARE LISTED IN THE STOCK EXCHANGES: IT IS 
FURTHER REQUIRED THAT AT LEAST TWENTY PERCENT (20%) OF THE 


OUTSTANDING SHARES OF STOCK OF THE NEW INSURANCE OR 
REINSURANCE COMPANY OR INTERMEDIARY INCORPORATED IN THE 
PHILIPPINES UNDER ITEM "B" ABOVE IS HELD BY FILIPINOS. 
THE 
FOREIGN AppLrCANT MUST LIKEWISE HAVE A SENIOR OFFICER WITH 
THE RANK OF VICE-PRESIDENT OR HIGHER IN TITLE OPERATIONS WITH 
TITLE UNDERWRITING EXPERTISE WHO IS A FILIPINO. 
SECTION 199. "€E HEAD OFFICE OF A FOREIGN INSURANCE OR 
REINSURANCE COMPANY SHALL GUARANTEE PROMPT PAYMENT OF 
ALL LIABILI'SIESOF ITS PMtPPINE BRANCH. 
SECTION 200. 
SUBJECT TO EXISTING LAWS, NON-FILIPINO 
NATIONALS MAY BECOME MEMBERS OF THE BOARD OF DIRECTORS OF 
AN INSURANCE OR REINSURANCE COMPANY TO THE EXTENT OF THE 
FOREIGN PARTICIPATION IN THE EQUITY OF SUCH COMPANY. 
EXPATRIATES WILL A'LSO BE ALLOWED TO OCCUPY MANAGERIAL 
POSITIONS SUBJECT TO EXISTING LAWS, RULES AND REGULATIONS. 
Sub-Title VI-E 
COVERAGE 
SECTION 201. 
A TITLE INSURER SHALL NOT ISSUE A TITLE 
INSURANCE BINDER, COMMITMENT, ENDORSEMENT, TITLE INSURANCE 
POLICY, OR GUARANTEE OF TITLE UNTIL THE TITLE INSURER HAS 
CAUSED 
TO BE 
CONDUCTED 
A 
REASONABLE 
SEARCH 
AND 
EXAMINATION OF THE TITLE AND OF SUCH OTHER INFORMATION AS 
MAY BE NECESSARY, AND HAS CAUSED TO BE MADE A DETERMINATION 
OF THE INSURABILITY OF THE TITLE, INCLUDING ENDORSEMENT 
COVERAGES, 
IN 
ACCORDANCE 
WITH 
SOUND 
UNDERWRITING 
PRACTICES. 
SECTION 202. THE TITLE INSURER SHALL CAUSE THE EVIDENCE OF 
THE REASONABLE SEARCH AND EXAMINATION OF THE TITLE TO BE 
PRESERVED AND RETAINED IN ITS FILES OR IN THE FILES OF ITS TITLE 


INSURANCE AGENT FOR A PERIOD OF NOT LESS THAN TEN (10) YEARS 
AFTER THE TITLE INSURANCE BINDER, COMMITMENT, TITLE INSURANCE 
POLICY, OR GUARANTEE OF ETLE WAS ISSUED. TWE TITLE INSURER 
MUST FURNISH THE INSURANCE COMMISSION AND THE LAND 
REGISTRATION AUTHOREY WITH A COPY OF THE RESULTS OF ITS 
SEARCH AND EXAMINATION AND MUST PRODUCE THE EVIDENCE 
REQUIRED TO BE MAINTAINED BY THIS SECTION AT ITS OFFICES UPON 
THE DEMAND BY GOVERNMENT AGENCIES. INSTEAD OF RETAINING THE 
ORIGINAL EVIDENCE, THE TITLE INSURER OR THE INSURANCE AGENT 
MAY, IN THE REGULAR COURSE OF BUSINESS, ESTABLISH A SYSTEM 
UNDER WHICH ALL OR PART OF THE EVIDENCE IS RECORDED, COPIED 
OR REPRODUCED BY ANY PHOTOGRAPHIC, PHOTOSTATIC MICROFILM 
MICROCARD MINIATURE PHOTOGRAPHIC, OR OTHER PROCES’S WHICH 
ACCURATELY REPRODUCES OR FORMS A DURABLE MEDIUM FOR 
REPRODUCING THE ORIGINAL. 
SEC. 2. Section 184 and all succeeding Sections of Presidential Decree No. 
612 shall be renumbered accordingly. 
SEC. 3. lmplementiilg Rules aiid Regulations. -,Within three (3) months 
from the passage of this Act, the Insurance Commission shall draw and adopt the 
required rules and regulations to govern Land Title Insurance. 
SEC. 4. Repeazing Clause. - All laws, executive orders, executive issuances 
or letters of instruction, or any part thereof, inconsistent with or contrary to the 
provisions of this Act are hereby repealed, amended or modified accordingly. 
SEC. 5. Separability Elause. - If, for any reason, any section or provision of 
this Act shall be declared unconstitutional 07 invalid, the other parts thereof not 


affected thereby shall remain valid. 
SEC. 6. Effectivity Clause. - This Act shall take effect fifteen (15) days after 
its publication in the Official Guzette or in at least two (2) national newspapers of 
general circulation. 
Approved,