Fifteenth Congress of the Republic 
of the Philippines 
First Regular Session 
) 
) 
) 
SENATE 
S.B.No. 1992 
, 
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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 payor settle benefits due to claimants. 
In view of the foregoing, early passage of this bill is earnestly urged. 


; 
Fifteenth Congress of the Republic 
of the Philippines 
First Regular Session 
) 
) 
) 
SENATE 
S.B.No. 1992 
'),f :'", n 
~ 
OJ: TH S!:CHi: rAm 
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 CRIMINAL 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. Refusal or failure to pay the 
claim within the time prescribed herein will entitle the beneficiary to 
collect interest on the proceeds of the policy for the duration of the delay 
at the rate of twice 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, FURTHER, 
THAT 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 ITS 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." 
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• 
SECTION 2. Section 243 of Presidential Decree No. 1460, as amended otherwise known 
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 after such receipt. Refusal 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 INCLUDING THE ACCRUED INTERESTS 
THEREIN WITHIN FIFTEEN (15) DAYS FROM THE FILING OF 
THE DEMAND FOR PAYMENT, SAID INSURANCE COMPANY 
IS LIABLE FOR ESTAFA, AND THE PENALTY PRESCRffiED 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 THAT THE CLAIM IS FRAUDULENT." 
SECTION 3. This act shall take effect upon its approval. 
Approved, 
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