Republic of the Philippines Congress of the Philippines Metro Manila Begun and held in Metro Manila, on Monday, the

twenty-third day of July, two thousand twelve. [REPUBLI ! " #$. 10607% !# ! " &"RE#'"(E#I#' "(E I#&UR!# E I#)U&"R*, +UR"(ER !ME#)I#' PRE&I)E#"I!L )E REE #$. ,-., $"(ER/I&E 0#$/# !& 1"(E I#&UR!# E $)E2, !& !ME#)E) B* PRE&I)E#"I!L )E REE #$&. --3-, -.45, -366, -3,5, -4-3 !#) -74-, !#) B!"!& P!MB!#&! BL'. 483, !#) +$R $"(ER PURP$&E& Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: &E "I$# -. Presidential )e9ree #o. ,-., as a:ended, is here;y further a:ended to read as follows< 1'E#ER!L PR$=I&I$#& 1&E "I$# -. "his )e9ree shall ;e >nown as ?"he Insuran9e ode@. 1&E . .. /henever used in this ode, the following ter:s shall have the resAe9tive :eanings hereinafter set forth or indi9ated, unless the 9onteBt otherwise reCuires< 1DaE ! contract of insurance is an agree:ent where;y one underta>es for a 9onsideration to inde:nify another against loss, da:age or lia;ility arising fro: an un>nown or 9ontingent event. 1! 9ontra9t of suretyshiA shall ;e dee:ed to ;e an insuran9e 9ontra9t, within the :eaning

Fifteenth Congress Third Regular Session of this ode, only if :ade ;y a surety who or whi9h, as su9h, is doing an insuran9e ;usiness as hereinafter Arovided. 1D;E "he ter: doing an insurance business or transacting an insurance business, within the :eaning of this ode, shall in9lude< 1D-E Ma>ing or AroAosing to :a>e, as insurer, any insuran9e 9ontra9tF 1D.E Ma>ing or AroAosing to :a>e, as surety, any 9ontra9t of suretyshiA as a vo9ation and not as :erely in9idental to any other legiti:ate ;usiness or a9tivity of the suretyF 1DGE )oing any >ind of ;usiness, in9luding a reinsuran9e ;usiness, sAe9ifi9ally re9ogniHed as 9onstituting the doing of an insuran9e ;usiness within the :eaning of this odeF 1D3E )oing or AroAosing to do any ;usiness in su;stan9e eCuivalent to any of the foregoing in a :anner designed to evade the Arovisions of this ode. 1In the aAAli9ation of the Arovisions of this ode, the fa9t that no Arofit is derived fro: the :a>ing of insuran9e 9ontra9ts, agree:ents or transa9tions or that no seAarate or dire9t 9onsideration is re9eived therefor, shall not ;e dee:ed 9on9lusive to show that the :a>ing thereof does not 9onstitute the doing or transa9ting of an insuran9e ;usiness. 1D9E !s used in this Commissioner :eans Commissioner. 1 (!P"ER I ode, the ter: the Insurance

1"(E $#"R! " $+ I#&UR!# E 1"I"LE 1/(!" M!* BE I#&URE) 1&E . G. !ny 9ontingent or un>nown event, whether Aast or future, whi9h :ay da:nify a Aerson having an insura;le interest, or 9reate a lia;ility against hi:, :ay ;e insured against, su;Ie9t to the Arovisions of this 9haAter. 1"he 9onsent of the sAouse is not ne9essary for the validity of an insuran9e Aoli9y ta>en out ;y a :arried Aerson on his or her life or that of his or her 9hildren. 1!ll rights, title and interest in the Aoli9y of insuran9e ta>en out ;y an original owner on the life or health of the Aerson insured shall auto:ati9ally vest in the latter uAon the death of the original owner, unless otherwise Arovided for in the Aoli9y. 1&E . 3. "he Are9eding se9tion does not authoriHe an insuran9e for or against the drawing of any lottery, or for or against any 9han9e or ti9>et in a lottery drawing a AriHe. 1&E . 6. !ll >inds of insuran9e are su;Ie9t to the Arovisions of this 9haAter so far as the Arovisions 9an aAAly. 1"I"LE . 1P!R"IE& "$ "(E $#"R! " 1&E . ,. Every 9orAoration, AartnershiA, or asso9iation, duly authoriHed to transa9t insuran9e ;usiness as elsewhere Arovided in this ode, :ay ;e an insurer. 1&E . 8. !nyone eB9eAt a Au;li9 ene:y :ay ;e insured.

1&E . 4. Unless the Aoli9y otherwise Arovides, where a :ortgagor of AroAerty effe9ts insuran9e in his own na:e Aroviding that the loss shall ;e Aaya;le to the :ortgagee, or assigns a Aoli9y of insuran9e to a :ortgagee, the insuran9e is dee:ed to ;e uAon the interest of the :ortgagor, who does not 9ease to ;e a Aarty to the original 9ontra9t, and any a9t of his, Arior to the loss, whi9h would otherwise avoid the insuran9e, will have the sa:e effe9t, although the AroAerty is in the hands of the :ortgagee, ;ut any a9t whi9h, under the 9ontra9t of insuran9e, is to ;e Aerfor:ed ;y the :ortgagor, :ay ;e Aerfor:ed ;y the :ortgagee therein na:ed, with the sa:e effe9t as if it had ;een Aerfor:ed ;y the :ortgagor. 1&E . 7. If an insurer assents to the transfer of an insuran9e fro: a :ortgagor to a :ortgagee, and, at the ti:e of his assent, i:Aoses further o;ligations on the assignee, :a>ing a new 9ontra9t with hi:, the a9ts of the :ortgagor 9annot affe9t the rights of said assignee. 1"I"LE G 1I#&UR!BLE I#"ERE&" 1&E . -5. Every Aerson has an insura;le interest in the life and health< 1DaE $f hi:self, of his sAouse and of his 9hildrenF 1D;E $f any Aerson on who: he deAends wholly or in Aart for edu9ation or suAAort, or in who: he has a Ae9uniary interestF 1D9E $f any Aerson under a legal o;ligation to hi: for the Aay:ent of :oney, or resAe9ting AroAerty or servi9es, of whi9h death or illness :ight delay or Arevent the Aerfor:an9eF and

1DdE $f any Aerson uAon whose life any estate or interest vested in hi: deAends. 1&E . --. "he insured shall have the right to 9hange the ;enefi9iary he designated in the Aoli9y, unless he has eBAressly waived this right in said Aoli9y. #otwithstanding the foregoing, in the event the insured does not 9hange the ;enefi9iary during his lifeti:e, the designation shall ;e dee:ed irrevo9a;le. 1&E . -.. "he interest of a ;enefi9iary in a life insuran9e Aoli9y shall ;e forfeited when the ;enefi9iary is the Arin9iAal, a99o:Ali9e, or a99essory in willfully ;ringing a;out the death of the insured. In su9h a 9ase, the share forfeited shall Aass on to the other ;enefi9iaries, unless otherwise disCualified. In the a;sen9e of other ;enefi9iaries, the Aro9eeds shall ;e Aaid in a99ordan9e with the Aoli9y 9ontra9t. If the Aoli9y 9ontra9t is silent, the Aro9eeds shall ;e Aaid to the estate of the insured. 1&E . -G. Every interest in AroAerty, whether real or Aersonal, or any relation thereto, or lia;ility in resAe9t thereof, of su9h nature that a 9onte:Alated Aeril :ight dire9tly da:nify the insured, is an insura;le interest. 1&E . -3. !n insura;le interest in AroAerty :ay 9onsist in< 1DaE !n eBisting interestF 1D;E !n in9hoate interest founded on an eBisting interestF or 1D9E !n eBAe9tan9y, 9ouAled with an eBisting interest in that out of whi9h the eBAe9tan9y arises. 1&E . -6. ! 9arrier or deAository of any >ind has an insura;le interest in a thing held

;y hi: as su9h, to the eBtent of his lia;ility ;ut not to eB9eed the value thereof. 1&E . -,. ! :ere 9ontingent or eBAe9tant interest in any thing, not founded on an a9tual right to the thing, nor uAon any valid 9ontra9t for it, is not insura;le. 1&E . -8. "he :easure of an insura;le interest in AroAerty is the eBtent to whi9h the insured :ight ;e da:nified ;y loss or inIury thereof. 1&E . -4. #o 9ontra9t or Aoli9y of insuran9e on AroAerty shall ;e enfor9ea;le eB9eAt for the ;enefit of so:e Aerson having an insura;le interest in the AroAerty insured. 1&E . -7. !n interest in AroAerty insured :ust eBist when the insuran9e ta>es effe9t, and when the loss o99urs, ;ut need not eBist in the :eanti:eF and interest in the life or health of a Aerson insured :ust eBist when the insuran9e ta>es effe9t, ;ut need not eBist thereafter or when the loss o99urs. 1&E . .5. EB9eAt in the 9ases sAe9ified in the neBt four se9tions, and in the 9ases of life, a99ident, and health insuran9e, a 9hange of interest in any Aart of a thing insured una99o:Aanied ;y a 9orresAonding 9hange of interest in the insuran9e, susAends the insuran9e to an eCuivalent eBtent, until the interest in the thing and the interest in the insuran9e are vested in the sa:e Aerson. 1&E . .-. ! 9hange of interest in a thing insured, after the o99urren9e of an inIury whi9h results in a loss, does not affe9t the right of the insured to inde:nity for the loss. 1&E . ... ! 9hange of interest in one or :ore of several distin9t things, seAarately insured ;y one Aoli9y, does not avoid the insuran9e as to the others.

1&E . .G. ! 9hange of interest, ;y will or su99ession, on the death of the insured, does not avoid an insuran9eF and his interest in the insuran9e Aasses to the Aerson ta>ing his interest in the thing insured. 1&E . .3. ! transfer of interest ;y one of several Aartners, Ioint owners, or owners in 9o::on, who are Iointly insured, to the others, does not avoid an insuran9e even though it has ;een agreed that the insuran9e shall 9ease uAon an alienation of the thing insured. 1&E . .6. Every stiAulation in a Aoli9y of insuran9e for the Aay:ent of loss whether the Aerson insured has or has not any interest in the AroAerty insured, or that the Aoli9y shall ;e re9eived as Aroof of su9h interest, and every Aoli9y eBe9uted ;y way of ga:ing or wagering, is void. 1"I"LE 3 1 $# E!LME#" 1&E . .,. ! negle9t to 9o::uni9ate that whi9h a Aarty >nows and ought to 9o::uni9ate, is 9alled a 9on9eal:ent. 1&E . .8. ! 9on9eal:ent whether intentional or unintentional entitles the inIured Aarty to res9ind a 9ontra9t of insuran9e. 1&E . .4. Ea9h Aarty to a 9ontra9t of insuran9e :ust 9o::uni9ate to the other, in good faith, all fa9ts within his >nowledge whi9h are :aterial to the 9ontra9t and as to whi9h he :a>es no warranty, and whi9h the other has not the :eans of as9ertaining. 1&E . .7. !n intentional and fraudulent o:ission, on the Aart of one insured, to 9o::uni9ate infor:ation of :atters Aroving

or tending to Arove the falsity of a warranty, entitles the insurer to res9ind. 1&E . G5. #either Aarty to a 9ontra9t of insuran9e is ;ound to 9o::uni9ate infor:ation of the :atters following, eB9eAt in answer to the inCuiries of the other< 1DaE "hose whi9h the other >nowsF 1D;E "hose whi9h, in the eBer9ise of ordinary 9are, the other ought to >now, and of whi9h the for:er has no reason to suAAose hi: ignorantF 1D9E "hose of whi9h the other waives 9o::uni9ationF 1DdE "hose whi9h Arove or tend to Arove the eBisten9e of a ris> eB9luded ;y a warranty, and whi9h are not otherwise :aterialF and 1DeE "hose whi9h relate to a ris> eB9eAted fro: the Aoli9y and whi9h are not otherwise :aterial. 1&E . G-. Materiality is to ;e deter:ined not ;y the event, ;ut solely ;y the Aro;a;le and reasona;le influen9e of the fa9ts uAon the Aarty to who: the 9o::uni9ation is due, in for:ing his esti:ate of the disadvantages of the AroAosed 9ontra9t, or in :a>ing his inCuiries. 1&E . G.. Ea9h Aarty to a 9ontra9t of insuran9e is ;ound to >now all the general 9auses whi9h are oAen to his inCuiry, eCually with that of the other, and whi9h :ay affe9t the Aoliti9al or :aterial Aerils 9onte:AlatedF and all general usages of trade. 1&E . GG. "he right to infor:ation of :aterial fa9ts :ay ;e waived, either ;y the ter:s of insuran9e or ;y negle9t to :a>e inCuiry as to su9h fa9ts, where they are

distin9tly i:Alied in other fa9ts of whi9h infor:ation is 9o::uni9ated. 1&E . G3. Infor:ation of the nature or a:ount of the interest of one insured need not ;e 9o::uni9ated unless in answer to an inCuiry, eB9eAt as Ares9ri;ed ;y &e9tion 6-. 1&E . G6. #either Aarty to a 9ontra9t of insuran9e is ;ound to 9o::uni9ate, even uAon inCuiry, infor:ation of his own Iudg:ent uAon the :atters in Cuestion. 1"I"LE 6 1REPRE&E#"!"I$# 1&E . G,. ! reAresentation :ay ;e oral or written. 1&E . G8. ! reAresentation :ay ;e :ade at the ti:e of, or ;efore, issuan9e of the Aoli9y. 1&E . G4. "he language of a reAresentation is to ;e interAreted ;y the sa:e rules as the language of 9ontra9ts in general. 1&E . G7. ! reAresentation as to the future is to ;e dee:ed a Aro:ise, unless it aAAears that it was :erely a state:ent of ;elief or eBAe9tation. 1&E . 35. ! reAresentation 9annot Cualify an eBAress Arovision in a 9ontra9t of insuran9e, ;ut it :ay Cualify an i:Alied warranty. 1&E . 3-. ! reAresentation :ay ;e altered or withdrawn ;efore the insuran9e is effe9ted, ;ut not afterwards. 1&E . 3.. ! reAresentation :ust ;e Aresu:ed to refer to the date on whi9h the 9ontra9t goes into effe9t.

1&E . 3G. /hen a Aerson insured has no Aersonal >nowledge of a fa9t, he :ay nevertheless reAeat infor:ation whi9h he has uAon the su;Ie9t, and whi9h he ;elieves to ;e true, with the eBAlanation that he does so on the infor:ation of othersF or he :ay su;:it the infor:ation, in its whole eBtent, to the insurerF and in neither 9ase is he resAonsi;le for its truth, unless it Aro9eeds fro: an agent of the insured, whose duty it is to give the infor:ation. 1&E . 33. ! reAresentation is to ;e dee:ed false when the fa9ts fail to 9orresAond with its assertions or stiAulations. 1&E . 36. If a reAresentation is false in a :aterial Aoint, whether affir:ative or Aro:issory, the inIured Aarty is entitled to res9ind the 9ontra9t fro: the ti:e when the reAresentation ;e9o:es false. 1&E . 3,. "he :ateriality of a reAresentation is deter:ined ;y the sa:e rules as the :ateriality of a 9on9eal:ent. 1&E . 38. "he Arovisions of this 9haAter aAAly as well to a :odifi9ation of a 9ontra9t of insuran9e as to its original for:ation. 1&E . 34. /henever a right to res9ind a 9ontra9t of insuran9e is given to the insurer ;y any Arovision of this 9haAter, su9h right :ust ;e eBer9ised Arevious to the 9o::en9e:ent of an a9tion on the 9ontra9t. 1!fter a Aoli9y of life insuran9e :ade Aaya;le on the death of the insured shall have ;een in for9e during the lifeti:e of the insured for a Aeriod of two D.E years fro: the date of its issue or of its last reinstate:ent, the insurer 9annot Arove that the Aoli9y is void ab initio or is res9inda;le ;y reason of the fraudulent 9on9eal:ent or :isreAresentation of the insured or his agent.

1"I"LE , 1"(E P$LI * 1&E . 37. "he written instru:ent in whi9h a 9ontra9t of insuran9e is set forth, is 9alled a Aoli9y of insuran9e. 1&E . 65. "he Aoli9y shall ;e in Arinted for: whi9h :ay 9ontain ;lan> sAa9esF and any word, Ahrase, 9lause, :ar>, sign, sy:;ol, signature, nu:;er, or word ne9essary to 9o:Alete the 9ontra9t of insuran9e shall ;e written on the ;lan> sAa9es Arovided therein. 1!ny rider, 9lause, warranty or endorse:ent AurAorting to ;e Aart of the 9ontra9t of insuran9e and whi9h is Aasted or atta9hed to said Aoli9y is not ;inding on the insured, unless the des9riAtive title or na:e of the rider, 9lause, warranty or endorse:ent is also :entioned and written on the ;lan> sAa9es Arovided in the Aoli9y. 1Unless aAAlied for ;y the insured or owner, any rider, 9lause, warranty or endorse:ent issued after the original Aoli9y shall ;e 9ountersigned ;y the insured or owner, whi9h 9ountersignature shall ;e ta>en as his agree:ent to the 9ontents of su9h rider, 9lause, warranty or endorse:ent. 1#otwithstanding the foregoing, the Aoli9y :ay ;e in ele9troni9 for: su;Ie9t to the Aertinent Arovisions of ReAu;li9 !9t #o. 487., otherwise >nown as the ?Ele9troni9 o::er9e !9t@ and to su9h rules and regulations as :ay ;e Ares9ri;ed ;y the o::issioner. 1&E . 6-. ! Aoli9y of insuran9e :ust sAe9ify< 1DaE "he Aarties ;etween who: the 9ontra9t is :adeF

1D;E "he a:ount to ;e insured eB9eAt in the 9ases of oAen or running Aoli9iesF 1D9E "he Are:iu:, or if the insuran9e is of a 9hara9ter where the eBa9t Are:iu: is only deter:ina;le uAon the ter:ination of the 9ontra9t, a state:ent of the ;asis and rates uAon whi9h the final Are:iu: is to ;e deter:inedF 1DdE "he AroAerty or life insuredF 1DeE "he interest of the insured in AroAerty insured, if he is not the a;solute owner thereofF 1DfE "he ris>s insured againstF and 1DgE "he Aeriod during whi9h the insuran9e is to 9ontinue. 1&E . 6.. over notes :ay ;e issued to ;ind insuran9e te:Aorarily Aending the issuan9e of the Aoli9y. /ithin siBty D,5E days after issue of a 9over note, a Aoli9y shall ;e issued in lieu thereof, in9luding within its ter:s the identi9al insuran9e ;ound under the 9over note and the Are:iu: therefor. 1 over notes :ay ;e eBtended or renewed ;eyond su9h siBty D,5E days with the written aAAroval of the o::issioner if he deter:ines that su9h eBtension is not 9ontrary to and is not for the AurAose of violating any Arovisions of this ode. "he o::issioner :ay Aro:ulgate rules and regulations governing su9h eBtensions for the AurAose of Areventing su9h violations and :ay ;y su9h rules and regulations disAense with the reCuire:ent of written aAAroval ;y hi: in the 9ase of eBtension in 9o:Alian9e with su9h rules and regulations. 1&E . 6G. "he insuran9e Aro9eeds shall ;e aAAlied eB9lusively to the AroAer interest of

the Aerson in whose na:e or for whose ;enefit it is :ade unless otherwise sAe9ified in the Aoli9y. 1&E . 63. /hen an insuran9e 9ontra9t is eBe9uted with an agent or trustee as the insured, the fa9t that his Arin9iAal or ;enefi9iary is the real Aarty in interest :ay ;e indi9ated ;y des9ri;ing the insured as agent or trustee, or ;y other general words in the Aoli9y. 1&E . 66. "o render an insuran9e effe9ted ;y one Aartner or Aart-owner, aAAli9a;le to the interest of his 9o-Aartners or other Aartowners, it is ne9essary that the ter:s of the Aoli9y should ;e su9h as are aAAli9a;le to the Ioint or 9o::on interest. 1&E . 6,. /hen the des9riAtion of the insured in a Aoli9y is so general that it :ay 9o:Arehend any Aerson or any 9lass of Aersons, only he who 9an show that it was intended to in9lude hi:, 9an 9lai: the ;enefit of the Aoli9y. 1&E . 68. ! Aoli9y :ay ;e so fra:ed that it will inure to the ;enefit of who:soever, during the 9ontinuan9e of the ris>, :ay ;e9o:e the owner of the interest insured. 1&E . 64. "he :ere transfer of a thing insured does not transfer the Aoli9y, ;ut susAends it until the sa:e Aerson ;e9o:es the owner of ;oth the Aoli9y and the thing insured. 1&E . 67. ! Aoli9y is either oAen, valued or running. 1&E . ,5. !n oAen Aoli9y is one in whi9h the value of the thing insured is not agreed uAon, and the a:ount of the insuran9e :erely reAresents the insurer@s :aBi:u: lia;ility. "he value of su9h thing insured shall ;e as9ertained at the ti:e of the loss.

1&E . ,-. ! valued Aoli9y is one whi9h eBAresses on its fa9e an agree:ent that the thing insured shall ;e valued at a sAe9ifi9 su:. 1&E . ,.. ! running Aoli9y is one whi9h 9onte:Alates su99essive insuran9es, and whi9h Arovides that the o;Ie9t of the Aoli9y :ay ;e fro: ti:e to ti:e defined, esAe9ially as to the su;Ie9ts of insuran9e, ;y additional state:ents or indorse:ents. 1&E . ,G. ! 9ondition, stiAulation, or agree:ent in any Aoli9y of insuran9e, li:iting the ti:e for 9o::en9ing an a9tion thereunder to a Aeriod of less than one D-E year fro: the ti:e when the 9ause of a9tion a99rues, is void. 1&E . ,3. #o Aoli9y of insuran9e other than life shall ;e 9an9elled ;y the insurer eB9eAt uAon Arior noti9e thereof to the insured, and no noti9e of 9an9ellation shall ;e effe9tive unless it is ;ased on the o99urren9e, after the effe9tive date of the Aoli9y, of one or :ore of the following< 1DaE #onAay:ent of Are:iu:F 1D;E onvi9tion of a 9ri:e arising out of a9ts in9reasing the haHard insured againstF 1D9E )is9overy of :isreAresentationF fraud or :aterial

1DdE )is9overy of willful or re9>less a9ts or o:issions in9reasing the haHard insured againstF 1DeE Physi9al 9hanges in the AroAerty insured whi9h result in the AroAerty ;e9o:ing uninsura;leF 1DfE )is9overy of other insuran9e 9overage that :a>es the total insuran9e in eB9ess of the value of the AroAerty insuredF or

1DgE ! deter:ination ;y the o::issioner that the 9ontinuation of the Aoli9y would violate or would Ala9e the insurer in violation of this ode. 1&E . ,6. !ll noti9es of 9an9ellation :entioned in the Are9eding se9tion shall ;e in writing, :ailed or delivered to the na:ed insured at the address shown in the Aoli9y, or to his ;ro>er Arovided the ;ro>er is authoriHed in writing ;y the Aoli9y owner to re9eive the noti9e of 9an9ellation on his ;ehalf, and shall state< 1DaE /hi9h of the grounds set forth in &e9tion ,3 is relied uAonF and 1D;E "hat, uAon written reCuest of the na:ed insured, the insurer will furnish the fa9ts on whi9h the 9an9ellation is ;ased. 1&E . ,,. In 9ase of insuran9e other than life, unless the insurer at least forty-five D36E days in advan9e of the end of the Aoli9y Aeriod :ails or delivers to the na:ed insured at the address shown in the Aoli9y noti9e of its intention not to renew the Aoli9y or to 9ondition its renewal uAon redu9tion of li:its or eli:ination of 9overages, the na:ed insured shall ;e entitled to renew the Aoli9y uAon Aay:ent of the Are:iu: due on the effe9tive date of the renewal. !ny Aoli9y written for a ter: of less than one D-E year shall ;e 9onsidered as if written for a ter: of one D-E year. !ny Aoli9y written for a ter: longer than one D-E year or any Aoli9y with no fiBed eBAiration date shall ;e 9onsidered as if written for su99essive Aoli9y Aeriods or ter:s of one D-E year. 1"I"LE 8 1/!RR!#"IE& 1&E . ,8. ! warranty is either eBAressed or i:Alied.

1&E . ,4. ! warranty :ay relate to the Aast, the Aresent, the future, or to any or all of these. 1&E . ,7. #o Aarti9ular for: of words is ne9essary to 9reate a warranty. 1&E . 85. /ithout AreIudi9e to &e9tion 6-, every eBAress warranty, :ade at or ;efore the eBe9ution of a Aoli9y, :ust ;e 9ontained in the Aoli9y itself, or in another instru:ent signed ;y the insured and referred to in the Aoli9y as :a>ing a Aart of it. 1&E . 8-. ! state:ent in a Aoli9y, of a :atter relating to the Aerson or thing insured, or to the ris>, as fa9t, is an eBAress warranty thereof. 1&E . 8.. ! state:ent in a Aoli9y, whi9h i:Aarts that it is intended to do or not to do a thing whi9h :aterially affe9ts the ris>, is a warranty that su9h a9t or o:ission shall ta>e Ala9e. 1&E . 8G. /hen, ;efore the ti:e arrives for the Aerfor:an9e of a warranty relating to the future, a loss insured against haAAens, or Aerfor:an9e ;e9o:es unlawful at the Ala9e of the 9ontra9t, or i:Aossi;le, the o:ission to fulfill the warranty does not avoid the Aoli9y. 1&E . 83. "he violation of a :aterial warranty, or other :aterial Arovision of a Aoli9y, on the Aart of either Aarty thereto, entitles the other to res9ind. 1&E . 86. ! Aoli9y :ay de9lare that a violation of sAe9ified Arovisions thereof shall avoid it, otherwise the ;rea9h of an i::aterial Arovision does not avoid the Aoli9y. 1&E . 8,. ! ;rea9h of warranty without fraud :erely eBonerates an insurer fro: the

ti:e that it o99urs, or where it is ;ro>en in its in9eAtion, Arevents the Aoli9y fro: atta9hing to the ris>. 1"I"LE 4 1PREMIUM 1&E . 88. !n insurer is entitled to Aay:ent of the Are:iu: as soon as the thing insured is eBAosed to the Aeril insured against. #otwithstanding any agree:ent to the 9ontrary, no Aoli9y or 9ontra9t of insuran9e issued ;y an insuran9e 9o:Aany is valid and ;inding unless and until the Are:iu: thereof has ;een Aaid, eB9eAt in the 9ase of a life or an industrial life Aoli9y whenever the gra9e Aeriod Arovision aAAlies, or whenever under the ;ro>er and agen9y agree:ents with duly li9ensed inter:ediaries, a ninety D75E-day 9redit eBtension is given. #o 9redit eBtension to a duly li9ensed inter:ediary should eB9eed ninety D75E days fro: date of issuan9e of the Aoli9y. 1&E . 84. E:Aloyees of the ReAu;li9 of the PhiliAAines, in9luding its Aoliti9al su;divisions and instru:entalities, and govern:ent-owned or -9ontrolled 9orAorations, :ay Aay their insuran9e Are:iu:s and loan o;ligations through salary dedu9tion< Provided, "hat the treasurer, 9ashier, Aay:aster or offi9ial of the entity e:Aloying the govern:ent e:Aloyee is authoriHed, notwithstanding the Arovisions of any eBisting law, rules and regulations to the 9ontrary, to :a>e dedu9tions fro: the salary, wage or in9o:e of the latter Aursuant to the agree:ent ;etween the insurer and the govern:ent e:Aloyee and to re:it su9h dedu9tions to the insurer 9on9erned, and 9olle9t su9h reasona;le fee for its servi9es. 1&E . 87. !n a9>nowledg:ent in a Aoli9y or 9ontra9t of insuran9e or the re9eiAt of

Are:iu: is 9on9lusive eviden9e of its Aay:ent, so far as to :a>e the Aoli9y ;inding, notwithstanding any stiAulation therein that it shall not ;e ;inding until the Are:iu: is a9tually Aaid. 1&E . 45. ! Aerson insured is entitled to a return of Are:iu:, as follows< 1DaE "o the whole Are:iu: if no Aart of his interest in the thing insured ;e eBAosed to any of the Aerils insured againstF 1D;E /here the insuran9e is :ade for a definite Aeriod of ti:e and the insured surrenders his Aoli9y, to su9h Aortion of the Are:iu: as 9orresAonds with the uneBAired ti:e, at a Aro rata rate, unless a short Aeriod rate has ;een agreed uAon and aAAears on the fa9e of the Aoli9y, after dedu9ting fro: the whole Are:iu: any 9lai: for loss or da:age under the Aoli9y whi9h has Areviously a99rued< Provided, "hat no holder of a life insuran9e Aoli9y :ay avail hi:self of the Arivileges of this AaragraAh without suffi9ient 9ause as otherwise Arovided ;y law. 1&E . 4-. If a Aeril insured against has eBisted, and the insurer has ;een lia;le for any Aeriod, however short, the insured is not entitled to return of Are:iu:s, so far as that Aarti9ular ris> is 9on9erned. 1&E . 4.. ! Aerson insured is entitled to a return of the Are:iu: when the 9ontra9t is voida;le, and su;seCuently annulled under the Arovisions of the ivil odeF or on a99ount of the fraud or :isreAresentation of the insurer, or of his agent, or on a99ount of fa9ts, or the eBisten9e of whi9h the insured was ignorant of without his faultF or when ;y any default of the insured other than a9tual fraud, the insurer never in9urred any lia;ility under the Aoli9y.

1! Aerson insured is not entitled to a return of Are:iu: if the Aoli9y is annulled, res9inded or if a 9lai: is denied ;y reason of fraud. 1&E . 4G. In 9ase of an over insuran9e ;y several insurers other than life, the insured is entitled to a rata;le return of the Are:iu:, AroAortioned to the a:ount ;y whi9h the aggregate su: insured in all the Aoli9ies eB9eeds the insura;le value of the thing at ris>. 1&E . 43. !n insurer :ay 9ontra9t and a99eAt Aay:ents, in addition to regular Are:iu:, for the AurAose of Aaying future Are:iu:s on the Aoli9y or to in9rease the ;enefits thereof. 1"I"LE 7 1L$&& 1&E . 46. !n agree:ent not to transfer the 9lai: of the insured against the insurer after the loss has haAAened, is void if :ade ;efore the loss eB9eAt as otherwise Arovided in the 9ase of life insuran9e. 1&E . 4,. Unless otherwise Arovided ;y the Aoli9y, an insurer is lia;le for a loss of whi9h a Aeril insured against was the AroBi:ate 9ause, although a Aeril not 9onte:Alated ;y the 9ontra9t :ay have ;een a re:ote 9ause of the lossF ;ut he is not lia;le for a loss of whi9h the Aeril insured against was only a re:ote 9ause. 1&E . 48. !n insurer is lia;le where the thing insured is res9ued fro: a Aeril insured against that would otherwise have 9aused a loss, if, in the 9ourse of su9h res9ue, the thing is eBAosed to a Aeril not insured against, whi9h Aer:anently deArives the insured of its Aossession, in whole or in AartF or where a loss is 9aused ;y efforts to res9ue

the thing insured fro: a Aeril insured against. 1&E . 44. /here a Aeril is esAe9ially eB9eAted in a 9ontra9t of insuran9e, a loss, whi9h would not have o99urred ;ut for su9h Aeril, is there;y eB9eAted although the i::ediate 9ause of the loss was a Aeril whi9h was not eB9eAted. 1&E . 47. !n insurer is not lia;le for a loss 9aused ;y the willful a9t or through the 9onnivan9e of the insuredF ;ut he is not eBonerated ;y the negligen9e of the insured, or of the insuran9e agents or others. 1"I"LE -5 1#$"I E $+ L$&& 1&E . 75. In 9ase of loss uAon an insuran9e against fire, an insurer is eBonerated, if written noti9e thereof ;e not given to hi: ;y an insured, or so:e Aerson entitled to the ;enefit of the insuran9e, without unne9essary delay. +or other non-life insuran9e, the o::issioner :ay sAe9ify the Aeriod for the su;:ission of the noti9e of loss. 1&E . 7-. /hen a Areli:inary Aroof of loss is reCuired ;y a Aoli9y, the insured is not ;ound to give su9h Aroof as would ;e ne9essary in a 9ourt of Iusti9eF ;ut it is suffi9ient for hi: to give the ;est eviden9e whi9h he has in his Aower at the ti:e. 1&E . 7.. !ll defe9ts in a noti9e of loss, or in Areli:inary Aroof thereof, whi9h the insured :ight re:edy, and whi9h the insurer o:its to sAe9ify to hi:, without unne9essary delay, as grounds of o;Ie9tion, are waived. 1&E . 7G. )elay in the Aresentation to an insurer of noti9e or Aroof of loss is waived if 9aused ;y any a9t of hi:, or if he o:its to

ta>e o;Ie9tion Aro:Atly and sAe9ifi9ally uAon that ground. 1&E . 73. If the Aoli9y reCuires, ;y way of Areli:inary Aroof of loss, the 9ertifi9ate or testi:ony of a Aerson other than the insured, it is suffi9ient for the insured to use reasona;le diligen9e to Aro9ure it, and in 9ase of the refusal of su9h Aerson to give it, then to furnish reasona;le eviden9e to the insurer that su9h refusal was not indu9ed ;y any Iust grounds of dis;elief in the fa9ts ne9essary to ;e 9ertified or testified. 1"I"LE -1)$UBLE I#&UR!# E 1&E . 76. ! dou;le insuran9e eBists where the sa:e Aerson is insured ;y several insurers seAarately in resAe9t to the sa:e su;Ie9t and interest. 1&E . 7,. /here the insured in a Aoli9y other than life is over insured ;y dou;le insuran9e< 1DaE "he insured, unless the Aoli9y otherwise Arovides, :ay 9lai: Aay:ent fro: the insurers in su9h order as he :ay sele9t, uA to the a:ount for whi9h the insurers are severally lia;le under their resAe9tive 9ontra9tsF 1D;E /here the Aoli9y under whi9h the insured 9lai:s is a valued Aoli9y, any su: re9eived ;y hi: under any other Aoli9y shall ;e dedu9ted fro: the value of the Aoli9y without regard to the a9tual value of the su;Ie9t :atter insuredF 1D9E /here the Aoli9y under whi9h the insured 9lai:s is an unvalued Aoli9y, any su: re9eived ;y hi: under any Aoli9y shall ;e dedu9ted against the full insura;le value,

for any su: re9eived ;y hi: under any Aoli9yF 1DdE /here the insured re9eives any su: in eB9ess of the valuation in the 9ase of valued Aoli9ies, or of the insura;le value in the 9ase of unvalued Aoli9ies, he :ust hold su9h su: in trust for the insurers, a99ording to their right of 9ontri;ution a:ong the:selvesF 1DeE Ea9h insurer is ;ound, as ;etween hi:self and the other insurers, to 9ontri;ute rata;ly to the loss in AroAortion to the a:ount for whi9h he is lia;le under his 9ontra9t. 1"I"LE -. 1REI#&UR!# E 1&E . 78. ! 9ontra9t of reinsuran9e is one ;y whi9h an insurer Aro9ures a third Aerson to insure hi: against loss or lia;ility ;y reason of su9h original insuran9e. 1&E . 74. /here an insurer o;tains reinsuran9e, eB9eAt under auto:ati9 reinsuran9e treaties, he :ust 9o::uni9ate all the reAresentations of the original insured, and also all the >nowledge and infor:ation he Aossesses, whether Areviously or su;seCuently a9Cuired, whi9h are :aterial to the ris>. 1&E . 77. ! reinsuran9e is Aresu:ed to ;e a 9ontra9t of inde:nity against lia;ility, and not :erely against da:age. 1&E . -55. "he original insured has no interest in a 9ontra9t of reinsuran9e. 1 (!P"ER II 1 L!&&E& $+ I#&UR!# E 1"I"LE I

1M!RI#E I#&UR!# E 1&UB-"I"LE --! 1)E+I#I"I$# 1&E . -5-. Marine Insuran9e in9ludes< 1DaE Insuran9e against loss of or da:age to< 1D-E =essels, 9raft, air9raft, vehi9les, goods, freights, 9argoes, :er9handise, effe9ts, dis;urse:ents, Arofits, :oneys, se9urities, 9hoses in a9tion, instru:ents of de;ts, valua;le AaAers, ;otto:ry, and resAondentia interests and all other >inds of AroAerty and interests therein, in resAe9t to, aAAertaining to or in 9onne9tion with any and all ris>s or Aerils of navigation, transit or transAortation, or while ;eing asse:;led, Aa9>ed, 9rated, ;aled, 9o:Aressed or si:ilarly AreAared for shiA:ent or while awaiting shiA:ent, or during any delays, storage, transhiA:ent, or reshiA:ent in9ident thereto, in9luding war ris>s, :arine ;uilder@s ris>s, and all Aersonal AroAerty floater ris>sF 1D.E Person or AroAerty in 9onne9tion with or aAAertaining to a :arine, inland :arine, transit or transAortation insuran9e, in9luding lia;ility for loss of or da:age arising out of or in 9onne9tion with the 9onstru9tion, reAair, oAeration, :aintenan9e or use of the su;Ie9t :atter of su9h insuran9e D;ut not in9luding life insuran9e or surety ;onds nor insuran9e against loss ;y reason of ;odily inIury to any Aerson arising out of ownershiA, :aintenan9e, or use of auto:o;ilesEF 1DGE Pre9ious stones, Iewels, Iewelry, Are9ious :etals, whether in 9ourse of transAortation or otherwiseF and 1D3E Bridges, instru:entalities tunnels and other of transAortation and

9o::uni9ation DeB9luding ;uildings, their furniture and furnishings, fiBed 9ontents and suAAlies held in storageEF Aiers, wharves, do9>s and sliAs, and other aids to navigation and transAortation, in9luding dry do9>s and :arine railways, da:s and aAAurtenant fa9ilities for the 9ontrol of waterways. 1D;E Marine protection and indemnity insurance, :eaning insuran9e against, or against legal lia;ility of the insured for loss, da:age, or eBAense in9ident to ownershiA, oAeration, 9hartering, :aintenan9e, use, reAair, or 9onstru9tion of any vessel, 9raft or instru:entality in use of o9ean or inland waterways, in9luding lia;ility of the insured for Aersonal inIury, illness or death or for loss of or da:age to the AroAerty of another Aerson. 1&UB-"I"LE --B 1I#&UR!BLE I#"ERE&" 1&E . -5.. "he owner of a shiA has in all 9ases an insura;le interest in it, even when it has ;een 9hartered ;y one who 9ovenants to Aay hi: its value in 9ase of loss< Provided, "hat in this 9ase the insurer shall ;e lia;le for only that Aart of the loss whi9h the insured 9annot re9over fro: the 9harterer. 1&E . -5G. "he insura;le interest of the owner of the shiA hyAothe9ated ;y ;otto:ry is only the eB9ess of its value over the a:ount se9ured ;y ;otto:ry. 1&E . -53. +reightage, in the sense of a Aoli9y of :arine insuran9e, signifies all the ;enefits derived ;y the owner, either fro: the 9hartering of the shiA or its e:Aloy:ent for the 9arriage of his own goods or those of others. 1&E . -56. "he owner of a shiA has an insura;le interest in eBAe9ted freightage

whi9h a99ording to the ordinary and Aro;a;le 9ourse of things he would have earned ;ut for the intervention of a Aeril insured against or other Aeril in9ident to the voyage. 1&E . -5,. "he interest :entioned in the last se9tion eBists, in 9ase of a 9harter Aarty, when the shiA has ;ro>en ground on the 9hartered voyage. If a Ari9e is to ;e Aaid for the 9arriage of goods it eBists when they are a9tually on ;oard, or there is so:e 9ontra9t for Autting the: on ;oard, and ;oth shiA and goods are ready for the sAe9ified voyage. 1&E . -58. $ne who has an interest in the thing fro: whi9h Arofits are eBAe9ted to Aro9eed has an insura;le interest in the Arofits. 1&E . -54. "he 9harterer of a shiA has an insura;le interest in it, to the eBtent that he is lia;le to ;e da:nified ;y its loss. 1&UB-"I"LE -1 $# E!LME#" 1&E . -57. In :arine insuran9e, ea9h Aarty is ;ound to 9o::uni9ate, in addition to what is reCuired ;y &e9tion .4, all the infor:ation whi9h he Aossesses, :aterial to the ris>, eB9eAt su9h as is :entioned in &e9tion G5, and to state the eBa9t and whole truth in relation to all :atters that he reAresents, or uAon inCuiry dis9loses or assu:es to dis9lose. 1&E . --5. In :arine insuran9e, infor:ation of the ;elief or eBAe9tation of a third Aerson, in referen9e to a :aterial fa9t, is :aterial. 1&E . ---. ! Aerson insured ;y a 9ontra9t of :arine insuran9e is Aresu:ed to have >nowledge, at the ti:e of insuring, of a Arior loss, if the infor:ation :ight Aossi;ly have

rea9hed hi: in the usual :ode of trans:ission and at the usual rate of 9o::uni9ation. 1&E . --.. ! 9on9eal:ent in a :arine insuran9e, in resAe9t to any of the following :atters, does not vitiate the entire 9ontra9t, ;ut :erely eBonerates the insurer fro: a loss resulting fro: the ris> 9on9ealed< 1DaE "he national 9hara9ter of the insuredF 1D;E "he lia;ility of the thing insured to 9aAture and detentionF 1D9E "he lia;ility to seiHure fro: ;rea9h of foreign laws of tradeF 1DdE "he want of ne9essary do9u:entsF and 1DeE "he use of false and si:ulated AaAers. 1&UB-"I"LE --) 1REPRE&E#"!"I$# 1&E . --G. If a reAresentation ;y a Aerson insured ;y a 9ontra9t of :arine insuran9e, is intentionally false in any :aterial resAe9t, or in resAe9t of any fa9t on whi9h the 9hara9ter and nature of the ris> deAends, the insurer :ay res9ind the entire 9ontra9t. 1&E . --3. "he eventual falsity of a reAresentation as to eBAe9tation does not, in the a;sen9e of fraud, avoid a 9ontra9t of :arine insuran9e. 1&UB-"I"LE --E 1IMPLIE) /!RR!#"IE& 1&E . --6. In every :arine insuran9e uAon a shiA or freight, or freightage, or uAon any thing whi9h is the su;Ie9t of :arine

insuran9e, a warranty is i:Alied that the shiA is seaworthy. 1&E . --,. ! shiA is seaworthy when reasona;ly fit to Aerfor: the servi9e and to en9ounter the ordinary Aerils of the voyage 9onte:Alated ;y the Aarties to the Aoli9y. 1&E . --8. !n i:Alied warranty of seaworthiness is 9o:Alied with if the shiA ;e seaworthy at the ti:e of the 9o::en9e:ent of the ris>, eB9eAt in the following 9ases< 1DaE /hen the insuran9e is :ade for a sAe9ified length of ti:e, the i:Alied warranty is not 9o:Alied with unless the shiA ;e seaworthy at the 9o::en9e:ent of every voyage it underta>es during that ti:eF 1D;E /hen the insuran9e is uAon the 9argo whi9h, ;y the ter:s of the Aoli9y, des9riAtion of the voyage, or esta;lished 9usto: of the trade, is to ;e transhiAAed at an inter:ediate Aort, the i:Alied warranty is not 9o:Alied with unless ea9h vessel uAon whi9h the 9argo is shiAAed, or transhiAAed, ;e seaworthy at the 9o::en9e:ent of ea9h Aarti9ular voyage. 1&E . --4. ! warranty of seaworthiness eBtends not only to the 9ondition of the stru9ture of the shiA itself, ;ut reCuires that it ;e AroAerly laden, and Arovided with a 9o:Aetent :aster, a suffi9ient nu:;er of 9o:Aetent offi9ers and sea:en, and the reCuisite aAAurtenan9es and eCuiA:ent, su9h as ;allasts, 9a;les and an9hors, 9ordage and sails, food, water, fuel and lights, and other ne9essary or AroAer stores and i:Ale:ents for the voyage. 1&E . --7. /here different Aortions of the voyage 9onte:Alated ;y a Aoli9y differ in resAe9t to the things reCuisite to :a>e the shiA seaworthy therefor, a warranty of seaworthiness is 9o:Alied with if, at the

9o::en9e:ent of ea9h Aortion, the shiA is seaworthy with referen9e to that Aortion. 1&E . -.5. /hen the shiA ;e9o:es unseaworthy during the voyage to whi9h an insuran9e relates, an unreasona;le delay in reAairing the defe9t eBonerates the insurer on shiA or shiAowner@s interest fro: lia;ility fro: any loss arising therefro:. 1&E . -.-. ! shiA whi9h is seaworthy for the AurAose of an insuran9e uAon the shiA :ay, nevertheless, ;y reason of ;eing unfitted to re9eive the 9argo, ;e unseaworthy for the AurAose of insuran9e uAon the 9argo. 1&E . -... /here the nationality or neutrality of a shiA or 9argo is eBAressly warranted, it is i:Alied that the shiA will 9arry the reCuisite do9u:ents to show su9h nationality or neutrality and that it will not 9arry any do9u:ents whi9h 9ast reasona;le susAi9ion thereon. 1&UB-"I"LE --+ 1"(E =$*!'E !#) )E=I!"I$# 1&E . -.G. /hen the voyage 9onte:Alated ;y a :arine insuran9e Aoli9y is des9ri;ed ;y the Ala9es of ;eginning and ending, the voyage insured is one whi9h 9onfor:s to the 9ourse of sailing fiBed ;y :er9antile usage ;etween those Ala9es. 1&E . -.3. If the 9ourse of sailing is not fiBed ;y :er9antile usage, the voyage insured ;y a :arine insuran9e Aoli9y is that way ;etween the Ala9es sAe9ified, whi9h to a :aster of ordinary s>ill and dis9retion, would :ean the :ost natural, dire9t and advantageous. 1&E . -.6. )eviation is a deAarture fro: the 9ourse of the voyage insured, :entioned

in the last two D.E se9tions, or an unreasona;le delay in Aursuing the voyage or the 9o::en9e:ent of an entirely different voyage. 1&E . -.,. ! deviation is AroAer< 1DaE /hen 9aused ;y 9ir9u:stan9es over whi9h neither the :aster nor the owner of the shiA has any 9ontrolF 1D;E /hen ne9essary to 9o:Aly with a warranty, or to avoid a Aeril, whether or not the Aeril is insured againstF 1D9E /hen :ade in good faith, and uAon reasona;le grounds of ;elief in its ne9essity to avoid a AerilF or 1DdE /hen :ade in good faith, for the AurAose of saving hu:an life or relieving another vessel in distress. 1&E . -.8. Every deviation not sAe9ified in the last se9tion is i:AroAer. 1&E . -.4. !n insurer is not lia;le for any loss haAAening to the thing insured su;seCuent to an i:AroAer deviation. 1&UB-"I"LE --' 1L$&& 1&E . -.7. ! loss :ay ;e either total or Aartial. 1&E . -G5. Every loss whi9h is not total is Aartial. 1&E . -G-. ! total loss :ay ;e either a9tual or 9onstru9tive. 1&E . -G.. !n a9tual total loss is 9aused ;y< 1DaE ! total destru9tion of the thing insuredF

1D;E "he irretrieva;le loss of the thing ;y sin>ing, or ;y ;eing ;ro>en uAF 1D9E !ny da:age to the thing whi9h renders it valueless to the owner for the AurAose for whi9h he held itF or 1DdE !ny other event whi9h effe9tively deArives the owner of the Aossession, at the Aort of destination, of the thing insured. 1&E . -GG. ! 9onstru9tive total loss is one whi9h gives to a Aerson insured a right to a;andon, under &e9tion -3-. 1&E . -G3. !n a9tual loss :ay ;e Aresu:ed fro: the 9ontinued a;sen9e of a shiA without ;eing heard of. "he length of ti:e whi9h is suffi9ient to raise this Aresu:Ation deAends on the 9ir9u:stan9es of the 9ase. 1&E . -G6. /hen a shiA is Arevented, at an inter:ediate Aort, fro: 9o:Aleting the voyage, ;y the Aerils insured against, the lia;ility of a :arine insurer on the 9argo 9ontinues after they are thus reshiAAed. 1#othing in this se9tion shall Arevent an insurer fro: reCuiring an additional Are:iu: if the haHard ;e in9reased ;y this eBtension of lia;ility. 1&E . -G,. In addition to the lia;ility :entioned in the last se9tion, a :arine insurer is ;ound for da:ages, eBAenses of dis9harging, storage, reshiA:ent, eBtra freightage, and all other eBAenses in9urred in saving 9argo reshiAAed Aursuant to the last se9tion, uA to the a:ount insured. 1#othing in this or in the Are9eding se9tion shall render a :arine insurer lia;le for any a:ount in eB9ess of the insured value or, if there ;e none, of the insura;le value.

1&E . -G8. UAon an a9tual total loss, a Aerson insured is entitled to Aay:ent without noti9e of a;andon:ent. 1&E . -G4. /here it has ;een agreed that an insuran9e uAon a Aarti9ular thing, or 9lass of things, shall ;e free fro: Aarti9ular average, a :arine insurer is not lia;le for any Aarti9ular average loss not deAriving the insured of the Aossession, at the Aort of destination, of the whole of su9h thing, or 9lass of things, even though it ;e9o:es entirely worthlessF ;ut su9h insurer is lia;le for his AroAortion of all general average loss assessed uAon the thing insured. 1&E . -G7. !n insuran9e 9onfined in ter:s to an a9tual loss does not 9over a 9onstru9tive total loss, ;ut 9overs any loss, whi9h ne9essarily results in deAriving the insured of the Aossession, at the Aort of destination, of the entire thing insured. 1&UB-"I"LE --( 1!B!#)$#ME#" 1&E . -35. !;andon:ent, in :arine insuran9e, is the a9t of the insured ;y whi9h, after a 9onstru9tive total loss, he de9lares the relinCuish:ent to the insurer of his interest in the thing insured. 1&E . -3-. ! Aerson insured ;y a 9ontra9t of :arine insuran9e :ay a;andon the thing insured, or any Aarti9ular Aortion thereof seAarately valued ;y the Aoli9y, or otherwise seAarately insured, and re9over for a total loss thereof, when the 9ause of the loss is a Aeril insured against< 1DaE If :ore than three-fourths DJE thereof in value is a9tually lost, or would have to ;e eBAended to re9over it fro: the AerilF

1D;E If it is inIured to su9h an eBtent as to redu9e its value :ore than three-fourths DJEF 1D9E If the thing insured is a shiA, and the 9onte:Alated voyage 9annot ;e lawfully Aerfor:ed without in9urring either an eBAense to the insured of :ore than threefourths DJE the value of the thing a;andoned or a ris> whi9h a Arudent :an would not ta>e under the 9ir9u:stan9esF or 1DdE If the thing insured, ;eing 9argo or freightage, and the voyage 9annot ;e Aerfor:ed, nor another shiA Aro9ured ;y the :aster, within a reasona;le ti:e and with reasona;le diligen9e, to forward the 9argo, without in9urring the li>e eBAense or ris> :entioned in the Are9eding su;AaragraAh. But freightage 9annot in any 9ase ;e a;andoned unless the shiA is also a;andoned. 1&E . -3.. !n a;andon:ent :ust ;e neither Aartial nor 9onditional. 1&E . -3G. !n a;andon:ent :ust ;e :ade within a reasona;le ti:e after re9eiAt of relia;le infor:ation of the loss, ;ut where the infor:ation is of a dou;tful 9hara9ter, the insured is entitled to a reasona;le ti:e to :a>e inCuiry. 1&E . -33. /here the infor:ation uAon whi9h an a;andon:ent has ;een :ade Aroves in9orre9t, or the thing insured was so far restored when the a;andon:ent was :ade that there was then in fa9t no total loss, the a;andon:ent ;e9o:es ineffe9tual. 1&E . -36. !;andon:ent is :ade ;y giving noti9e thereof to the insurer, whi9h :ay ;e done orally, or in writing< Provided, "hat if the noti9e ;e done orally, a written noti9e of su9h a;andon:ent shall ;e su;:itted within seven D8E days fro: su9h oral noti9e.

1&E . -3,. ! noti9e of a;andon:ent :ust ;e eBAli9it, and :ust sAe9ify the Aarti9ular 9ause of the a;andon:ent, ;ut need state only enough to show that there is Aro;a;le 9ause therefor, and need not ;e a99o:Aanied with Aroof of interest or of loss. 1&E . -38. !n a;andon:ent 9an ;e sustained only uAon the 9ause sAe9ified in the noti9e thereof. 1&E . -34. !n a;andon:ent is eCuivalent to a transfer ;y the insured of his interest to the insurer, with all the 9han9es of re9overy and inde:nity. 1&E . -37. If a :arine insurer Aays for a loss as if it were an a9tual total loss, he is entitled to whatever :ay re:ain of the thing insured, or its Aro9eeds or salvage, as if there had ;een a for:al a;andon:ent. 1&E . -65. UAon an a;andon:ent, a9ts done in good faith ;y those who were agents of the insured in resAe9t to the thing insured, su;seCuent to the loss, are at the ris> of the insurer, and for his ;enefit. 1&E . -6-. /here noti9e of a;andon:ent is AroAerly given, the rights of the insured are not AreIudi9ed ;y the fa9t that the insurer refuses to a99eAt the a;andon:ent. 1&E . -6.. "he a99eAtan9e of an a;andon:ent :ay ;e either eBAress or i:Alied fro: the 9ondu9t of the insurer. "he :ere silen9e of the insurer for an unreasona;le length of ti:e after noti9e shall ;e 9onstrued as an a99eAtan9e. 1&E . -6G. "he a99eAtan9e of an a;andon:ent, whether eBAress or i:Alied, is 9on9lusive uAon the Aarties, and ad:its the loss and the suffi9ien9y of the a;andon:ent.

1&E . -63. !n a;andon:ent on9e :ade and a99eAted is irrevo9a;le, unless the ground uAon whi9h it was :ade Aroves to ;e unfounded. 1&E . -66. $n an a99eAted a;andon:ent of a shiA, freightage earned Arevious to the loss ;elongs to the insurer of said freightageF ;ut freightage su;seCuently earned ;elongs to the insurer of the shiA. 1&E . -6,. If an insurer refuses to a99eAt a valid a;andon:ent, he is lia;le as uAon an a9tual total loss, dedu9ting fro: the a:ount any Aro9eeds of the thing insured whi9h :ay have 9o:e to the hands of the insured. 1&E . -68. If a Aerson insured o:its to a;andon, he :ay nevertheless re9over his a9tual loss. 1&UB-"I"LE --I 1ME!&URE $+ I#)EM#I"* 1&E . -64. ! valuation in a Aoli9y of :arine insuran9e is 9on9lusive ;etween the Aarties thereto in the adIust:ent of either a Aartial or total loss, if the insured has so:e interest at ris>, and there is no fraud on his AartF eB9eAt that when a thing has ;een hyAothe9ated ;y ;otto:ry or resAondentia, ;efore its insuran9e, and without the >nowledge of the Aerson a9tually Aro9uring the insuran9e, he :ay show the real value. But a valuation fraudulent in fa9t, entitles the insurer to res9ind the 9ontra9t. 1&E . -67. ! :arine insurer is lia;le uAon a Aartial loss, only for su9h AroAortion of the a:ount insured ;y hi: as the loss ;ears to the value of the whole interest of the insured in the AroAerty insured. 1&E . -,5. /here Arofits are seAarately insured in a 9ontra9t of :arine insuran9e,

the insured is entitled to re9over, in 9ase of loss, a AroAortion of su9h Arofits eCuivalent to the AroAortion whi9h the value of the AroAerty lost ;ears to the value of the whole. 1&E . -,-. In 9ase of a valued Aoli9y of :arine insuran9e on freightage or 9argo, if a Aart only of the su;Ie9t is eBAosed to ris>, the valuation aAAlies only in AroAortion to su9h Aart. 1&E . -,.. /hen Arofits are valued and insured ;y a 9ontra9t of :arine insuran9e, a loss of the: is 9on9lusively Aresu:ed fro: a loss of the AroAerty out of whi9h they are eBAe9ted to arise, and the valuation fiBes their a:ount. 1&E . -,G. In esti:ating a loss under an oAen Aoli9y of :arine insuran9e the following rules are to ;e o;served< 1DaE "he value of a shiA is its value at the ;eginning of the ris>, in9luding all arti9les or 9harges whi9h add to its Aer:anent value or whi9h are ne9essary to AreAare it for the voyage insuredF 1D;E "he value of the 9argo is its a9tual 9ost to the insured, when laden on ;oard, or where the 9ost 9annot ;e as9ertained, its :ar>et value at the ti:e and Ala9e of lading, adding the 9harges in9urred in Aur9hasing and Ala9ing it on ;oard, ;ut without referen9e to any loss in9urred in raising :oney for its Aur9hase, or to any draw;a9> on its eBAortation, or to the flu9tuation of the :ar>et at the Aort of destination, or to eBAenses in9urred on the way or on arrivalF 1D9E "he value of freightage is the gross freightage, eB9lusive of Ari:age, without referen9e to the 9ost of earning itF and 1DdE "he 9ost of insuran9e is in ea9h 9ase to ;e added to the value thus esti:ated.

1&E . -,3. If 9argo insured against Aartial loss arrives at the Aort of destination in a da:aged 9ondition, the loss of the insured is dee:ed to ;e the sa:e AroAortion of the value whi9h the :ar>et Ari9e at that Aort, of the thing so da:aged, ;ears to the :ar>et Ari9e it would have ;rought if sound. 1&E . -,6. ! :arine insurer is lia;le for all the eBAenses attendant uAon a loss whi9h for9es the shiA into Aort to ;e reAairedF and where it is stiAulated in the Aoli9y that the insured shall la;or for the re9overy of the AroAerty, the insurer is lia;le for the eBAense in9urred there;y, su9h eBAense, in either 9ase, ;eing in addition to a total loss, if that afterwards o99urs. 1&E . -,,. ! :arine insurer is lia;le for a loss falling uAon the insured, through a 9ontri;ution in resAe9t to the thing insured, reCuired to ;e :ade ;y hi: towards a general average loss 9alled for ;y a Aeril insured against< Provided, "hat the lia;ility of the insurer shall ;e li:ited to the AroAortion of 9ontri;ution atta9hing to his Aoli9y value where this is less than the 9ontri;uting value of the thing insured. 1&E . -,8. /hen a Aerson insured ;y a 9ontra9t of :arine insuran9e has a de:and against others for 9ontri;ution, he :ay 9lai: the whole loss fro: the insurer, su;rogating hi: to his own right to 9ontri;ution. But no su9h 9lai: 9an ;e :ade uAon the insurer after the seAaration of the interests lia;le to 9ontri;ution, nor when the insured, having the right and oAAortunity to enfor9e 9ontri;ution fro: others, has negle9ted or waived the eBer9ise of that right. 1&E . -,4. In the 9ase of a Aartial loss of shiA or its eCuiA:ent, the old :aterials are to ;e aAAlied towards Aay:ent for the new. Unless otherwise stiAulated in the Aoli9y, a :arine insurer is lia;le for only two-thirds

D.KGE of the re:aining 9ost of reAairs after su9h dedu9tion, eB9eAt that an9hors :ust ;e Aaid in full. 1"I"LE . 1+IRE I#&UR!# E 1&E . -,7. !s used in this ode, the ter: fire insurance shall in9lude insuran9e against loss ;y fire, lightning, windstor:, tornado or earthCua>e and other allied ris>s, when su9h ris>s are 9overed ;y eBtension to fire insuran9e Aoli9ies or under seAarate Aoli9ies. 1&E . -85. !n alteration in the use or 9ondition of a thing insured fro: that to whi9h it is li:ited ;y the Aoli9y :ade without the 9onsent of the insurer, ;y :eans within the 9ontrol of the insured, and in9reasing the ris>s, entitles an insurer to res9ind a 9ontra9t of fire insuran9e. 1&E . -8-. !n alteration in the use or 9ondition of a thing insured fro: that to whi9h it is li:ited ;y the Aoli9y, whi9h does not in9rease the ris>, does not affe9t a 9ontra9t of fire insuran9e. 1&E . -8.. ! 9ontra9t of fire insuran9e is not affe9ted ;y any a9t of the insured su;seCuent to the eBe9ution of the Aoli9y, whi9h does not violate its Arovisions, even though it in9reases the ris> and is the 9ause of the loss. 1&E . -8G. If there is no valuation in the Aoli9y, the :easure of inde:nity in an insuran9e against fire is the eBAense it would ;e to the insured at the ti:e of the 9o::en9e:ent of the fire to reAla9e the thing lost or inIured in the 9ondition in whi9h it was at the ti:e of the inIuryF ;ut if there is a valuation in a Aoli9y of fire

insuran9e, the effe9t shall ;e the sa:e as in a Aoli9y of :arine insuran9e. 1&E . -83. /henever the insured desires to have a valuation na:ed in his Aoli9y, insuring any ;uilding or stru9ture against fire, he :ay reCuire su9h ;uilding or stru9ture to ;e eBa:ined ;y an indeAendent aAAraiser and the value of the insured@s interest therein :ay then ;e fiBed as ;etween the insurer and the insured. "he 9ost of su9h eBa:ination shall ;e Aaid for ;y the insured. ! 9lause shall ;e inserted in su9h Aoli9y stating su;stantially that the value of the insured@s interest in su9h ;uilding or stru9ture has ;een thus fiBed. In the a;sen9e of any 9hange in9reasing the ris> without the 9onsent of the insurer or of fraud on the Aart of the insured, then in 9ase of a total loss under su9h Aoli9y, the whole a:ount so insured uAon the insured@s interest in su9h ;uilding or stru9ture, as stated in the Aoli9y uAon whi9h the insurers have re9eived a Are:iu:, shall ;e Aaid, and in 9ase of a Aartial loss the full a:ount of the Aartial loss shall ;e so Aaid, and in 9ase there are two D.E or :ore Aoli9ies 9overing the insured@s interest therein, ea9h Aoli9y shall 9ontri;ute pro rata to the Aay:ent of su9h whole or Aartial loss. But in no 9ase shall the insurer ;e reCuired to Aay :ore than the a:ount thus stated in su9h Aoli9y. "his se9tion shall not Arevent the Aarties fro: stiAulating in su9h Aoli9ies 9on9erning the reAairing, re;uilding or reAla9ing of ;uildings or stru9tures wholly or Aartially da:aged or destroyed. 1&E . -86. #o Aoli9y of fire insuran9e shall ;e Aledged, hyAothe9ated, or transferred to any Aerson, fir: or 9o:Aany who a9ts as agent for or otherwise reAresents the issuing 9o:Aany, and any su9h Aledge, hyAothe9ation, or transfer hereafter :ade shall ;e void and of no effe9t insofar as it :ay affe9t other 9reditors of the insured.

1"I"LE G 1 !&U!L"* I#&UR!# E 1&E . -8,. asualty insuran9e is insuran9e 9overing loss or lia;ility arising fro: a99ident or :ishaA, eB9luding 9ertain tyAes of loss whi9h ;y law or 9usto: are 9onsidered as falling eB9lusively within the s9oAe of other tyAes of insuran9e su9h as fire or :arine. It in9ludes, ;ut is not li:ited to, e:Aloyer@s lia;ility insuran9e, :otor vehi9le lia;ility insuran9e, Alate glass insuran9e, ;urglary and theft insuran9e, Aersonal a99ident and health insuran9e as written ;y non-life insuran9e 9o:Aanies, and other su;stantially si:ilar >inds of insuran9e. 1"I"LE 3 1&URE"*&(IP 1&E . -88. ! 9ontra9t of suretyshiA is an agree:ent where;y a Aarty 9alled the surety guarantees the Aerfor:an9e ;y another Aarty 9alled the Arin9iAal or o;ligor of an o;ligation or underta>ing in favor of a third Aarty 9alled the o;ligee. It in9ludes offi9ial re9ogniHan9es, stiAulations, ;onds or underta>ings issued ;y any 9o:Aany ;y virtue of and under the Arovisions of !9t #o. 6G,, as a:ended ;y !9t #o. ..5,. 1&E . -84. "he lia;ility of the surety or sureties shall ;e Ioint and several with the o;ligor and shall ;e li:ited to the a:ount of the ;ond. It is deter:ined stri9tly ;y the ter:s of the 9ontra9t of suretyshiA in relation to the Arin9iAal 9ontra9t ;etween the o;ligor and the o;ligee. 1&E . -87. "he surety is entitled to Aay:ent of the Are:iu: as soon as the 9ontra9t of suretyshiA or ;ond is Aerfe9ted and delivered to the o;ligor. #o 9ontra9t of suretyshiA or ;onding shall ;e valid and ;inding unless

and until the Are:iu: therefor has ;een Aaid, eB9eAt where the o;ligee has a99eAted the ;ond, in whi9h 9ase the ;ond ;e9o:es valid and enfor9ea;le irresAe9tive of whether or not the Are:iu: has ;een Aaid ;y the o;ligor to the surety< Provided, "hat if the 9ontra9t of suretyshiA or ;ond is not a99eAted ;y, or filed with the o;ligee, the surety shall 9olle9t only a reasona;le a:ount, not eB9eeding fifty Aer9ent D65LE of the Are:iu: due thereon as servi9e fee Alus the 9ost of sta:As or other taBes i:Aosed for the issuan9e of the 9ontra9t or ;ond< Provided, ho ever, "hat if the nona99eAtan9e of the ;ond ;e due to the fault or negligen9e of the surety, no su9h servi9e fee, sta:As or taBes shall ;e 9olle9ted. 1In the 9ase of a 9ontinuing ;ond, the o;ligor shall Aay the su;seCuent annual Are:iu: as it falls due until the 9ontra9t of suretyshiA is 9an9elled ;y the o;ligee or ;y the o::issioner or ;y a 9ourt of 9o:Aetent Iurisdi9tion, as the 9ase :ay ;e. 1&E . -45. Pertinent Arovisions of the ivil ode of the PhiliAAines shall ;e aAAlied in a suAAletory 9hara9ter whenever ne9essary in interAreting the Arovisions of a 9ontra9t of suretyshiA. 1"I"LE 6 1LI+E I#&UR!# E 1&E . -4-. Life insuran9e is insuran9e on hu:an lives and insuran9e aAAertaining thereto or 9onne9ted therewith. 1Every 9ontra9t or underta>ing for the Aay:ent of annuities in9luding 9ontra9ts for the Aay:ent of lu:A su:s under a retire:ent Arogra: where a life insuran9e 9o:Aany :anages or a9ts as a trustee for su9h retire:ent Arogra: shall ;e 9onsidered

a life insuran9e 9ontra9t for AurAoses of this ode. 1&E . -4.. !n insuran9e uAon life :ay ;e :ade Aaya;le on the death of the Aerson, or on his surviving a sAe9ified Aeriod, or otherwise 9ontingently on the 9ontinuan9e or 9essation of life. 1Every 9ontra9t or Aledge for the Aay:ent of endow:ents or annuities shall ;e 9onsidered a life insuran9e 9ontra9t for AurAoses of this ode. 1In the a;sen9e of a Iudi9ial guardian, the father, or in the latter@s a;sen9e or in9aAa9ity, the :other, of any :inor, who is an insured or a ;enefi9iary under a 9ontra9t of life, health, or a99ident insuran9e, :ay eBer9ise, in ;ehalf of said :inor, any right under the Aoli9y, without ne9essity of 9ourt authority or the giving of a ;ond, where the interest of the :inor in the Aarti9ular a9t involved does not eB9eed +ive hundred thousand Aesos DP655,555.55E or in su9h reasona;le a:ount as :ay ;e deter:ined ;y the o::issioner. &u9h right :ay in9lude, ;ut shall not ;e li:ited to, o;taining a Aoli9y loan, surrendering the Aoli9y, re9eiving the Aro9eeds of the Poli9y, and giving the :inor@s 9onsent to any transa9tion on the Aoli9y. 1In the a;sen9e or in 9ase of the in9aAa9ity of the father or :other, the grandAarent, the eldest ;rother or sister at least eighteen D-4E years of age, or any relative who has a9tual 9ustody of the :inor insured or ;enefi9iary, shall a9t as a guardian without need of a 9ourt order or Iudi9ial aAAoint:ent as su9h guardian, as long as su9h Aerson is not otherwise disCualified or in9aAa9itated. Pay:ent :ade ;y the insurer Aursuant to this se9tion shall relieve su9h insurer of any lia;ility under the 9ontra9t.

1&E . -4G. "he insurer in a life insuran9e 9ontra9t shall ;e lia;le in 9ase of sui9ide only when it is 9o::itted after the Aoli9y has ;een in for9e for a Aeriod of two D.E years fro: the date of its issue or of its last reinstate:ent, unless the Aoli9y Arovides a shorter Aeriod< Provided, ho ever, "hat sui9ide 9o::itted in the state of insanity shall ;e 9o:Aensa;le regardless of the date of 9o::ission. 1&E . -43. ! Aoli9y of insuran9e uAon life or health :ay Aass ;y transfer, will or su99ession to any Aerson, whether he has an insura;le interest or not, and su9h Aerson :ay re9over uAon it whatever the insured :ight have re9overed. 1&E . -46. #oti9e to an insurer of a transfer or ;eCuest thereof is not ne9essary to Areserve the validity of a Aoli9y of insuran9e uAon life or health, unless there;y eBAressly reCuired. 1&E . -4,. Unless the interest of a Aerson insured is sus9eAti;le of eBa9t Ae9uniary :easure:ent, the :easure of inde:nity under a Aoli9y of insuran9e uAon life or health is the su: fiBed in the Aoli9y. 1"I"LE , 1MI R$I#&UR!# E 1&E . -48. Mi9roinsuran9e is a finan9ial Arodu9t or servi9e that :eets the ris> Arote9tion needs of the Aoor where< 1DaE "he a:ount of 9ontri;utions, Are:iu:s, fees or 9harges, 9o:Auted on a daily ;asis, does not eB9eed seven and a half Aer9ent D8.6LE of the 9urrent daily :ini:u: wage rate for nonagri9ultural wor>ers in Metro ManilaF and

1D;E "he :aBi:u: su: of guaranteed ;enefits is not :ore than one thousand D-,555E ti:es of the 9urrent daily :ini:u: wage rate for nonagri9ultural wor>ers in Metro Manila. 1&E . -44. #o insuran9e 9o:Aany or :utual ;enefit asso9iation shall engage in the ;usiness of :i9roinsuran9e unless it Aossesses all the reCuire:ents as :ay ;e Ares9ri;ed ;y the o::issioner. "he o::issioner shall issue su9h rules and regulations governing :i9roinsuran9e. 1 (!P"ER II-!

9on9erning finan9ial reAorting Aro:ulgated ;y the !9tuarial &o9iety of the PhiliAAines. 1"he assets and invest:ents dis9ussed in &e9tions .53 to .-6 shall ;e a99ounted for in a99ordan9e with this se9tion. 1"he valuation of reserves shall ;e a99ounted for in a99ordan9e with "itle 6 of this ode. 1 (!P"ER III 1"(E BU&I#E&& $+ I#&UR!# E 1"I"LE -

1+I#!# I!L +R!ME/$R0

REP$R"I#' 1I#&UR!# E $R'!#IM!"I$#, !PI"!LIM!"I$# !U"($RIM!"I$# $MP!#IE&, !#)

1&E . -47. !ll 9o:Aanies regulated ;y the o::ission, unless otherwise reCuired ;y law, should 9o:Aly with the finan9ial reAorting fra:ewor>s adoAted ;y the o::ission for AurAoses of 9reating the statutory finan9ial reAorts and the annual state:ents to ;e su;:itted to the o::ission. +inan9ial reAorting fra:ewor> :eans a set of a99ounting and reAorting Arin9iAles, standards, interAretations and Aronoun9e:ents that :ust ;e adoAted in the AreAaration and su;:ission of the statutory finan9ial state:ents and reAorts reCuired ;y the o::ission. "his finan9ial reAorting fra:ewor> is not the sa:e as the finan9ial reAorting fra:ewor> used to AreAare the finan9ial state:ents that the &e9urities and EB9hange o::ission :ay reCuire. "he :ain AurAose of the statutory state:ents is to Aresent i:Aortant infor:ation a;out the level of ris> and solven9y situation of insurers. In Ares9ri;ing the aAAli9a;le statutory finan9ial reAorting fra:ewor>, the o::issioner shall ta>e into a99ount international standards 9on9erning solven9y and insuran9e 9o:Aany reAorting as well as generally a99eAted a9tuarial Arin9iAles

1&E . -75. +or AurAoses of this ode, the ter: insurer or insurance company shall in9lude all AartnershiAs, asso9iations, 9ooAeratives or 9orAorations, in9luding govern:ent-owned or -9ontrolled 9orAorations or entities, engaged as Arin9iAals in the insuran9e ;usiness, eB9eAting :utual ;enefit asso9iations. Unless the 9onteBt otherwise reCuires, the ter: shall also in9lude Arofessional reinsurers defined in &e9tion .44. !omestic company shall in9lude 9o:Aanies for:ed, organiHed or eBisting under the laws of the PhiliAAines. "oreign company when used without li:itation shall in9lude 9o:Aanies for:ed, organiHed, or eBisting under any laws other than those of the PhiliAAines. 1&E . -7-. "he Arovisions of the orAoration ode, as a:ended, shall aAAly to all insuran9e 9orAorations now or hereafter engaged in ;usiness in the PhiliAAines insofar as they do not 9onfli9t with the Arovisions of this 9haAter.

1&E . -7.. #o 9orAoration, AartnershiA, or asso9iation of Aersons shall transa9t any insuran9e ;usiness in the PhiliAAines eB9eAt as agent of a 9orAoration, AartnershiA or asso9iation authoriHed to do the ;usiness of insuran9e in the PhiliAAines, unless Aossessed of the 9aAital and assets reCuired of an insuran9e 9orAoration doing the sa:e >ind of ;usiness in the PhiliAAines and invested in the sa:e :annerF unless the o::issioner shall have granted it a 9ertifi9ate to the effe9t that it has 9o:Alied with all the Arovisions of this ode. 1Every entity re9eiving any su9h 9ertifi9ate of authority shall ;e su;Ie9t to the insuran9e and other aAAli9a;le laws of the PhiliAAines and to the Iurisdi9tion and suAervision of the o::issioner. 1&E . -7G. #o insuran9e 9o:Aany shall transa9t any insuran9e ;usiness in the PhiliAAines until after it shall have o;tained a 9ertifi9ate of authority for that AurAose fro: the o::issioner uAon aAAli9ation therefor and Aay:ent ;y the 9o:Aany 9on9erned of the fees hereinafter Ares9ri;ed. 1"he o::issioner :ay refuse to issue a 9ertifi9ate of authority to any insuran9e 9o:Aany if, in his Iudg:ent, su9h refusal will ;est Aro:ote the interest of the AeoAle of this 9ountry. #o su9h 9ertifi9ate of authority shall ;e granted to any su9h 9o:Aany until the o::issioner shall have satisfied hi:self ;y su9h eBa:ination as he :ay :a>e and su9h eviden9e as he :ay reCuire that su9h 9o:Aany is Cualified ;y the laws of the PhiliAAines to transa9t ;usiness therein, that the grant of su9h authority aAAears to ;e Iustified in the light of lo9al e9ono:i9 reCuire:ents, and that the dire9tion and ad:inistration, as well as the integrity and resAonsi;ility of the organiHers and ad:inistrators, the finan9ial organiHation and the a:ount of 9aAital,

reasona;ly assure the safety of the interests of the Aoli9yholders and the Au;li9. 1In order to :aintain the Cuality of the :anage:ent of the insuran9e 9o:Aanies and afford ;etter Arote9tion to Aoli9yholders and the Au;li9 in general, any Aerson of good :oral 9hara9ter, unCuestioned integrity and re9ogniHed 9o:Aeten9e :ay ;e ele9ted or aAAointed dire9tor or offi9er of insuran9e 9o:Aanies in a99ordan9e with the Aertinent Arovisions 9ontained in the 9orAorate governan9e 9ir9ulars Ares9ri;ed ;y the o::issioner. In addition hereto, the o::issioner shall Ares9ri;e the Cualifi9ations of dire9tors, eBe9utive offi9ers and other >ey offi9ials of insuran9e 9o:Aanies for AurAoses of this se9tion. 1#o Aerson shall 9on9urrently ;e a )ire9tor andKor $ffi9er of an insuran9e 9o:Aany and an adIust:ent 9o:Aany. 1Before issuing su9h 9ertifi9ate of authority, the o::issioner :ust ;e satisfied that the na:e of the 9o:Aany is not that of any other >nown 9o:Aany transa9ting a si:ilar ;usiness in the PhiliAAines, or a na:e so si:ilar as to ;e 9al9ulated to :islead the Au;li9. "he o::issioner :ay issue rules and regulations on the use of na:es of insuran9e 9o:Aanies and other suAervised Aersons or entities. 1"he 9ertifi9ate of authority issued ;y the o::issioner shall eBAire on the last day of )e9e:;er, three DGE years following its date of issuan9e, and shall ;e renewa;le every three DGE years thereafter, su;Ie9t to the 9o:Aany@s 9ontinuing 9o:Alian9e with the Arovisions of this ode, 9ir9ulars, instru9tions, rulings or de9isions of the o::ission. 1Every 9o:Aany re9eiving any su9h 9ertifi9ates of authority shall ;e su;Ie9t to

the Arovisions of this ode and other related laws and to the Iurisdi9tion and suAervision of the o::issioner. 1#o insuran9e 9o:Aany :ay ;e authoriHed to transa9t in the PhiliAAines the ;usiness of life and non-life insuran9e 9on9urrently, unless sAe9ifi9ally authoriHed to do so ;y the o::issioner< Provided, "hat the ter:s life and non-life insuran9e shall ;e dee:ed to in9lude health, a99ident and disa;ility insuran9e. 1#o insuran9e 9o:Aany shall have eCuity in an adIust:ent 9o:Aany and neither shall an adIust:ent 9o:Aany have eCuity in an insuran9e 9o:Aany. 1#o insuran9e 9o:Aany issued with a valid 9ertifi9ate of authority to transa9t insuran9e ;usiness anywhere in the PhiliAAines ;y the Insuran9e o::issioner, shall ;e ;arred, Arevented, or disenfran9hised fro: issuing any insuran9e Aoli9y or fro: transa9ting any insuran9e ;usiness within the s9oAe or 9overage of its 9ertifi9ate of authority, anywhere in the PhiliAAines, ;y any lo9al govern:ent unit or authority, for whatever guise or reason whatsoever, in9luding under any >ind of ordinan9e, a99reditation syste:, or s9he:e. !ny lo9al ordinan9e or lo9al govern:ent unit regulatory issuan9e i:Aosing su9h restri9tion or disenfran9hise:ent on any insuran9e 9o:Aany shall ;e dee:ed null and void ab initio. 1&E . -73. EB9eAt as Arovided in &e9tion .47, no new do:esti9 life or non-life insuran9e 9o:Aany shall, in a sto9> 9orAoration, engage in ;usiness in the PhiliAAines unless Aossessed of a Aaid-uA 9aAital eCual to at least $ne ;illion Aesos DP-,555,555,555.55E< Provided, "hat a do:esti9 insuran9e 9o:Aany already doing ;usiness in the PhiliAAines shall have a net

worth ;y June G5, .5-G of "wo hundred fifty :illion Aesos DP.65,555,555.55E. +urther:ore, said 9o:Aany :ust have ;y )e9e:;er G-, .5-,, an additional "hree hundred :illion Aesos DPG55,555,555.55E in net worthF ;y )e9e:;er G-, .5-7, an additional "hree hundred fifty :illion Aesos DPG65,555,555.55E in net worthF and ;y )e9e:;er G-, .5.., an additional +our hundred :illion Aesos DP355,555,555.55E in net worth. 1"he o::issioner :ay, as a Are-li9ensing reCuire:ent of a new insuran9e 9o:Aany, in addition to the Aaid-uA 9aAital sto9>, reCuire the sto9>holders to Aay in 9ash to the 9o:Aany in AroAortion to their su;s9riAtion interests a 9ontri;uted surAlus fund of not less than $ne hundred :illion Aesos DP-55,555,555.55E. (e :ay also reCuire su9h 9o:Aany to su;:it to hi: a ;usiness Alan showing the 9o:Aany@s esti:ated re9eiAts and dis;urse:ents, as well as the ;asis therefor, for the neBt su99eeding three DGE years. 1If organiHed as a :utual 9o:Aany, in lieu of su9h net worth, it :ust have availa;le total :e:;ers eCuity in an a:ount to ;e deter:ined ;y the Insuran9e o::ission a;ove all lia;ilities for losses reAortedF eBAenses, taBes, legal reserve, and reinsuran9e of all outstanding ris>s, and the 9ontri;uted surAlus fund eCual to the a:ounts reCuired of sto9> 9orAorations. ! sto9> insuran9e 9o:Aany doing ;usiness in the PhiliAAines :ay, su;Ie9t to the Aertinent law and regulation whi9h now or hereafter :ay ;e in for9e, alter its organiHation and transfor: itself into a :utual insuran9e 9o:Aany. 1"he &e9retary of +inan9e :ay, uAon re9o::endation of the o::issioner, in9rease su9h :ini:u: Aaid-uA 9aAital sto9> or 9ash assets reCuire:ent under su9h

ter:s and 9onditions as he :ay i:Aose, to an a:ount whi9h, in his oAinion, would reasona;ly assure the safety of the interests of the Aoli9yholders and the Au;li9. "he :ini:u: Aaid-uA 9aAital and net worth reCuire:ent :ust re:ain uni:Aaired for the 9ontinuan9e of the li9ense. "he o::issioner :ay reCuire the adoAtion of the ris>-;ased 9aAital aAAroa9h and other internationally a99eAted for:s of 9aAital fra:ewor>. 1+or the AurAose of this se9tion, net worth shall 9onsist of< 1DaE Paid-uA 9aAitalF 1D;E Retained earningsF 1D9E Uni:Aaired surAlusF and 1DdE Revaluation of assets as :ay ;e aAAroved ;y the o::issioner. 1"he o::ission :ay adoAt for AurAoses of 9o:Alian9e with 9aAital ;uild uA reCuire:ent under this ode the re9ognition as Aart of the 9aAital a99ount, 9aAital notes or de;entures whi9h are su;ordinate to all 9redits and senior only to 9o::on 9aAital sto9>s. 1"he President of the PhiliAAines :ay order a Aeriodi9 review every two D.E years the 9aAital stru9ture set out a;ove to deter:ine the 9aAital adeCua9y of the lo9al insuran9e industry fro: and after the integration and li;eraliHation of the finan9ial servi9es, in9luding insuran9e, in the !&E!# Region. +or this AurAose, a review 9o::ittee 9onsisting of reAresentatives fro: the )eAart:ent of +inan9e D)$+E, the Insuran9e o::ission DI E, the #ational E9ono:i9 and )eveloA:ent !uthority D#E)!E, the &e9urities and EB9hange o::ission D&E E and other agen9ies whi9h the President :ay

designate shall 9ondu9t the review and :ay re9o::end to the President to adoAt for i:Ale:entation the ne9essary 9aAital adIust:ent. 1&E . -76. Every 9o:Aany :ust, ;efore engaging in the ;usiness of insuran9e in the PhiliAAines, file with the o::issioner the following< 1DaE ! 9ertified 9oAy of the last annual state:ent or a verified finan9ial state:ent eBhi;iting the 9ondition and affairs of su9h 9o:AanyF 1D;E If in9orAorated under the laws of the PhiliAAines, a 9oAy of the arti9les of in9orAoration and ;ylaws, and any a:end:ents to either, 9ertified ;y the &e9urities and EB9hange o::ission to ;e a 9oAy of that whi9h is filed in its $ffi9eF 1D9E If in9orAorated under any laws other than those of the PhiliAAines, a 9ertifi9ate fro: the &e9urities and EB9hange o::ission showing that it is duly registered in the :er9antile registry of that o::ission in a99ordan9e with the orAoration ode. ! 9oAy of the arti9les of in9orAoration and ;ylaws, and any a:end:ents to either, if organiHed or for:ed under any law reCuiring su9h to ;e filed, duly 9ertified ;y the offi9er having the 9ustody of sa:e, or if not so organiHed, a 9oAy of the law, 9harter or deed of settle:ent under whi9h the deed of organiHation is :ade, duly 9ertified ;y the AroAer 9ustodian thereof, or Aroved ;y affidavit to ;e a 9oAyF also, a 9ertifi9ate under the hand and seal of the AroAer offi9er of su9h state or 9ountry having suAervision of insuran9e ;usiness therein, if any there ;e, that su9h 9orAoration or 9o:Aany is organiHed under the laws of su9h state or 9ountry, with the a:ount of 9aAital sto9> or

assets and legal reserve reCuired ;y this odeF 1DdE If not in9orAorated and of foreign do:i9ile, aside fro: the 9ertifi9ate :entioned in AaragraAh D9E of this se9tion, a 9ertifi9ate setting forth the nature and 9hara9ter of the ;usiness, the lo9ation of the Arin9iAal offi9e, the na:e of the individual or na:es of the Aersons 9o:Aosing the AartnershiA or asso9iation, the a:ount of a9tual 9aAital e:Aloyed or to ;e e:Aloyed therein, and the na:es of all offi9ers and Aersons ;y who: the ;usiness is or :ay ;e :anaged. 1"he 9ertifi9ate :ust ;e verified ;y the affidavit of the 9hief offi9er, se9retary, agent, or :anager of the 9o:AanyF and if there are any written arti9les of agree:ent of the 9o:Aany, a 9oAy thereof :ust a99o:Aany su9h 9ertifi9ate. 1&E . -7,. "he o::issioner :ust reCuire as a 9ondition Are9edent to the transa9tion of insuran9e ;usiness in the PhiliAAines ;y any foreign insuran9e 9o:Aany, that su9h 9o:Aany file in his offi9e a written Aower of attorney designating so:e Aerson who shall ;e a resident of the PhiliAAines as its general agent, on who: any noti9e Arovided ;y law or ;y any insuran9e Aoli9y, Aroof of loss, su::ons and other legal Aro9esses :ay ;e served in all a9tions or other legal Aro9eedings against su9h 9o:Aany, and 9onsenting that servi9e uAon su9h general agent shall ;e ad:itted and held as valid as if served uAon the foreign 9o:Aany at its ho:e offi9e. !ny su9h foreign 9o:Aany shall, as further 9ondition Are9edent to the transa9tion of insuran9e ;usiness in the PhiliAAines, :a>e and file with the o::issioner an agree:ent or stiAulation, eBe9uted ;y the AroAer authorities of said 9o:Aany in for: and su;stan9e as follows<

1"he Dna:e of 9o:AanyE does here;y stiAulate and agree in 9onsideration of the Aer:ission granted ;y the Insuran9e o::issioner to transa9t ;usiness in the PhiliAAines, that if at any ti:e said 9o:Aany shall leave the PhiliAAines, or 9ease to transa9t ;usiness therein, or shall ;e without any agent in the PhiliAAines on who: any noti9e, Aroof of loss, su::ons, or legal Aro9ess :ay ;e served, then in any a9tion or Aro9eeding arising out of any ;usiness or transa9tion whi9h o99urred in the PhiliAAines, servi9e of any noti9e Arovided ;y law, or insuran9e Aoli9y, Aroof of loss, su::ons, or other legal Aro9ess :ay ;e :ade uAon the Insuran9e o::issioner, and that su9h servi9e uAon the Insuran9e o::issioner shall have the sa:e for9e and effe9t as if :ade uAon the 9o:Aany. 1/henever su9h servi9e of noti9e, Aroof of loss, su::ons, or other legal Aro9ess shall ;e :ade uAon the o::issioner, he :ust, within ten D-5E days thereafter, trans:it ;y :ail, Aostage Aaid, a 9oAy of su9h noti9e, Aroof of loss, su::ons, or other legal Aro9ess to the 9o:Aany at its ho:e or Arin9iAal offi9e. "he sending of su9h 9oAy ;y the o::issioner shall ;e a ne9essary Aart of the servi9e of the noti9e, Aroof of loss, or other legal Aro9ess. 1&E . -78. #o insuran9e 9o:Aany organiHed or eBisting under the govern:ent or laws other than those of the PhiliAAines shall engage in ;usiness in the PhiliAAines unless Aossessed of uni:Aaired 9aAital or assets and reserve of not less than $ne ;illion Aesos DP-,555,555,555.55E, nor until it shall have deAosited with the o::issioner for the ;enefit and se9urity of the Aoli9yholders and 9reditors of su9h 9o:Aany in the PhiliAAines, se9urities satisfa9tory to the o::issioner 9onsisting of good se9urities of the PhiliAAines, in9luding new issues of sto9> of registered

enterArises, as this ter: is defined in EBe9utive $rder #o. .., of -748, as a:ended, to the a9tual :ar>et value of not less than the a:ount herein reCuired< Provided, "hat at least fifty Aer9ent D65LE of su9h se9urities shall 9onsist of ;onds or other instru:ents of de;t of the 'overn:ent of the PhiliAAines, its Aoliti9al su;divisions and instru:entalities, or of govern:entowned or -9ontrolled 9orAorations and entities, in9luding the Bang>o &entral ng PiliAinas< Provided, further, "hat the total invest:ent of a foreign insuran9e 9o:Aany in any registered enterArise shall not eB9eed twenty Aer9ent D.5LE of the net worth of said foreign insuran9e 9o:Aany nor twenty Aer9ent D.5LE of the 9aAital of the registered enterArise, unless Areviously authoriHed in writing ;y the o::issioner. 1"he o::issioner :ay, as a Are-li9ensing reCuire:ent of a new ;ran9h offi9e of a foreign insuran9e 9o:Aany, in addition to the reCuired asset or net worth, reCuire the 9o:Aany to have an additional surAlus fund in an a:ount to ;e deter:ined ;y the Insuran9e o::ission. 1+or AurAoses of this ode, the net worth of a foreign insuran9e 9o:Aany shall refer only to its net worth in the PhiliAAines. 1&E . -74. "he o::issioner shall hold the se9urities, deAosited as reCuired in the i::ediately Are9eding se9tion, for the ;enefit and se9urity of all the Aoli9yholders and 9reditors of the 9o:Aany deAositing the sa:e< Provided, "hat the o::issioner :ay as long as the 9o:Aany is solvent, Aer:it the 9o:Aany to 9olle9t the interest or dividends on the se9urities so deAosited, and, fro: ti:e to ti:e, with his assent, to withdraw any of su9h se9urities, uAon deAositing with said o::issioner other li>e se9urities, the :ar>et value of whi9h shall ;e eCual to the :ar>et value of su9h as

:ay ;e withdrawn. In the event of any 9o:Aany 9easing to do ;usiness in the PhiliAAines, the se9urities deAosited as aforesaid shall ;e returned to the 9o:Aany uAon the o::issioner@s written aAAroval and only after the 9o:Aany has duly Aroven in its aAAli9ation therefor that it has no further lia;ility whatsoever under any of its Aoli9ies nor to any of its 9reditors in the PhiliAAines. 1&E . -77. Every foreign 9o:Aany doing ;usiness in the PhiliAAines shall set aside an a:ount 9orresAonding to the legal reserves of the Aoli9ies written in the PhiliAAines and invest and >eeA the sa:e therein in a99ordan9e with the Arovisions of this se9tion. "he legal reserve therein reCuired to ;e set aside shall ;e invested only in the 9lasses of PhiliAAine se9urities des9ri;ed in &e9tion .5,< Provided, ho ever, "hat no invest:ent in sto9>s or ;onds of any single entity shall, in the aggregate eB9eed twenty Aer9ent D.5LE of the net worth of the investing 9o:Aany or twenty Aer9ent D.5LE of the 9aAital of the issuing 9o:Aany, whi9hever is the lesser, unless otherwise aAAroved in writing ;y the o::issioner. "he se9urities Aur9hased and >eAt in the PhiliAAines under this se9tion, shall not ;e sent out of the territorial Iurisdi9tion of the PhiliAAines without the written 9onsent of the o::issioner. 1"I"LE . 1&$L=E# * 1&E . .55. !n insuran9e 9o:Aany doing ;usiness in the PhiliAAines shall at all ti:es :aintain the :ini:u: Aaid-uA 9aAital, and net worth reCuire:ents as Ares9ri;ed ;y the o::issioner. &u9h solven9y reCuire:ents shall ;e ;ased on internationally a99eAted solven9y fra:ewor>s and adoAted only after

due 9onsultation with the insuran9e industry asso9iations. 1/henever the afore:entioned reCuire:ent ;e found to ;e less than that herein reCuired to ;e :aintained, the o::issioner shall forthwith dire9t the 9o:Aany to :a>e good any su9h defi9ien9y ;y 9ash, to ;e 9ontri;uted ;y all sto9>holders of re9ord in AroAortion to their resAe9tive interests, and Aaid to the treasurer of the 9o:Aany, within fifteen D-6E days fro: re9eiAt of the order< Provided, "hat the 9o:Aany in the interi: shall not ;e Aer:itted to ta>e any new ris> of any >ind or 9hara9ter unless and until it :a>e good any su9h defi9ien9y< Provided# further, "hat a sto9>holder who aside fro: Aaying the 9ontri;ution due fro: hi:, Aays the 9ontri;ution due fro: another sto9>holder ;y reason of the failure or refusal of the latter to do so, shall have a lien on the 9ertifi9ates of sto9> of the insuran9e 9o:Aany 9on9erned aAAearing in its ;oo>s in the na:e of the defaulting sto9>holder on the date of default, as well as on any interests or dividends that have a99rued or will a99rue to the said 9ertifi9ates of sto9>, until the 9orresAonding Aay:ent or rei:;urse:ent is :ade ;y the defaulting sto9>holder. 1&E . .5-. #o do:esti9 insuran9e 9orAoration shall de9lare or distri;ute any dividend on its outstanding sto9>s unless it has :et the :ini:u: Aaid-uA 9aAital and net worth reCuire:ents under &e9tion -73 and eB9eAt fro: Arofits attested in a sworn state:ent to the o::issioner ;y the Aresident or treasurer of the 9orAoration to ;e re:aining on hand after retaining uni:Aaired< 1DaE "he entire Aaid-uA 9aAital sto9>F 1D;E "he solven9y reCuire:ents defined ;y &e9tion .55F

1D9E In the 9ase of life insuran9e 9orAorations, the legal reserve fund reCuired ;y &e9tion .-8F 1DdE In the 9ase of 9orAorations other than life, the legal reserve fund reCuired ;y &e9tion .-7F and 1DeE ! su: suffi9ient to Aay all net losses reAorted, or in the 9ourse of settle:ent, and all lia;ilities for eBAenses and taBes. 1!ny dividend de9lared or distri;uted under the Are9eding AaragraAh shall ;e reAorted to the o::issioner within thirty DG5E days after su9h de9laration or distri;ution. 1If the o::issioner finds that any su9h 9orAoration has de9lared or distri;uted any su9h dividend in violation of this se9tion, he :ay order su9h 9orAoration to 9ease and desist fro: doing ;usiness until the a:ount of su9h dividend or the Aortion thereof in eB9ess of the a:ount allowed under this se9tion has ;een restored to said 9orAoration. 1"he o::issioner shall Ares9ri;e solven9y reCuire:ents for ;ran9hes of foreign insuran9e 9o:Aanies oAerating in the PhiliAAines. 1"I"LE G 1!&&E"& 1&E . .5.. In any deter:ination of the finan9ial 9ondition of any insuran9e 9o:Aany doing ;usiness in the PhiliAAines, there shall ;e allowed and ad:itted as assets only su9h assets legally or ;enefi9ially owned ;y the insuran9e 9o:Aany 9on9erned as deter:ined ;y the o::issioner whi9h 9onsist of<

1DaE ash in the Aossession of the insuran9e 9o:Aany or in transit under its 9ontrol, and the true and duly verified ;alan9e of any deAosit of su9h 9o:Aany in a finan9ially sound ;an> or trust 9o:Aany duly authoriHed ;y the Bang>o &entral ng PiliAinas. 1D;E Invest:ents in se9urities, in9luding :oney :ar>et instru:ents, and in real AroAerty a9Cuired or held in a99ordan9e with and su;Ie9t to the aAAli9a;le Arovisions of this ode and the in9o:e realiHed therefro: or a99rued thereon. 1D9E Loans granted ;y the insuran9e 9o:Aany 9on9erned to the eBtent of that Aortion thereof adeCuately se9ured ;y nonsAe9ulative assets with readily realiHa;le values in a99ordan9e with and su;Ie9t to the li:itations i:Aosed ;y aAAli9a;le Arovisions of this ode. 1DdE Poli9y loans and other Aoli9y assets and liens on Aoli9ies, 9ontra9ts or 9ertifi9ates of a life insuran9e 9o:Aany, in an a:ount not eB9eeding legal reserves and other Aoli9y lia;ilities 9arried on ea9h individual life insuran9e Aoli9y, 9ontra9t or 9ertifi9ate. 1DeE "he net a:ount of un9olle9ted and deferred Are:iu:s and annuity 9onsiderations in the 9ase of a life insuran9e 9o:Aany whi9h 9arries the full :ean ta;ular reserve lia;ility. 1DfE Reinsuran9e re9overa;le ;y the 9eding insurer< 1D-E +ro: an insurer authoriHed to transa9t ;usiness in this 9ountry, the full a:ount thereofF or 1D.E +ro: an insurer not authoriHed in this 9ountry, in an a:ount not eB9eeding the lia;ilities 9arried ;y the 9eding insurer for

a:ounts withheld under a reinsuran9e treaty with su9h unauthoriHed insurer as se9urity for the Aay:ent of o;ligations thereunder if su9h funds are held su;Ie9t to withdrawal ;y, and under the 9ontrol of, the 9eding insurer. "he o::issioner :ay Ares9ri;e the 9onditions under whi9h a 9eding insurer :ay ;e allowed 9redit, as an asset or as a dedu9tion fro: loss and unearned Are:iu: reserves, for reinsuran9e re9overa;le fro: an insurer not authoriHed in this 9ountry ;ut whi9h Aresents satisfa9tory eviden9e that it :eets the aAAli9a;le standards of solven9y reCuired in this 9ountry. 1DgE +unds withheld ;y a 9eding insurer under a reinsuran9e treaty, Arovided reserves for unAaid losses and unearned Are:iu:s are adeCuately Arovided. 1DhE )eAosits or a:ounts re9overa;le fro: underwriting asso9iations, syndi9ates and reinsuran9e funds, or fro: any susAended ;an>ing institution, to the eBtent dee:ed ;y the o::issioner to ;e availa;le for the Aay:ent of losses and 9lai:s and values to ;e deter:ined ;y hi:. 1DiE Ele9troni9 data Aro9essing :a9hines, as :ay ;e authoriHed ;y the o::issioner to ;e a9Cuired ;y the insuran9e 9o:Aany 9on9erned, the a9Cuisition 9ost of whi9h to ;e a:ortiHed in eCual annual a:ounts within a Aeriod of five D6E years fro: the date of a9Cuisition thereof. 1DIE Invest:ents in :utual funds, real estate invest:ent trusts, salary loans, unit invest:ent trust funds and sAe9ial deAosit a99ounts, su;Ie9t to the 9onditions as :ay ;e Arovided for ;y the o::issioner. 1D>E $ther assets, not in9onsistent with the Arovisions of AaragraAhs DaE to DIE hereof, whi9h are dee:ed ;y the o::issioner to ;e readily realiHa;le and availa;le for the

Aay:ent of losses and 9lai:s at values to ;e deter:ined ;y hi: in a 9ir9ular, rule or regulation. 1&E . .5G. In addition to su9h assets as the o::issioner :ay fro: ti:e to ti:e deter:ine to ;e non-ad:itted assets of insuran9e 9o:Aanies doing ;usiness in the PhiliAAines, the following assets shall in no 9ase ;e allowed as ad:itted assets of an insuran9e 9o:Aany doing ;usiness in the PhiliAAines, in any deter:ination of its finan9ial 9ondition< 1DaE 'oodwill, trade na:es, and other li>e intangi;le assets. 1D;E PreAaid or deferred 9harges for eBAenses and 9o::issions Aaid ;y su9h insuran9e 9o:Aany. 1D9E !dvan9es to offi9ers Dother than Aoli9y loansE, whi9h are not adeCuately se9ured and whi9h are not Areviously authoriHed ;y the o::issioner, as well as advan9es to e:Aloyees, agents, and other Aersons on :ere Aersonal se9urity. 1DdE &hares of sto9> of su9h insuran9e 9o:Aany, owned ;y it, or any eCuity therein as well as loans se9ured there;y, or any AroAortionate interest in su9h shares of sto9> through the ownershiA ;y su9h insuran9e 9o:Aany of an interest in another 9orAoration or ;usiness unit. 1DeE +urniture, furnishing, fiBtures, safes, eCuiA:ent, li;rary, stationery, literature, and suAAlies. 1DfE Ite:s of ;an> 9redits reAresenting 9he9>s, drafts or notes returned unAaid after the date of state:ent. 1DgE "he a:ount, if any, ;y whi9h the aggregate value of invest:ents as 9arried in

the ledger assets of su9h insuran9e 9o:Aany eB9eeds the aggregate value thereof as deter:ined in a99ordan9e with the Arovisions of this ode andKor the rules of the o::issioner. 1!ll non-ad:itted assets and all other assets of dou;tful value or 9hara9ter in9luded as ledger or non-ledger assets in any state:ent su;:itted ;y an insuran9e 9o:Aany to the o::issioner, or in any insuran9e eBa:iner@s reAort to hi:, shall also ;e reAorted, to the eBtent of the value disallowed as dedu9tions fro: the gross assets of su9h insuran9e 9o:Aany, eB9eAt where the o::issioner Aer:its a reserve to ;e 9arried a:ong the lia;ilities of su9h insuran9e 9o:Aany in lieu of any su9h dedu9tion. 1"I"LE 3 1I#=E&"ME#"& 1&E . .53. ! life insuran9e 9o:Aany :ay lend to any of its Aoli9yholders uAon the se9urity of the value of its Aoli9y su9h su: as :ay ;e deter:ined Aursuant to the Arovisions of the Aoli9y. 1#o insuran9e 9o:Aany shall loan any of its :oney or deAosits to any Aerson, 9orAoration or asso9iation, eB9eAt uAon the se9urity of any of the following< 1DaE +irst :ortgage or deeds of trust of registered, unen9u:;ered, i:Aroved or uni:Aroved real estate, in9luding 9ondo:iniu:sF 1D;E +irst :ortgages or deeds of trust of a9tually 9ultivated, i:Aroved and unen9u:;ered agri9ultural lands in the PhiliAAinesF

1D9E Pur9hase :oney :ortgages, lease Aur9hase agree:ents or si:ilar se9urities eBe9uted or re9eived ;y it on a99ount of the sale or eB9hange of real AroAerty a9Cuired Aursuant to &e9tions .5, and .54F 1DdE Bonds or other instru:ents of inde;tedness issued or guaranteed ;y the 'overn:ent of the PhiliAAines or its Aoliti9al su;divisions authoriHed ;y law to in9ur su9h o;ligations or issue su9h guarantees or of govern:ent-owned or -9ontrolled 9orAorations and instru:entalities in9luding the Bang>o &entral ng PiliAinasF or 1DeE $;ligations issued or guaranteed ;y universal ;an>s, 9o::er9ial ;an>s, offshore ;an>ing units, invest:ent houses or other finan9ial inter:ediaries duly registered with the Bang>o &entral ng PiliAinasF or 1DfE $;ligations issued or guaranteed ;y foreign ;an>s or 9orAorations, ea9h of whi9h shall have total net worth of at least $ne hundred fifty :illion U& dollars DNU&-65,555,555.55E or su9h other higher net worth as :ay ;e Ares9ri;ed ;y the Insuran9e o::ission, as shown in their finan9ial state:ents as of the i::ediately Are9eding fis9al yearF or 1DgE !ssign:ents of :onetary instru:ents su9h as 9ash deAosits, deAosit 9ertifi9ates or other si:ilar instru:ents of universal ;an>s, 9o::er9ial ;an>s, invest:ent houses or other finan9ial inter:ediaries duly registered with the Bang>o &entral ng PiliAinasF or 1DhE Pledges of shares of sto9>, ;onds or other instru:ents of inde;tedness sAe9ified in &e9tion .57F or 1DiE hattel :ortgages over eCuiA:ent not :ore than three DGE years oldF and

1DIE &u9h other se9urity as :ay ;e aAAroved ;y the o::issioner. 1"he loans Arovided in the Are9eding su;se9tion shall ;e su;Ie9t to the following 9onditions< 1D-E "he a:ount of loan se9ured ;y real estate :ortgage over a non-agri9ultural land shall not eB9eed seventy Aer9ent D85LE of its aAAraised value, and in the 9ase of a loan se9ured ;y a real estate :ortgage over an agri9ultural land, the a:ount of loan shall not eB9eed forty Aer9ent D35LE of its :ar>et value< Provided, "hat, in no 9ase shall su9h loan have a :aturity Aeriod in eB9ess of twenty-five D.6E yearsF 1D.E Unless aAAroved ;y the o::issioner, no loan :ay ;e granted uAon the se9urity of a :ortgage on i:Aroved real estate if the i:Arove:ents thereon do not ;elong to the owner of the land, and the owner of the i:Arove:ents does not sign the deed of :ortgage. (owever, if the owner of the land is the 'overn:ent of the PhiliAAines or any of its Aoliti9al su;divisions and a long-ter: lease has ;een eBe9uted in favor of the owner of the i:Arove:ents, the owner of the land need not ;e a Aarty to the deed of :ortgage. "he eBAiration date of the lease shall not, however, Are9ede the :aturity of the loan. "he Ahrase ?i:Aroved real estate@ as used herein shall :ean land with Aer:anent ;uilding or ;uildings ere9ted thereonF 1DGE Lease-agree:ents or si:ilar se9urities re9eived on the sale of real estate AroAerty shall not eB9eed one hundred Aer9ent D-55LE of the selling Ari9e of said AroAerty, or one hundred Aer9ent D-55LE of its :ar>et value at the ti:e of its disAosition, whi9hever a:ount is lower. (owever, in no 9ase shall su9h agree:ent have a :aturity Aeriod not eB9eeding thirty DG5E yearsF

1D3E Loans se9ured ;y shares of sto9> of solvent 9orAorations or institutions shall not eB9eed fifty Aer9ent D65LE of< 1DiE "he weighted average :ar>et Ari9e for the one hundred eighty D-45E days Are9eding the aAAroval of the loan for shares listed in the sto9> eB9hangeF and 1DiiE +or unlisted shares, the adIusted ;oo> value of su9h shares. 1D6E Loans se9ured ;y the 9hattel :ortgages over eCuiA:ent shall not eB9eed seventy Aer9ent D85LE of the :ar>et value of said eCuiA:ent. 1&E . .56. #o loan ;y any insuran9e 9o:Aany on the se9urity of real estate shall ;e :ade unless the title to su9h real estate shall have first ;een registered in a99ordan9e with the eBisting Land Registration !9t, or shall have ;een Areviously registered under the Arovisions of the eBisting Mortgage Law and the lien or interest of the insuran9e 9o:Aany as :ortgagee has ;een registered. 1&E . .5,. DaE !n insuran9e 9o:Aany :ay Aur9hase, hold, own and 9onvey su9h AroAerty, real and Aersonal, as :ay have ;een :ortgaged, Aledged, or 9onveyed to it in good faith in trust for its ;enefit ;y reason of :oney loaned ;y it in Aursuan9e of the regular ;usiness of the 9o:Aany, and su9h real or Aersonal AroAerty as :ay have ;een Aur9hased ;y it at sales under Aledges, :ortgages or deeds of trust for its ;enefit on a99ount of :oney loaned ;y itF and su9h real and Aersonal AroAerty as :ay have ;een 9onveyed to it ;y ;orrowers in satisfa9tion and dis9harge of loans :ade ;y the 9o:Aany in Aay:ent or ;y reason of any loan :ade ;y the 9o:Aany in Aay:ent or ;y reason of any loan :ade ;y it shall ;e sold ;y the 9o:Aany within twenty D.5E years after the title thereto has ;een vested in it.

1D;E !n insuran9e 9o:Aany :ay Aur9hase, hold, and own the following< 1D-E Real AroAerties whi9h serve as its :ain Ala9e of ;usiness andKor ;ran9h offi9es< Provided, "hat su9h invest:ent shall not in the overall eB9eed twenty Aer9ent D.5LE of its net worth as shown ;y its latest finan9ial state:ent aAAroved ;y the o::issioner. 1D.E Bonds or other instru:ents of inde;tedness of the 'overn:ent of the PhiliAAines or its Aoliti9al su;divisions authoriHed ;y law to issue ;onds at the reasona;le :ar>et value thereof. 1DGE Bonds or other instru:ents of de;t of govern:ent-owned or -9ontrolled 9orAorations and entities, in9luding the Bang>o &entral ng PiliAinas. 1D3E Bonds, de;entures or other instru:ents of inde;tedness of any solvent 9orAoration or institution 9reated or eBisting under the laws of the PhiliAAines< Provided, ho ever, "hat the issuing, assu:ing or guaranteeing entity or its Arede9essors shall not have defaulted in the Aay:ent of interest on any of its se9urities and that during ea9h of any three DGE in9luding the last two D.E of the five D6E fis9al years neBt Are9eding the date of a9Cuisition ;y su9h insuran9e 9o:Aany of su9h ;onds, de;entures, or other instru:ents of inde;tedness, the net earnings of the issuing, assu:ing or guaranteeing institution availa;le for its fiBed 9harges, as hereinafter defined, shall have ;een not less than one and one-Cuarter D-OE ti:es the total of its fiBed 9harges for su9h year< Provided, further, "hat no life insuran9e 9o:Aany shall invest in or loan uAon the o;ligations of any one institution in the >inds Aer:itted under this su;se9tion an a:ount in eB9ess of twenty-five Aer9ent D.6LE of the total ad:itted assets of su9h insurer as of

)e9e:;er thirty-first neBt Are9eding the date of su9h invest:ent. 1!s used in this su;se9tion the ter: net earnings available for fi$ed charges shall :ean net in9o:e after dedu9ting oAerating and :aintenan9e eBAenses, taBes other than in9o:e taBes, deAre9iation and deAletionF ;ut eB9luding eBtraordinary nonre9urring ite:s of in9o:e or eBAense aAAearing in the regular finan9ial state:ent of the issuing, assu:ing or guaranteeing institution. "he ter: fi$ed charges shall in9lude interest on funded and unfunded de;t, a:ortiHation of de;t dis9ount, and rentals for leased AroAerties. 1D6E Preferred or guaranteed sto9>s of any solvent 9orAoration or institution 9reated or eBisting under the laws of the PhiliAAines< Provided, "hat if the sto9>s are guaranteed, the a:ount of sto9>s so guaranteed is not in eB9ess of fifty Aer9ent D65LE of the a:ount of the Areferred or 9o::on sto9>s, as the 9ase :ay ;e, of the guaranteeing 9orAoration< Provided, finally, "hat no life insuran9e 9o:Aany shall invest in or loan uAon o;ligations of any one institution in the >inds Aer:itted under this su;se9tion an a:ount in eB9ess of ten Aer9ent D-5LE of the total ad:itted assets of su9h insurer as of )e9e:;er thirty-first neBt Are9eding the date of su9h invest:ent. 1D,E o::on sto9>s of any solvent 9orAoration or institution 9reated or eBisting under the laws of the PhiliAAines< Provided, ho ever, "hat no life insuran9e 9o:Aany shall invest in or loan uAon the o;ligations of any one 9orAoration or institution in the >inds Aer:itted under this su;se9tion an a:ount in eB9ess of ten Aer9ent D-5LE of the total ad:itted assets of su9h insurer as of )e9e:;er thirty-first neBt Are9eding the date of su9h invest:ent.

1D8E &e9urities issued ;y a registered enterArise, as this ter: is defined in EBe9utive $rder #o. ..,, otherwise >nown as the $:ni;us Invest:ents ode of -748, as a:ended< Provided, "hat the total invest:ent of a do:esti9 non-life insuran9e 9o:Aany in any registered enterArise shall not eB9eed twenty Aer9ent D.5LE of the net worth of said insuran9e 9o:Aany as shown ;y its aforesaid finan9ial state:ent unless Areviously authoriHed ;y the o::issioner. 1D4E ertifi9ates, notes and other o;ligations issued ;y the trustees or re9eivers of any institution 9reated or eBisting under the laws of the PhiliAAines whi9h, or the assets of whi9h, are ;eing ad:inistered under the dire9tion of any 9ourt having Iurisdi9tion< Provided, ho ever, "hat su9h 9ertifi9ates, notes or other o;ligations are adeCuately se9ured as to Arin9iAal and interests. 1D7E ECuiA:ent trust o;ligations or 9ertifi9ates whi9h are adeCuately se9ured or other adeCuately se9ured instru:ents eviden9ing an interest in eCuiA:ent wholly or in Aart within the PhiliAAines< Provided, ho ever, "hat there is a right to re9eive deter:ined Aortions of rental, Aur9hase or other fiBed o;ligatory Aay:ents for the use or Aur9hase of su9h eCuiA:ent. 1D-5E !ny o;ligation of any 9orAoration or institution 9reated or eBisting under the laws of the PhiliAAines whi9h is, on the date of a9Cuisition ;y the insurer, adeCuately se9ured and has Cualities and 9hara9teristi9s wherein the sAe9ulative ele:ents are not Aredo:inant. 1D--E &u9h other se9urities as :ay ;e aAAroved ;y the o::issioner. 1D9E !ny do:esti9 insurer whi9h has outstanding insuran9e, annuity or reinsuran9e 9ontra9ts in 9urren9ies other

than the national 9urren9y of the PhiliAAines :ay invest in, or otherwise a9Cuire or loan uAon se9urities and invest:ents in su9h 9urren9y whi9h are su;stantially of the sa:e >inds, 9lasses and invest:ent grades as those eligi;le for invest:ent under the foregoing su;divisions of this se9tionF ;ut the aggregate a:ount of su9h invest:ents and of su9h 9ash in su9h 9urren9y whi9h is at any ti:e held ;y su9h insurer shall not eB9eed one and one-half D-PE ti:es the a:ount of its reserves and other o;ligations under su9h 9ontra9ts or the a:ount whi9h su9h insurer is reCuired ;y the law of any 9ountry or Aossession outside the ReAu;li9 of the PhiliAAines to ;e invested in su9h 9ountry or Aossession, whi9hever shall ;e greater. 1&E . .58. !n insuran9e 9o:Aany :ay< 1D-E Invest in eCuities of other finan9ial institutionsF and 1D.E Engage in the ;uying and selling of long-ter: de;t instru:ents< Provided, "hat any or all of su9h invest:ents shall ;e with the Arior aAAroval of the o::issioner. Insuran9e 9o:Aanies :ay, however, invest in listed eCuities of other finan9ial institutions without need of Arior aAAroval ;y the o::issioner. 1&E . .54. !ny life insuran9e 9o:Aany :ay< 1DaE !9Cuire or 9onstru9t housing AroIe9ts and, in 9onne9tion with any su9h AroIe9t, :ay a9Cuire land or any interest therein ;y Aur9hase, lease or otherwise, or use land a9Cuired Aursuant to any other Arovision of this ode. &u9h 9o:Aany :ay thereafter own, :aintain, :anage, 9olle9t or re9eive in9o:e fro:, or sell and 9onvey, any land or interest therein so a9Cuired and any i:Arove:ents thereon. "he aggregate ;oo>

value of the invest:ents of any su9h 9o:Aany in all su9h AroIe9ts shall not eB9eed at the ti:e of su9h invest:ents twenty-five Aer9ent D.6LE of the total ad:itted assets of su9h 9o:Aany on the thirty-first day of )e9e:;er neBt Are9eding< Provided, "hat the funds of the 9o:Aany for the Aay:ent of Aending 9lai:s and o;ligations shall not ;e used for su9h invest:ents. 1D;E !9Cuire real AroAerty, other than AroAerty to ;e used Ari:arily for Aroviding housing and AroAerty for a99o::odation of its own ;usiness, as an invest:ent for the Arodu9tion of in9o:e, or :ay a9Cuire real AroAerty to ;e i:Aroved or develoAed for su9h invest:ent AurAose Aursuant to a Arogra: therefor, su;Ie9t to the 9ondition that the 9ost of ea9h Aar9el of real AroAerty so a9Cuired under the authority of this AaragraAh D;E, in9luding the esti:ated 9ost to the 9o:Aany of the i:Arove:ent or develoA:ent thereof, when added to the ;oo> value of all other real AroAerty held ;y it Aursuant to this AaragraAh D;E, shall not eB9eed twenty-five Aer9ent D.6LE of its ad:itted assets as of the thirty-first day of )e9e:;er neBt Are9eding. 1&E . .57. Every do:esti9 insuran9e 9o:Aany shall, to the eBtent of an a:ount eCual in value to twenty-five Aer9ent D.6LE of the :ini:u: net worth reCuired under &e9tion -73, invest its funds only in se9urities, satisfa9tory to the o::issioner, 9onsisting of ;onds or other instru:ents of de;t of the 'overn:ent of the PhiliAAines or its Aoliti9al su;divisions or instru:entalities, or of govern:ent-owned or -9ontrolled 9orAorations and entities, in9luding the Bang>o &entral ng PiliAinas< Provided, "hat su9h invest:ents shall at all ti:es ;e :aintained free fro: any lien or en9u:;ran9e< Provided, further, "hat su9h se9urities shall ;e deAosited with and held

;y the o::issioner for the faithful Aerfor:an9e ;y the deAositing insurer of all its o;ligations under its insuran9e 9ontra9ts. "he Arovisions of &e9tion -74 shall, so far as Ara9ti9a;le, aAAly to the se9urities deAosited under this se9tion. 1EB9eAt as otherwise Arovided in this ode, no Iudg:ent 9reditor or other 9lai:ant shall have the right to levy uAon any of the se9urities of the insurer held on deAosit under this se9tion or held on deAosit Aursuant to the reCuire:ent of the o::issioner. 1&E . .-5. !fter satisfying the reCuire:ents 9ontained in the Are9eding se9tion, any do:esti9 non-life insuran9e 9o:Aany, shall invest, to an a:ount Ares9ri;ed ;elow, its funds in, or otherwise, a9Cuire or loan uAon, only the 9lasses of invest:ents des9ri;ed in &e9tion .5,, in9luding se9urities issued ;y any registered enterArise, as this ter: is defined in EBe9utive $rder #o. ..,, otherwise >nown as ?"he $:ni;us Invest:ents ode of -748Q and su9h other 9lasses of invest:ents as :ay ;e authoriHed ;y the o::issioner for AurAoses of this se9tion< Provided, "hat< 1DaE #o :ore than twenty Aer9ent D.5LE of the net worth of su9h 9o:Aany as shown ;y its latest finan9ial state:ent aAAroved ;y the o::issioner shall ;e invested in the lot and ;uilding in whi9h the insuran9e 9o:Aany 9ondu9ts its ;usinessF and 1D;E "he total invest:ent of an insuran9e 9o:Aany in any registered enterArise shall not eB9eed twenty Aer9ent D.5LE of the net worth of said insuran9e 9o:Aany as shown ;y its aforesaid finan9ial state:ent nor twenty Aer9ent D.5LE of the Aaid-uA 9aAital of the registered enterArise eB9luding the intended invest:ent, unless Areviously authoriHed ;y the o::issioner< Provided,

further, "hat su9h invest:ents, free fro: any lien or en9u:;ran9e, shall ;e at least eCual in a:ount to the aggregate a:ount of< D-E its legal reserve, as Arovided in &e9tion .-7, and D.E its reserve fund held for reinsuran9e as Arovided for in the Aertinent treaty Arovision in the 9ase of reinsuran9e 9eded to authoriHed insurers. 1&E . .--. !fter satisfying the reCuire:ents 9ontained in &e9tions -78, -77, .57 and .-5, any non-life insuran9e 9o:Aany :ay invest any Aortion of its funds reAresenting earned surAlus in any of the invest:ents des9ri;ed in &e9tions .53, .5, and .58, or in any se9urities issued ;y a registered enterArise :entioned in the Are9eding se9tions< Provided, "hat no invest:ent in sto9>s or ;onds of any single entity shall in the aggregate, eB9eed twenty Aer9ent D.5LE of the net worth of the insuran9e 9o:Aany as shown in its latest finan9ial state:ent aAAroved ;y the o::issioner or twenty Aer9ent D.5LE of the Aaid-uA 9aAital of the issuing 9o:Aany, whi9hever is lesser, unless otherwise aAAroved ;y the o::issioner. 1&E . .-.. !fter satisfying the :ini:u: 9aAital invest:ent reCuired in &e9tion .57, any life insuran9e 9o:Aany :ay invest its legal Aoli9y reserve, as Arovided in &e9tion .-8 or in &e9tion .-4, in any of the 9lasses of se9urities or tyAes of invest:ents des9ri;ed in &e9tions .53, .5,, .58 and .54, su;Ie9t to the li:itations therein 9ontained, and in any se9urities issued ;y any registered enterArise :entioned in &e9tion .-5, free fro: any lien or en9u:;ran9e, in su9h a:ounts as :ay ;e aAAroved ;y the o::issioner. &u9h 9o:Aany :ay li>ewise invest any Aortion of its earned surAlus in the aforesaid se9urities or invest:ents su;Ie9t to the aforesaid li:itations.

1&E . .-G. !ny invest:ent :ade in violation of the aAAli9a;le Arovisions of this title shall ;e 9onsidered non-ad:itted assets. 1&E . .-3. DaE !ll ;onds or other instru:ents of inde;tedness having a fiBed ter: and rate of interest and held ;y any life insuran9e 9o:Aany authoriHed to do ;usiness in this 9ountry, if a:Aly se9ured and if not in default as to Arin9iAal or interest, shall ;e valued ;ased on their a:ortiHed 9ost using effe9tive interest :ethod less i:Aair:ent and unre9overa;le a:ount ;ased on aAAroAriate :easure:ent :ethods whi9h are generally a99eAted in the industry and a99eAted ;y the o::issioner. "he o::issioner shall have the Aower to deter:ine the eligi;ility of any su9h invest:ents for valuation on the ;asis of a:ortiHation, and :ay ;y regulation Ares9ri;e or li:it the 9lasses of se9urities so eligi;le for a:ortiHation. !ll ;onds or other instru:ents of inde;tedness whi9h in the Iudg:ent of the o::issioner are not a:Aly se9ured shall not ;e eligi;le for a:ortiHation and shall ;e valued in a99ordan9e with AaragraAh two. "he o::issioner :ay, if he finds that the interest of Aoli9yholders so Aer:it or reCuire, ;y offi9ial regulation Aer:it or reCuire any 9lass or 9lasses of insurers, other than life insuran9e 9o:Aanies authoriHed to do ;usiness in this 9ountry, to value their ;onds or other instru:ents of inde;tedness in a99ordan9e with the foregoing rule. 1D;E "he invest:ents of all insurers authoriHed to do ;usiness in this 9ountry, eB9eAt se9urities su;Ie9t to a:ortiHation and eB9eAt as otherwise Arovided in this 9haAter, shall ;e valued, in the dis9retion of the o::issioner, at their a:ortiHed 9ost using effe9tive interest :ethod less i:Aair:ent and unre9overa;le a:ount or at valuation reAresenting their fair :ar>et value. If the o::issioner finds that in view of the

9hara9ter of invest:ents of any insurer authoriHed to do ;usiness in this 9ountry it would ;e Arudent for su9h insurer to esta;lish a sAe9ial reserve for Aossi;le losses or flu9tuations in the values of its invest:ents, he :ay reCuire su9h insurer to esta;lish su9h reserve, reasona;le in a:ount, and in9lude a reAort thereon in any state:ent or reAort of the finan9ial 9ondition of su9h insurer. "he o::issioner :ay, in 9onne9tion with any eBa:ination or reCuired finan9ial state:ent of an authoriHed insurer, reCuire su9h insurer to furnish hi: 9o:Alete finan9ial state:ents and audited reAort of the finan9ial 9ondition of any 9orAoration of whi9h the se9urities are owned wholly or Aartly ;y su9h insurer and :ay 9ause an eBa:ination to ;e :ade of any su;sidiary or affiliate of su9h insurer as aAAroAriate to sAe9ifi9 invest:ents as Arovided in aAAroAriate 9ir9ulars issued ;y the o::issioner. 1D9E Invest:ents in eCuity of an insuran9e 9o:Aany shall ;e valued as follows< 1D-E Listed sto9>s shall ;e valued at :ar>et value and Aeriodi9ally adIusted to refle9t :ar>et 9hanges through a sAe9ial valuation a99ount to refle9t their realiHa;le value when soldF 1D.E Unlisted sto9>s shall ;e valued at adIusted ;oo> value ;ased on the latest unCualified audited finan9ial state:ents of the 9o:Aany whi9h issued su9h sto9>sF and 1DGE &to9>s of a 9orAoration under the 9ontrol of the insurer shall ;e valued using the eCuity :ethod whi9h is the 9ost Alus or :inus the share of the 9ontrolling 9o:Aany in the earnings or losses of the 9ontrolled 9o:Aany after a9Cuisition of su9h sto9>s. 1DdE "he sto9> of an insuran9e 9o:Aany shall ;e valued at the lesser of its :ar>et

value or its ;oo> value as shown ;y its last aAAroved audited finan9ial state:ent or the last reAort on eBa:ination, whi9hever is :ore re9ent. "he ;oo> value of a share of 9o::on sto9> of an insuran9e 9o:Aany shall ;e as9ertained ;y dividing D-E the a:ount of its 9aAital and surAlus less the value of all of its Areferred sto9>, if any, outstanding, ;y D.E the nu:;er of shares of its 9o::on sto9> issued and outstanding. 1#otwithstanding the foregoing Arovisions, an insurer :ay, at its oAtion, value its holdings of sto9> in a su;sidiary insuran9e 9o:Aany in an a:ount not less than a9Cuisition 9ost if su9h a9Cuisition 9ost is less than the value deter:ined as herein;efore Arovided. 1DeE Real estate a9Cuired ;y fore9losure or ;y deed in lieu thereof, in the a;sen9e of a re9ent aAAraisal dee:ed ;y the o::issioner to ;e relia;le, shall not ;e valued at an a:ount greater than the unAaid Arin9iAal of the defaulted loan at the date of su9h fore9losure or deed, together with any taBes and eBAenses Aaid or in9urred ;y su9h insurer at su9h ti:e in 9onne9tion with su9h a9Cuisition, and the 9ost of additions or i:Arove:ents thereafter Aaid ;y su9h insurer and any a:ount or a:ounts thereafter Aaid ;y su9h insurer or any assess:ents levied for i:Arove:ents in 9onne9tion with the AroAerty. 1DfE Pur9hase :oney :ortgages re9eived on disAositions of real AroAerty held Aursuant to &e9tion .54 shall ;e valued in an a:ount eCuivalent to ninety Aer9ent D75LE of the value of su9h real AroAerty. Pur9hase :oney :ortgages re9eived on disAosition of real AroAerty otherwise held shall ;e valued in an a:ount not eB9eeding ninety Aer9ent D75LE of the value of su9h real AroAerty as deter:ined ;y an aAAraisal :ade ;y an

aAAraiser at or a;out the ti:e of disAosition of su9h real AroAerty. 1DgE "he sto9> of a su;sidiary of an insurer shall ;e valued on the ;asis of the greater of< 1D-E "he value of only su9h of the assets of su9h su;sidiary as would 9onstitute lawful invest:ents for the insurer if a9Cuired or held dire9tly ;y the insurerF or 1D.E &u9h other value deter:ined Aursuant to standards and 9u:ulative li:itations, 9ontained in a regulation to ;e Aro:ulgated ;y the o::issioner. 1DhE #otwithstanding any Arovision 9ontained in this se9tion or elsewhere in this 9haAter, if the o::issioner finds that the interests of Aoli9yholders so Aer:it or reCuire, he :ay Aer:it or reCuire any 9lass or 9lasses of insurers authoriHed to do ;usiness in this 9ountry to value their invest:ents or any 9lass or 9lasses thereof as of any date heretofore or hereafter in a99ordan9e with any aAAli9a;le valuation or :ethod. 1&E . .-6. It shall ;e the duty of the offi9ers of the insuran9e 9o:Aany to reAort within the first fifteen D-6E days of every :onth all su9h invest:ents as :ay ;e :ade ;y the: during the Are9eding :onth, and the o::issioner :ay, if su9h invest:ents or any of the: see: inIudi9ious to hi:, reCuire the sale or disAosal of the sa:e. "he reAort shall also in9lude a list of invest:ents sold or disAosed of ;y the 9o:Aany during the sa:e Aeriod. 1"I"LE 6 1RE&ER=E& 1&E . .-,. Every life insuran9e 9o:Aany, doing ;usiness in the PhiliAAines, shall

annually :a>e a valuation of all Aoli9ies, additions thereto, unAaid dividends, and all other o;ligations outstanding on the thirtyfirst day of )e9e:;er of the Are9eding year. !ll su9h valuations shall ;e :ade a99ording to the standard adoAted ;y the 9o:Aany, as Ares9ri;ed ;y the o::issioner in a99ordan9e with internationally a99eAted a9tuarial standards, whi9h standard shall ;e stated in its annual reAort. 1&u9h standard of valuations shall ;e a99ording to a standard ta;le of :ortality with interest to ;e deter:ined ;y the Insuran9e o::issioner. /hen the Areli:inary ter: ;asis is used, the ter: insuran9e shall ;e li:ited to the first Aoli9y year. 1"he results of su9h valuations shall ;e reAorted to the o::issioner on or ;efore the thirtieth day of !Aril of ea9h year a99o:Aanied ;y a sworn state:ent of a designated 9o:Aany offi9er and stating the :ethods and assu:Ations used in arriving at the values reAorted. 1&E . .-8. "he aggregate net value so as9ertained of the Aoli9ies of su9h 9o:Aany shall ;e dee:ed its reserve lia;ility, to Arovide for whi9h it shall hold funds in se9ure invest:ents eCual to su9h net value, a;ove all its other lia;ilitiesF and it shall ;e the duty of the o::issioner, after having verified, to su9h an eBtent as he :ay dee: ne9essary, the valuation of all Aoli9ies in for9e, to satisfy hi:self that the 9o:Aany has su9h a:ount in safe legal se9urities after all other de;ts and 9lai:s against it have ;een Arovided for. 1"he reserve lia;ility for varia;le 9ontra9ts defined in &e9tion .G4 shall ;e esta;lished in a99ordan9e with a9tuarial Aro9edures that re9ogniHe the varia;le nature of the ;enefits

Arovided, and shall ;e aAAroved ;y the o::issioner. 1&E . .-4. Every life insuran9e 9o:Aany, 9ondu9ted on the :utual Alan or a Alan in whi9h Aoli9yholders are ;y the ter:s of their Aoli9ies entitled to share in the Arofits or surAlus shall, on all Aoli9ies of life insuran9e heretofore or hereafter issued, under the 9onditions of whi9h the distri;ution of surAlus is deferred to a fiBed or sAe9ified ti:e and 9ontingent uAon the Aoli9y ;eing in for9e and the insured living at that ti:e, annually as9ertain the a:ount of the surAlus to whi9h all su9h Aoli9ies as a seAarate 9lass are entitled, and shall annually aAAortion to su9h Aoli9ies as a 9lass the a:ount of the surAlus so as9ertained, and 9arry the a:ount of su9h aAAortioned surAlus, Alus the a9tual interest earnings and a99retions to su9h fund, as a distin9t and seAarate lia;ility to su9h 9lass of Aoli9ies on and for whi9h the sa:e was a99u:ulated, and no 9o:Aany or any of its offi9ers shall ;e Aer:itted to use any Aart of su9h aAAortioned surAlus fund for any AurAose whatsoever other than for the eBAress AurAose for whi9h the sa:e was a99u:ulated. 1&E . .-7. Every insuran9e 9o:Aany, other than life, shall :aintain a reserve for unearned Are:iu:s on its Aoli9ies in for9e, whi9h shall ;e 9harged as a lia;ility in any deter:ination of its finan9ial 9ondition. &u9h reserve shall ;e 9al9ulated ;ased on the twenty-fourth D.3thE :ethod. 1&E . ..5. In addition to its lia;ilities and reserves on 9ontra9ts of insuran9e issued ;y it, every insuran9e 9o:Aany shall ;e 9harged with the esti:ated a:ount of all of its other lia;ilities, in9luding taBes, eBAenses and other o;ligations due or a99rued at the date of state:ent, and in9luding any sAe9ial reserves reCuired ;y the o::issioner Aursuant to the Arovisions of this ode.

"I"LE , 1LIMI" $+ &I#'LE RI&0 1&E . ..-. #o insuran9e 9o:Aany other than life, whether foreign or do:esti9, shall retain any ris> on any one su;Ie9t of insuran9e in an a:ount eB9eeding twenty Aer9ent D.5LE of its net worth. +or AurAoses of this se9tion, the ter: sub%ect of insurance shall in9lude all AroAerties or ris>s insured ;y the sa:e insurer that 9usto:arily are 9onsidered ;y non-life 9o:Aany underwriters to ;e su;Ie9t to loss or da:age fro: the sa:e o99urren9e of any haHard insured against. 1"he o::issioner :ay issue regulations Aroviding for a :aBi:u: li:it on the overall retained ris>s of insurers to serve as a 9atastroAhe 9over reCuire:ent for the sa:e. 1Reinsuran9e 9eded as authoriHed under the su99eeding title shall ;e dedu9ted in deter:ining the ris> retained. !s to surety ris>, dedu9tion shall also ;e :ade of the a:ount assu:ed ;y any other 9o:Aany authoriHed to transa9t surety ;usiness and the value of any se9urity :ortgaged, Aledged, or held su;Ie9t to the surety@s 9ontrol and for the surety@s Arote9tion. 1"I"LE 8 1REI#&UR!# E "R!#&! "I$#& 1&E . .... !n insuran9e 9o:Aany doing ;usiness in the PhiliAAines :ay a99eAt reinsuran9es only of su9h ris>s, and retain ris> thereon within su9h li:its, as it is otherwise authoriHed to insure. 1&E . ..G. #o insuran9e 9o:Aany doing ;usiness in the PhiliAAines shall 9ede all or Aart of any ris>s situated in the PhiliAAines

;y way of reinsuran9e dire9tly to any foreign insurer not authoriHed to do ;usiness in the PhiliAAines unless su9h foreign insurer or, if the servi9es of a nonresident ;ro>er are utiliHed, su9h nonresident ;ro>er is reAresented in the PhiliAAines ;y a resident agent duly registered with the o::issioner as reCuired in this ode. 1"he resident agent of su9h unauthoriHed foreign insurer or nonresident ;ro>er shall i::ediately uAon registration furnish the o::issioner with the annual state:ent of su9h insurer, or of su9h 9o:Aany or 9o:Aanies where su9h ;ro>er :ay Ala9e PhiliAAine ;usiness as of the year Are9eding su9h registration, and annually thereafter as soon as availa;le. 1&E . ..3. !ll insuran9e 9o:Aanies, ;oth life and non-life, authoriHed to do ;usiness in the PhiliAAines shall 9ede their eB9ess ris>s to other 9o:Aanies si:ilarly authoriHed to do ;usiness in the PhiliAAines in su9h a:ounts and under su9h arrange:ents as would ;e 9onsistent with sound underwriting Ara9ti9es ;efore they enter into reinsuran9e arrange:ents with unauthoriHed foreign insurers. 1&E . ..6. !ny insuran9e 9o:Aany doing ;usiness in the PhiliAAines desiring to 9ede their eB9ess ris>s to foreign insuran9e or reinsuran9e 9o:Aanies not authoriHed to transa9t ;usiness in the PhiliAAines :ay do so under su9h ter:s and 9onditions whi9h the o::issioner :ay Ares9ri;e. 1&hould any reinsuran9e agree:ent ;e for any reason 9an9elled or ter:inated, the 9eding 9o:Aany 9on9erned shall infor: the o::issioner in writing of su9h 9an9ellation or ter:ination within thirty DG5E days fro: the date of su9h 9an9ellation or ter:ination or fro: the date noti9e or infor:ation of su9h 9an9ellation or

ter:ination is re9eived ;y su9h 9o:Aany as the 9ase :ay ;e. 1&E . ..,. Every insuran9e 9o:Aany authoriHed to do ;usiness in the PhiliAAines shall reAort to the o::issioner on for:s Ares9ri;ed ;y hi: the Aarti9ulars of reinsuran9e treaties or any new treaties or 9hanges in eBisting treaties within three DGE :onths fro: their effe9tivity. 1&E . ..8. #o 9redit shall ;e allowed as an ad:itted asset or as a dedu9tion fro: lia;ility, to any 9eding insurer for reinsuran9e :ade, 9eded, renewed, or otherwise ;e9o:ing effe9tive after January -, -786, unless the reinsuran9e shall ;e Aaya;le ;y the assu:ing insurer on the ;asis of the lia;ility of the 9eding insurer under the 9ontra9t or 9ontra9ts reinsured without di:inution ;e9ause of the insolven9y of the 9eding insurer nor unless under the 9ontra9t or 9ontra9ts of reinsuran9e the lia;ility for su9h reinsuran9e is assu:ed ;y the assu:ing insurer or insurers as of the sa:e effe9tive dateF nor unless the reinsuran9e agree:ent Arovides that Aay:ents ;y the assu:ing insurer shall ;e :ade dire9tly to the 9eding insurer or to its liCuidator, re9eiver, or statutory su99essor eB9eAt< 1DaE /here the 9ontra9t sAe9ifi9ally Arovides another Aayee of su9h reinsuran9e in the event of the insolven9y of the 9eding insurerF and 1D;E /here the assu:ing insurer with the 9onsent of the dire9t insured or insureds has assu:ed su9h Aoli9y o;ligations of the 9eding insurer as dire9t o;ligations of the assu:ing insurer to the Aayees under su9h Aoli9ies and in su;stitution for the o;ligations of the 9eding insurer to su9h Aayees.

1&E . ..4. #o life insuran9e 9o:Aany doing ;usiness in the PhiliAAines shall reinsure its whole ris> on any individual life or Ioint lives, or su;stantially all of its insuran9e in for9e, without having first o;tained the written Aer:ission of the o::issioner. 1"I"LE 4 1!##U!L &"!"EME#" 1&E . ..7. Every insuran9e 9o:Aany doing ;usiness in the PhiliAAines shall ter:inate its fis9al Aeriod on the thirty-first day of )e9e:;er every year, and shall annually on or ;efore the thirtieth day of !Aril of ea9h year render to the o::issioner a state:ent signed and sworn to ;y the 9hief offi9er of su9h 9o:Aany showing, in su9h for: and details as :ay ;e Ares9ri;ed ;y the o::issioner, the eBa9t 9ondition of its affairs on the Are9eding thirty-first day of )e9e:;er. 1"he annual state:ent shall ;e AreAared in a99ordan9e with the finan9ial reAorting fra:ewor> as deter:ined ;y the o::issioner. In addition, the o::issioner :ay reCuire other relevant infor:ation. "he for: and details of su9h other relevant infor:ation shall ;e Ares9ri;ed ;y the o::issioner and shall for: Aart of the suAAle:entary s9hedules to the annual state:ent. 1!ny entry in the state:ent whi9h is found to ;e false shall 9onstitute a :isde:eanor and the offi9er signing su9h state:ent shall ;e su;Ie9t to the Aenalty Arovided for under &e9tion 33.. 1&E . .G5. Every insuran9e 9o:Aany authoriHed under "itle -5 of this 9haAter to issue, deliver or use varia;le 9ontra9ts shall annually file with the o::issioner

seAarate annual state:ent of its seAarate varia;le a99ounts. &u9h state:ent shall ;e on a for: Ares9ri;ed or aAAroved ;y the o::issioner and shall in9lude details as to all of the in9o:e, dis;urse:ents, assets and lia;ility ite:s of and asso9iated with the said seAarate varia;le a99ounts. &aid state:ent shall ;e under oath of two D.E offi9ers of the 9o:Aany and shall ;e filed si:ultaneously with the annual state:ent reCuired ;y the Are9eding se9tion. 1&E . .G-. /ithin thirty DG5E days after re9eiAt of the annual state:ent aAAroved ;y the o::issioner, every insuran9e 9o:Aany doing ;usiness in the PhiliAAines shall Au;lish in a newsAaAer of general 9ir9ulation, a full synoAsis of its annual finan9ial state:ent showing fully the 9onditions of its ;usiness, and setting forth its resour9es and lia;ilities in a99ordan9e with su9h for: Ares9ri;ed ;y the o::issioner. 1"he o::issioner shall have the authority to :a>e, a:end, and res9ind su9h a99ounting rules and regulations as :ay ;e ne9essary to 9arry out the Arovisions of this ode, and define a99ounting, te9hni9al and trade ter:s used in this ode< Provided, "hat su9h shall ;e in a99ordan9e with internationally a99eAted a99ounting standards. !:ong other things, the o::issioner :ay Ares9ri;e the for: or for:s in whi9h reCuired infor:ation shall ;e set forth, the ite:s or details to ;e shown in the ;alan9e sheet and in9o:e state:ent, and the :ethods to ;e followed in the AreAaration of a99ounts, aAAraisal or valuation of assets and lia;ilities, deter:ination of re9urring and nonre9urring in9o:e, differentiation of invest:ent and oAerating in9o:e, and in the AreAaration, where the o::issioner dee:s it ne9essary or desira;le, of 9onsolidated ;alan9e sheets or in9o:e a99ounts of any Aerson dire9tly or

indire9tly 9ontrolling or 9ontrolled ;y the insuran9e 9o:Aany. 1"I"LE 7 1P$LI * +$RM& 1&E . .G.. #o Aoli9y, 9ertifi9ate or 9ontra9t of insuran9e shall ;e issued or delivered within the PhiliAAines unless in the for: Areviously aAAroved ;y the o::issioner, and no aAAli9ation for: shall ;e used with, and no rider, 9lause, warranty or endorse:ent shall ;e atta9hed to, Arinted or sta:Aed uAon su9h Aoli9y, 9ertifi9ate or 9ontra9t unless the for: of su9h aAAli9ation, rider, 9lause, warranty or endorse:ent has ;een aAAroved ;y the o::issioner. 1&E . .GG. In the 9ase of individual life or endow:ent insuran9e, the Aoli9y shall 9ontain in su;stan9e the following 9onditions< 1DaE ! Arovision that the Aoli9yholder is entitled to a gra9e Aeriod either of thirty DG5E days or of one D-E :onth within whi9h the Aay:ent of any Are:iu: after the first :ay ;e :ade, su;Ie9t at the oAtion of the insurer to an interest 9harge not in eB9ess of siB Aer9ent D,LE Aer annu: for the nu:;er of days of gra9e elaAsing ;efore the Aay:ent of the Are:iu:, during whi9h Aeriod of gra9e the Aoli9y shall 9ontinue in full for9e, ;ut in 9ase the Aoli9y ;e9o:es a 9lai: during the said Aeriod of gra9e ;efore the overdue Are:iu: is Aaid, the a:ount of su9h Are:iu: with interest :ay ;e dedu9ted fro: the a:ount Aaya;le under the Aoli9y in settle:entF 1D;E ! Arovision that the Aoli9y shall ;e in9ontesta;le after it shall have ;een in for9e during the lifeti:e of the insured for a Aeriod of two D.E years fro: its date of issue as shown in the Aoli9y, or date of aAAroval

of last reinstate:ent, eB9eAt for nonAay:ent of Are:iu: and eB9eAt for violation of the 9onditions of the Aoli9y relating to :ilitary or naval servi9e in ti:e of warF 1D9E ! Arovision that the Aoli9y shall 9onstitute the entire 9ontra9t ;etween the Aarties, ;ut if the 9o:Aany desires to :a>e the aAAli9ation a Aart of the 9ontra9t it :ay do so Arovided a 9oAy of su9h aAAli9ation shall ;e indorsed uAon or atta9hed to the Aoli9y when issued, and in su9h 9ase the Aoli9y shall 9ontain a Arovision that the Aoli9y and the aAAli9ation therefor shall 9onstitute the entire 9ontra9t ;etween the AartiesF 1DdE ! Arovision that if the age of the insured is 9onsidered in deter:ining the Are:iu: and the ;enefits a99ruing under the Aoli9y, and the age of the insured has ;een :isstated, the a:ount Aaya;le under the Aoli9y shall ;e su9h as the Are:iu: would have Aur9hased at the 9orre9t ageF 1DeE If the Aoli9y is Aarti9iAating, a Arovision that the 9o:Aany shall Aeriodi9ally as9ertain and aAAortion any divisi;le surAlus a99ruing on the Aoli9y under 9onditions sAe9ified thereinF 1DfE ! Arovision sAe9ifying the oAtions to whi9h the Aoli9yholder is entitled to in the event of default in a Are:iu: Aay:ent after three DGE full annual Are:iu:s shall have ;een Aaid. &u9h oAtion shall 9onsist of< 1D-E ! 9ash surrender value Aaya;le uAon surrender of the Aoli9y whi9h shall not ;e less than the reserve on the Aoli9y, the ;asis of whi9h shall ;e indi9ated, for the then 9urrent Aoli9y year and any dividend additions thereto, redu9ed ;y a surrender 9harge whi9h shall not ;e :ore than onefifth D-K6E of the entire reserve or two and one-half Aer9ent D.PLE of the a:ount

insured and any dividend additions theretoF and 1D.E $ne or :ore Aaid-uA ;enefits on a Alan or Alans sAe9ified in the Aoli9y of su9h value as :ay ;e Aur9hased ;y the 9ash surrender value. 1DgE ! Arovision that at any ti:e after a 9ash surrender value is availa;le under the Aoli9y and while the Aoli9y is in for9e, the 9o:Aany will advan9e, on AroAer assign:ent or Aledge of the Aoli9y and on sole se9urity thereof, a su: eCual to, or at the oAtion of the owner of the Aoli9y, less than the 9ash surrender value on the Aoli9y, at a sAe9ified rate of interest, not :ore than the :aBi:u: allowed ;y law, to ;e deter:ined ;y the 9o:Aany fro: ti:e to ti:e, ;ut not :ore often than on9e a year, su;Ie9t to the aAAroval of the o::issionerF and that the 9o:Aany will dedu9t fro: su9h loan value any eBisting inde;tedness on the Aoli9y and any unAaid ;alan9e of the Are:iu: for the 9urrent Aoli9y year, and :ay 9olle9t interest in advan9e on the loan to the end of the 9urrent Aoli9y year, whi9h Arovision :ay further Arovide that su9h loan :ay ;e deferred for not eB9eeding siB D,E :onths after the aAAli9ation therefor is :adeF 1DhE ! ta;le showing in figures 9ash surrender values and Aaid-uA oAtions availa;le under the Aoli9y ea9h year uAon default in Are:iu: Aay:ents, during at least twenty D.5E years of the Aoli9y ;eginning with the year in whi9h the values and oAtions first ;e9o:e availa;le, together with a Arovision that in the event of the failure of the Aoli9yholder to ele9t one of the said oAtions within the ti:e sAe9ified in the Aoli9y, one of said oAtions shall auto:ati9ally ta>e effe9t and no Aoli9yholder shall ever forfeit his right to sa:e ;y reason of his failure to so ele9tF

1DiE In 9ase the Aro9eeds of a Aoli9y are Aaya;le in install:ents or as an annuity, a ta;le showing the :ini:u: a:ounts of the install:ents or annuity Aay:entsF 1DIE ! Arovision that the Aoli9yholder shall ;e entitled to have the Aoli9y reinstated at any ti:e within three DGE years fro: the date of default of Are:iu: Aay:ent unless the 9ash surrender value has ;een duly Aaid, or the eBtension Aeriod has eBAired, uAon Arodu9tion of eviden9e of insura;ility satisfa9tory to the 9o:Aany and uAon Aay:ent of all overdue Are:iu:s and any inde;tedness to the 9o:Aany uAon said Aoli9y, with interest rate not eB9eeding that whi9h would have ;een aAAli9a;le to said Are:iu:s and inde;tedness in the Aoli9y years Arior to reinstate:ent. 1!ny of the foregoing Arovisions or Aortions thereof not aAAli9a;le to single Are:iu: or ter: Aoli9ies shall to that eBtent not ;e in9orAorated thereinF and any su9h Aoli9y :ay ;e issued and delivered in the PhiliAAines whi9h in the oAinion of the o::issioner 9ontains Arovisions on any one or :ore of the foregoing reCuire:ents :ore favora;le to the Aoli9yholder than herein;efore reCuired. 1"his se9tion shall not aAAly to Aoli9ies of grouA life or industrial life insuran9e. 1&E . .G3. #o Aoli9y of grouA life insuran9e shall ;e issued and delivered in the PhiliAAines unless it 9ontains in su;stan9e the following Arovisions, or Arovisions whi9h in the oAinion of the o::issioner are :ore favora;le to the Aersons insured, or at least as favora;le to the Aersons insured and :ore favora;le to the Aoli9yholders< 1DaE ! Arovision that the Aoli9yholder is entitled to a gra9e Aeriod of either thirty DG5E

days or of one D-E :onth for the Aay:ent of any Are:iu: due after the first, during whi9h gra9e Aeriod the death ;enefit 9overage shall 9ontinue in for9e, unless the Aoli9yholder shall have given the insurer written noti9e of dis9ontinuan9e in advan9e of the date of dis9ontinuan9e and in a99ordan9e with the ter:s of the Aoli9y. "he Aoli9y :ay Arovide that the Aoli9yholder shall ;e lia;le for the Aay:ent of a pro rata Are:iu: for the ti:e the Aoli9y is in for9e during su9h gra9e AeriodF 1D;E ! Arovision that the validity of the Aoli9y shall not ;e 9ontested, eB9eAt for nonAay:ent of Are:iu:s after it has ;een in for9e for two D.E years fro: its date of issueF and that no state:ent :ade ;y any insured under the Aoli9y relating to his insura;ility shall ;e used in 9ontesting the validity of the insuran9e with resAe9t to whi9h su9h state:ent was :ade after su9h insuran9e has ;een in for9e Arior to the 9ontest for a Aeriod of two D.E years during su9h Aerson@s lifeti:e nor unless 9ontained in a written instru:ent signed ;y hi:F 1D9E ! Arovision that a 9oAy of the aAAli9ation, if any, of the Aoli9yholder shall ;e atta9hed to the Aoli9y when issued, that all state:ents :ade ;y the Aoli9yholder or ;y Aersons insured shall ;e dee:ed reAresentations and not warranties, and that no state:ent :ade ;y any insured shall ;e used in any 9ontest unless a 9oAy of the instru:ent 9ontaining the state:ent is or has ;een furnished to su9h Aerson or to his ;enefi9iaryF 1DdE ! Arovision setting forth the 9onditions, if any, under whi9h the insurer reserves the right to reCuire a Aerson eligi;le for insuran9e to furnish eviden9e of individual insura;ility satisfa9tory to the insurer as a 9ondition to Aart or all of his 9overageF

1DeE ! Arovision sAe9ifying an eCuita;le adIust:ent of Are:iu:s or of ;enefits or of ;oth to ;e :ade in the event that the age of a Aerson insured has ;een :isstated, su9h Arovision to 9ontain a 9lear state:ent of the :ethod of adIust:ent to ;e usedF 1DfE ! Arovision that any su: ;e9o:ing due ;y reason of death of the Aerson insured shall ;e Aaya;le to the ;enefi9iary designated ;y the insured, su;Ie9t to the Arovisions of the Aoli9y in the event that there is no designated ;enefi9iary, as to all or any Aart of su9h su:, living at the death of the insured, and su;Ie9t to any right reserved ;y the insurer in the Aoli9y and set forth in the 9ertifi9ate to Aay at its oAtion a Aart of su9h su: not eB9eeding +ive hundred Aesos DP655.55E to any Aerson aAAearing to the insurer to ;e eCuita;ly entitled thereto ;y reason of having in9urred funeral or other eBAenses in9ident to the last illness or, death of the Aerson insuredF 1DgE ! Arovision that the insurer will issue to the Aoli9yholder for delivery to ea9h Aerson insured a state:ent as to the insuran9e Arote9tion to whi9h he is entitled, to who: the insuran9e ;enefits are Aaya;le, and the rights set forth in AaragraAhs DhE, DiE and DIE followingF 1DhE ! Arovision that if the insuran9e, or any Aortion of it, on a Aerson 9overed under the Aoli9y 9eases ;e9ause of ter:ination of e:Aloy:ent or of :e:;ershiA in the 9lass or 9lasses eligi;le for 9overage under the Aoli9y, su9h Aerson shall ;e entitled to have issued to hi: ;y the insurer, without eviden9e of insura;ility, an individual Aoli9y of life insuran9e without disa;ility or other suAAle:entary ;enefits, Arovided aAAli9ation for the individual Aoli9y and Aay:ent of the first Are:iu: to the insurer shall ;e :ade within thirty DG5E days after su9h ter:ination, and Arovided further that<

1D-E "he individual Aoli9y shall ;e on any one of the for:s, eB9eAt ter: insuran9e, then 9usto:arily issued ;y the insurer at the age and for an a:ount not in eB9ess of the 9overage under the grouA Aoli9yF and 1D.E "he Are:iu: on the individual Aoli9y shall ;e at the insurer@s then 9usto:ary rate aAAli9a;le to the for: and a:ount of the individual Aoli9y, to the 9lass of ris> to whi9h su9h Aerson then ;elongs, and to his age attained on the effe9tive date of the individual Aoli9y. 1DiE ! Arovision that if the grouA Aoli9y ter:inates or is a:ended so as to ter:inate the insuran9e of any 9lass of insured Aersons, every Aerson insured thereunder at the date of su9h ter:ination whose insuran9e ter:inates and who has ;een so insured for five D6E years Arior to su9h ter:ination date shall ;e entitled to have issued to hi: ;y the insurer an individual Aoli9y of life insuran9e su;Ie9t to the sa:e li:itations as set forth in AaragraAh DhE, eB9eAt that the grouA Aoli9y :ay Arovide that the a:ount of su9h individual Aoli9y shall not eB9eed the a:ount of the Aerson@s life insuran9e Arote9tion 9easingF 1DIE ! Arovision that if a Aerson insured under the grouA Aoli9y dies during the thirty DG5E-day Aeriod within whi9h he would have ;een entitled to an individual Aoli9y issued to hi: in a99ordan9e with AaragraAhs DhE and DiE a;ove and ;efore su9h individual Aoli9y shall have ;e9o:e effe9tive, the a:ount of life insuran9e whi9h he would have ;een entitled to have issued to hi: as an individual Aoli9y shall ;e Aaya;le as a 9lai: under the grouA Aoli9y whether or not aAAli9ation for the individual Aoli9y or the Aay:ent of the first Are:iu: has ;een :adeF

1D>E In the 9ase of a Aoli9y issued to a 9reditor to insure de;tors of su9h 9reditor, a Arovision that the insurer will furnish to the Aoli9yholder for delivery to ea9h de;tor insured under the Aoli9y a for: whi9h will 9ontain a state:ent that the life of the de;tor is insured under the Aoli9y and that any death ;enefit Aaid thereunder ;y reason of his death shall ;e aAAlied to redu9e or eBtinguish inde;tedness. 1"he Arovisions of AaragraAhs DfE to DIE shall not aAAly to Aoli9ies issued to a 9reditor to insure his de;tors. If a grouA life Aoli9y is on a Alan of insuran9e other than ter:, it shall 9ontain a non-forfeiture Arovision or Arovisions whi9h in the oAinion of the o::issioner is or are eCuita;le to the insured or the Aoli9yholder< Provided, "hat nothing herein 9ontained shall ;e so 9onstrued as to reCuire grouA life Aoli9ies to 9ontain the sa:e non-forfeiture Arovisions as are reCuired of individual life Aoli9ies. 1&E . .G6. "he ter: industrial life insurance as used in this ode shall :ean that for: of life insuran9e under whi9h the Are:iu:s are Aaya;le either :onthly or oftener, if the fa9e a:ount of insuran9e Arovided in any Aoli9y is not :ore than five hundred ti:es that of the 9urrent statutory :ini:u: daily wage in the ity of Manila, and if the words industrial policy are Arinted uAon the Aoli9y as Aart of the des9riAtive :atter. 1!n industrial life Aoli9y shall not laAse for nonAay:ent of Are:iu: if su9h nonAay:ent was due to the failure of the 9o:Aany to send its reAresentative or agent to the insured at the residen9e of the insured or at so:e other Ala9e indi9ated ;y hi: for the AurAose of 9olle9ting su9h Are:iu:< Provided, "hat the Arovisions of this AaragraAh shall not aAAly when the Are:iu: on the Aoli9y re:ains unAaid for a Aeriod of

three DGE :onths or twelve D-.E wee>s after the gra9e Aeriod has eBAired. 1&E . .G,. In the 9ase of industrial life insuran9e, the Aoli9y shall 9ontain in su;stan9e the following Arovisions< 1DaE ! Arovision that the insured is entitled to a gra9e Aeriod of four D3E wee>s within whi9h the Aay:ent of any Are:iu: after the first :ay ;e :ade, eB9eAt that where Are:iu:s are Aaya;le :onthly, the Aeriod of gra9e shall ;e either one D-E :onth or thirty DG5E daysF and that during the Aeriod of gra9e, the Aoli9y shall 9ontinue in full for9e, ;ut if during su9h gra9e Aeriod the Aoli9y ;e9o:es a 9lai:, then any overdue and unAaid Are:iu:s :ay ;e dedu9ted fro: any a:ount Aaya;le under the Aoli9y in settle:entF 1D;E ! Arovision that the Aoli9y shall ;e in9ontesta;le after it has ;een in for9e during the lifeti:e of the insured for a sAe9ified Aeriod, not :ore than two D.E years fro: its date of issue, eB9eAt for nonAay:ent of Are:iu:s and eB9eAt for violation of the 9onditions of the Aoli9y relating to naval or :ilitary servi9e, or servi9es auBiliary thereto, and eB9eAt as to Arovisions relating to ;enefits in the event of disa;ility as defined in the Aoli9y, and those granting additional insuran9e sAe9ifi9ally against death ;y a99ident or ;y a99idental :eans, or to additional insuran9e against loss of, or loss of use of, sAe9ifi9 :e:;ers of the ;odyF 1D9E ! Arovision that the Aoli9y shall 9onstitute the entire 9ontra9t ;etween the Aarties, or if a 9oAy of the aAAli9ation is endorsed uAon and atta9hed to the Aoli9y when issued, a Arovision that the Aoli9y and the aAAli9ation therefor shall 9onstitute the entire 9ontra9t ;etween the Aarties, and in the latter 9ase, a Arovision that all state:ents

:ade ;y the insured shall, in the a;sen9e of fraud, ;e dee:ed reAresentations and not warrantiesF 1DdE ! Arovision that if the age of the Aerson insured, or the age of any Aerson, 9onsidered in deter:ining the Are:iu:, or the ;enefits a99ruing under the Aoli9y, has ;een :isstated, any a:ount Aaya;le or ;enefit a99ruing under the Aoli9y shall ;e su9h as the Are:iu: Aaid would have Aur9hased at the 9orre9t ageF 1DeE ! Arovision that if the Aoli9y is a Aarti9iAating Aoli9y, the 9o:Aany shall Aeriodi9ally as9ertain and aAAortion any divisi;le surAlus a99ruing on the Aoli9y under the 9onditions sAe9ified thereinF 1DfE ! Arovision that in the event of default in Are:iu: Aay:ents after three DGE full years@ Are:iu:s have ;een Aaid, the Aoli9y shall ;e 9onverted into a stiAulated for: of insuran9e, and that in the event of default in Are:iu: Aay:ents after five D6E full years@ Are:iu:s have ;een Aaid, a sAe9ified 9ash surrender value shall ;e availa;le, in lieu of the stiAulated for: of insuran9e, at the oAtion of the Aoli9yholder. "he net value of su9h stiAulated for: of insuran9e and the a:ount of su9h 9ash value shall not ;e less than the reserve on the Aoli9y and dividend additions thereto, if any, at the end of the last 9o:Aleted Aoli9y year for whi9h Are:iu:s shall have ;een Aaid Dthe Aoli9y to sAe9ify the :ortality ta;le, rate of interest and :ethod of valuation adoAted to 9o:Aute su9h reserveE, eB9lusive of any reserve on disa;ility ;enefits and a99idental death ;enefits, less an a:ount not to eB9eed two and one-half Aer9ent D.PLE of the :aBi:u: a:ount insured ;y the Aoli9y and dividend additions thereto, if any, when the issue age is under ten D-5E years, and less an a:ount not to eB9eed two and one-half Aer9ent D.PLE of the 9urrent a:ount

insured ;y the Aoli9y and dividend additions thereto, if any, if the issue age is ten D-5E years or older, and less any eBisting inde;tedness to the 9o:Aany on or se9ured ;y the Aoli9yF 1DgE ! Arovision that the Aoli9y :ay ;e surrendered to the 9o:Aany at its ho:e offi9e within a Aeriod of not less than siBty D,5E days after the due date of a Are:iu: in default for the sAe9ified 9ash value< Provided, "hat the insurer :ay defer Aay:ent for not :ore than siB D,E :onths after the aAAli9ation therefor is :adeF 1DhE ! ta;le that shows in figures the nonforfeiture ;enefits availa;le under the Aoli9y every year uAon default in Aay:ent of Are:iu:s during at least the first twenty D.5E years of the Aoli9y, su9h ta;le to ;egin with the year in whi9h su9h values ;e9o:e availa;le, and a Arovision that the 9o:Aany will furnish uAon reCuest an eBtension of su9h ta;le ;eyond the year shown in the Aoli9yF 1DiE ! Arovision that sAe9ifies whi9h one of the stiAulated for:s of insuran9e Arovided for under the Arovision of AaragraAh DfE of this se9tion shall ta>e effe9t in the event of the insured@s failure, within siBty D,5E days fro: the due date of the Are:iu: in default, to notify the insurer in writing as to whi9h one of su9h for:s he has sele9tedF 1DIE ! Arovision that the Aoli9y :ay ;e reinstated at any ti:e within two D.E years fro: the due date of the Are:iu: in default unless the 9ash surrender value has ;een Aaid or the Aeriod of eBtended ter: insuran9e eBAired, uAon Arodu9tion of eviden9e of insura;ility satisfa9tory to the 9o:Aany and Aay:ent of arrears of Are:iu:s with interest at a rate not eB9eeding siB Aer9ent D,LE Aer annu: Aaya;le annuallyF

1D>E ! Arovision that when a Aoli9y shall ;e9o:e a 9lai: ;y death of the insured, settle:ent shall ;e :ade uAon re9eiAt of due Aroof of death, or not later than two D.E :onths after re9eiAt of su9h AroofF 1DlE ! title on the fa9e and on the ;a9> of the Aoli9y 9orre9tly des9ri;ing its for:F 1D:E ! sAa9e on the front or the ;a9> of the Aoli9y for the na:e of the ;enefi9iary designated ;y the insured with a reservation of the insured@s right to designate or 9hange the ;enefi9iary after the issuan9e of the Aoli9y. "he Aoli9y :ay also Arovide that no designation or 9hange of ;enefi9iary shall ;e ;inding on the insurer until endorsed on the Aoli9y ;y the insurer, and that the insurer :ay refuse to endorse the na:e of any AroAosed ;enefi9iary who does not aAAear to the insurer to have an insura;le interest in the life of the insured. &u9h Aoli9y :ay also 9ontain a Arovision that if the ;enefi9iary designated in the Aoli9y does not surrender the Aoli9y with due Aroof of death within the Aeriod stated in the Aoli9y, whi9h shall not ;e less than thirty DG5E days after the death of the insured, or if the ;enefi9iary is the estate of the insured, or is a :inor, or dies ;efore the insured, or is not legally 9o:Aetent to give valid release, then the insurer :ay :a>e any Aay:ent thereunder to the eBe9utor or ad:inistrator of the insured, or to any of the insured@s relatives ;y ;lood or legal adoAtion or 9onne9tions ;y :arriage or to any Aerson aAAearing to the insurer to ;e eCuita;ly entitled thereto ;y reason of having in9urred eBAense for the :aintenan9e, :edi9al attention or ;urial of the insuredF and 1DnE ! Arovision that when an industrial life insuran9e Aoli9y is issued Aroviding for a99idental or health ;enefits, or ;oth, in addition to life insuran9e, the foregoing

Arovisions shall aAAly only to the life insuran9e Aortion of the Aoli9y. 1!ny of the foregoing Arovisions or Aortions thereof not aAAli9a;le to nonAarti9iAating or ter: Aoli9ies shall to that eBtent not ;e in9orAorated therein. "he foregoing Arovisions shall not aAAly to Aoli9ies issued or granted Aursuant to the nonforfeiture Arovisions Ares9ri;ed in Arovisions of AaragraAhs DfE and DiE of this se9tion, nor shall Arovisions of AaragraAhs DfE, DgE, DhE, and DiE hereof ;e reCuired in ter: insuran9e of twenty D.5E years or less ;ut su9h ter: Aoli9ies shall sAe9ify the :ortality ta;le, rate of interest, and :ethod of 9o:Auting reserves. 1&E . .G8. #o Aoli9y of industrial life insuran9e shall ;e issued or delivered in the PhiliAAines if it 9ontains any of the following Arovisions< 1DaE ! Arovision that gives the insurer the right to de9lare the Aoli9y void ;e9ause the insured has had any disease or ail:ent, whether sAe9ified or not, or ;e9ause the insured has re9eived institutional, hosAital, :edi9al or surgi9al treat:ent or attention, eB9eAt a Arovision whi9h gives the insurer the right to de9lare the Aoli9y void if the insured has, within two D.E years Arior to the issuan9e of the Aoli9y, re9eived institutional, hosAital, :edi9al or surgi9al treat:ent or attention and if the insured or the 9lai:ant under the Aoli9y fails to show that the 9ondition o99asioning su9h treat:ent or attention was not of a serious nature or was not :aterial to the ris>F 1D;E ! Arovision that gives the insurer the right to de9lare the Aoli9y void ;e9ause the insured has ;een reIe9ted for insuran9e, unless su9h right ;e 9onditioned uAon a showing ;y the insurer that >nowledge of

su9h reIe9tion would have led to a refusal ;y the insurer to :a>e su9h 9ontra9tF 1D9E ! Arovision that allows the 9o:Aany to Aay the Aro9eeds of the Aoli9y at the death of the insured to any Aerson other than the na:ed ;enefi9iary, eB9eAt in a99ordan9e with a standard Arovision as sAe9ified under the Arovisions of AaragraAh D:E of the Are9eding se9tionF 1DdE ! Arovision that li:its the ti:e within whi9h any a9tion at law or in eCuity :ay ;e 9o::en9ed to less than siB D,E years after the 9ause of a9tion shall a99rueF and 1DeE ! Arovision that sAe9ifies any :ode of settle:ent at :aturity of less value than the a:ount insured ;y the Aoli9y Alus dividend additions, if any, less any inde;tedness to the 9o:Aany on the Aoli9y and less any Are:iu: that :ay ;y the ter:s of the Aoli9y ;e dedu9ted, Aay:ents to ;e :ade in a99ordan9e with the ter:s of the Aoli9y. 1#othing 9ontained in this se9tion nor in the Arovision of AaragraAh D;E of the Are9eding se9tion, relating to in9ontesta;ility, shall ;e 9onstrued as Arohi;iting the life insuran9e 9o:Aany fro: Ala9ing in its industrial life Aoli9ies Arovisions li:iting its lia;ility with resAe9t to< 1D-E )eath resulting fro: aviation other than as a fare-Aaying Aassenger on a regularly s9heduled route ;etween definitely esta;lished airAortsF and 1D.E Military or naval servi9e< Provided, "hat if the lia;ility of the 9o:Aany is li:ited as herein Arovided, su9h lia;ility shall in no event ;e fiBed at an a:ount less than the reserve on the Aoli9y DeB9luding the reserve for any additional ;enefits in the event of death ;y a99ident or a99idental :eans or for ;enefits in the event of any tyAe of

disa;ilityE, less any inde;tedness on or se9ured ;y su9h Aoli9yF nor shall any Arovision of this se9tion aAAly to any Arovision in an industrial life insuran9e Aoli9y for additional ;enefits in the event of death ;y a99ident or a99idental :eans. 1"I"LE -5 1=!RI!BLE $#"R! "& 1&E . .G4. DaE #o insuran9e 9o:Aany authoriHed to transa9t ;usiness in the PhiliAAines shall issue, deliver, sell or use any varia;le 9ontra9t in the PhiliAAines, unless and until su9h 9o:Aany shall have satisfied the o::issioner that its finan9ial and general 9ondition and its :ethods of oAerations, in9luding the issue and sale of varia;le 9ontra9ts, are not and will not ;e haHardous to the Au;li9 or to its Aoli9y and 9ontra9t owners. #o foreign insuran9e 9o:Aany shall ;e authoriHed to issue, deliver or sell any varia;le 9ontra9t in the PhiliAAines, unless it is li>ewise authoriHed to do so ;y the laws of its do:i9ile. 1D;E "he ter: variable contract shall :ean any Aoli9y or 9ontra9t on either a grouA or on an individual ;asis issued ;y an insuran9e 9o:Aany Aroviding for ;enefits or other 9ontra9tual Aay:ents or values thereunder to vary so as to refle9t invest:ent results of any segregated Aortfolio of invest:ents or of a designated seAarate a99ount in whi9h a:ounts re9eived in 9onne9tion with su9h 9ontra9ts shall have ;een Ala9ed and a99ounted for seAarately and aAart fro: other invest:ents and a99ounts. "his 9ontra9t :ay also Arovide ;enefits or values in9idental thereto Aaya;le in fiBed or varia;le a:ounts, or ;oth. It shall not ;e dee:ed to ;e a se9urity or se9urities as defined in "he &e9urities !9t, as a:ended, or in the Invest:ent o:Aany

!9t, as a:ended, nor su;Ie9t to regulations under said !9ts. 1D9E In deter:ining the Cualifi9ations of a 9o:Aany reCuesting authority to issue, deliver, sell or use varia;le 9ontra9ts, the o::issioner shall always 9onsider the following< 1D-E "he history, finan9ial and general 9ondition of the 9o:Aany< Provided, "hat su9h 9o:Aany, if a foreign 9o:Aany, :ust have deAosited with the o::issioner for the ;enefit and se9urity of its varia;le 9ontra9t owners in the PhiliAAines, se9urities satisfa9tory to the o::issioner 9onsisting of ;onds of the 'overn:ent of the PhiliAAines or its instru:entalities with an a9tual :ar>et value of "wo :illion Aesos DP.,555,555.55EF 1D.E "he 9hara9ter, resAonsi;ility and fitness of the offi9ers and dire9tors of the 9o:AanyF and 1DGE "he law and regulation under whi9h the 9o:Aany is authoriHed in the state of do:i9ile to issue su9h 9ontra9ts. 1DdE If after noti9e and hearing, the o::issioner shall find that the 9o:Aany is Cualified to issue, deliver, sell or use varia;le 9ontra9ts in a99ordan9e with this ode and the regulations and rules issued thereunder, the 9orresAonding order of authoriHation shall ;e issued. !ny de9ision or order denying authority to issue, deliver, sell or use varia;le 9ontra9ts shall 9learly and distin9tly state the reasons and grounds on whi9h it is ;ased. 1&E . .G7. !ny insuran9e 9o:Aany issuing varia;le 9ontra9ts Aursuant to this ode :ay in its dis9retion issue 9ontra9ts Aroviding a 9o:;ination of fiBed a:ount and varia;le

a:ount of ;enefits and for oAtion lu:A-su: Aay:ent of ;enefits. 1&E . .35. Every varia;le 9ontra9t for: delivered or issued for delivery in the PhiliAAines, and every 9ertified for: eviden9ing varia;le ;enefits issued Aursuant to any su9h 9ontra9t on a grouA ;asis, and the aAAli9ation, rider and endorse:ent for:s aAAli9a;le thereto and used in 9onne9tion therewith, shall ;e su;Ie9t to the Arior aAAroval of the o::issioner. 1&E . .3-. Illustration of ;enefits Aaya;le under any varia;le 9ontra9t shall not in9lude or involve AroIe9tions of Aast invest:ent eBAerien9e into the future and shall 9onfor: with the rules and regulations Aro:ulgated ;y the o::issioner. 1&E . .3.. =aria;le 9ontra9ts :ay ;e issued on the industrial life ;asis, Arovided that the Aertinent Arovisions of this ode and of the rules and regulations of the o::issioner governing varia;le 9ontra9ts are 9o:Alied with in 9onne9tion with su9h 9ontra9ts. 1&E . .3G. Every life insuran9e 9o:Aany authoriHed under the Arovisions of this ode to issue, deliver, sell or use varia;le 9ontra9ts shall, in 9onne9tion with the sa:e, esta;lish one or :ore seAarate a99ounts to ;e >nown as seAarate varia;le a99ounts. !ll a:ounts re9eived ;y the 9o:Aany in 9onne9tion with any su9h 9ontra9ts whi9h are reCuired ;y the ter:s thereof, to ;e allo9ated or aAAlied to one or :ore designated seAarate varia;le a99ounts shall ;e Ala9ed in su9h designated a99ount or a99ounts. "he assets and lia;ilities of ea9h su9h seAarate varia;le a99ount shall at all ti:es ;e 9learly identifia;le and distinguisha;le fro: the assets and lia;ilities in all other a99ounts of the 9o:Aany. #otwithstanding any Arovision of law to the 9ontrary, the assets held in any su9h seAarate

varia;le a99ount shall not ;e 9hargea;le with lia;ilities arising out of any other ;usiness the 9o:Aany :ay 9ondu9t ;ut shall ;e held and aAAlied eB9lusively for the ;enefit of the owners or ;enefi9iaries of the varia;le 9ontra9ts aAAli9a;le thereto. In the event of the insolven9y of the 9o:Aany, the assets of ea9h su9h seAarate varia;le a99ount shall ;e aAAlied to the 9ontra9tual 9lai:s of the owners or ;enefi9iaries of the varia;le 9ontra9ts aAAli9a;le thereto. EB9eAt as otherwise sAe9ifi9ally Arovided ;y the 9ontra9t, no sale, eB9hange or other transfer of assets :ay ;e :ade ;y a 9o:Aany, ;etween any of its seAarate a99ounts or ;etween any other invest:ent a99ount and one or :ore of its seAarate a99ounts, unless in the 9ase of a transfer into a seAarate a99ount, su9h transfer is :ade solely to esta;lish the a99ount or to suAAort the oAeration of the 9ontra9ts with resAe9t to the seAarate a99ount to whi9h the transfer is :ade, or in 9ase of a transfer fro: a seAarate a99ount, su9h transfer would not 9ause the re:aining assets of the a99ount to ;e9o:e less than the reserves and other 9ontra9t lia;ilities with resAe9t to su9h seAarate a99ount. &u9h transfer, whether into or fro: a seAarate a99ount, shall ;e :ade ;y a transfer of 9ash, or ;y a transfer of se9urities having a valuation whi9h 9ould ;e readily deter:ined in the :ar>et Ala9e< Provided, "hat su9h transfer of se9urities is aAAroved ;y the o::issioner. "he o::issioner :ay authoriHe other transfers a:ong su9h a99ounts, if, in his oAinion, su9h transfers would not ;e ineCuita;le. !ll a:ounts and assets allo9ated to any su9h seAarate varia;le a99ount shall ;e owned ;y the 9o:Aany and with resAe9t to the sa:e the 9o:Aany shall not ;e nor hold itself out to ;e a trustee. 1&E . .33. !ny insuran9e 9o:Aany whi9h has esta;lished one or :ore seAarate varia;le a99ounts Aursuant to the Are9eding se9tion :ay invest and reinvest all or any

Aart of the assets allo9ated to any su9h a99ount in the se9urities and invest:ents authoriHed ;y &e9tions .53, .5,, .58 and .54 for any of the funds of an insuran9e 9o:Aany in su9h a:ount or a:ounts as :ay ;e aAAroved ;y the o::issioner. In addition thereto, su9h 9o:Aany :ay also invest in 9o::on sto9>s or other eCuities whi9h are listed on or ad:itted to trading in a se9urities eB9hange lo9ated in the PhiliAAines, or whi9h are Au;li9ly held and traded in the over-the-9ounter :ar>et as defined ;y the o::issioner and as to whi9h :ar>et Cuotations have ;een availa;le< Provided, ho ever, "hat no su9h 9o:Aany shall invest in eB9ess of ten Aer9ent D-5LE of the assets of any su9h seAarate varia;le a99ounts in any one 9orAoration issuing su9h 9o::on sto9>. "he assets and invest:ents of su9h seAarate varia;le a99ounts shall not ;e ta>en into a99ount in aAAlying the Cuantitative invest:ent li:itations aAAli9a;le to other invest:ents of the 9o:Aany. In the Aur9hase of 9o::on 9aAital sto9> or other eCuities, the insurer shall designate to the ;ro>er, or to the seller if the Aur9hase is not :ade through a ;ro>er, the sAe9ifi9 varia;le a99ount for whi9h the invest:ent is :ade. 1&E . .36. !ssets allo9ated to any seAarate varia;le a99ount shall ;e valued at their :ar>et value on the date of any valuation, or if there is no readily availa;le :ar>et value then in a99ordan9e with the ter:s of the varia;le 9ontra9t aAAli9a;le to su9h assets, or if there are no su9h 9ontra9t ter:s then in su9h :anner as :ay ;e Ares9ri;ed ;y the rules and regulations of the o::issioner. 1&E . .3,. "he reserve lia;ility for varia;le 9ontra9ts shall ;e esta;lished in a99ordan9e with a9tuarial Aro9edures that re9ogniHe the varia;le nature of the ;enefits Arovided, and shall ;e aAAroved ;y the o::issioner.

1"I"LE -1 L!IM& &E""LEME#" 1&E . .38. DaE #o insuran9e 9o:Aany doing ;usiness in the PhiliAAines shall refuse, without Iust 9ause, to Aay or settle 9lai:s arising under 9overages Arovided ;y its Aoli9ies, nor shall any su9h 9o:Aany engage in unfair 9lai: settle:ent Ara9ti9es. !ny of the following a9ts ;y an insuran9e 9o:Aany, if 9o::itted without Iust 9ause and Aerfor:ed with su9h freCuen9y as to indi9ate a general ;usiness Ara9ti9e, shall 9onstitute unfair 9lai: settle:ent Ara9ti9es< 1D-E 0nowingly :isreAresenting to 9lai:ants Aertinent fa9ts or Aoli9y Arovisions relating to 9overage at issueF 1D.E +ailing to a9>nowledge with reasona;le Aro:Atness Aertinent 9o::uni9ations with resAe9t to 9lai:s arising under its Aoli9iesF 1DGE +ailing to adoAt and i:Ale:ent reasona;le standards for the Aro:At investigation of 9lai:s arising under its Aoli9iesF 1D3E #ot atte:Ating in good faith to effe9tuate Aro:At, fair and eCuita;le settle:ent of 9lai:s su;:itted in whi9h lia;ility has ;e9o:e reasona;ly 9learF or 1D6E o:Aelling Aoli9yholders to institute suits to re9over a:ounts due under its Aoli9ies ;y offering without Iustifia;le reason su;stantially less than the a:ounts ulti:ately re9overed in suits ;rought ;y the:. 1D;E Eviden9e as to nu:;ers and tyAes of valid and Iustifia;le 9o:Alaints to the o::issioner against an insuran9e 9o:Aany, and the o::issioner@s 9o:Alaint eBAerien9e with other insuran9e

9o:Aanies writing si:ilar lines of insuran9e shall ;e ad:issi;le in eviden9e in an ad:inistrative or Iudi9ial Aro9eeding ;rought under this se9tion. 1D9E If it is found, after noti9e and an oAAortunity to ;e heard, that an insuran9e 9o:Aany has violated this se9tion, ea9h instan9e of non9o:Alian9e with AaragraAh DaE :ay ;e treated as a seAarate violation of this se9tion and shall ;e 9onsidered suffi9ient 9ause for the susAension or revo9ation of the 9o:Aany@s 9ertifi9ate of authority. 1&E . .34. "he Aro9eeds of a life insuran9e Aoli9y shall ;e Aaid i::ediately uAon :aturity of the Aoli9y, unless su9h Aro9eeds are :ade Aaya;le in install:ents or as an annuity, in whi9h 9ase the install:ents, or annuities shall ;e Aaid as they ;e9o:e due< Provided, ho ever, "hat in the 9ase of a Aoli9y :aturing ;y the death of the insured, the Aro9eeds thereof shall ;e Aaid within siBty D,5E days after Aresentation of the 9lai: and filing of the Aroof of death of the insured. Refusal or failure to Aay the 9lai: within the ti:e Ares9ri;ed herein will entitle the ;enefi9iary to 9olle9t interest on the Aro9eeds of the Aoli9y for the duration of the delay at the rate of twi9e the 9eiling Ares9ri;ed ;y the Monetary Board, unless su9h failure or refusal to Aay is ;ased on the ground that the 9lai: is fraudulent. 1"he Aro9eeds of the Aoli9y :aturing ;y the death of the insured Aaya;le to the ;enefi9iary shall in9lude the dis9ounted value of all Are:iu:s Aaid in advan9e of their due dates, ;ut are not due and Aaya;le at :aturity. 1&E . .37. "he a:ount of any loss or da:age for whi9h an insurer :ay ;e lia;le, under any Aoli9y other than life insuran9e Aoli9y, shall ;e Aaid within thirty DG5E days

after Aroof of loss is re9eived ;y the insurer and as9ertain:ent of the loss or da:age is :ade either ;y agree:ent ;etween the insured and the insurer or ;y ar;itrationF ;ut if su9h as9ertain:ent is not had or :ade within siBty D,5E days after su9h re9eiAt ;y the insurer of the Aroof of loss, then the loss or da:age shall ;e Aaid within ninety D75E days after su9h re9eiAt. Refusal or failure to Aay the loss or da:age within the ti:e Ares9ri;ed herein will entitle the assured to 9olle9t interest on the Aro9eeds of the Aoli9y for the duration of the delay at the rate of twi9e the 9eiling Ares9ri;ed ;y the Monetary Board, unless su9h failure or refusal to Aay is ;ased on the ground that the 9lai: is fraudulent. 1&E . .65. In 9ase of any litigation for the enfor9e:ent of any Aoli9y or 9ontra9t of insuran9e, it shall ;e the duty of the o::issioner or the ourt, as the 9ase :ay ;e, to :a>e a finding as to whether the Aay:ent of the 9lai: of the insured has ;een unreasona;ly denied or withheldF and in the affir:ative 9ase, the insuran9e 9o:Aany shall ;e adIudged to Aay da:ages whi9h shall 9onsist of attorney@s fees and other eBAenses in9urred ;y the insured Aerson ;y reason of su9h unreasona;le denial or withholding of Aay:ent Alus interest of twi9e the 9eiling Ares9ri;ed ;y the Monetary Board of the a:ount of the 9lai: due the insured, fro: the date following the ti:e Ares9ri;ed in &e9tion .34 or in &e9tion .37, as the 9ase :ay ;e, until the 9lai: is fully satisfied< Provided, "hat failure to Aay any su9h 9lai: within the ti:e Ares9ri;ed in said se9tions shall ;e 9onsidered prima facie eviden9e of unreasona;le delay in Aay:ent. 1&E . .6-. It is unlawful to< 1DaE Present or 9ause to ;e Aresented any fraudulent 9lai: for the Aay:ent of a loss under a 9ontra9t of insuran9eF and

1D;E +raudulently AreAare, :a>e or su;s9ri;e any writing with intent to Aresent or use the sa:e, or to allow it to ;e Aresented in suAAort of any su9h 9lai:. !ny Aerson who violates this se9tion shall ;e Aunished ;y a fine not eB9eeding twi9e the a:ount 9lai:ed or i:Arison:ent of two D.E years, or ;oth, at the dis9retion of the 9ourt. 1"I"LE -. 1ER!MI#!"I$# $+ $MP!#IE& 1&E . .6.. "he o::issioner shall reCuire every insuran9e 9o:Aany doing ;usiness in the PhiliAAines to >eeA its ;oo>s, re9ords, a99ounts and vou9hers in su9h :anner that he or his authoriHed reAresentatives :ay readily verify its annual state:ents and as9ertain whether the 9o:Aany is solvent and has 9o:Alied with the Arovisions of this ode or the 9ir9ulars, instru9tions, rulings or de9isions of the o::issioner. 1&E . .6G. "he o::issioner shall at least on9e a year and whenever he 9onsiders the Au;li9 interest so de:ands, 9ause an eBa:ination to ;e :ade into the affairs, finan9ial 9ondition and :ethod of ;usiness of every insuran9e 9o:Aany authoriHed to transa9t ;usiness in the PhiliAAines and of any other Aerson, fir: or 9orAoration :anaging the affairs andKor AroAerty of su9h insuran9e 9o:Aany. &u9h 9o:Aany, as well as su9h :anaging Aerson, fir: or 9orAoration, shall su;:it to the eBa:iner all su9h ;oo>s, AaAers and se9urities as he :ay reCuire and su9h eBa:iner shall also have the Aower to eBa:ine the offi9ers of su9h 9o:Aany under oath tou9hing its ;usiness and finan9ial 9ondition, and the authority to transa9t ;usiness in the PhiliAAines of any su9h 9o:Aany shall ;e susAended ;y the o::issioner if su9h eBa:ination is refused and su9h 9o:Aany shall not thereafter ;e allowed to transa9t further

;usiness in the PhiliAAines until it has fully 9o:Alied with the Arovisions of this se9tion. 1'overn:ent-owned or -9ontrolled 9orAorations or entities engaged in so9ial or Arivate insuran9e shall si:ilarly ;e su;Ie9t to su9h eBa:ination ;y the o::issioner unless their resAe9tive 9harters otherwise Arovide. 1"I"LE -G 1&U&PE#&I$# $R RE=$ !"I$# $+ !U"($RI"* 1&E . .63. If the o::issioner is of the oAinion uAon eBa:ination of other eviden9e that any do:esti9 or foreign insuran9e 9o:Aany is in an unsound 9ondition, or that it has failed to 9o:Aly with the Arovisions of law or regulations o;ligatory uAon it, or that its 9ondition or :ethod of ;usiness is su9h as to render its Aro9eedings haHardous to the Au;li9 or to its Aoli9yholders, or that its net worth reCuire:ent, in the 9ase of a do:esti9 sto9> 9o:Aany, or its availa;le 9ash assets, in the 9ase of a do:esti9 :utual 9o:Aany, or its se9urity deAosits, in the 9ase of a foreign 9o:Aany, is i:Aaired or defi9ient, or that the :argin of solven9y reCuired of su9h 9o:Aany is defi9ient, the o::issioner is authoriHed to susAend or revo>e all 9ertifi9ates of authority granted to su9h insuran9e 9o:Aany, its offi9ers and agents, and no new ;usiness shall thereafter ;e done ;y su9h 9o:Aany or for su9h 9o:Aany ;y its agent in the PhiliAAines while su9h susAension, revo9ation or disa;ility 9ontinues or until its authority to do ;usiness is restored ;y the o::issioner. Before restoring su9h authority, the o::issioner shall reCuire the 9o:Aany 9on9erned to su;:it to hi: a ;usiness Alan showing the 9o:Aany@s esti:ated re9eiAts and dis;urse:ents, as well as the ;asis therefor, for the neBt su99eeding three DGE years.

1"I"LE -3 1!PP$I#"ME#" $+ $#&ER=!"$R 1&E . .66. If at any ti:e ;efore, or after, the susAension or revo9ation of the 9ertifi9ate of authority of an insuran9e 9o:Aany as Arovided in the Are9eding title, the o::issioner finds that su9h 9o:Aany is in a state of 9ontinuing ina;ility or unwillingness to :aintain a 9ondition of solven9y or liCuidity dee:ed adeCuate to Arote9t the interest of Aoli9yholders and 9reditors, he :ay aAAoint a 9onservator to ta>e 9harge of the assets, lia;ilities, and the :anage:ent of su9h 9o:Aany, 9olle9t all :oneys and de;ts due to said 9o:Aany and eBer9ise all Aowers ne9essary to Areserve the assets of said 9o:Aany, reorganiHe the :anage:ent thereof, and restore its via;ility. "he said 9onservator shall have the Aower to overrule or revo>e the a9tions of the Arevious :anage:ent and ;oard of dire9tors of the said 9o:Aany, any Arovision of law, or of the arti9les of in9orAoration or ;ylaws of the 9o:Aany, to the 9ontrary notwithstanding, and su9h other Aowers as the o::issioner shall dee: ne9essary. 1"he 9onservator :ay ;e another insuran9e 9o:Aany doing ;usiness in the PhiliAAines, any offi9er or offi9ers of su9h 9o:Aany, or any other 9o:Aetent and Cualified Aerson, fir: or 9orAoration. "he re:uneration of the 9onservator and other eBAenses attendant to the 9onservation shall ;e ;orne ;y the insuran9e 9o:Aany 9on9erned. 1"he 9onservator shall not ;e su;Ie9t to any a9tion, 9lai: or de:and ;y, or lia;ility to, any Aerson in resAe9t of anything done or o:itted to ;e done in good faith in the eBer9ise, or in 9onne9tion with the eBer9ise, of the Aowers 9onferred on the 9onservator.

1"he 9onservator aAAointed shall reAort and ;e resAonsi;le to the o::issioner until su9h ti:e as the o::issioner is satisfied that the insuran9e 9o:Aany 9an 9ontinue to oAerate on its own and the 9onservatorshiA shall li>ewise ;e ter:inated should the o::issioner, on the ;asis of the reAort of the 9onservator or of his own findings, deter:ine that the 9ontinuan9e in ;usiness of the insuran9e 9o:Aany would ;e haHardous to Aoli9yholders and 9reditors, in whi9h 9ase the Arovisions of "itle -6 shall aAAly. 1#o insuran9e 9o:Aany, life or non-life, or any Arofessional reinsurer, ordered to ;e liCuidated ;y the o::issioner under the Arovisions hereunder :ay ;e reha;ilitated or authoriHed to transa9t anew, insuran9e or reinsuran9e ;usiness, as the 9ase :ay ;e. 1"I"LE -6 1PR$ EE)I#'& UP$# I#&$L=E# * 1&E . .6,. /henever, uAon eBa:ination or other eviden9e, it shall ;e dis9losed that the 9ondition of any insuran9e 9o:Aany doing ;usiness in the PhiliAAines is one of insolven9y, or that its 9ontinuan9e in ;usiness would ;e haHardous to its Aoli9yholders and 9reditors, the o::issioner shall forthwith order the 9o:Aany to 9ease and desist fro: transa9ting ;usiness in the PhiliAAines and shall designate a re9eiver to i::ediately ta>e 9harge of its assets and lia;ilities, as eBAeditiously as Aossi;le 9olle9t and gather all the assets and ad:inister the sa:e for the ;enefit of its Aoli9yholders and 9reditors, and eBer9ise all the Aowers ne9essary for these AurAoses in9luding, ;ut not li:ited to, ;ringing suits and fore9losing :ortgages in the na:e of the insuran9e 9o:Aany.

1"he o::issioner shall thereuAon deter:ine within ninety D75E days whether the insuran9e 9o:Aany :ay ;e reorganiHed or otherwise Ala9ed in su9h 9ondition so that it :ay ;e Aer:itted to resu:e ;usiness with safety to its Aoli9yholders and 9reditors and shall Ares9ri;e the 9onditions under whi9h su9h resu:Ation of ;usiness shall ta>e Ala9e as well as the ti:e for fulfill:ent of su9h 9onditions. In su9h 9ase, the eBAenses and fees in the 9olle9tion and ad:inistration of the insuran9e 9o:Aany shall ;e deter:ined ;y the o::issioner and shall ;e Aaid out of the assets of su9h 9o:Aany. 1If the o::issioner shall deter:ine and 9onfir: within the said Aeriod that the insuran9e 9o:Aany is insolvent, as defined hereunder, or 9annot resu:e ;usiness with safety to its Aoli9yholders and 9reditors, he shall, if the Au;li9 interest reCuires, order its liCuidation, indi9ate the :anner of its liCuidation and aAArove a liCuidation Alan and i:Ale:ent it i::ediately. "he o::issioner shall designate a 9o:Aetent and Cualified Aerson as liCuidator who shall ta>e over the fun9tions of the re9eiver Areviously designated and, with all 9onvenient sAeed, reinsure all its outstanding Aoli9ies, 9onvert the assets of the insuran9e 9o:Aany to 9ash, or sell, assign or otherwise disAose of the sa:e to the Aoli9yholders, 9reditors and other Aarties for the AurAose of settling the lia;ilities or Aaying the de;ts of su9h 9o:Aany and he :ay, in the na:e of the 9o:Aany, institute su9h a9tions as :ay ;e ne9essary in the aAAroAriate 9ourt to 9olle9t and re9over a99ounts and assets of the insuran9e 9o:Aany, and to do su9h other a9ts as :ay ;e ne9essary to 9o:Alete the liCuidation as ordered ;y the o::issioner. 1"he Arovisions of any law to the notwithstanding, the a9tions o::issioner under this se9tion final and eBe9utory, and 9an ;e set 9ontrary of the shall ;e aside ;y

the 9ourt uAon Aetition ;y the 9o:Aany and only if there is 9onvin9ing Aroof that the a9tion is Alainly ar;itrary and :ade in ;ad faith. "he o::issioner, through the &oli9itor 'eneral, shall then file the 9orresAonding answer re9iting the Aro9eeding ta>en and Araying the assistan9e of the 9ourt in the liCuidation of the 9o:Aany. #o restraining order or inIun9tion shall ;e issued ;y the 9ourt enIoining the o::issioner fro: i:Ale:enting his a9tions under this se9tion, unless there is 9onvin9ing Aroof that the a9tion of the o::issioner is Alainly ar;itrary and :ade in ;ad faith and the Aetitioner or Alaintiff files with the ler> or Judge of the ourt in whi9h the a9tion is Aending a ;ond eBe9uted in favor of the o::issioner in an a:ount to ;e fiBed ;y the 9ourt. "he restraining order or inIun9tion shall ;e refused or, if granted, shall ;e dissolved uAon filing ;y the o::issioner, if he so desires, of a ;ond in an a:ount twi9e the a:ount of the ;ond of the Aetitioner or Alaintiff 9onditioned that it will Aay the da:ages whi9h the Aetition or Alaintiff :ay suffer ;y the refusal or the dissolution of the inIun9tion. "he Arovisions of Rule 64 of the #ew Rules of ourt insofar as they are aAAli9a;le shall govern the issuan9e and dissolution of the restraining order or inIun9tion 9onte:Alated in this se9tion. 1!ll Aro9eedings under this title shall ;e given Areferen9e in the 9ourts. "he o::issioner shall not ;e reCuired to Aay any fee to any Au;li9 offi9er for filing, re9ording, or in any :anner authenti9ating any AaAer or instru:ent relating to the Aro9eedings. 1!s used in this title, the ter: Insolvency shall :ean the ina;ility of an insuran9e 9o:Aany to Aay its lawful o;ligations as they fall due in the usual and ordinary 9ourse of ;usiness as :ay ;e shown ;y its

failure to :aintain the solven9y reCuire:ents under &e9tion .55 of this ode. 1&E . .68. "he re9eiver or the liCuidator, as the 9ase :ay ;e, designated under the Arovisions of this title, shall not ;e su;Ie9t to any a9tion, 9lai: or de:and ;y, or lia;ility to, any Aerson in resAe9t of anything done or o:itted to ;e done in good faith in the eBer9ise, or in 9onne9tion with the eBer9ise, of the Aowers 9onferred on su9h re9eiver or liCuidator. 1"I"LE -, 1 $#&$LI)!"I$# !#) MER'ER $+ I#&UR!# E $MP!#IE& 1&E . .64. UAon Arior noti9e to the o::issioner, two D.E or :ore do:esti9 insuran9e 9o:Aanies, a9ting through their resAe9tive ;oards of dire9tors, :ay negotiate to :erge into a single 9orAoration whi9h shall ;e one of the 9onstituent 9orAorations, or 9onsolidate into a single 9orAoration whi9h shall ;e a new 9orAoration to ;e for:ed ;y the 9onsolidation. ! 9o::on agree:ent of the AroAosed :erger or 9onsolidation shall ;e drawn uA for su;:ission to the sto9>holders or :e:;ers of the 9onstituent 9o:Aanies for adoAtion and aAAroval in a99ordan9e with the Arovisions of the resAe9tive ;ylaws of the 9onstituent 9o:Aanies and all eBisting laws that :ay ;e Aertinent. 1&E . .67. &u9h agree:ent shall in9lude, aside fro: the AroAosed :erger or 9onsolidation, Arovisions relative to the :anner of transfer of assets to and assu:Ation of lia;ilities ;y the a;sor;ing or a9Cuiring 9o:Aany fro: the a;sor;ed or dissolved 9o:Aany or 9o:AaniesF the AroAosed arti9les of :erger or 9onsolidation and ;ylaws of the surviving or a9Cuiring

9o:AanyF the 9orAorate na:e to ;e adoAted whi9h should not ;e that of any other eBisting 9o:Aany transa9ting si:ilar ;usiness or one so si:ilar as to ;e 9al9ulated to :islead the Au;li9F the rights of the sto9>holders or :e:;ers of the a;sor;ed or dissolved 9o:AaniesF date of effe9tivity of the :erger or 9onsolidationF and su9h Aarti9ulars as :ay ;e ne9essary to eBAlain and :a>e :anifest the o;Ie9ts and AurAoses of the a;sor;ing or a9Cuiring 9o:Aany. 1&E . .,5. UAon eBe9ution of su9h agree:ent to :erge or 9onsolidate ;y and ;etween or a:ong the ;oards of dire9tors of the 9onstituent 9o:Aanies, noti9e thereof shall ;e :ailed i::ediately to their Aoli9yholders and 9reditors. "he 9o:Aany or 9o:Aanies to ;e a;sor;ed or dissolved shall dis9harge all its a99rued lia;ilitiesF otherwise, su9h lia;ilities shall, with the 9onsent of its 9reditors, ;e transferred to and assu:ed ;y the a;sor;ing or a9Cuiring 9o:Aany, or su9h lia;ilities ;e reinsured ;y the latter. In the 9ase of su9h Aoli9ies as are su;Ie9t to 9an9ellation ;y the 9o:Aany or 9o:Aanies to ;e a;sor;ed or dissolved, sa:e :ay ;e 9an9elled Aursuant to the ter:s thereof in lieu of su9h transfer, assu:Ation, or reinsuran9e. 1&E . .,-. UAon aAAroval or adoAtion in the :eetings of the sto9>holders or :e:;ers 9alled for the AurAose in ea9h of the 9onstituent 9o:Aanies of the agree:ent to :erge or 9onsolidate, all sto9>holders or :e:;ers dissenting or o;Ie9ting to the :erger or 9onsolidation shall ;e Aaid the value of their shares ;y the 9o:Aany 9on9erned in a99ordan9e with the ;ylaws thereof. 1&E . .,.. UAon aAAroval or adoAtion of the agree:ent to :erge or 9onsolidate ;y the sto9>holders or :e:;ers of the 9onstituent 9o:Aanies, the 9orresAonding

arti9les of :erger or of 9onsolidation shall ;e duly eBe9uted ;y the Aresidents and attested ;y the 9orAorate se9retaries and shall ;ear the 9orAorate seals of the :erging or 9onsolidating 9o:Aanies setting forth< 1DaE "he Alan of :erger or the Alan of 9onsolidationF 1D;E !s to ea9h 9orAoration, the nu:;er of shares outstanding, or in 9ase of :utual 9orAorations, the nu:;er of :e:;ersF and 1D9E !s to ea9h 9orAoration, the nu:;er of shares or :e:;ers voted for and against su9h Alan, resAe9tively. "hereafter, a 9ertified 9oAy of su9h arti9les of :erger or 9onsolidation, together with a 9ertifi9ate of aAAroval or adoAtion ;y the sto9>holders or :e:;ers of su9h arti9les of :erger or 9onsolidation, verified ;y affidavits of su9h offi9ers and under the seal of the 9onstituent 9o:Aanies, shall ;e su;:itted to the o::issioner, together with su9h other AaAers or do9u:ents whi9h the o::issioner :ay reCuire, for his 9onsideration. 1&E . .,G. "he arti9les of :erger or of 9onsolidation, signed and verified as hereina;ove reCuired, shall ;e filed with the &e9urities and EB9hange o::ission for its eBa:ination and aAAroval. 1&E . .,3. UAon re9eiAt fro: the &e9urities and EB9hange o::ission of the 9ertifi9ate of :erger or of 9onsolidation, the 9onstituent 9o:Aanies shall surrender to the o::issioner their resAe9tive 9ertifi9ates of authority to transa9t insuran9e ;usiness. "he a;sor;ing or surviving 9o:Aany in 9ase of :erger, or the newly for:ed 9o:Aany in 9ase of 9onsolidation, shall i::ediately file with the o::issioner the 9orresAonding aAAli9ation for issuan9e of a new 9ertifi9ate of authority to transa9t insuran9e ;usiness,

together with a 9ertified 9oAy of the 9ertifi9ate of :erger or of 9onsolidation, and of the 9ertifi9ate of in9rease of sto9>s, if there is any, issued ;y the &e9urities and EB9hange o::ission. 1&E . .,6. #othing in this title shall ;e 9onstrued to enlarge the Aowers of the a;sor;ing or surviving 9o:Aany in 9ase of :erger, or the newly for:ed 9o:Aany in 9ase of 9onsolidation, eB9eAt those 9onferred ;y the 9ertifi9ate of :erger or of 9onsolidation and the arti9les of :erger or of 9onsolidation, or the a:ended arti9les of in9orAoration, as registered with the &e9urities and EB9hange o::ission. 1&E . .,,. #o dire9tor, offi9er, or sto9>holder of any su9h 9onstituent 9o:Aanies shall re9eive any fee, 9o::ission, 9o:Aensation, or other valua;le 9onsideration whatsoever, dire9tly or indire9tly, or in any :anner aiding, Aro:oting or assisting in su9h :erger or 9onsolidation. 1&E . .,8. "he :erger or 9onsolidation of 9o:Aanies under this ode shall ;e su;Ie9t to the Arovisions of the orAoration ode, and, in those 9ases sAe9ified in ReAu;li9 !9t #o. 6366, as a:ended, ;e further su;Ie9t to the Arovisions of said law. 1"I"LE -8 1MU"U!LIM!"I$# $+ &"$ 0 LI+E I#&UR!# E $MP!#IE& 1&E . .,4. !ny do:esti9 sto9> life insuran9e 9o:Aany doing ;usiness in the PhiliAAines :ay 9onvert itself into an in9orAorated :utual life insurer. "o that end it :ay Arovide and 9arry out a Alan for the a9Cuisition of the outstanding shares of its 9aAital sto9> for the ;enefit of its Aoli9yholders, or any 9lass or 9lasses of its

Aoli9yholders, ;y 9o:Alying reCuire:ents of this 9haAter.

with

the

1&E .,7. &u9h Alan shall in9lude aAAroAriate Aro9eedings for a:ending the insurer@s arti9les of in9orAoration to give effe9t to the a9Cuisition, ;y said insurer, for the ;enefit of its Aoli9yholders or any 9lass or 9lasses thereof, of the outstanding shares of its 9aAital sto9> and the 9onversion of the insurer fro: a sto9> 9orAoration into a nonsto9> 9orAoration for the ;enefit of its :e:;ers. "he :e:;ers of su9h nonsto9> 9orAoration shall ;e the Aoli9yholders fro: ti:e to ti:e of the 9lass or 9lasses for whose ;enefit the sto9> of the insurer was a9Cuired, and the Aoli9yholders of su9h other 9lass or 9lasses as :ay ;e sAe9ified in su9h 9orAoration@s arti9les of in9orAoration as they :ay ;e a:ended fro: ti:e to ti:e. &u9h Alan shall ;e< 1DaE !doAted ;y a vote of a :aIority of the dire9torsF 1D;E !AAroved ;y the vote of the holders of at least a :aIority of the outstanding shares at a sAe9ial :eeting of shareholders 9alled for that AurAose, or ;y the written 9onsent of su9h shareholdersF 1D9E &u;:itted to the o::issioner and aAAroved ;y hi: in writingF 1DdE !AAroved ;y a :aIority vote of all the Aoli9yholders of the 9lass or 9lasses for whose ;enefit the sto9> is to ;e a9Cuired voting at an ele9tion ;y the Aoli9yholders 9alled for that AurAose, su;Ie9t to the Arovisions of &e9tion .8-. "he ter:s policyholder or policyholders as used in this 9haAter shall ;e dee:ed to :ean the Aerson or Aersons insured under an individual Aoli9y of life insuran9e, or of health and a99ident insuran9e, or of any 9o:;ination of life, health and a99ident insuran9e. "hey

shall also in9lude the Aerson or Aersons to who: any annuity or Aure endow:ent is Aresently or ArosAe9tively Aaya;le ;y the ter:s of an individual annuity or Aure endow:ent 9ontra9t, eB9eAt where the Aoli9y or 9ontra9t de9lares so:e other Aerson to ;e the owner or holder thereof, in whi9h 9ase su9h other Aerson shall ;e dee:ed Aoli9yholder. In any 9ase where a Aoli9y or 9ontra9t na:es two or :ore Aersons as Ioint insured, Aayees, owners or holders thereof, the Aersons so na:ed shall ;e dee:ed 9olle9tively to ;e one D-E Aoli9yholder for the AurAose of this 9haAter. In any 9ase where a Aoli9y or 9ontra9t shall have ;een assigned ;y assign:ent a;solute on its fa9e to an assignee other than the insurer, and su9h assign:ent shall have ;een filed at the Arin9iAal offi9e of the insurer at least thirty DG5E days Arior to the date of any ele9tion or :eeting referred to in this 9haAter, then su9h assignee shall ;e dee:ed at su9h ele9tion or :eeting to ;e the Aoli9yholder. +or the AurAose of this 9haAter the ter:s policyholder and policyholders in9lude the e:Aloyer to who:, or a Aresident, se9retary or other eBe9utive offi9er of any 9orAoration or asso9iation to whi9h a :aster grouA Aoli9y has ;een issued, ;ut eB9lude the holders of 9ertifi9ates or Aoli9ies issued under or in 9onne9tion with a :aster grouA Aoli9y. Benefi9iaries under un:atured 9ontra9ts shall not as su9h ;e dee:ed to ;e Aoli9yholdersF and 1DeE +iled with the o::issioner after having ;een aAAroved as Arovided in this se9tion. 1&E . .85. "he o::issioner shall eBa:ine the Alan su;:itted to hi: under the Arovisions of su;AaragraAh D9E of &e9tion .,7. (e shall not aAArove su9h Alan unless in his oAinion the rights and interests of the insurer, its Aoli9yholders and shareholders

are Arote9ted nor unless he is satisfied that the Alan will ;e fair and eCuita;le in its oAeration. 1&E . .8-. "he ele9tion Ares9ri;ed ;y su;AaragraAh DdE of &e9tion .,7 shall ;e 9alled ;y the ;oard of dire9tors or the Aresident, and every Aoli9yholder of the 9lass or 9lasses for whose ;enefit the sto9> is to ;e a9Cuired, whose insuran9e shall have ;een in for9e for at least one D-E year Arior to su9h ele9tion shall have one vote, regardless of the nu:;er of Aoli9ies or a:ount of insuran9e he holds, and regardless of whether su9h Aoli9ies are Aoli9ies of life insuran9e or Aoli9ies of health and a99ident insuran9e or annuity 9ontra9ts. #oti9e of su9h ele9tion shall ;e given to Aoli9yholders entitled to vote ;y :ail fro: the Arin9iAal offi9e of su9h insurer at least thirty DG5E days Arior to the date set for su9h ele9tion, in a sealed enveloAe, Aostage AreAaid, addressed to ea9h su9h Aoli9yholder at his last >nown address. 1=oting shall ;e ;y one of the following :ethods< 1DaE !t a :eeting of su9h Aoli9yholders, held Aursuant to su9h noti9e, ;y ;allot in Aerson or ;y AroBy. 1D;E If not ;y the :ethod des9ri;ed in the Are9eding su;AaragraAh, then ;y :ail Aursuant to a Aro9edure and on for:s to ;e Ares9ri;ed ;y su9h Alan. 1&u9h ele9tion shall ;e 9ondu9ted under the dire9tion and suAervision of three DGE i:Aartial and disinterested insAe9tors aAAointed ;y the insurer and aAAroved ;y the o::issioner. In 9ase any Aerson aAAointed as insAe9tor fails to aAAear at su9h :eeting or fails or refuses to a9t at su9h ele9tion, the va9an9y, if o99urring in advan9e of the 9onvening of the :eeting or

in advan9e of the oAening of the :ail vote, :ay ;e filled in the :anner Ares9ri;ed for the aAAoint:ent of insAe9tors and, if o99urring at the :eeting or during the 9anvass of the :ail vote, :ay ;e filled ;y the Aerson a9ting as 9hair:an of said :eeting or designated for that AurAose in su9h Alan. "he de9ision, a9t or 9ertifi9ate of a :aIority of the insAe9tors shall ;e effe9tive in all resAe9ts as the de9ision, a9t or 9ertifi9ate of all. "he insAe9tors of ele9tion shall deter:ine the nu:;er of Aoli9yholders, the voting Aower of ea9h, the Aoli9yholders reAresented at the :eeting or voting ;y :ail, the eBisten9e of a Cuoru: and the authenti9ity, validity and effe9t of AroBies. "hey shall re9eive votes, hear and deter:ine all 9hallenges and Cuestions in any way arising in 9onne9tion with the right to vote, 9ount and ta;ulate all votes, deter:ine the result, and do su9h other a9ts as are AroAer to 9ondu9t the vote with fairness to all Aoli9yholders. "he insAe9tors of ele9tion shall, ;efore 9o::en9ing Aerfor:an9e of their duties, su;s9ri;e to and file with the insurer and with the o::issioner an oath that they, and ea9h of the:, will Aerfor: their duties i:Aartially, in good faith, to the ;est of their a;ility and as eBAeditiously as is Ara9ti9a;le. $n the reCuest of the insurer, the o::issioner, a Aoli9yholder or his AroBy, the insAe9tors shall :a>e a reAort in writing of any 9hallenge or Cuestion or :atter deter:ined ;y the: and eBe9ute a 9ertifi9ate of any fa9t found ;y the:. "hey shall also 9ertify the result of su9h vote to the insurer and to the o::issioner. !ny reAort or 9ertifi9ate :ade ;y the: shall ;e prima facie eviden9e of fa9ts stated therein. !ll ne9essary eBAenses in9urred in 9onne9tion with su9h ele9tion shall ;e Aaid ;y the insurer. +or the AurAose of this se9tion, a Cuoru: shall 9onsist of five Aer9ent D6LE of the Aoli9yholders of su9h insurer entitled to vote at su9h ele9tion.

1&E . .8.. In 9arrying out any su9h Alan, the insurer :ay a9Cuire any shares of its own sto9> ;y gift, ;eCuest or Aur9hase. !ny shares so a9Cuired shall, unless as a result of su9h a9Cuisition all of the shares of the insurer shall have ;een a9Cuired, ;e a9Cuired in trust for the Aoli9yholders of the 9lass or 9lasses for whose ;enefit the Alan Arovides that the sto9> of the insurer shall ;e a9Cuired as hereinafter Arovided. &u9h shares shall ;e assigned and transferred on the ;oo>s of su9h insurer and aAAroved ;y the o::issioner. &u9h trustees shall hold su9h sto9> in trust until all of the outstanding shares of 9aAital sto9> of su9h insurer have ;een a9Cuired, ;ut for not longer than thirty DG5E years with su9h eBtensions of not :ore than five D6E years ea9h as :ay ;e granted ;y the o::issioner. &u9h eBtensions :ay ;e granted ;y the o::issioner if the Alan so Arovides and if in his oAinion the Alan of a9Cuisition of all of su9h sto9> 9an ;e 9o:Aleted within a reasona;le Aeriod. &u9h trustees shall vote su9h sto9> at all 9orAorate :eetings at whi9h sto9>holders have the right to vote. /hen all the outstanding shares of 9aAital sto9> of su9h insurer have ;een a9Cuired, all said shares shall ;e 9an9elled, the 9ertifi9ate of a:end:ent of the insurer@s arti9les of in9orAoration giving effe9t thereto shall ;e filed in a99ordan9e with the Arovisions of the orAoration ode, and the insurer shall ;e9o:e a nonsto9> 9orAoration for the Arofit of its :e:;ers and su9h trust shall thereuAon ter:inate. "hereafter su9h 9orAoration shall ;e 9ondu9ted for the :utual ;enefit, rata;ly, of its Aoli9yholders of the 9lass or 9lasses for whose ;enefit the sto9> was a9Cuired and shall have Aower to issue non-assessa;le Aoli9ies on a reserve ;asis su;Ie9t to all Arovisions of law aAAli9a;le to in9orAorated life insurers issuing non-assessa;le Aoli9ies on a reserve ;asis. Poli9ies so issued :ay ;e uAon the ;asis of full or Aartial Aarti9iAation

therein as agreed ;etween the insurer and the insured. 1UAon the ter:ination of any su9h voting trust, either in a99ordan9e with its ter:s or as hereina;ove Arovided, su9h Alan of :utualiHation shall ter:inate, unless theretofore 9o:Aleted. UAon su9h ter:ination, unless the Alan of :utualiHation Arovides for the disAosition of the shares a9Cuired ;y the insurer under su9h Alan or for the disAosition of the Aro9eeds thereof, the shares held ;y su9h trustees shall ;e disAosed of in a99ordan9e with an order of the 9ourt of 9o:Aetent Iurisdi9tion in the Iudi9ial distri9t in whi9h is lo9ated the Arin9iAal offi9e of su9h insurer, :ade uAon a verified Aetition of the o::issioner. 1&E . .8G. !ny su9h Alan of :utualiHation :ay Arovide for the 9reation of a voting trust under a trust agree:ent for the holding and voting ;y three DGE or :ore trustees of any Aortion or all of the shares of the insurer not reCuired uAon the adoAtion of su9h Alan. "he voting trustees shall ;e na:ed in a99ordan9e with su9h Alan or, if no Arovision is :ade therein for the na:ing of su9h trustees, then ;y the insurer. "he voting trust agree:ent and voting trustees shall ;e su;Ie9t to the aAAroval of the o::issioner. !ny or all of the trustees under su9h voting trust agree:ent :ay ;e the sa:e Aerson or Aersons as any or all of the trustees referred to in &e9tion .8.. &u9h voting trust agree:ent shall Arovide that in the event of a9Cuisition ;y the insurer of any of the shares of sto9> held thereunder in a99ordan9e with the Arovisions of the Alan, su9h shares so a9Cuired together with the voting rights thereof shall ;e transferred ;y the trustees na:ed under the Arovisions of this se9tion to the trustees na:ed under the Arovisions of &e9tion .8.. !ny voting trust agree:ent 9reated Aursuant to the Arovisions of this se9tion :ay ;e :ade irrevo9a;le for

not longer than thirty DG5E years and thereafter until the ter:ination of the trust Arovided for in &e9tion .8.. "he trust 9reated Aursuant to the Arovisions of this se9tion shall ter:inate in any event uAon ter:ination of the trust Arovided for in &e9tion .8.. UAon the ter:ination of the trust 9reated Aursuant to the Arovisions of this se9tion, any shares held in su9h trust shall revert to the Aersons entitled thereto ;y law. 1&E . .83. Every Aay:ent for the a9Cuisition of any shares of the 9aAital sto9> of su9h insurer, the Aur9hase Ari9e of whi9h is not fiBed ;y su9h Alan, shall ;e su;Ie9t to the Arior aAAroval of the o::issioner. #either su9h Alan, nor any su9h Aay:ent, :ay ;e aAAroved ;y the o::issioner unless he finds that the rights and interests of the insurer, its Aoli9yholders, and shareholders are Arote9ted. 1&E . .86. "he trustees referred to in &e9tion .8. shall file with su9h insurer and with the o::issioner a verified a99eAtan9e of their aAAoint:ents and verified de9larations that they will faithfully dis9harge their duties as su9h trustees. !ll dividends and other su:s re9eived ;y said trustees on the shares held ;y the:, after Aaying the ne9essary eBAenses of eBe9uting their trust, shall ;e i::ediately reAaid to su9h insurer for the ;enefit of all who are, or :ay ;e9o:e, Aoli9yholders of su9h insuran9e of the 9lass or 9lasses for whose ;enefit the sto9> of su9h insurer was a9Cuired and entitled to Aarti9iAate in the Arofits thereof and shall ;e added to and ;e9o:e Aart of the assets of su9h insurer. 1&E . .8,. If, at any ti:e within the Aeriod Arovided in the Alan for the a9Cuisition of the outstanding shares of sto9> of the insurer, ninety Aer9ent D75LE thereof has already ;een a9Cuired and transferred to the

trustees under the Alan, the insurer ;y a vote of a :aIority of the dire9tors :ay deter:ine to :a>e an offer, with the Aer:ission of the o::issioner and su;Ie9t to su9h reCuire:ent as he :ay sAe9ify, to a9Cuire ;y Aur9hase all of the shares not theretofore a9Cuired under the Alan, at a sAe9ified Ari9e whi9h the insurer 9onsiders to ;e their fair value as of the date of :a>ing su9h offer. 1If the offer to a9Cuire is Aer:itted ;y the o::issioner, the insurer shall :a>e a written offer ;y registered :ail to ea9h shareholder whose shares have not theretofore ;een a9Cuired under the Alan or otherwise, offering to a9Cuire all his shares at su9h Ari9e if a99eAted in writing within thirty DG5E days after the :ailing of su9h offer. !ny shareholder a99eAting su9h offer within the ti:e therefor shall, within siBty D,5E days after his a99eAtan9e, transfer to the insurer the 9ertifi9ates reAresenting su9h shares and, uAon doing so, shall ;e Aaid ;y the insurer the a:ount of su9h offer for his shares. !ny share so a9Cuired shall ;e assigned and transferred to the trustees under the Alan and held ;y the: as shares a9Cuired Aursuant to the Alan. 1Ea9h shareholder who does not a99eAt su9h offer to a9Cuire his shares within the ti:e stated in su9h offer for a99eAtan9e thereof shall within fifteen D-6E days after the eBAiration of su9h offer aAAly to the &e9retary of +inan9e for a deter:ination of the fair value of his shares as of the date of :a>ing su9h offer. "he &e9retary of +inan9e :ay hi:self, after due noti9e and hearing, deter:ine uAon the eviden9e re9eived the fair value of the shares as of the date of :a>ing su9h offer, or aAAoint three DGE i:Aartial and disinterested Aersons to aAAraise the fair value of su9h shares with su9h dire9tion as he shall dee: AroAer and ne9essary to eBAedite the Aro9eedings. UAon 9o:Aletion of the aAAraisal Aro9eedings, the

aAAraisers shall file with the &e9retary of +inan9e their reAort in writing stating the fair value of su9h shares as of the date of the :a>ing of su9h offer and setting forth their findings in suAAort of su9h state:ent. "he aAAraisers shall furnish ea9h Aarty to the Aro9eedings a 9oAy of their aAAraisal reAort, and within ten D-5E days after re9eiAt thereof, any su9h Aarty :ay signify his o;Ie9tion, if any, to the reAort or :ove for the aAAroval thereof. UAon the eBAiration of the Aeriod of ten D-5E days referred to a;ove, the reAort shall ;e set for hearing, after whi9h the &e9retary of +inan9e shall issue an order adoAting, :odifying or reIe9ting the reAort, in whole or in Aart, or he :ay re9eive further eviden9e or :ay re9o::it it with instru9tions. /henever the &e9retary of +inan9e shall deter:ine in any :anner, as aforesaid, the fair value of su9h shares, he :ay also deter:ine the ter:s of Aay:ent thereof ;y the insurer. "he eBAenses in9idental to the Aro9eedings in9luding 9harges of the aAAraisers, if any, shall ;e Aaid eCually ;y the insurer and the shareholder. 1"he findings of the &e9retary of +inan9e on all Cuestions of fa9t raised at the hearing of the aAAli9ation for deter:ination of the fair value of su9h shares shall ;e 9on9lusive uAon all Aarties to the Aro9eedings. "he order of the &e9retary of +inan9e deter:ining the fair value of the shares and the ter:s of Aay:ent thereof shall have the for9e and effe9t of a Iudg:ent whi9h shall ;e aAAeala;le on any Cuestion of law. &u9h order shall ;e9o:e final and eBe9utory fifteen D-6E days after re9eiAt thereof ;y the Aarties to the Aro9eedings. 1UAon any su9h order ;e9o:ing final and fro: whi9h no aAAeal is Aending, or when the ti:e to aAAeal therefro: has eBAired, ea9h shareholder Aarty to the Aro9eedings shall transfer his shares to the insurer and

surrender to the said insurer the 9ertifi9ates reAresenting su9h shares and the insurer shall :a>e Aay:ent therefor as Arovided in su9h order. !ny shares so a9Cuired ;y the insurer shall ;e assigned and transferred to the trustees and held ;y the: as shares a9Cuired Aursuant to the Alan. 1!ny shareholder who does not aAAly to the &e9retary of +inan9e in the :anner and within the ti:e herein;efore Ares9ri;ed shall ;e dee:ed to have a99eAted the offer referred to a;ove, effe9tive, however, uAon the eBAiration of the ti:e hereina;ove Ares9ri;ed for :a>ing su9h aAAli9ation, and su9h shareholder@s ti:e for a99eAting su9h offer shall, for that AurAose only, ;e dee:ed to have ;een eBtended a99ordingly. 1!ny offer to a9Cuire shares :ade Aursuant to this se9tion shall, eB9eAt as otherwise Arovided herein, ;e irrevo9a;le until all Aro9eedings uAon su9h offer have ;een 9o:Aleted or all shares have otherwise ;een earlier a9Cuired ;y the insurer. 1!ny shareholder who has eBAressly or i:Aliedly a99eAted the Alan or the offer to a9Cuire his shares not theretofore a9Cuired under the Alan, and any shareholder who has reIe9ted su9h Alan or su9h offer and has aAAlied, as aforesaid, to the &e9retary of +inan9e for a deter:ination of the fair value of his shares su;seCuent to whi9h an agree:ent has ;een rea9hed or a final order issued fiBing su9h fair value ;ut who fails to surrender his 9ertifi9ates for 9an9ellation uAon Aay:ent of the a:ount to whi9h he is entitled, :ay ;e 9o:Aelled to do so ;y an order of the &e9retary of +inan9e for that AurAose and su9h order :ay Arovide that uAon failure of su9h shareholder to surrender su9h 9ertifi9ates for 9an9ellation, su9h order shall stand in lieu of su9h surrender and 9an9ellation.

1&E . .88. &u9h insurer, after :utualiHation, shall ;e a 9ontinuation of the original insurer, and su9h :utualiHation shall not affe9t su9h insurer@s 9ertifi9ate of authority nor eBisting suits, rights or 9ontra9ts eB9eAt as Arovided in said Alan for the a9Cuisition of the outstanding shares of the 9aAital sto9> of su9h insurer, aAAroved as Arovided in this 9haAter. &u9h insurer, after :utualiHation, shall eBer9ise all the rights and Aowers and shall Aerfor: all the duties 9onferred or i:Aosed ;y law uAon insurers writing the 9lasses of insuran9e written ;y it, and to Arote9t rights and 9ontra9ts eBisting Arior to :utualiHation, su;Ie9t to the effe9t of said Alan. "he ;oard of dire9tors of su9h insurer, Arior to :utualiHation, :ay adoAt a:end:ents to its ;ylaws to ta>e effe9t uAon :utualiHation. 1&E . .84. DaE !n annual :eeting of :e:;ers shall ;e held at ten o@9lo9> in the :orning of the fourth "uesday of Mar9h of ea9h year at the Arin9iAal offi9e of the insurer, unless a different ti:e or Ala9e is Arovided in the ;ylaws. 1D;E &Ae9ial :eetings of the :e:;ers, for any AurAose or AurAoses whatsoever, :ay ;e 9alled at any ti:e ;y the Aresident, or ;y the ;oard of dire9tors, or ;y one or :ore :e:;ers holding not less than one-fifth D-K6E of the voting Aower of su9h insurer, or ;y su9h other offi9ers or Aersons as the ;ylaws authoriHe. D9E #oti9e of all :eetings of :e:;ers whether annual or sAe9ial shall ;e given in writing to the :e:;ers entitled to vote ;y the se9retary, or an assistant se9retary, or other Aerson 9harged with that duty, or if there ;e no su9h offi9er, or in 9ase of his negle9t or refusal, ;y any dire9tor or :e:;er. !t the oAtion of the insurer su9h noti9e :ay ;e i:Arinted on Are:iu: noti9es or re9eiAts or on ;oth.

1! noti9e :ay ;e given ;y su9h insurer to any :e:;er either Aersonally, or ;y :ail, or other :eans of written 9o::uni9ation, 9harges AreAaid, addressed to su9h :e:;er at his address aAAearing on the ;oo>s of the insurer, or given ;y hi: to the insurer for the AurAose of noti9e. If a :e:;er gives no address, noti9e shall ;e dee:ed to have ;een given hi: if sent ;y :ail or other :eans of written 9o::uni9ation addressed to the Ala9e where the Arin9iAal offi9e of the insurer is situated, or if Au;lished at least on9e in so:e newsAaAer of general 9ir9ulation in the Ala9e in whi9h said offi9e is lo9ated. 1#oti9e of any :eeting of :e:;ers shall ;e sent to ea9h :e:;er entitled thereto not less than seven D8E days ;efore su9h :eeting, unless the ;ylaws Arovide otherwise. 1#oti9e of any :eeting of :e:;ers shall sAe9ify the Ala9e, the day and the hour of the :eeting and the general nature of the ;usiness to ;e transa9ted. 1#oti9e of an annual :eeting to ;e held at the ti:e and Ala9e sAe9ified in su;AaragraAh DaE of this se9tion shall ;e suffi9iently given if Au;lished at least on9e in ea9h of four D3E su99essive wee>s in a newsAaAer of general 9ir9ulation in the Ala9e in whi9h the Arin9iAal offi9e of su9h insurer is lo9ated, and if so Au;lished no other noti9e of su9h :eeting shall ;e reCuired. 1DdE "he Aresen9e in Aerson or ;y AroBy of five Aer9ent D6LE of the :e:;ers entitled to vote at any :eeting shall 9onstitute a Cuoru: for the transa9tion of ;usiness, in9luding the a:end:ent of the arti9les of in9orAoration andKor the ;ylaws unless otherwise Arovided ;y the ;ylaws. 1DeE Ea9h su9h :e:;er shall have one D-E vote at any :eeting of :e:;ers regardless

of the nu:;er of Aoli9ies or the a:ount of insuran9e that su9h :e:;er holds and regardless of whether su9h Aoli9ies are Aoli9ies of life insuran9e, or of health and a99ident insuran9e, or ;oth. !ny :e:;er entitled to vote shall have the right to do so either in Aerson or ;y an agent or agents authoriHed ;y a written AroBy eBe9uted ;y su9h Aerson or his duly authoriHed agent and filed with the se9retary of su9h insurer. 1DfE "he dire9tors of the insurer in offi9e at the ti:e the insurer is :utualiHed as Arovided in this 9haAter shall 9ontinue in offi9e until the first annual :eeting of :e:;ers. !t the first annual :eeting of :e:;ers and at ea9h annual :eeting thereafter, dire9tors shall ;e ele9ted ;y the :e:;ers for the ter: or ter:s authoriHed ;y this 9haAter. 1DgE "he arti9les of in9orAoration or the ;ylaws :ay Arovide that the dire9tors :ay ;e divided into two D.E or :ore 9lasses whose ter:s of offi9e shall eBAire at different ti:es, ;ut no ter:s shall 9ontinue longer than siB D,E years. In the a;sen9e of su9h Arovisions, ea9h dire9tor, eB9eAt :e:;ers of the ;oard of dire9tors at the ti:e the insurer is :utualiHed, shall ;e ele9ted for a ter: of one D-E year. !ll dire9tors shall hold offi9e for a ter: for whi9h they are ele9ted and until their su99essors are ele9ted and Cualified. ! dire9tor :ay, ;ut need not ;e a :e:;er or Aoli9yholder of the insurer of whi9h he is a9ting as dire9tor. =a9an9ies in the ;oard of dire9tors :ay ;e filled ;y a :aIority of the re:aining dire9tors, though less than a Cuoru:, and ea9h dire9tor so ele9ted shall hold offi9e until the neBt annual :eeting.

1DhE !ll insurers :utualiHed under the Arovisions of this 9haAter shall ;e su;Ie9t to all other aAAli9a;le Arovisions of this ode. "he Arovisions of the orAoration ode shall aAAly in a suAAletory :anner. 1&E . .87. "he Arovisions of o::onwealth !9t #o. 4G, otherwise >nown as the &e9urities !9t, as a:ended, shall not aAAly to any of the following< 1DaE &hares of the 9aAital sto9> of su9h insurer a9Cuired as Arovided in &e9tion .8. and assigned and transferred to the trustees as is Arovided in said se9tion, and the assign:ent and transfer of said shares as so ArovidedF 1D;E !ny 9ertifi9ate or other instru:ent issued to a Aoli9yholder of su9h :utualiHed insurer 9onferring or eviden9ing :e:;ershiA in su9h :utualiHed insurer or 9onferring or eviden9ing su9h :e:;er@s right to Aarti9iAate in the Arofits or share in the assets of su9h :utualiHed insurer ;y virtue of his :e:;ershiA therein, and the issuan9e of su9h 9ertifi9ate or other instru:entF 1D9E "he Alan for the a9Cuisition of the outstanding shares of the 9aAital sto9> of su9h insurer authoriHed ;y the Arovisions of this 9haAter, the su;:ission of said Alan to the o::issioner and to the Aoli9yholders of su9h insurer as Arovided in this 9haAter, and the aAAroval and 9arrying out of said Alan or any Aart thereof in a99ordan9e with the Arovisions of this 9haAter.

1&E . .45. ! do:esti9 :utual life insuran9e 9o:Aany doing ;usiness in the PhiliAAines :ay 9onvert itself into an in9orAorated sto9> life insuran9e 9o:Aany ;y de:utualiHation. "o that end, it :ay Arovide and 9arry out a Alan for the 9onversion ;y 9o:Alying with the reCuire:ents of this title. 1"he 9onversion of a do:esti9 :utual life insuran9e 9o:Aany to an in9orAorated sto9> life insuran9e 9o:Aany shall ;e 9arried out Aursuant to a 9onversion Alan duly aAAroved ;y the o::issioner. 1"he o::issioner shall Aro:ulgate su9h rules and regulations as he or she :ay dee: ne9essary to 9arry out the Arovisions of this title, after due 9onsultation with reAresentatives of the insuran9e industry. 1!ll 9onverted insurers under the Arovisions of this title shall ;e su;Ie9t to all other aAAli9a;le Arovisions of this ode. "he Arovisions of the orAoration ode shall aAAly in a suAAletory :anner. 1"I"LE -4 1/I"()R!/!L $+ I#&UR!# E $MP!#IE& +$REI'#

1&E . .4-. ! foreign insuran9e 9o:Aany doing ;usiness in the PhiliAAines, uAon Aay:ent of the fee hereinafter Ares9ri;ed and surrender to the o::issioner of its 9ertifi9ate of authority, :ay aAAly to withdraw fro: the PhiliAAines. &u9h aAAli9ation shall ;e duly eBe9uted in writing, a99o:Aanied ;y eviden9e of due authority for su9h eBe9ution, AroAerly a9>nowledged. 1&E . .4.. "he o::issioner shall Au;lish the aAAli9ation for withdrawal on9e a wee> for three DGE 9onse9utive wee>s in a

newsAaAer of general 9ir9ulation in the PhiliAAines. "he eBAenses of su9h Au;li9ation shall ;e Aaid ;y the insuran9e 9o:Aany filing su9h aAAli9ation. 1&E . .4G. Every foreign insuran9e 9o:Aany desiring to withdraw fro: the PhiliAAines shall, Arior to su9h withdrawal, dis9harge its lia;ilities to Aoli9yholders and 9reditors in this 9ountry. In 9ase of its Aoli9ies insuring residents of the PhiliAAines, it shall 9ause the Ari:ary lia;ilities under su9h Aoli9ies to ;e reinsured and assu:ed ;y another insuran9e 9o:Aany authoriHed to transa9t ;usiness in the PhiliAAines. In the 9ase of su9h Aoli9ies as are su;Ie9t to 9an9ellation ;y the withdrawing 9o:Aany, it :ay 9an9el su9h Aoli9ies Aursuant to the ter:s thereof in lieu of su9h reinsuran9e and assu:Ation of lia;ilities. 1&E . .43. "he o::issioner shall 9ause an eBa:ination of the ;oo>s and re9ords of the withdrawing 9o:Aany, and if, uAon su9h eBa:ination, the o::issioner finds that the insurer has no outstanding lia;ilities to Aoli9yholders and 9reditors in the PhiliAAines, and no Aoli9ies un9an9elledF or its Ari:ary lia;ilities have ;een reinsured or assu:ed ;y another insuran9e 9o:Aany authoriHed to transa9t ;usiness in the PhiliAAines, as reCuired in the Are9eding se9tion, it shall 9an9el the withdrawing 9o:Aany@s 9ertifi9ate of authority, if uneBAired, and shall Aer:it the insurer to withdraw. "he 9ost and eBAenses of all su9h eBa:ination shall ;e Aaid as Ares9ri;ed in &e9tion 335.

1&E . .46. UAon the failure of su9h withdrawing insuran9e 9o:Aany or its agents in the PhiliAAines to Aay the eBAenses of su9h Au;li9ation within thirty DG5E days after the Aresentation of the ;ill therefor, the o::issioner shall 9olle9t su9h fee fro: the deAosit furnished in a99ordan9e with the Arovisions of &e9tion -78. 1&E . .4,. ! foreign life insuran9e 9o:Aany that withdraws fro: the PhiliAAines shall ;e 9onsidered a servi9ing insuran9e 9o:Aany if its ;usiness transa9tions are 9onfined to a99eAting Aeriodi9 Are:iu: Aay:ents fro:, or granting Aoli9y loans and Aaying 9ash surrender values of outstanding Aoli9ies to, or reviving laAsed Aoli9ies of, PhiliAAine Aoli9yholders, and su9h other related servi9es. 1&E . .48. #o 9o:Aany shall a9t as a servi9ing insuran9e 9o:Aany until after it shall have o;tained a sAe9ial 9ertifi9ate of authority to a9t as su9h fro: the o::issioner uAon aAAli9ation therefor and Aay:ent ;y the 9o:Aany of the fees hereinafter Ares9ri;ed. &u9h 9ertifi9ate shall eBAire on the last day of )e9e:;er of the third year and shall ;e renewed, while the 9o:Aany 9ontinues to servi9e its Aoli9yholders, and to 9o:Aly with all the aAAli9a;le Arovisions of law and regulations. 1"I"LE -7 1PR$+E&&I$#!L REI#&URER& 1&E . .44. EB9eAt as otherwise Arovided in this ode, no AartnershiA, asso9iation or 9orAoration shall transa9t any ;usiness in the PhiliAAines as a Arofessional reinsurer until it shall have o;tained a 9ertifi9ate of authority for that AurAose fro: the o::issioner uAon aAAli9ation therefor and Aay:ent ;y su9h entity of the fees

hereinafter Ares9ri;ed. !s used in this ode, the ter: ?Arofessional reinsurer@ shall :ean any entity that transa9ts solely and eB9lusively reinsuran9e ;usiness in the PhiliAAines. 1"he o::issioner :ay refuse to issue a 9ertifi9ate of authority to any su9h entity when su9h refusal will ;est Aro:ote Au;li9 interest. #o su9h 9ertifi9ate of authority shall ;e granted to any su9h entity unless and until the o::issioner is satisfied ;y su9h eBa:ination and su9h eviden9e as :ay ;e reCuired that su9h entity is Cualified ;y the laws of the PhiliAAines to transa9t ;usiness therein as a Arofessional reinsurer. 1Before issuing su9h 9ertifi9ate of authority, the o::issioner :ust ;e satisfied that the na:e of the aAAli9ant is not that of any other >nown 9o:Aany transa9ting insuran9e or reinsuran9e ;usiness in the PhiliAAines, or a na:e so si:ilar as to ;e 9al9ulated to :islead the Au;li9. 1&u9h 9ertifi9ate of authority shall eBAire on the last day of )e9e:;er the third year following its issuan9e unless it is renewed. 1Every su9h AartnershiA, asso9iation, or 9orAoration re9eiving su9h 9ertifi9ate of authority shall ;e su;Ie9t to the Arovisions of this ode and other related laws, and to the Iurisdi9tion and suAervision of the o::issioner. 1&E . .47. !ny AartnershiA, asso9iation, or 9orAoration authoriHed to transa9t solely reinsuran9e ;usiness :ust have a 9aAitaliHation of at least "hree ;illion Aesos DPG,555,555,555.55E Aaid in 9ash of whi9h at least fifty Aer9ent D65LE is Aaid-uA and the re:aining Aortion thereof is 9ontri;uted surAlus, whi9h in no 9ase shall ;e less than +our hundred :illion Aesos DP355,555,555.55E or su9h 9aAitaliHation as

:ay ;e deter:ined ;y the &e9retary of +inan9e, uAon the re9o::endation of the o::issioner< Provided, "hat twenty-five Aer9ent D.6LE of the Aaid-uA 9aAital :ust ;e invested in se9urities satisfa9tory to the o::issioner 9onsisting of ;onds or other instru:ents of de;t of the 'overn:ent of the PhiliAAines or its Aoliti9al su;divisions or instru:entalities, or of govern:entowned or -9ontrolled 9orAorations and entities, in9luding the Bang>o &entral ng PiliAinas, and deAosited with the o::issioner, and the re:aining seventyfive Aer9ent D86LE in su9h other se9urities as :ay ;e allowed and Aer:itted ;y the o::issioner, whi9h se9urities shall at all ti:es ;e :aintained free fro: any lien or en9u:;ran9e< Provided, further, "hat the aforesaid 9aAital reCuire:ent is without AreIudi9e to other reCuire:ents to ;e i:Aosed under any ris>-;ased 9aAital :ethod that :ay ;e adoAted ;y the o::issioner< Provided, finally, "hat the Arovisions of this 9haAter aAAli9a;le to insuran9e 9o:Aanies shall as far as Ara9ti9a;le ;e li>ewise aAAli9a;le to Arofessional reinsurers. 1"I"LE .5 1($L)I#' $MP!#IE& 1&E . .75. !s used in this title, the following ter:s shall have the resAe9tive :eanings hereinafter set forth unless the 9onteBt shall otherwise reCuire< 1DaE Person :eans an individual, AartnershiA, fir:, asso9iation, 9orAoration, trust, any si:ilar entity or any 9o:;ination of the foregoing a9ting in 9on9ert. 1D;E Control, in9luding the ter:s controlling, controlled by and under common control ith, :eans the Aossession dire9tly or indire9tly of the Aower to dire9t

or 9ause the dire9tion of the :anage:ent and Aoli9ies of a Aerson, whether through the ownershiA of voting se9urities ;y a 9ontra9t other than a 9o::er9ial 9ontra9t for goods or non-:anage:ent servi9es or otherwise. &u;Ie9t to &e9tion .7., 9ontrol shall ;e Aresu:ed to eBist if any Aerson dire9tly or indire9tly owns, 9ontrols or holds with the Aower to vote forty Aer9ent D35LE or :ore of the voting se9urities of any other Aerson< Provided, "hat no Aerson shall ;e dee:ed to 9ontrol another Aerson solely ;y reason of his ;eing an offi9er or dire9tor of su9h other Aerson. 1D9E Holding company :eans any Aerson who dire9tly or indire9tly 9ontrols any authoriHed insurer. 1DdE Controlled insurer :eans an authoriHed insurer 9ontrolled dire9tly or indire9tly ;y a holding 9o:Aany. 1DeE Controlled person :eans any Aerson, other than a 9ontrolled insurer, who is 9ontrolled dire9tly or indire9tly ;y a holding 9o:Aany. 1DfE Holding company system :eans a holding 9o:Aany together with its 9ontrolled insurers and 9ontrolled Aersons. 1&E . .7-. #otwithstanding AaragraAh D;E of &e9tion .75, the o::issioner :ay deter:ine after noti9e and oAAortunity to ;e heard, that a Aerson eBer9ises dire9tly or indire9tly either alone or Aursuant to an agree:ent with one or :ore other Aersons su9h a 9ontrolling influen9e over the :anage:ent or Aoli9ies of an authoriHed insurer as to :a>e it ne9essary or aAAroAriate in the Au;li9 interest or for the Arote9tion of Aoli9yholders or sto9>holders of the insurer that the Aerson ;e dee:ed to 9ontrol the insurer.

1&E . .7.. "he o::issioner :ay deter:ine uAon aAAli9ation that any Aerson, either alone or Aursuant to agree:ent with one or :ore other Aersons, does not or will not uAon the ta>ing of so:e AroAosed a9tion 9ontrol another Aerson. "he filing of an aAAli9ation hereunder in good faith ;y any Aerson shall relieve the aAAli9ant fro: any o;ligation or lia;ility i:Aosed ;y this title with resAe9t to the su;Ie9t of the aAAli9ation, eB9eAt as 9ontained in &e9tion G5., until the o::issioner has a9ted uAon the aAAli9ation. /ithin thirty DG5E days or su9h further Aeriod as he :ay Ares9ri;e, the o::issioner :ay ArosAe9tively revo>e or :odify his deter:ination, after noti9e and oAAortunity to ;e heard, whenever in his Iudg:ent, revo9ation or :odifi9ation is 9onsistent with this title. 1&E . .7G. #otwithstanding any other Arovisions of this title, the following shall not ;e dee:ed holding 9o:Aanies< 1DaE !uthoriHed insurers or reinsurers or their su;sidiariesF and 1D;E "he 'overn:ent of the PhiliAAines, or any Aoliti9al su;division, agen9y or instru:entality thereof, or any 9orAoration whi9h is wholly owned dire9tly or indire9tly ;y one or :ore of the foregoing. 1"he o::issioner :ay 9onditionally or un9onditionally eBe:At any sAe9ified Aerson or 9lass of Aersons fro: any of the o;ligations or lia;ilities i:Aosed under this title, if and to the eBtent he finds the eBe:Ation ne9essary or aAAroAriate in the Au;li9 interest or not adverse to the interests of Aoli9yholders or sto9>holders and 9onsistent with the AurAoses of this title. 1&E . .73. DaE Every Aerson who on the date this ode ta>es effe9t is a 9ontrolled insurer and every Aerson who thereafter

;e9o:es a 9ontrolled insurer, shall, within siBty D,5E days thereafter, or within thirty DG5E days after ;e9o:ing a 9ontrolled insurer, whi9hever is later, register with the o::issioner. &u9h registration shall ;e a:ended within thirty DG5E days following any 9hange in the identity of its holding 9o:Aany. "he o::issioner :ay grant one or :ore reasona;le eBtensions of the ti:e to register. 1D;E Every registrant shall furnish the o::issioner with the following infor:ation 9on9erning its holding 9o:Aany< 1D-E ! 9oAy of its 9harter or arti9les of in9orAoration and its ;ylawsF 1D.E "he identities of its Arin9iAal shareholders, offi9ers, dire9tors and 9ontrolled AersonsF and 1DGE Infor:ation as to its 9aAital stru9ture and finan9ial 9ondition, and a des9riAtion of its Arin9iAal ;usiness a9tivities. 1&E . .76. Every 9ontrolled insurer shall file with the o::issioner su9h reAorts or :aterial as he :ay dire9t for the AurAose of dis9losing infor:ation 9on9erning the oAerations of Aersons within the holding 9o:Aany syste: whi9h :ay :aterially affe9t the oAerations, :anage:ent or finan9ial 9ondition of the insurer. 1&E . .7,. Every holding 9o:Aany and every 9ontrolled Aerson within a holding 9o:Aany syste: shall ;e su;Ie9t to eBa:ination ;y order of the o::issioner if he has 9ause to ;elieve that the oAerations of su9h Aersons :ay :aterially affe9t the oAerations, :anage:ent or finan9ial 9ondition of any 9ontrolled insurer with the syste: and that he is una;le to o;tain relevant infor:ation fro: su9h 9ontrolled

insurer. "he grounds relied uAon ;y the o::issioner for su9h eBa:ination shall ;e stated in his order, whi9h order shall ;e su;Ie9t to Iudi9ial review only at the instan9e of the Aerson sought to ;e eBa:ined. &u9h eBa:ination shall ;e 9onfined to :atters sAe9ified in the order. "he 9ost of su9h eBa:ination shall ;e assessed against the Aerson eBa:ined and no Aortion thereof shall thereafter ;e rei:;ursed to it dire9tly or indire9tly ;y the 9ontrolled insurer. 1&E . .78. "he o::issioner shall >eeA the 9ontents of ea9h reAort :ade Aursuant to this title and any infor:ation o;tained ;y hi: in 9onne9tion therewith 9onfidential and shall not :a>e the sa:e Au;li9 without the Arior written 9onsent of the 9ontrolled insurer to whi9h it Aertains unless the o::issioner after noti9e and an oAAortunity to ;e heard shall deter:ine that the interests of Aoli9yholders, sto9>holders or the Au;li9 will ;e served ;y the Au;li9ation thereof. In any a9tion or Aro9eeding ;y the o::issioner against the Aerson eBa:ined or any other Aerson within the sa:e holding 9o:Aany syste: a reAort of su9h eBa:ination Au;lished ;y hi: shall ;e ad:issi;le as eviden9e of the fa9ts stated therein. 1&E . .74. "ransa9tions within a holding 9o:Aany syste: to whi9h a 9ontrolled insurer is a Aarty shall ;e su;Ie9t to the following< 1DaE "he ter:s shall ;e fair and eCuita;leF 1D;E harges or fees for servi9es Aerfor:ed shall ;e reasona;leF

1D9E EBAenses in9urred and Aay:ents re9eived shall ;e allo9ated to the insurer on an eCuita;le ;asis in 9onfor:ity with 9usto:ary insuran9e a99ounting Ara9ti9es 9onsistently aAAlied. 1"he ;oo>s, a99ounts and re9ords of ea9h Aarty to all su9h transa9tions shall ;e :aintained as to 9learly and a99urately dis9lose the nature and details of the transa9tions in9luding su9h a99ounting infor:ation as is ne9essary to suAAort the reasona;leness of the 9harges or fees to the resAe9tive Aarties. 1&E . .77. "he Arior written aAAroval of the o::issioner shall ;e reCuired for the following transa9tions ;etween a 9ontrolled insurer and any Aerson in its holding 9o:Aany syste:< sales, Aur9hases, eB9hanges, loans or eBtensions of 9redit, or invest:ents, involving five Aer9ent D6LE or :ore of the insurer@s ad:itted assets as of the thirty-first day of )e9e:;er neBt Are9eding. 1&E . G55. "he following transa9tions ;etween a 9ontrolled insurer and any Aerson in its holding 9o:Aany syste: :ay not ;e entered into unless the insurer has notified the o::issioner in writing of its intention to enter into any su9h transa9tion at least thirty DG5E days Arior thereto, or su9h shorter Aeriod as he :ay Aer:it, and he has not disaAAroved it within su9h Aeriod< 1DaE &ales, Aur9hases, eB9hanges, loans or eBtensions of 9redit, or invest:ents, involving :ore than one-half of one Aer9ent DPLE ;ut less than five Aer9ent D6LE of the insurer@s ad:itted assets as of the thirty-first day of )e9e:;er neBt Are9edingF 1D;E Reinsuran9e treaties or agree:entsF

1D9E Rendering of servi9es on a regular or syste:ati9 ;asisF or 1DdE !ny :aterial transa9tion, sAe9ified ;y regulation, whi9h the o::issioner deter:ines :ay adversely affe9t the interest of the insurer@s Aoli9yholders or sto9>holders or of the Au;li9. 1#othing herein 9ontained shall ;e dee:ed to authoriHe or Aer:it any transa9tion whi9h, in the 9ase of a non-9ontrolled insurer, would ;e otherwise 9ontrary to law. 1&E . G5-. "he o::issioner, in reviewing transa9tions Aursuant to &e9tions .77 and G55, shall 9onsider whether the transa9tions 9o:Aly with the standard set forth in &e9tion .74 and whether they :ay adversely affe9t the interests of Aoli9yholders. "his se9tion shall not aAAly to transa9tions su;Ie9t to other se9tions of this ode whi9h i:Aose noti9e or aAAroval reCuire:ents greater than those Ares9ri;ed ;y this title. 1&E . G5.. DaE #o Aerson, other than an authoriHed insurer, shall a9Cuire 9ontrol of any do:esti9 insurer, whether ;y Aur9hase of its se9urities or otherwise, eB9eAt< 1D-E !fter twenty D.5E days written noti9e to its insurer or su9h shorter Aeriod as the o::issioner :ay Aer:it, of its intention to a9Cuire 9ontrolF and 1D.E /ith the Arior written aAAroval of the o::issioner. 1D;E "he o::issioner shall disaAArove the a9Cuisition of 9ontrol of a do:esti9 insurer if he deter:ines, after noti9e and an oAAortunity to ;e heard, that su9h a9tion is reasona;ly ne9essary to Arote9t the interest of the AeoAle of this 9ountry. "he following shall ;e the only fa9tors to ;e 9onsidered ;y hi: in rea9hing the foregoing deter:ination<

1D-E "he finan9ial 9ondition of the a9Cuiring Aerson and the insurerF 1D.E "he trustworthiness of the a9Cuiring Aerson or any of its offi9ers or dire9torsF 1DGE ! Alan for the AroAer and effe9tive 9ondu9t of the insurer@s oAerationsF 1D3E "he sour9e of the funds or assets for the a9CuisitionF 1D6E "he fairness of any eB9hange of sto9>, assets, 9ash or other 9onsideration for the sto9> or assets to ;e re9eivedF 1D,E /hether the effe9t of the a9Cuisition :ay ;e su;stantially to lessen 9o:Aetition in any line of 9o::er9e in insuran9e or to tend to 9reate a :onoAoly thereinF and 1D8E /hether the a9Cuisition is li>ely to ;e haHardous or AreIudi9ial to the insurer@s Aoli9yholders or sto9>holders. 1D9E "he following 9onditions affe9ting any 9ontrolled insurer, regardless of when su9h 9ontrol has ;een a9Cuired, are violations of this title< 1D-E "he 9ontrolling Aerson or any of its offi9ers or dire9tors have de:onstrated untrustworthinessF and 1D.E "he effe9t of retention of 9ontrol :ay ;e su;stantially to lessen 9o:Aetition in any line of 9o::er9e in insuran9e in this 9ountry or to tend to 9reate a :onoAoly therein. If, after noti9e and an oAAortunity to ;e heard, the o::issioner deter:ines that any of the foregoing violations eBists, he shall redu9e his findings to writing and shall issue an order ;ased thereon and 9ause the sa:e to ;e served uAon the insurer and uAon all Aersons affe9ted there;y dire9ting any Aerson found to ;e in violation thereof to

ta>e aAAroAriate a9tion to 9ure su9h violation. UAon the failure of any su9h Aerson to 9o:Aly with su9h order, &e9tion G5, shall ;e9o:e aAAli9a;le. 1DdE "he o::issioner :ay reCuire the su;:ission of su9h infor:ation as he dee:s ne9essary to deter:ine whether any a9Cuisition or retention of 9ontrol 9o:Alies with this title and :ay reCuire, as a 9ondition of aAAroval of su9h a9Cuisition or retention of 9ontrol, that all or any Aortion of su9h infor:ation ;e dis9losed to the insurer@s sto9>holders. 1DeE Unless su;Ie9t to registration under &e9tion .73 or unless a9Cuisition of its 9ontrol is su;Ie9t to AaragraAhs DaE and D;E hereof, every authoriHed insurer shall notify the o::issioner in writing of the identity of any Aerson who: the insurer then >nows or has reason to ;elieve 9ontrols or has ta>en any a9tion, other than Areli:inary negotiations or dis9ussion, to a9Cuire 9ontrol of the insurer. 1&E . G5G. DaE #otwithstanding the 9ontrol of an authoriHed insurer ;y any Aerson, the offi9ers and dire9tors of the insurer shall not there;y ;e relieved of any o;ligation or lia;ility to whi9h they would otherwise ;e su;Ie9t ;y law, and the insurer shall ;e :anaged so as to assure its seAarate oAerating identity 9onsistent with this title. 1D;E #othing herein shall Are9lude an authoriHed insurer fro: having or sharing a 9o::on :anage:ent or 9ooAerative or Ioint use of Aersonnel, AroAerty or servi9es with one or :ore other Aersons under arrange:ents :eeting the standards of &e9tion .74. 1&E . G53. "o the eBtent that any infor:ation or :aterial is set forth in for:s or other :atter on file with any govern:ent

agen9y or in a registration for: filed with the o::issioner ;y another Aerson within the sa:e holding 9o:Aany syste:, the 9ontrolled insurer :ay 9o:Aly with the registration or reAorting reCuire:ents of this title ;y referring in its registration for: or reAort to su9h other filed :atter and atta9hing a 9oAy thereof 9ertified ;y the insurer as a true and 9o:Alete 9oAy, to su9h registration for: or reAort or, if su9h other filed :atter is on file with the o::issioner, in9orAorating su9h :atter ;y referen9e. 1&E . G56. #o holding 9o:Aany or 9ontrolled Aerson shall dire9tly or indire9tly or through another Aerson do or 9ause to ;e done for or in ;ehalf of the 9ontrolled insurer any a9t intended to affe9t the insuran9e oAerations of the insurer whi9h, if done ;y the insurer, would violate any Arovision of this ode. 1&E . G5,. In addition to any other Aenalty Arovided ;y law, the o::issioner :ay, uAon the willful failure of any Aerson within a holding 9o:Aany syste: to 9o:Aly with this title or any regulation or order Aro:ulgated hereunder< 1DaE Pro9eed under "itle -3 or "itle -6, haAter III of this ode with resAe9t to insurer within the holding 9o:Aany syste:F or 1D;E Revo>e or refuse to renew the authority to do ;usiness in this 9ountry of an insurer within the holding 9o:Aany syste: or refuse to issue su9h authority to any other insurer in the syste:F or 1D9E )ire9t that, in addition to any other Aenalty Arovided ;y law, su9h Aerson forfeit to the AeoAle of this 9ountry a su: not less than +ive thousand Aesos DP6,555.55E for a first violation and "wenty-five thousand

Aesos DP.6,555.55E for any su;seCuent violation. !n additional su: not less than "wenty-five thousand Aesos DP.6,555.55E shall ;e i:Aosed for ea9h :onth during whi9h any su9h violation shall 9ontinue. 1 (!P"ER I= 1&!LE& !'E# IE& !#) "E (#I !L &ER=I E& 1"I"LE l 1I#&UR!# E !'E#"& I#&UR!# E BR$0ER& !#)

1&E . G58. #o insuran9e 9o:Aany doing ;usiness in the PhiliAAines, nor any agent thereof, shall Aay any 9o::ission or other 9o:Aensation to any Aerson for servi9es in o;taining insuran9e, unless su9h Aerson shall have first Aro9ured fro: the o::issioner a li9ense to a9t as an insuran9e agent of su9h 9o:Aany or as an insuran9e ;ro>er as hereinafter Arovided. 1#o Aerson shall a9t as an insuran9e agent or as an insuran9e ;ro>er in the soli9itation or Aro9ure:ent of aAAli9ations for insuran9e, or re9eive for servi9es in o;taining insuran9e, any 9o::ission or other 9o:Aensation fro: any insuran9e 9o:Aany doing ;usiness in the PhiliAAines, or any agent thereof, without first Aro9uring a li9ense so to a9t fro: the o::issioner, whi9h :ust ;e renewed every three DGE years thereafter. &u9h li9ense shall ;e issued ;y the o::issioner only uAon the written aAAli9ation of the Aerson desiring it, su9h aAAli9ation if for a li9ense to a9t as insuran9e agent, ;eing aAAroved or endorsed ;y the 9o:Aany su9h Aerson desires to reAresent, and shall ;e uAon a for: Ares9ri;ed ;y the o::issioner giving su9h infor:ation as he :ay reCuire, and uAon Aay:ent of the 9orresAonding fee

hereinafter Ares9ri;ed. "he o::issioner shall satisfy hi:self as to the 9o:Aeten9e and trustworthiness of the aAAli9ant and shall have the right to refuse to issue or renew and to susAend or revo>e any su9h li9ense in his dis9retion. "he li9ense shall eBAire after the thirty-first day of )e9e:;er of the third year following the date of issuan9e unless it is renewed. 1Li9enses :ay ;e renewed in the 9ase of the 9o:Aany reAresented ;y su9h agents, and in the 9ase of insuran9e ;ro>ers, uAon the aAAli9ation of the said ;ro>ers, the:selves. 1&E . G54. "he Arovisions of &e9tions G58 and G57 shall aAAly to an e:Aloyee who shall ;e engaged to sell insuran9e Arodu9ts ;y an insuran9e 9o:Aany. 1&E . G57. !ny Aerson who for 9o:Aensation soli9its or o;tains insuran9e on ;ehalf of any insuran9e 9o:Aany or trans:its for a Aerson other than hi:self an aAAli9ation for a Aoli9y or 9ontra9t of insuran9e to or fro: su9h 9o:Aany or offers or assu:es to a9t in the negotiating of su9h insuran9e shall ;e an insuran9e agent within the intent of this se9tion and shall there;y ;e9o:e lia;le to all the duties, reCuire:ents, lia;ilities and Aenalties to whi9h an insuran9e agent is su;Ie9t. 1!n insuran9e agent is an indeAendent 9ontra9tor and not an e:Aloyee of the 9o:Aany reAresented. ?Insuran9e agent@ in9ludes an agen9y leader, agen9y :anager, or their eCuivalent. 1&in9e the insuran9e industry is i:;ued with Au;li9 interest, the insuran9e 9o:Aanies uAon aAAroval of the o::issioner :ay eBer9ise wide latitude in suAervising the a9tivities of their insuran9e agents to ensure the Arote9tion of the insuring Au;li9.

1&E . G-5. !ny Aerson who for any 9o:Aensation, 9o::ission or other thing of value a9ts or aids in any :anner in soli9iting, negotiating or Aro9uring the :a>ing of any insuran9e 9ontra9t or in Ala9ing ris> or ta>ing out insuran9e, on ;ehalf of an insured other than hi:self, shall ;e an insuran9e ;ro>er within the intent of this ode, and shall there;y ;e9o:e lia;le to all the duties, reCuire:ents, lia;ilities and Aenalties to whi9h an insuran9e ;ro>er is su;Ie9t. 1&E . G--. Every aAAli9ant for an insuran9e ;ro>er@s li9ense shall file with the aAAli9ation and shall thereafter :aintain in for9e while so li9ensed, a ;ond in favor of the AeoAle of the ReAu;li9 of the PhiliAAines eBe9uted ;y a 9o:Aany authoriHed to ;e9o:e surety uAon offi9ial re9ogniHan9es, stiAulations, ;onds and underta>ings. "he ;ond shall ;e in su9h a:ount as :ay ;e fiBed ;y the o::issioner, ;ut in no 9ase less than +ive hundred thousand Aesos DP655,555.55E, and shall ;e 9onditioned uAon full a99ounting and due Aay:ent to the Aerson entitled thereto of funds 9o:ing into the ;ro>er@s Aossession through insuran9e transa9tions under li9ense. "he ;ond shall re:ain in for9e until released ;y the o::issioner, or until 9an9elled ;y the surety. /ithout AreIudi9e to any lia;ility Areviously in9urred thereunder, the surety :ay 9an9el the ;ond on thirty DG5E days advan9e written noti9e to ;oth the ;ro>er and the o::issioner. 1UAon aAAroval of the aAAli9ation, the aAAli9ant :ust also file two D.E errors and o:issions DArofessional lia;ility or Arofessional inde:nityE Aoli9ies issued seAarately ;y two D.E insuran9e 9o:Aanies authoriHed to do ;usiness in the PhiliAAines, satisfa9tory to the o::issioner to inde:nify the aAAli9ant against any 9lai: or 9lai:s for ;rea9h of duty as insuran9e

;ro>er whi9h :ay ;e :ade against hi: ;y reason of any negligent a9t, error or o:ission, whenever or wherever 9o::itted or alleged to have ;een 9o::itted, on the Aart of the aAAli9ant or any Aerson who has ;een, is now, or :ay hereafter during the su;sisten9e of the Aoli9ies ;e e:Aloyed ;y the said aAAli9ant in his 9aAa9ity as insuran9e ;ro>er< Provided, "hat the filing of any 9lai: or 9lai:s under one of su9h Aoli9ies shall Are9lude the filing of the said 9lai: or 9lai:s under the other Aoli9y. "he said Aoli9ies shall ;e in su9h a:ounts as :ay ;e Ares9ri;ed ;y the o::issioner, deAending uAon the siHe or a:ount of the ;ro>ing ;usiness of the aAAli9ant, ;ut in no 9ase shall the a:ount of ea9h of su9h Aoli9ies ;e less than +ive hundred thousand Aesos DP655,555.55E. 1&E . G-.. "he o::issioner shall, in order to deter:ine the 9o:Aeten9e of every aAAli9ant to have the >ind of li9ense aAAlied for, reCuire su9h aAAli9ant to su;:it to a written eBa:ination and to Aass the sa:e to the satisfa9tion of the o::issioner. "he o::issioner :ay delegate or authoriHe the ad:inistration of the eBa:ination to an indeAendent organiHation, su;Ie9t to su9h 9onditions that the o::issioner :ay Arovide. 1&E . G-G. !n aAAli9ant for the written eBa:ination :entioned in the Are9eding se9tion :ust ;e of good :oral 9hara9ter and :ust not have ;een 9onvi9ted of any 9ri:e involving :oral turAitude. (e :ust satisfa9torily show to the o::issioner that he has ;een trained in the >ind of insuran9e 9onte:Alated in the li9ense aAAlied for. &u9h eBa:ination :ay ;e waived if it is shown to the satisfa9tion of the o::issioner that the aAAli9ant has undergone eBtensive edu9ation andKor training in insuran9e.

1&E . G-3. !n aAAli9ation for the issuan9e or renewal of a li9ense to a9t as an insuran9e agent or insuran9e ;ro>er :ay ;e refused, or su9h li9ense, if already issued or renewed, shall ;e susAended or revo>ed if the o::issioner finds that the aAAli9ant for, or holder of, su9h li9ense< 1DaE (as willfully violated any Arovision of this odeF or 1D;E (as intentionally :ade a :aterial :isstate:ent in the aAAli9ation to Cualify for su9h li9enseF or 1D9E (as o;tained or atte:Ated to o;tain a li9ense ;y fraud or :isreAresentationF or 1DdE (as ;een guilty of fraudulent or dishonest Ara9ti9esF or 1DeE (as :isaAAroAriated or 9onverted to his own use or illegally withheld :oneys reCuired to ;e held in a fidu9iary 9aAa9ityF or 1DfE (as not de:onstrated trustworthiness and 9o:Aeten9e to transa9t ;usiness as an insuran9e agent or insuran9e ;ro>er in su9h :anner as to safeguard the Au;li9F or 1DgE (as :aterially :isreAresented the ter:s and 9onditions of Aoli9ies or 9ontra9ts of insuran9e whi9h he see>s to sell or has soldF or 1DhE (as failed to Aass the written eBa:ination Ares9ri;ed, if not otherwise eBe:At fro: ta>ing the sa:e. 1In addition to the foregoing 9auses, no li9ense to a9t as insuran9e agent or insuran9e ;ro>er shall ;e renewed if the holder thereof has not ;een a9tively engaged as su9h agent or ;ro>er in a99ordan9e with su9h rules as the o::issioner :ay Ares9ri;e.

1&E . G-6. "he Are:iu:, or any Aortion thereof, whi9h an insuran9e agent or insuran9e ;ro>er 9olle9ts fro: an insured and whi9h is to ;e Aaid to an insuran9e 9o:Aany ;e9ause of the assu:Ation of lia;ility through the issuan9e of Aoli9ies or 9ontra9ts of insuran9e, shall ;e held ;y the agent or ;ro>er in a fidu9iary 9aAa9ity and shall not ;e :isaAAroAriated or 9onverted to his own use or illegally withheld ;y the agent or ;ro>er. 1!ny insuran9e 9o:Aany whi9h delivers to an insuran9e agent or insuran9e ;ro>er a Aoli9y or 9ontra9t of insuran9e shall ;e dee:ed to have authoriHed su9h agent or ;ro>er to re9eive on its ;ehalf Aay:ent of any Are:iu: whi9h is due on su9h Aoli9y or 9ontra9t of insuran9e at the ti:e of its issuan9e or delivery or whi9h ;e9o:es due thereon. 1In order to ensure faithful Aerfor:an9e ;y the insuran9e agent or insuran9e ;ro>er of these fidu9iary resAonsi;ilities, the Insuran9e o::issioner shall Ares9ri;e the :ini:u: ter:s and 9onditions on su9h :atters in the standard agen9y or ;ro>ers agree:ent ;etween the agents andKor the ;ro>er with the insuran9e 9o:Aanies. 1&E . G-,. !ny Arovision of eBisting laws to the 9ontrary notwithstanding, no Aerson shall, within the PhiliAAines, sell or offer for sale a varia;le 9ontra9t or do or Aerfor: any a9t or thing in the sale, negotiation, :a>ing or 9onsu::ating of any varia;le 9ontra9t other than for hi:self unless su9h Aerson shall have a valid and 9urrent li9ense fro: the o::issioner authoriHing su9h Aerson to a9t as a varia;le 9ontra9t agent. #o su9h li9ense shall ;e issued unless and until the o::issioner is satisfied, after eBa:ination that su9h Aerson is ;y training, >nowledge, a;ility and 9hara9ter Cualified to a9t as su9h agent. !ny su9h li9ense :ay ;e withdrawn

and 9an9elled ;y the o::issioner after noti9e and hearing, if he shall find that the holder thereof does not then have the Cualifi9ations reCuired for the issuan9e of su9h li9ense. 1&E . G-8. It shall ;e unlawful for any Aerson, 9o:Aany or 9orAoration in the PhiliAAines to a9t as general agent of any insuran9e 9o:Aany unless he is e:Aowered ;y a written Aower of attorney duly eBe9uted ;y su9h insuran9e 9o:Aany, and registered with the o::issioner to re9eive noti9es, su::ons and legal Aro9esses for and in ;ehalf of the insuran9e 9o:Aany 9on9erned in 9onne9tion with a9tions or other legal Aro9eedings against said insuran9e 9o:Aany. It shall ;e the duty of said general agent to notify the o::issioner of his Aost offi9e address in the PhiliAAines, or any 9hange thereof. #oti9es, su::ons, or Aro9esses of any >ind sent ;y registered :ail to the last registered address of su9h general agent of the 9o:Aany 9on9erned or to the o::issioner shall ;e suffi9ient servi9e and dee:ed as if served on the insuran9e 9o:Aany itself. 1&E . G-4. EB9eAt as otherwise Arovided ;y law or treaty, it shall ;e unlawful for any Aerson, AartnershiA, asso9iation or 9orAoration in the PhiliAAines, for hi:self or itself, or for so:e other Aerson, AartnershiA, asso9iation or 9orAoration, either to Aro9ure, re9eive or forward aAAli9ations of insuran9e in, or to issue or to deliver or a99eAt Aoli9ies or 9ontra9ts of insuran9e of or for, any insuran9e 9o:Aany or 9o:Aanies not authoriHed to transa9t ;usiness in the PhiliAAines, 9overing ris>s, life or non-life, situated in the PhiliAAinesF and any su9h Aerson, AartnershiA, asso9iation or 9orAoration violating the Arovisions of this se9tion shall ;e dee:ed guilty of a Aenal offense, and uAon 9onvi9tion thereof, shall for ea9h su9h offense ;e Aunished ;y a fine

of "wo hundred fifty thousand Aesos DP.65,555.55E, or i:Arison:ent of siB D,E :onths, or ;oth, at the dis9retion of the 9ourt< Provided, "hat the Arovisions of this se9tion shall not aAAly to reinsuran9e. 1"I"LE . 1REI#&UR!# E BR$0ER& 1&E . G-7. EB9eAt as Arovided in the neBt su99eeding title, no Aerson shall a9t as reinsuran9e ;ro>er in the PhiliAAines unless he is authoriHed as su9h ;y the o::issioner. 1! reinsuran9e ;ro>er is one who, for 9o:Aensation, not ;eing a duly authoriHed agent, e:Aloyee or offi9er of an insurer in whi9h any reinsuran9e is effe9ted, a9ts or aids in any :anner in negotiating 9ontra9ts of reinsuran9e, or Ala9ing ris>s of effe9ting reinsuran9e, for any insuran9e 9o:Aany authoriHed to do ;usiness in the PhiliAAines. 1&E . G.5. UAon aAAli9ation and Aay:ent of the 9orresAonding fee hereinafter Ares9ri;ed, and the filing of two D.E errors and o:issions DArofessional lia;ility or Arofessional inde:nityE Aoli9ies hereinafter des9ri;ed, a Aerson :ay, if found Cualified, ;e issued a li9ense to a9t as reinsuran9e ;ro>er ;y the o::issioner. #o su9h li9ense shall ;e valid after )e9e:;er G- of the third year following its issuan9e unless it is renewed. 1"he errors and o:issions DArofessional lia;ility or Arofessional inde:nityE Aoli9ies :entioned a;ove shall inde:nify the aAAli9ant against any 9lai: or 9lai:s for ;rea9h of duty as reinsuran9e ;ro>er whi9h :ay ;e :ade against hi: ;y reason of any negligent a9t, error or o:ission, whenever or wherever 9o::itted or alleged to have ;een 9o::itted, on the Aart of the aAAli9ant or

any Aerson who has ;een, is now, or :ay hereafter during the su;sisten9e of the Aoli9ies ;e e:Aloyed ;y the said aAAli9ant in his 9aAa9ity as reinsuran9e ;ro>er< Provided, "hat the filing of any 9lai: or 9lai:s under one of su9h Aoli9ies shall Are9lude the filing of the said 9lai: or 9lai:s under the other Aoli9y. "he said Aoli9ies shall ;e issued seAarately ;y two D.E insuran9e 9o:Aanies authoriHed to do ;usiness in the PhiliAAines and shall ;e in su9h a:ounts as :ay ;e Ares9ri;ed ;y the Insuran9e o::issioner, deAending uAon the siHe or a:ount of the ;ro>ing ;usiness of the aAAli9ant, ;ut in no 9ase shall the a:ount of ea9h of su9h Aoli9ies ;e less than +ive hundred thousand Aesos DP655,555.55E. 1&E . G.-. "he o::issioner :ay re9all, susAend or revo>e the li9ense granted to a reinsuran9e ;ro>er for violation of any eBisting law, rule and regulation, or any Arovision of this ode after due noti9e and hearing. 1"I"LE G 1RE&I)E#" !'E#"& 1&E . G... #o Aerson shall a9t as resident agent, as hereinafter defined, unless he is registered as su9h with the o::issioner. 1&E . G.G. "he ter: resident agent, as used in this title, is one duly aAAointed ;y a foreign insurer or ;ro>er not authoriHed to do ;usiness in the PhiliAAines to re9eive in its ;ehalf noti9es, su::ons and legal Aro9esses in 9onne9tion with a9tions or other legal Aro9eedings against su9h foreign insurer or ;ro>er. 1&E . G.3. "he aAAli9ation for a 9ertifi9ate of registration as resident agent filed with the o::issioner :ust ;e a99o:Aanied with a 9oAy of the Aower of attorney, duly

notariHed and authenti9ated ;y the PhiliAAine onsul in the Ala9e where su9h foreign insurer or ;ro>er is do:i9iled, e:Aowering the aAAli9ant to a9t as resident agent and to re9eive noti9es, su::ons and legal Aro9esses for and in ;ehalf of su9h foreign insurer or ;ro>er in 9onne9tion with any a9tion or legal Aro9eeding against su9h foreign insurer or ;ro>er. 1&E . G.6. It shall ;e the duty of su9h resident agent to notify i::ediately the o::issioner of any 9hange of his offi9e address. 1&E . G.,. ! 9ertifi9ate of registration issued to a resident agent shall eBAire on the thirty-first day of )e9e:;er of the third year following its issuan9e unless it is renewed. 1"he o::issioner :ay, after due noti9e and hearing, re9all or 9an9el the 9ertifi9ate of registration issued to a resident agent for violation of any eBisting law, rule or regulation, or any Arovision of this ode. 1"I"LE 3 1#$#-LI+E $MP!#* U#)ER/RI"ER 1&E . G.8. #o Aerson shall a9t, and no 9o:Aany shall e:Aloy any Aerson, as nonlife 9o:Aany underwriter, whose duty and resAonsi;ility it shall ;e to sele9t, evaluate and a99eAt ris>s for, and to deter:ine the ter:s and 9onditions, in9luding those Aertaining to a:ounts of retentions, under whi9h su9h ris>s are to ;e a99eAted ;y the 9o:Aany, unless su9h underwriter is registered as su9h with the o::issioner. 1&E . G.4. Every non-life insuran9e 9o:Aany doing ;usiness in the PhiliAAines :ust :aintain at all ti:es a register of ris>s a99eAted and a 9lai:s register for ea9h line of ris>s engaged in ;y su9h non-life

insuran9e 9o:Aany with su9h entries therein as are now or as :ay hereafter ;e reCuired ;y the o::issioner, and it shall ;e the resAonsi;ility of the underwriter on the Aarti9ular line of ris> involved to see to it that the said registers are well :aintained and >eAt, and that all entries therein are AroAerly and 9orre9tly re9orded. &u9h registers shall ;e oAen to insAe9tion and eBa:ination of duly authoriHed reAresentatives of the o::issioner at all ti:es during ;usiness hours. 1&E . G.7. #o Aerson shall ;e registered with the o::issioner, unless su9h Aerson shall ;e at least twenty-one D.-E years of age on the date of su9h registrationF a resident of the PhiliAAinesF of good :oral 9hara9ter and with no 9onvi9tion of any 9ri:e involving :oral turAitudeF has had at the ti:e su9h registration is :ade at least two D.E years of underwriting wor> in the Aarti9ular line of ris> involvedF and has Aassed su9h Cualifying written eBa:ination that the o::issioner shall 9ondu9t at su9h ti:e and in su9h Ala9e as he :ay de9ide to hold for aAAli9ants desiring to a9t as underwriters. 1&u9h eBa:ination shall not ;e reCuired of any Aerson who has served as non-life 9o:Aany underwriter for a Aeriod of at least five D6E years, if the o::issioner is satisfied of the aAAli9ant@s 9o:Aeten9e as shown ;y the results of his underwriting wor> in the non-life insuran9e 9o:Aany or 9o:Aanies that e:Aloyed hi: in that 9aAa9ity. "he :ini:u: underwriting eBAerien9e herein reCuired :ay ;e redu9ed or waived if it is shown to the satisfa9tion of the o::issioner that the non-life 9o:Aany underwriter has undergone eBtensive edu9ation andKor training in insuran9e. 1&E . GG5. !ny aAAli9ant who :isreAresents or o:its any :aterial fa9t in

his aAAli9ation for registration as a non-life 9o:Aany underwriter, or 9o::its any dishonest a9t in ta>ing or in 9onne9tion with the Cualifying written eBa:ination for underwriters, shall ;e ;arred fro: ;eing registered as su9h non-life 9o:Aany underwriter and, if already registered, his registration shall ;e 9an9elled and the 9ertifi9ate of registration issued in his favor shall ;e re9alled i::ediately ;y the o::issioner. 1In the event that the 9ertifi9ate of authority of a non-life insuran9e 9o:Aany to transa9t ;usiness is susAended or revo>ed due to ;usiness failure arising largely fro: the i:Arudent and inIudi9ious a99eAtan9e of ris>s ;y the underwriter 9on9erned, the registration of su9h underwriter shall li>ewise ;e 9an9elled and his 9ertifi9ate of registration shall ;e re9alled ;y the o::issioner, and no si:ilar 9ertifi9ate shall thereafter ;e issued in his favor. 1&E . GG-. #o 9ertifi9ate of registration issued to an underwriter shall ;e valid after )e9e:;er G- of the third year following its issuan9e unless it is renewed. 1"he o::issioner :ay, after due noti9e and hearing, also susAend or 9an9el su9h 9ertifi9ate for violation of eBisting laws, rules and regulations or of any Arovisions of this ode. 1"I"LE 6 1!)JU&"ER& 1&E . GG.. #o Aerson, AartnershiA, asso9iation, or 9orAoration shall a9t as an adIuster, as hereinafter defined, unless authoriHed so to a9t ;y virtue of a li9ense issued or renewed ;y the o::issioner Aursuant to the Arovisions of this ode< Provided, "hat in the 9ase of a natural

Aerson, he :ust ;e a +iliAino 9itiHen and in the 9ase of a AartnershiA, asso9iation or 9orAoration, at least siBty Aer9ent D,5LE of its 9aAital :ust ;e owned ;y 9itiHens of the PhiliAAines. 1&E . GGG. !n adIuster :ay ;e an indeAendent adIuster or a Au;li9 adIuster. 1"he ter: independent ad%uster :eans any Aerson, AartnershiA, asso9iation or 9orAoration whi9h, for :oney, 9o::ission or any other thing of value, a9ts for or on ;ehalf of an insurer in the adIusting of 9lai:s arising under insuran9e 9ontra9ts or Aoli9ies issued ;y su9h insurer. 1"he ter: public ad%uster :eans any Aerson, AartnershiA, asso9iation or 9orAoration whi9h, for :oney, 9o::ission or any other thing of value, a9ts on ;ehalf of an insured in negotiating for, or effe9ting, the settle:ent of a 9lai: or 9lai:s of the said insured arising under insuran9e 9ontra9ts or Aoli9ies, or whi9h advertises for or soli9its e:Aloy:ent as an adIuster of su9h 9lai:s. 1&E . GG3. +or every line of insuran9e 9lai: adIust:ent, adIusters shall ;e li9ensed either as indeAendent adIusters or as Au;li9 adIusters. #o adIuster shall a9t on ;ehalf of an insurer unless said adIuster is li9ensed as an indeAendent adIusterF and no adIuster shall a9t on ;ehalf of an insured unless said adIuster is li9ensed as a Au;li9 adIuster< Provided, ho ever, "hat when a fir: or Aerson has ;een li9ensed as a Au;li9 adIuster, he shall not ;e granted another li9ense as indeAendent adIuster and vice versa.

1#o li9ense, however, shall ;e reCuired of any 9o:Aany adIuster who is a salaried e:Aloyee of an insuran9e 9o:Aany for the adIust:ent of 9lai:s filed under Aoli9ies issued ;y su9h insuran9e 9o:Aany. 1&E . GG6. &u9h li9ense or any renewal thereof :ay ;e issued ;y the o::issioner uAon written aAAli9ation filed ;y the Aerson interested on the for: or for:s Ares9ri;ed ;y the o::issioner, whi9h shall 9ontain su9h infor:ation as he :ay reCuire, and uAon Aay:ent of the 9orresAonding fee hereinafter Ares9ri;ed. 1&E . GG,. "he o::issioner shall 9ondu9t, at su9h ti:es, and in su9h Ala9es as he :ay de9ide to hold, written eBa:inations to deter:ine the 9o:Aeten9e and a;ility of aAAli9ants desiring to a9t as adIuster of insuran9e 9lai:s. 1&E . GG8. #o adIuster@s li9ense issued hereunder shall ;e valid after )e9e:;er Gof the third year following the issuan9e of su9h li9ense unless it is renewed. 1&E . GG4. #othing 9ontained in this title shall aAAly to any duly li9ensed attorney-atlaw who a9ts or aids in adIusting insuran9e 9lai:s as an in9ident to the Ara9ti9e of his Arofession and who does not advertise hi:self as an adIuster. 1&E . GG7. "he o::issioner :ay susAend or revo>e any adIuster@s li9ense if, after giving noti9e and hearing to the adIuster 9on9erned, the o::issioner finds that the said adIuster< 1DaE (as violated any Arovision of this ode and of the 9ir9ulars, rulings and instru9tions of the o::issioner or has violated any law in the 9ourse of his dealings as an adIusterF or

1D;E (as :ade a :aterial :isstate:ent in the aAAli9ation for su9h li9enseF or 1D9E (as ;een guilty of fraudulent or dishonest Ara9ti9esF or 1DdE (as de:onstrated his in9o:Aeten9e or untrustworthiness to a9t as adIusterF or 1DeE (as :ade Aatently unIust valuation of lossF or 1DfE (as failed to :a>e a reAort of the adIust:ent he AroAosed within siBty D,5E days fro: the date of the filing of the 9lai: ;y the insured with the insurer, unless Arevented so to do ;y reasons ;eyond his 9ontrolF or 1DgE (as refused to allow an eBa:ination into his affairs or :ethod of doing ;usiness as hereinafter Arovided. 1&E . G35. Every adIuster shall su;:it to the o::issioner a Cuarterly reAort of all losses whi9h are the su;Ie9t of adIust:ent effe9ted ;y hi: during ea9h :onth in the for: Ares9ri;ed ;y the o::issioner. "he reAort shall ;e filed within one D-E :onth after the end of ea9h Cuarter. 1&E . G3-. Every adIuster shall >eeA his or its ;oo>s, re9ords, reAorts, a99ounts, and vou9hers in su9h :anner that the o::issioner or his duly authoriHed reAresentatives :ay readily verify the Cuarterly reAorts of the said adIuster and as9ertain whether the said adIuster has 9o:Alied with the Arovisions of law or regulations o;ligatory uAon hi: or whether the :ethod of doing ;usiness of the said adIuster has ;een fair, Iust and honest. 1&E . G3.. "he o::issioner shall, at least on9e a year and whenever he 9onsiders the Au;li9 interest so de:ands, 9ause an

eBa:ination to ;e :ade into the affairs and :ethod of doing ;usiness of every adIuster. 1&E . G3G. !ny violation of any Arovision of this title shall ;e Aunished ;y a fine of not less than "en thousand Aesos DP-5,555.55E, or ;y i:Arison:ent at the dis9retion of the 9ourt< Provided, "hat, in 9ase of a AartnershiA, asso9iation or 9orAoration, the said Aenalty shall ;e i:Aosed uAon the Aartner, Aresident, :anager, :anaging dire9tor, dire9tor or Aerson in 9harge of its ;usiness or resAonsi;le for the violation. 1"I"LE , 1! "U!RIE& 1&E . G33. #o life insuran9e 9o:Aany shall ;e li9ensed to do ;usiness in the PhiliAAines nor shall any life insuran9e 9o:Aany doing ;usiness in the PhiliAAines ;e allowed to 9ontinue doing su9h ;usiness unless they shall engage the servi9es of an a9tuary duly a99redited with the o::issioner who shall, during his tenure of offi9e, ;e dire9tly resAonsi;le for the dire9tion and suAervision of all a9tuarial wor> 9onne9ted with or that :ay ;e involved in the ;usiness of the insuran9e 9o:Aany. "he o::issioner :ay also reCuire non-life insuran9e 9o:Aanies to engage the servi9es of an a99redited a9tuary, in a99ordan9e with the rules and regulations that the o::issioner will for:ulate. 1&E . G36. !ny Aerson :ay ;e offi9ially a99redited ;y the o::issioner to a9t as an a9tuary in any life insuran9e 9o:Aany or in any :utual ;enefit asso9iation authoriHed to do ;usiness in the PhiliAAines uAon aAAli9ation therefor and the Aay:ent of the 9orresAonding fee hereinafter Ares9ri;ed< Provided, "hat< 1DaE (e is a fellow of good standing of the !9tuarial &o9iety of the PhiliAAines at the

ti:e of his aAAoint:ent and re:ains in su9h good standing during the tenure of his engage:entF or 1D;E In the 9ase of one who is not a fellow of the !9tuarial &o9iety of the PhiliAAines, he :eets all the reCuire:ents of the said &o9iety for a99reditation as a fellow of the &o9iety, and has ;een given Aer:ission ;y the Aertinent govern:ent authorities in the PhiliAAines to render servi9es in the PhiliAAines, in the event that he is not a 9itiHen of the PhiliAAines. 1"he registration of the a9tuary shall ;e susAended or revo>ed ;y the o::issioner on the following grounds< 1D-E +ailure to adeCuately Aerfor: reCuired fun9tions and duties under this odeF 1D.E +ailure to dis9lose 9onfli9t of interestF 1DGE +ailure to 9o:Aly with the ode of ondu9t of the !9tuarial &o9iety of the PhiliAAinesF or 1D3E &u9h other grounds that :ay ;e deter:ined ;y the o::issioner. 1#o a9tuary engaged ;y a life insuran9e 9o:Aany shall ;e at the sa:e ti:e a sto9>holder or a dire9tor of the ;oard, 9hief eBe9utive offi9er or 9hief finan9ial offi9er of the 9o:Aany or hold any Aosition that the o::issioner :ay deter:ine to have an inherent 9onfli9t of interest to the Aosition of an a9tuary. 1#o 9ertifi9ate of registration issued under this title shall ;e valid after )e9e:;er G- of the third year following its issuan9e unless it is renewed. 1&E . G3,. "he following do9u:ents, whi9h are fro: ti:e to ti:e su;:itted to the

o::issioner ;y a life insuran9e 9o:Aany authoriHed to do ;usiness in the PhiliAAines, shall ;e duly 9ertified ;y an a99redited a9tuary e:Aloyed ;y su9h 9o:Aany< 1DaE Poli9y reserves, 9lai:s or loss reserves and net due and deferred Are:iu:s. 1D;E &tate:ents of ;ases and net Are:iu:s, loading for gross Are:iu:s, and on nonforfeiture values and reserves, when aAAlying for aAAroval of gross Are:iu:s, reserves and non-forfeiture values. 1D9E Poli9ies of insuran9e under any Alan su;:itted to the o::issioner as reCuired ;y law. 1DdE !nnual state:ents and valuation reAorts su;:itted to the o::issioner as reCuired ;y law. 1DeE +inan9ial AroIe9tion showing the Aro;a;le in9o:e and outgo and reserve reCuire:ents, enu:erating the a9tuarial assu:Ations and ;ases of AroIe9tions. 1DfE =aluation of annuity funds or retire:ent Alans. 1"he o::issioner :ay also reCuire nonlife insuran9e 9o:Aanies to su;:it, fro: ti:e to ti:e, si:ilar do9u:ents whi9h shall ;e duly 9ertified ;y an a99redited a9tuary e:Aloyed ;y su9h 9o:Aany. 1!ny life insuran9e 9o:Aany authoriHed to do ;usiness in the PhiliAAines :ay e:Aloy any Aerson who is not offi9ially a99redited under either of the Cualifi9ations for any >ind of a9tuarial wor>< Provided, "hat he shall not, at any ti:e, have the authority to 9ertify to the 9orre9tness of the foregoing do9u:ents.

1&E . G38. #o a99redited a9tuary shall serve :ore than one 9lient or e:Aloyer at the sa:e ti:e. (owever, one already in the e:Aloy of an insuran9e 9o:Aany :ay ;e allowed ;y the o::issioner to serve a :utual ;enefit asso9iation or any other insuran9e 9o:Aany, Arovided the following 9onditions are first 9o:Alied with< 1DaE "hat the reCuest to engage his servi9es ;y the other e:Aloyer is in writingF 1D;E "hat his Aresent e:Aloyer a9Cuies9ed to it in writingF and 1D9E "hat he furnishes the o::issioner with 9oAies of said reCuest and a9Cuies9en9e. 1#o eBternal auditor shall ;e engaged ;y suAervised Aersons or entities unless it has ;een issued an a99reditation 9ertifi9ate ;y the o::issioner. "he a99reditation 9ertifi9ate shall ;e valid until )e9e:;er Gof the third year fro: issuan9e unless it is revo>ed or susAended. "he o::issioner shall issue rules and regulations to govern the a99reditation of the eBternal auditor and the revo9ation or susAension of the a99reditation. 1"I"LE 8 1R!"I#' $R'!#IM!"I$# !#) R!"E M!0I#' 1&E . G34. Every organiHation whi9h now eBists or whi9h :ay hereafter ;e for:ed for the AurAose of :a>ing rates to ;e used ;y :ore than one insuran9e 9o:Aany authoriHed to do ;usiness in the PhiliAAines shall ;e >nown as a rating organiHation. "he ter: rate as used in this title shall generally :ean the ratio of the Are:iu: to the a:ount insured and shall in9lude, as the 9onteBt :ay reCuire, either the 9onsideration to ;e Aaid or

9harged for insuran9e 9ontra9ts, in9luding surety ;onds, or the ele:ents and fa9tors for:ing the ;asis for the deter:ination or aAAli9ation of the sa:e, or ;oth. 1&E . G37. Every rating organiHation whi9h now eBists or whi9h :ay hereafter ;e for:ed shall ;e su;Ie9t to the Arovisions of this title. 1&E . G65. #o rating organiHation hereafter for:ed shall 9o::en9e rate-:a>ing oAerations until it shall have o;tained a li9ense fro: the o::issioner. Before o;taining su9h li9ense, su9h rating organiHation shall file with the o::issioner a noti9e of its intention to 9o::en9e rate-:a>ing oAerations, a 9oAy of its 9onstitution, arti9les of agree:ent or asso9iation, or of in9orAoration, and its ;ylaws, a list of insuran9e 9o:Aanies that have agreed to ;e9o:e :e:;ers or su;s9ri;ers, and su9h other infor:ation 9on9erning su9h rating organiHation and its oAerations as :ay ;e reCuired ;y the o::issioner. If the o::issioner finds that the organiHation has 9o:Alied with the Arovisions of law and that it has a suffi9ient nu:;er of :e:;ers or su;s9ri;ers and is otherwise Cualified to fun9tion as a rating organiHation, the o::issioner :ay issue a li9ense to su9h rating organiHation authoriHing it to :a>e rates for the >inds of insuran9e or su;divisions thereof as :ay ;e sAe9ified in su9h li9ense. #o li9ense issued to a rating organiHation shall ;e valid after )e9e:;er G- of the third year following its issuan9e unless it is renewed. #o rating organiHation whi9h now eBists and is not li9ensed Aursuant to this se9tion shall 9ontinue rate-:a>ing oAerations until it shall have o;tained fro: the o::issioner a li9ense whi9h he :ay issue if satisfied that su9h organiHation is 9o:Alying with the Arovisions of this title. Every rating

organiHation shall notify the Aro:Atly of every 9hange in<

o::issioner

1DaE Its 9onstitution, its arti9les of agree:ent or asso9iation or its 9ertifi9ate of in9orAoration, and its ;ylaws, rules and regulations governing the 9ondu9t of its ;usinessF and 1D;E Its list of :e:;ers and su;s9ri;ers. 1! member :eans an insurer who Aarti9iAates in or is entitled to Aarti9iAate in the :anage:ent of a rating organiHation. 1! subscriber :eans an insurer whi9h is furnished at its reCuest with rates and rating :anuals ;y a rating organiHation of whi9h it is not a :e:;er. 1&E . G6-. Ea9h rating organiHation shall furnish its rating servi9e without dis9ri:ination to all of its :e:;ers and su;s9ri;ers, and shall, su;Ie9t to reasona;le rules and regulations, Aer:it any insuran9e 9o:Aany doing ;usiness in the PhiliAAines, not ad:itted to :e:;ershiA, to ;e9o:e a su;s9ri;er to its rating servi9es for any >ind of insuran9e or su;divisions thereof. #oti9e of AroAosed 9hanges in su9h rules and regulations shall ;e given to su;s9ri;ers. "he reasona;leness of any rule or regulation in its aAAli9ation to su;s9ri;ers, or the refusal of any rating organiHation to ad:it an insuran9e 9o:Aany as a su;s9ri;er, shall, at the reCuest of any su;s9ri;er or any su9h insuran9e 9o:Aany, ;e reviewed ;y the o::issioner at a hearing held uAon at least ten D-5E days@ written noti9e to su9h rating organiHation and to su9h su;s9ri;er or insuran9e 9o:Aany. "he o::issioner :ay, after su9h hearing, issue an aAAroAriate order. 1&E . G6.. #o rating organiHation or any other asso9iation shall refuse to do ;usiness

with, or Arohi;it or Arevent the Aay:ent of 9o::issions to, any Aerson li9ensed as an insuran9e ;ro>er Aursuant to the Arovisions of "itle - of this 9haAter. 1&E . G6G. Rating organiHations shall ;e su;Ie9t to eBa:ination ;y the o::issioner, as often as he :ay dee: su9h eBa:ination eBAedient, Aursuant to the Arovisions of this ode aAAli9a;le to the eBa:ination of insuran9e 9o:Aanies. (e shall 9ause su9h an eBa:ination of ea9h rating organiHation to ;e :ade at least on9e in every five D6E years. 1&E . G63. "he o::issioner :ay susAend or revo>e the li9ense of any rating organiHation whi9h fails to 9o:Aly with his order within the ti:e li:ited ;y su9h order, or any eBtension thereof whi9h he :ay grant. "he o::issioner :ay deter:ine when a susAension of li9ense shall ;e9o:e effe9tive and it shall re:ain in effe9t for the Aeriod fiBed ;y hi:, unless he :odifies or res9inds su9h susAension. 1&E . G66. !ny rating organiHation :ay su;s9ri;e for or Aur9hase a9tuarial, te9hni9al or other servi9es, and su9h servi9es shall ;e availa;le to all :e:;ers and su;s9ri;ers without dis9ri:ination. 1&E . G6,. !ny rating organiHation :ay Arovide for the eBa:ination of Aoli9ies, daily reAorts, ;inders, renewal 9ertifi9ates, endorse:ents or other instru:ents of insuran9e, or the 9an9ellation thereof, and :ay :a>e reasona;le rules governing their su;:ission. &u9h rules shall 9ontain a Arovision that in the event an insuran9e 9o:Aany does not within siBty D,5E days furnish satisfa9tory eviden9e to the rating organiHation of the 9orre9tion of any error or o:ission Areviously 9alled to its attention ;y the rating organiHation, it shall ;e the duty of the rating organiHation to notify the

o::issioner thereof. !ll infor:ation so su;:itted for eBa:ination shall ;e 9onfidential. 1&E . G68. ooAeration a:ong rating organiHations or a:ong rating organiHations and insurers in rate :a>ing or in other :atters within the s9oAe of this title is here;y authoriHed, Arovided the filings resulting fro: su9h 9ooAeration are su;Ie9t to all Arovisions of this title whi9h are aAAli9a;le to filings generally. "he o::issioner :ay review su9h 9ooAerative a9tivities and Ara9ti9es and if he finds that any su9h a9tivity or Ara9ti9e is unfair or unreasona;le or otherwise in9onsistent with the Arovisions of this title, he :ay issue a written order sAe9ifying in what resAe9ts su9h a9tivity or Ara9ti9e is unfair or unreasona;le or otherwise in9onsistent with the Arovisions of this title, and reCuiring the dis9ontinuan9e of su9h a9tivity or Ara9ti9e. 1&E . G64. Every rating organiHation and every insuran9e 9o:Aany whi9h :a>es and files its own rates, shall :a>e rates for all ris>s rated ;y su9h organiHation or insuran9e 9o:Aany in a99ordan9e with the following Arovisions< 1DaE Basi9 9lassifi9ation, :anual, :ini:u:, 9lass, or s9hedule rates or rating Alans, shall ;e :ade and adoAted for all su9h ris>s. !ny deAarture fro: su9h rates shall ;e in a99ordan9e with s9hedules, rating Alans and rules filed with the o::issionerF 1D;E Rates shall ;e reasona;le and adeCuate for the 9lass of ris>s to whi9h they aAAlyF 1D9E #o rate shall dis9ri:inate unfairly ;etween ris>s involving essentially the sa:e haHards and eBAense ele:ents or ;etween ris>s in the aAAli9ation of li>e 9harges and 9reditsF

1DdE onsideration shall ;e given to the Aast and ArosAe9tive loss eBAerien9e, in9luding the 9onflagration and 9atastroAhe haHards, if any, to all fa9tors reasona;ly attri;uta;le to the 9lass of ris>s, to a reasona;le Arofit, to 9o::issions Aaid during the :ost re9ent annual Aeriod and to Aast and ArosAe9tive other eBAenses. In 9ase of fire insuran9e rates, 9onsideration shall ;e given to the eBAerien9e of the fire insuran9e ;usiness during a Aeriod of not less than five D6E years neBt Are9eding the year in whi9h the review is :adeF 1DeE Ris> :ay ;e grouAed ;y 9lassifi9ations for the esta;lish:ent of rates and :ini:u: Are:iu:s. lassifi9ation rates :ay ;e :odified to Arodu9e rates for individual ris>s in a99ordan9e with rating Alans whi9h esta;lish standards for :easuring variations in haHards or eBAense Arovisions, or ;oth. &u9h standards :ay :easure any differen9e a:ong ris>s that 9an ;e de:onstrated to have a Aro;a;le effe9t uAon losses or eBAenses. 1&E . G67. #o rating organiHation and no insuran9e 9o:Aany whi9h :a>es and files its own rates shall :a>e or Aro:ulgate any rate or s9hedule of rates whi9h is to ;e aAAlied to any fire ris> on the 9ondition that the whole a:ount of insuran9e on any ris> or any sAe9ified Aart thereof shall ;e Ala9ed with the :e:;ers of or su;s9ri;ers to su9h rating organiHation or with su9h insurer. 1&E . G,5. Every insuran9e 9o:Aany doing ;usiness in the PhiliAAines shall annually file with the rating organiHation of whi9h it is a :e:;er or su;s9ri;er, or with su9h other agen9y as the o::issioner :ay designate, a statisti9al reAort showing a 9lassifi9ation s9hedule of its Are:iu:s and losses on all >inds or tyAes of insuran9e ;usiness to whi9h &e9tion G64 is aAAli9a;le, and su9h other infor:ation as the

o::issioner :ay dee: ne9essary or eBAedient for the ad:inistration of the Arovisions of this title. 1&E . G,-. Every non-life rating organiHation and every non-life insuran9e 9o:Aany doing ;usiness in the PhiliAAines shall file with the o::issioner, eB9eAt as to ris>s whi9h ;y general 9usto: of the ;usiness are not written a99ording to :anual rates or rating Alans, every rate :anual, s9hedule of rates, 9lassifi9ation of ris>s, rating Alan, and every other rating rule and every :odifi9ation of any of the foregoing whi9h it AroAoses to use. !n insuran9e 9o:Aany :ay satisfy its o;ligation to :a>e su9h filings for any >ind or tyAe of insuran9e ;y ;e9o:ing a :e:;er of or su;s9ri;er to a rating organiHation whi9h :a>es su9h filings for su9h >ind or tyAe of insuran9e, and ;y authoriHing the o::issioner to a99eAt su9h filings of the rating organiHation on ;ehalf of su9h insuran9e 9o:Aany. 1&E . G,.. Every :anual or s9hedule of rates and every rating Alan filed as Arovided in the Are9eding se9tion shall state or 9learly indi9ate the 9hara9ter and eBtent of the 9overage to whi9h any su9h rate or any :odifi9ation thereof will ;e aAAlied. 1&E . G,G. "he o::issioner shall review filings as soon as reasona;ly Aossi;le after they have ;een :ade in order to deter:ine whether they :eet the reCuire:ents of this title. /hen a filing is not a99o:Aanied ;y the infor:ation uAon whi9h the insuran9e 9o:Aany suAAorts su9h filing, and the o::issioner does not have suffi9ient infor:ation to deter:ine whether su9h filing :eets the reCuire:ents of this title, he shall reCuire su9h insuran9e 9o:Aany to furnish the infor:ation uAon whi9h it suAAorts su9h filing. "he infor:ation furnished in suAAort of a filing :ay in9lude<

1DaE "he eBAerien9e or Iudg:ent of the insuran9e 9o:Aany or rating organiHation :a>ing the filingF 1D;E Its interAretation of any statisti9al data it relies uAonF 1D9E "he eBAerien9e of other insuran9e 9o:Aanies or rating organiHationF or 1DdE !ny other relevant fa9tors. 1&E . G,3. If the o::issioner finds that any rate filings theretofore filed with hi: do not 9o:Aly with the Arovisions of this title or that they Arovide rates or rules whi9h are inadeCuate, eB9essive, unfairly dis9ri:inatory or otherwise unreasona;le, he :ay order the sa:e withdrawn and at the eBAiration of siBty D,5E days thereafter the sa:e shall ;e dee:ed no longer on file. Before :a>ing any su9h finding and order, the o::issioner shall give noti9e, not less than ten D-5E days in advan9e, and a hearing, to the rating organiHation, or to the insurer, whi9h filed the sa:e. &u9h order shall not affe9t any 9ontra9t or Aoli9y :ade or issued Arior to the eBAiration of su9h siBty D,5E-day Aeriod. 1&E . G,6. #o :e:;er or su;s9ri;er of a rating organiHation, and no insuran9e 9o:Aany doing ;usiness in the PhiliAAines, or agent, e:Aloyee or other reAresentative of su9h 9o:Aany, and no insuran9e ;ro>er shall 9harge or de:and a rate or re9eive a Are:iu: whi9h deviates fro: the rates, rating Alans, 9lassifi9ations, s9hedules, rules and standards, :ade and last filed ;y a rating organiHation or ;y or on ;ehalf of the insuran9e 9o:Aany, or shall issue or :a>e any Aoli9y or 9ontra9t involving a violation of su9h rate filings. 1&E . G,,. #otwithstanding any other Arovisions of this title, uAon the written

aAAli9ation of the insurer, stating his reasons therefor, filed with and aAAroved ;y the o::issioner, a rate in eB9ess of that Arovided ;y a filing otherwise aAAli9a;le :ay ;e used on any sAe9ifi9 ris>. 1&E . G,8. /henever the o::issioner shall deter:ine, after noti9e and a hearing, that the rates 9harged or filed on any 9lass of ris>s are eB9essive, dis9ri:inatory, inadeCuate or unreasona;le, he shall order that su9h rates ;e aAAroAriately adIusted. +or the AurAose of aAAlying the Arovisions of this se9tion, the o::issioner :ay fro: ti:e to ti:e aAArove reasona;le 9lassifi9ations of ris>s for any or all su9h 9lasses, having due regard to the Aast and ArosAe9tive loss eBAerien9e, in9luding 9onflagration or 9atastroAhe haHards, if any, to all other relevant fa9tors and to a reasona;le Arofit. 1&E . G,4. #othing 9ontained in this title shall ;e 9onstrued as reCuiring any insurer to ;e9o:e a :e:;er of or su;s9ri;er to any rating organiHation. 1&E . G,7. !gree:ents :ay ;e :ade a:ong insuran9e 9o:Aanies with resAe9t to the eCuita;le aAAortion:ent a:ong the: of insuran9e whi9h :ay ;e afforded aAAli9ants who are in good faith entitled to ;ut are una;le to Aro9ure su9h insuran9e through ordinary :ethods and su9h insuran9e 9o:Aanies :ay agree a:ong the:selves on the use of reasona;le rates and :odifi9ations for su9h insuran9e, su9h agree:ents and rate :odifi9ations to ;e su;Ie9t to the aAAroval of the o::issioner< Provided, ho ever, "hat the Arovisions of this se9tion shall not ;e dee:ed to aAAly to wor>:en@s 9o:Aensation insuran9e. 1&E . G85. #o insuran9e 9o:Aany doing ;usiness in the PhiliAAines or any agent thereof, no insuran9e ;ro>er, and no

e:Aloyee or other reAresentative of any su9h insuran9e 9o:Aany, agent, or ;ro>er, shall :a>e, Aro9ure or negotiate any 9ontra9t of insuran9e or agree:ent as to Aoli9y 9ontra9t, other than is Alainly eBAressed in the Aoli9y or other written 9ontra9t issued or to ;e issued as eviden9e thereof, or shall dire9tly or indire9tly, ;y giving or sharing a 9o::ission or in any :anner whatsoever, Aay or allow or offer to Aay or allow to the insured or to any e:Aloyee of su9h insured, either as an indu9e:ent to the :a>ing of su9h insuran9e or after su9h insuran9e has ;een effe9ted, any re;ate fro: the Are:iu: whi9h is sAe9ified in the Aoli9y, or any sAe9ial favor or advantage in the dividends or other ;enefits to a99rue thereon, or shall give or offer to give any valua;le 9onsideration or indu9e:ent of any >ind, dire9tly or indire9tly, whi9h is not sAe9ified in su9h Aoli9y or 9ontra9t of insuran9eF nor shall any su9h 9o:Aany, or any agent thereof, as to any Aoli9y or 9ontra9t of insuran9e issued, :a>e any dis9ri:ination against any +iliAino in the sense that he is given less advantageous rates, dividends or other Aoli9y 9onditions or Arivileges than are a99orded to other nationals ;e9ause of his ra9e. 1&E . G8-. #o insuran9e 9o:Aany doing ;usiness in the PhiliAAines, and no offi9er, dire9tor, or agent thereof, and no insuran9e ;ro>er or any other Aerson, AartnershiA or 9orAoration shall issue or 9ir9ulate or 9ause or Aer:it to ;e issued or 9ir9ulated any literature, illustration, 9ir9ular or state:ent of any sort :isreAresenting the ter:s of any Aoli9y issued ;y any insuran9e 9o:Aany of the ;enefits or advantages Aro:ised there;y, or any :isleading esti:ate of the dividends or share of surAlus to ;e re9eived thereon, or shall use any na:e or title of any Aoli9y or 9lass of Aoli9ies :isreAresenting the true nature thereofF nor shall any su9h 9o:Aany or agent thereof, or any other Aerson,

AartnershiA or 9orAoration :a>e any :isleading reAresentation or in9o:Alete 9o:Aarison of Aoli9ies to any Aerson insured in su9h 9o:Aany for the AurAose of indu9ing or tending to indu9e su9h Aerson to laAse, forfeit, or surrender his said insuran9e. 1&E . G8.. If the o::issioner, after noti9e and hearing, finds that any insuran9e 9o:Aany, rating organiHation, agent, ;ro>er or other Aerson has violated any of the Arovisions of this title, it shall order the Aay:ent of a fine not to eB9eed "wenty-five thousand Aesos DP.6,555.55E for ea9h su9h offense, and shall i::ediately susAend or revo>e the li9ense issued to su9h insuran9e 9o:Aany, rating organiHation, agent, or ;ro>er. "he issuan9e, Aro9ure:ent or negotiation of a single Aoli9y or 9ontra9t of insuran9e shall ;e dee:ed a seAarate offense. 1"I"LE 4 1PR$=I&I$# $MM$# "$ !'E#"&, BR$0ER& !#) !)JU&"ER& 1&E . G8G. ! li9ense issued to a AartnershiA, asso9iation or 9orAoration to a9t as an insuran9e agent, general agent, insuran9e ;ro>er, reinsuran9e ;ro>er, or adIuster shall authoriHe only the individual na:ed in the li9ense who shall Cualify therefor as though an individual li9ensee. "he o::issioner shall 9harge, and the li9ensee shall Aay, a full additional li9ense fee as to ea9h resAe9tive individual so na:ed in su9h li9ense in eB9ess of one. 1Li9enses and 9ertifi9ates of registration issued under the Arovisions of this 9haAter :ay ;e renewed ;y the filing of noti9es of intention on for:s to ;e Ares9ri;ed ;y the o::issioner and Aay:ent of the fees therefor.

1&E . G83. "he o::issioner, in 9onsultation with the duly a99redited asso9iations reAresenting the insuran9e industry, shall adoAt and Aro:ulgate a 9ode of 9ondu9t to Aro:ote integrity, honesty and ethi9al ;usiness Ara9ti9es a:ong insuran9e agents, distri;utors and other inter:ediaries. 1"I"LE 7 1B!# !&&UR!# E 1&E . G86. "he ter: bancassurance shall :ean the Aresentation and sale to ;an> 9usto:ers ;y an insuran9e 9o:Aany of its insuran9e Arodu9ts within the Are:ises of the head offi9e of su9h ;an> duly li9ensed ;y the Bang>o &entral ng PiliAinas or any of its ;ran9hes under su9h rules and regulations whi9h the o::issioner and the Bang>o &entral ng PiliAinas :ay Aro:ulgate. "o engage in ;an9assuran9e arrange:ent, a ;an> is not reCuired to have eCuity ownershiA of the insuran9e 9o:Aany. #o insuran9e 9o:Aany shall enter into a ;an9assuran9e arrange:ent unless it Aossesses all the reCuire:ents as :ay ;e Ares9ri;ed ;y the o::issioner and the Bang>o &entral ng PiliAinas. 1#o insuran9e Arodu9t under this se9tion, whether life or non-life, shall ;e issued or delivered unless in the for: Areviously aAAroved ;y the o::issioner. 1&E . G8,. Personnel tas>ed to Aresent and sell insuran9e Arodu9ts within the ;an> Are:ises shall ;e duly li9ensed ;y the o::issioner and shall ;e su;Ie9t to the rules and regulations of this !9t. 1&E . G88. "he o::issioner and the Bang>o &entral ng PiliAinas shall Aro:ulgate rules and regulations to effe9tively suAervise the ;usiness of ;an9assuran9e.

1 (!P"ER = 1&E URI"* +U#) 1&E . G84. "here is here;y 9reated a fund to ;e >nown as the &e9urity +und whi9h shall ;e used in the Aay:ent of allowed 9lai:s against an insuran9e 9o:Aany authoriHed to transa9t ;usiness in the PhiliAAines re:aining unAaid ;y reason of the insolven9y of su9h 9o:Aany. "he said +und :ay also ;e used to reinsure the Aoli9y of the insolvent insurer in any solvent insurer authoriHed to do ;usiness in the PhiliAAines as Arovided in &e9tion .6,. "he +und :ay li>ewise ;e used to Aay insured 9lai:s whi9h otherwise would not ;e 9o:Aensa;le under the Arovisions of the Aoli9y. #o Aay:ent fro: the &e9urity +und shall, however, ;e :ade to any Aerson who owns or 9ontrols ten Aer9ent D-5LE or :ore of the voting shares of sto9> of the insolvent insurer and no Aay:ent on any one 9lai: shall eB9eed "wenty thousand Aesos DP.5,555.55E. 1&E . G87. &u9h +und shall 9onsist of all Aay:ents :ade to the +und ;y insuran9e 9o:Aanies authoriHed to do ;usiness in the PhiliAAines. Pay:ents :ade ;y life insuran9e 9o:Aanies shall ;e treated seAarately fro: those :ade ;y non-life insuran9e 9o:Aanies and the 9orresAonding fund shall ;e 9alled Life !99ount and #onLife !99ount, resAe9tively, and shall ;e held and ad:inistered as su9h ;y the o::issioner in a99ordan9e with the Arovisions of this title. "he Life !99ount shall ;e utiliHed eB9lusively for dis;urse:ents that refer to life insuran9e 9o:Aanies, while the #on-Life !99ount shall ;e utiliHed eB9lusively for dis;urse:ents that refer to non-life insuran9e 9o:Aanies.

1&E . G45. !ll insuran9e 9o:Aanies doing ;usiness in the PhiliAAines shall 9ontri;ute to the &e9urity +und, Life or #on-Life !99ount, as the 9ase :ay ;e, the aggregate a:ount of +ive :illion Aesos DP6,555,555.55E for ea9h !99ount. "he 9ontri;utions of the life insuran9e 9o:Aanies and of the non-life insuran9e 9o:Aanies shall ;e in dire9t AroAortion to the ratio ;etween a Aarti9ular life insuran9e 9o:Aany or a Aarti9ular non-life insuran9e 9o:Aany@s net worth and the aggregate net worth of all life insuran9e 9o:Aanies or all non-life insuran9e 9o:Aanies, as the 9ase :ay ;e, as shown in their latest finan9ial state:ents aAAroved ;y the o::issioner. "his AroAortion aAAlied to the +ive :illion Aesos DP6,555,555.55E shall ;e the 9ontri;ution of a Aarti9ular 9o:Aany to the 9orresAonding !99ount of the &e9urity +und. 1"he a:ount of +ive :illion Aesos DP6,555,555.55E in ea9h !99ount shall ;e in the for: of a revolving trust fund. "he resAe9tive 9ontri;utions of the 9o:Aanies shall re:ain as ad:itted assets in their ;oo>s and any dis;urse:ent therefro: shall ;e dedu9ted AroAortionately fro: the 9ontri;utions of ea9h 9o:Aany whi9h will ;e allowed as dedu9tions for in9o:e taB AurAoses. !ny earnings of the +und shall ;e turned over to the 9ontri;uting 9o:Aanies in AroAortion to their 9ontri;utions.

1In the 9ase of dis;urse:ents of funds fro: the +und as Arovided in the foregoing AaragraAh, the life and non-life 9o:Aanies, as the 9ase :ay ;e, shall reAlenish the a:ount dis;ursed in dire9t AroAortion to the individual 9o:Aany@s net worth and the aggregate net worth of the life or non-life 9o:Aanies, as the 9ase :ay ;e. (owever, in no 9ase shall the +und eB9eed the aggregate a:ount of "en :illion Aesos DP-5,555,555.55E, or +ive :illion Aesos DP6,555,555.55E for ea9h !99ount. 1&hould the +und, Life or #on-Life !99ount, as the 9ase :ay ;e, ;e inadeCuate for a dis;urse:ent as Arovided for, then the Life or #on-Life 9o:Aanies, as the 9ase :ay ;e, shall 9ontri;ute to the +und their resAe9tive shares in the AroAortion Areviously :entioned. 1&E . G4-. "he o::issioner :ay adoAt, a:end, and enfor9e all reasona;le rules and regulations ne9essary for the AroAer ad:inistration of the +und and of the !99ounts. In the event any insurer shall fail to :a>e any Aay:ent reCuired ;y this title, or that any Aay:ent :ade is in9orre9t, he shall have full authority to eBa:ine all the ;oo>s and re9ords of the insurer for the AurAose of as9ertaining the fa9ts and shall deter:ine the 9orre9t a:ount to ;e Aaid and :ay Aro9eed in any 9ourt of 9o:Aetent Iurisdi9tion to re9over for the ;enefit of the +und or of the !99ount 9on9erned any su: shown to ;e due uAon su9h eBa:ination and deter:ination. !ny insurer whi9h fails to :a>e any Aay:ent to the +und or to the !99ount 9on9erned when due, shall there;y forfeit to said +und or !99ount 9on9erned a Aenalty of five Aer9ent D6LE of the a:ount deter:ined to ;e due as Arovided ;y this title, Alus one Aer9ent D-LE of su9h a:ount for ea9h :onth of delay or fra9tion thereof, after the eBAiration of the first :onth of su9h delay, ;ut the o::issioner, if satisfied that

the delay was eB9usa;le, :ay re:it all or any Aart of su9h Aenalty. "he o::issioner, in his dis9retion, :ay susAend or revo>e the 9ertifi9ate of authority to do ;usiness in the PhiliAAines of any insuran9e 9o:Aany whi9h shall fail to 9o:Aly with this title or to Aay any Aenalty i:Aosed in a99ordan9e therewith. 1&E . G4.. "he !99ounts 9reated ;y this title shall ;e seAarate and aAart fro: ea9h other and fro: any other fund. "he "reasurer of the PhiliAAines shall ;e the 9ustodian of the Life !99ount and #on-Life !99ount of the &e9urity +undF and all dis;urse:ents fro: any !99ount shall ;e :ade ;y the "reasurer of the PhiliAAines uAon vou9hers signed ;y the o::issioner or his deAuty, as hereinafter Arovided. "he :oneys of said !99ount :ay ;e invested ;y the o::issioner only in ;onds or other instru:ents of de;t of the 'overn:ent of the PhiliAAines or its Aoliti9al su;divisions or instru:entalities. "he o::issioner :ay sell any of the se9urities in whi9h an !99ount is invested, if advisa;le, for its AroAer ad:inistration or in the ;est interest of su9h !99ount. 1&E . G4G. Pay:ents fro: either the Life Insuran9e !99ount or #on-Life !99ount, as the 9ase :ay ;e, shall ;e :ade ;y the "reasurer of the PhiliAAines to the o::issioner, uAon the authority of aAAroAriate 9ertifi9ate filed with hi: ;y the o::issioner a9ting in su9h 9aAa9ity. 1&E . G43. "he o::issioner :ay, in his dis9retion, designate or aAAoint a duly authoriHed reAresentative or reAresentatives to aAAear and defend ;efore any 9ourt or other ;ody or offi9ial having Iurisdi9tion any or all a9tions or Aro9eedings against Arin9iAals or assureds on insuran9e Aoli9ies or 9ontra9ts issued to the: where the insurer has ;e9o:e insolvent or una;le to :eet its

insuran9e o;ligations. "he o::issioner shall have, as of the date of insolven9y of su9h insurer or as of the date of its ina;ility to :eet its insuran9e o;ligations, only the rights whi9h su9h insurer would have had if it had not ;e9o:e insolvent or una;le to :eet its insuran9e o;ligations. +or the AurAose of this title, the o::issioner shall have Aower to e:Aloy su9h 9ounsel, 9ler>s and assistants as he :ay dee: ne9essary. 1&E . G46. "he eBAense of ad:inistering an !99ount shall ;e Aaid out of the !99ount 9on9erned. "he o::issioner shall serve as ad:inistrator of the +und and of the !99ounts without additional 9o:Aensation, ;ut :ay ;e allowed and Aaid fro: the !99ount 9on9erned eBAenses in9urred in the Aerfor:an9e of his duties in 9onne9tion with said !99ount. "he 9o:Aensation of those Aersons e:Aloyed ;y the o::issioner shall ;e dee:ed ad:inistration eBAense Aaya;le fro: the !99ount 9on9erned. "he o::issioner shall in9lude in his annual reAort to the &e9retary of +inan9e a state:ent of the eBAenses of ad:inistration of the +und and of the Life !99ount and #on-Life !99ount for the Are9eding year. 1 (!P"ER =I 1 $MPUL&$R* M$"$R LI!BILI"* I#&UR!# E =E(I LE

1&E . G4,. +or AurAoses of this 9haAter< 1DaE Motor &ehicle is any vehi9le as defined in &e9tion G, AaragraAh DaE of ReAu;li9 !9t #o. 3-G,, otherwise >nown as the ?Land "ransAortation and "raffi9 ode@. 1D;E Passenger is any fare Aaying Aerson ;eing transAorted and 9onveyed in and ;y a :otor vehi9le for transAortation of Aassengers for 9o:Aensation, in9luding Aersons eBAressly authoriHed ;y law or ;y

the vehi9le@s oAerator or his agents to ride without fare. 1D9E 'hird party is any Aerson other than a Aassenger as defined in this se9tion and shall also eB9lude a :e:;er of the household, or a :e:;er of the fa:ily within the se9ond degree of 9onsanguinity or affinity, of a :otor vehi9le owner or land transAortation oAerator, as li>ewise defined herein, or his e:Aloyee in resAe9t of death, ;odily inIury, or da:age to AroAerty arising out of and in the 9ourse of e:Aloy:ent. 1DdE ( ner or motor vehicle o ner :eans the a9tual legal owner of a :otor vehi9le, in whose na:e su9h vehi9le is duly registered with the Land "ransAortation $ffi9eF 1DeE )and transportation operator :eans the owner or owners of :otor vehi9les for transAortation of Aassengers for 9o:Aensation, in9luding s9hool ;uses. 1DfE Insurance policy or Policy refers to a 9ontra9t of insuran9e against Aassenger and third-Aarty lia;ility for death or ;odily inIuries and da:age to AroAerty arising fro: :otor vehi9le a99idents. 1&E . G48. It shall ;e unlawful for any land transAortation oAerator or owner of a :otor vehi9le to oAerate the sa:e in the Au;li9 highways unless there is in for9e in relation thereto a Aoli9y of insuran9e or guaranty in 9ash or surety ;ond issued in a99ordan9e with the Arovisions of this 9haAter to inde:nify the death, ;odily inIury, andKor da:age to AroAerty of a third-Aarty or Aassenger, as the 9ase :ay ;e, arising fro: the use thereof.

1&E . G44. "he o::issioner shall furnish the Land "ransAortation $ffi9e with a list of insuran9e 9o:Aanies authoriHed to issue the Aoli9y of insuran9e or surety ;ond reCuired ;y this 9haAter. 1&E . G47. "he Land "ransAortation $ffi9e shall not allow the registration or renewal of registration of any :otor vehi9le without first reCuiring fro: the land transAortation oAerator or :otor vehi9le owner 9on9erned the Aresentation and filing of a su;stantiating do9u:entation in a for: aAAroved ;y the o::issioner eviden9ing that the Aoli9y of insuran9e or guaranty in 9ash or surety ;ond reCuired ;y this 9haAter is in effe9t. 1&E . G75. Every land transAortation oAerator and every owner of a :otor vehi9le shall, ;efore aAAlying for the registration or renewal of registration of any :otor vehi9le, at his oAtion, either se9ure an insuran9e Aoli9y or surety ;ond issued ;y any insuran9e 9o:Aany authoriHed ;y the o::issioner or :a>e a 9ash deAosit in su9h a:ount as herein reCuired as li:it of lia;ility for AurAoses sAe9ified in &e9tion G48. 1DaE In the 9ase of a land transAortation oAerator, the insuran9e guaranty in 9ash or surety ;ond shall 9over lia;ility for death or ;odily inIuries of third-Aarties andKor Aassengers arising out of the use of su9h vehi9le in the a:ount not less than "welve thousand Aesos DP-.,555.55E Aer Aassenger or third-Aarty and an a:ount, for ea9h of su9h 9ategories, in any one a99ident of not less than that set forth in the following s9ale< 1D-E Motor vehi9les with an authoriHed 9aAa9ity of twenty-siB D.,E or :ore Aassengers< +ifty thousand Aesos DP65,555.55EF

1D.E Motor vehi9les with an authoriHed 9aAa9ity of fro: twelve D-.E to twenty-five D.6E Aassengers< +orty thousand Aesos DP35,555.55EF 1DGE Motor vehi9les with an authoriHed 9aAa9ity of fro: siB D,E to eleven D--E Aassengers< "hirty thousand Aesos DPG5,555.55EF 1D3E Motor vehi9les with an authoriHed 9aAa9ity of five D6E or less Aassengers< +ive thousand Aesos DP6,555.55E :ultiAlied ;y the authoriHed 9aAa9ity. 1Provided, ho ever, "hat su9h 9ash deAosit :ade to, or surety ;ond Aosted with, the o::issioner shall ;e resorted to ;y hi: in 9ases of a99idents the inde:nities for whi9h to third-Aarties andKor Aassengers are not settled a99ordingly ;y the land transAortation oAerator and, in that event, the said 9ash deAosit shall ;e reAlenished or su9h surety ;ond shall ;e restored within siBty D,5E days after i:Aair:ent or eBAiry, as the 9ase :ay ;e, ;y su9h land transAortation oAerator, otherwise, he shall se9ure the insuran9e Aoli9y reCuired ;y this 9haAter. "he aforesaid 9ash deAosit :ay ;e invested ;y the o::issioner in readily :ar>eta;le govern:ent ;onds, andKor se9urities. 1D;E In the 9ase of an owner of a :otor vehi9le, the insuran9e or guaranty in 9ash or surety ;ond shall 9over lia;ility for death or inIury to third-Aarties in an a:ount not less than that set forth in the following s9ale in any one a99ident< 1D-E Private ars 1DiE Banta:< DP.5,555.55EF "wenty thousand Aesos

1DiiE Light< "wenty DP.5,555.55EF and 1DiiiE (eavy< DPG5,555.55E. "hirty

thousand thousand

Aesos Aesos

1D.E $ther Private =ehi9les 1DiE "ri9y9les, :otor9y9les and s9ooters< "welve thousand Aesos DP-.,555.55EF 1DiiE =ehi9les with an unladen weight of .,,55 >ilos or less< "wenty thousand Aesos DP.5,555.55EF 1DiiiE =ehi9les with an unladen weight of ;etween .,,5- >ilos and G,7G5 >ilos< "hirty thousand Aesos DPG5,555.55EF and 1DivE =ehi9les with an unladen weight over G,7G5 >ilos< +ifty thousand Aesos DP65,555.55E. 1"he o::issioner :ay, if warranted, set forth s9hedule of inde:nities for the Aay:ent of 9lai:s for death or ;odily inIuries with the 9overages set forth herein. 1&E . G7-. !ny 9lai: for death or inIury to any Aassenger or third-Aarty Aursuant to the Arovisions of this 9haAter shall ;e Aaid without the ne9essity of Aroving fault or negligen9e of any >ind< Provided, "hat for AurAoses of this se9tion< 1DaE "he total inde:nity in resAe9t of any Aerson shall not ;e less than +ifteen thousand Aesos DP-6,555.55EF 1D;E "he following Aroofs of loss, when su;:itted under oath, shall ;e suffi9ient eviden9e to su;stantiate the 9lai:< 1D-E Poli9e reAort of a99identF and

1D.E )eath 9ertifi9ate and eviden9e suffi9ient to esta;lish the AroAer AayeeF or 1DGE Medi9al reAort and eviden9e of :edi9al or hosAital dis;urse:ent in resAe9t of whi9h refund is 9lai:edF 1D9E lai: :ay ;e :ade against one :otor vehi9le only. In the 9ase of an o99uAant of a vehi9le, 9lai:, shall lie against the insurer of the vehi9le in whi9h the o99uAant is riding, :ounting or dis:ounting fro:. In any other 9ase, 9lai: shall lie against the insurer of the dire9tly offending vehi9le. In all 9ases, the right of the Aarty Aaying the 9lai: to re9over against the owner of the vehi9le resAonsi;le for the a99ident shall ;e :aintained. 1&E . G7.. #o land transAortation oAerator or owner of :otor vehi9le shall ;e unreasona;ly denied the Aoli9y of insuran9e or surety ;ond reCuired ;y this 9haAter ;y the insuran9e 9o:Aanies authoriHed to issue the sa:e, otherwise, the Land "ransAortation $ffi9e shall reCuire fro: said land transAortation oAerator or owner of the vehi9le, in lieu of a Aoli9y of insuran9e or surety ;ond, a 9ertifi9ate that a 9ash deAosit has ;een :ade with the o::issioner in su9h a:ount reCuired as li:its of inde:nity in &e9tion G75 to answer for the Aassenger andKor third-Aarty lia;ility of su9h land transAortation oAerator or owner of the vehi9le. 1#o insuran9e 9o:Aany :ay issue the Aoli9y of insuran9e or surety ;ond reCuired under this 9haAter unless so authoriHed under eBisting laws. 1"he authority to engage in the 9asualty andKor surety lines of ;usiness of an insuran9e 9o:Aany that refuses to issue or renew, without Iust 9ause, the insuran9e Aoli9y or surety ;ond therein reCuired shall ;e withdrawn i::ediately.

1&E . G7G. #o 9an9ellation of the Aoli9y shall ;e valid unless written noti9e thereof is given to the land transAortation oAerator or owner of the vehi9le and to the Land "ransAortation $ffi9e at least fifteen D-6E days Arior to the intended effe9tive date thereof. UAon re9eiAt of su9h noti9e, the Land "ransAortation $ffi9e, unless it re9eives eviden9e of a new valid insuran9e or guaranty in 9ash or surety ;ond as Ares9ri;ed in this 9haAter, or an endorse:ent of revival of the 9an9elled one, shall order the i::ediate 9onfis9ation of the Alates of the :otor vehi9le 9overed ;y su9h 9an9elled Aoli9y. "he sa:e :ay ;e reissued only uAon Aresentation of a new insuran9e Aoli9y or that a guaranty in 9ash or surety ;ond has ;een :ade or Aosted with the o::issioner and whi9h :eets the reCuire:ents of this 9haAter, or an endorse:ent or revival of the 9an9elled one. 1&E . G73. If the 9an9ellation of the Aoli9y or surety ;ond is 9onte:Alated ;y the land transAortation oAerator or owner of the vehi9le, he shall, ;efore the Aoli9y or surety ;ond 9eases to ;e effe9tive, se9ure a si:ilar Aoli9y of insuran9e or surety ;ond to reAla9e the Aoli9y or surety ;ond to ;e 9an9elled or :a>e a 9ash deAosit in suffi9ient a:ount with the o::issioner, and without any gaA, file the reCuired do9u:entation with the Land "ransAortation $ffi9e, and notify the insuran9e 9o:Aany 9on9erned of the 9an9ellation of its Aoli9y or surety ;ond. 1&E . G76. In 9ase of 9hange of owner shiA of a :otor vehi9le, or 9hange of the engine of an insured vehi9le, there shall ;e no need of issuing a new Aoli9y until the neBt date of registration or renewal of registration of su9h vehi9le, and< Provided, "hat the insuran9e 9o:Aany shall agree to 9ontinue the Aoli9y, su9h 9hange of ownershiA or su9h 9hange of the engine shall ;e indi9ated in a 9orresAonding endorse:ent ;y the

insuran9e 9o:Aany 9on9erned, and a signed duAli9ate of su9h endorse:ent shall, within a reasona;le ti:e, ;e filed with the Land "ransAortation $ffi9e. 1&E . G7,. In the settle:ent and Aay:ent of 9lai:s, the inde:nity shall not ;e availed of ;y any a99ident vi9ti: or 9lai:ant as an instru:ent of enri9h:ent ;y reason of an a99ident, ;ut as an assistan9e or restitution insofar as 9an fairly ;e as9ertained. 1&E . G78. !ny Aerson having any 9lai: uAon the Aoli9y issued Aursuant to this 9haAter shall, without any unne9essary delay, Aresent to the insuran9e 9o:Aany 9on9erned a written noti9e of 9lai: setting forth the nature, eBtent and duration of the inIuries sustained as 9ertified ;y a duly li9ensed Ahysi9ian. #oti9e of 9lai: :ust ;e filed within siB D,E :onths fro: the date of a99ident, otherwise, the 9lai: shall ;e dee:ed waived. !9tion or suit for re9overy of da:age due to loss or inIury :ust ;e ;rought, in AroAer 9ases, with the o::issioner or the 9ourts within one D-E year fro: denial of the 9lai:, otherwise, the 9lai:ant@s right of a9tion shall Ares9ri;e. 1&E . G74. "he insuran9e 9o:Aany 9on9erned shall forthwith as9ertain the truth and eBtent of the 9lai: and :a>e Aay:ent within five D6E wor>ing days after rea9hing an agree:ent. If no agree:ent is rea9hed, the insuran9e 9o:Aany shall Aay only the no-fault inde:nity Arovided in &e9tion G7without AreIudi9e to the 9lai:ant fro: Aursuing his 9lai: further, in whi9h 9ase, he shall not ;e reCuired or 9o:Aelled ;y the insuran9e 9o:Aany to eBe9ute any Cuit 9lai: or do9u:ent releasing it fro: lia;ility under the Aoli9y of insuran9e or surety ;ond issued. 1In 9ase of any disAute in the enfor9e:ent of the Arovisions of any Aoli9y issued Aursuant

to this 9haAter, the adIudi9ation of su9h disAute shall ;e within the original and eB9lusive Iurisdi9tion of the o::issioner, su;Ie9t to the li:itations Arovided in &e9tion 3G7. 1&E . G77. It shall ;e unlawful for a land transAortation oAerator or owner of :otor vehi9le to reCuire his or its drivers or other e:Aloyees to 9ontri;ute in the Aay:ent of Are:iu:s. 1&E . 355. #o govern:ent offi9e or agen9y having the duty of i:Ale:enting the Arovisions of this 9haAter nor any offi9ial or e:Aloyee thereof shall a9t as agent in Aro9uring the insuran9e Aoli9y or surety ;ond Arovided for herein. "he 9o::ission of an agent Aro9uring the said Aoli9y or ;ond shall in no 9ase eB9eed ten Aer9ent D-5LE of the a:ount of the Are:iu:s therefor. 1&E . 35-. !ny land transAortation oAerator or owner of :otor vehi9le or any other Aerson violating any of the Arovisions of the Are9eding se9tions shall ;e Aunished ;y a fine of not less than +ive hundred Aesos DP655.55E andKor i:Arison:ent for not :ore than siB D,E :onths. "he violation of &e9tion G75 ;y a land transAortation oAerator shall ;e a suffi9ient 9ause for the revo9ation of the 9ertifi9ate of Au;li9 9onvenien9e issued ;y the Land "ransAortation +ran9hising and Regulatory Board 9overing the vehi9le 9on9erned. 1&E . 35.. /henever any violation of the Arovisions of this 9haAter is 9o::itted ;y a 9orAoration or asso9iation, or ;y a govern:ent offi9e or entity, the eBe9utive offi9er or offi9ers of said 9orAoration, asso9iation or govern:ent offi9e or entity who shall have >nowingly Aer:itted, or failed to Arevent, said violation shall ;e held lia;le as Arin9iAals.

1 (!P"ER =II 1MU"U!L BE#E+I" !&&$ I!"I$#& !#) "RU&"& +$R (!RI"!BLE U&E& 1"I"LE l 1MU"U!L BE#E+I" !&&$ I!"I$#& 1&E . 35G. !ny so9iety, asso9iation or 9orAoration, without 9aAital sto9>, for:ed or organiHed not for Arofit ;ut :ainly for the AurAose of Aaying si9> ;enefits to :e:;ers, or of furnishing finan9ial suAAort to :e:;ers while out of e:Aloy:ent, or of Aaying to relatives of de9eased :e:;ers of fiBed or any su: of :oney, irresAe9tive of whether su9h ai: or AurAose is 9arried out ;y :eans of fiBed dues or assess:ents 9olle9ted regularly fro: the :e:;ers, or of Aroviding, ;y the issuan9e of 9ertifi9ates of insuran9e, Aay:ent of its :e:;ers of a99ident or life insuran9e ;enefits out of su9h fiBed and regular dues or assess:ents, ;ut in no 9ase shall in9lude any so9iety, asso9iation, or 9orAoration with su9h :utual ;enefit features and whi9h shall ;e 9arried out Aurely fro: voluntary 9ontri;utions 9olle9ted not regularly andKor no fiBed a:ount fro: who:soever :ay 9ontri;ute, shall ;e >nown as a :utual ;enefit asso9iation within the intent of this ode. 1!ny so9iety, asso9iation, or 9orAoration Arin9iAally organiHed as a la;or union shall ;e governed ;y the La;or ode notwithstanding any :utual ;enefit feature Arovisions in its 9harter as in9ident to its organiHation. 1In no 9ase shall a :utual ;enefit asso9iation ;e organiHed and authoriHed to transa9t ;usiness as a 9harita;le or ;enevolent organiHation, and whenever it has this feature as in9ident to its eBisten9e,

the 9orresAonding 9harter Arovision shall ;e revised to 9onfor: with the Arovision of this se9tion. Mutual ;enefit asso9iation, already li9ensed to transa9t ;usiness as su9h on the date this ode ;e9o:es effe9tive, having 9harita;le or ;enevolent feature shall a;andon su9h in9idental AurAose uAon effe9tivity of this ode if they desire to 9ontinue oAerating as su9h :utual ;enefit asso9iations. 1&E . 353. ! :utual ;enefit asso9iation, ;efore it :ay transa9t as su9h, :ust first se9ure a li9ense fro: the o::issioner. "he aAAli9ation for su9h li9ense shall ;e filed with the o::issioner together with 9ertified true 9oAies of the arti9les of in9orAoration or the 9onstitution and ;ylaws of the asso9iation, and all a:end:ents thereto, and su9h other do9u:ents or testi:onies as the o::issioner :ay reCuire. 1#o li9ense shall ;e granted to a :utual ;enefit asso9iation until the o::issioner shall have ;een satisfied ;y su9h eBa:ination as he :ay :a>e and su9h eviden9e as he :ay reCuire that the asso9iation is Cualified under eBisting laws to oAerate and transa9t ;usiness as su9h. "he o::issioner :ay refuse to issue a li9ense to any :utual ;enefit asso9iation if, in his Iudg:ent, su9h refusal will ;est Aro:ote the interest of the :e:;ers of su9h asso9iation and of the AeoAle of this 9ountry. !ny li9ense issued shall eBAire on the last day of )e9e:;er of the third year following its issuan9e and, uAon AroAer aAAli9ation, :ay ;e renewed if the asso9iation is 9ontinuing to 9o:Aly with eBisting laws, rules and regulations, orders, instru9tions, rulings and de9isions of the o::issioner. Every asso9iation re9eiving any su9h li9ense shall ;e su;Ie9t to the suAervision of the o::issioner< Provided, "hat no su9h li9ense shall ;e granted to any su9h

asso9iation if su9h asso9iation has no a9tuary. 1&E . 356. #o :utual ;enefit asso9iation shall ;e issued a li9ense to oAerate as su9h unless it has 9onstituted and esta;lished a 'uaranty +und ;y deAositing with the o::issioner an initial :ini:u: a:ount of +ive :illion Aesos DP6,555,555.55E in 9ash, or in govern:ent se9urities with a total value eCual to su9h a:ount, to answer for any valid ;enefit 9lai: of any of its :e:;ers. 1!ll :oneys re9eived ;y the o::issioner for this AurAose :ust ;e deAosited ;y hi: in interest-;earing deAosits with any ;an> or ;an>s authoriHed to transa9t ;usiness in the PhiliAAines for the a99ount of the Aarti9ular asso9iation 9onstituting the 'uaranty +und. 1!ny a99rual to su9h fund, ;e it interest earned or dividend additions on :oneys or se9urities so deAosited, :ay, with the Arior aAAroval of the o::issioner, ;e withdrawn ;y the asso9iation if there is no Aending ;enefit 9lai: against it, in9luding interest thereon or dividend additions thereto. 1"he o::issioner, Arior to or after li9ensing a :utual ;enefit asso9iation, :ay reCuire su9h asso9iation to in9rease its 'uaranty +und fro: the initial :ini:u: a:ount reCuired to an a:ount eCual to the 9aAital invest:ent reCuired of an eBisting do:esti9 insuran9e 9o:Aany under &e9tion .57 of this ode. 1&E . 35,. Every :utual ;enefit asso9iation li9ensed to do ;usiness as su9h shall issue :e:;ershiA 9ertifi9ates to its :e:;ers sAe9ifying the ;enefits to whi9h su9h :e:;ers are entitled.

1&u9h 9ertifi9ates, together with the arti9les of in9orAoration of the asso9iation or its 9onstitution and ;ylaws, and all eBisting laws as :ay ;e Aertinent shall 9onstitute the agree:ent, as of the date of its issuan9e, ;etween the asso9iation and the :e:;er. "he :e:;ershiA 9ertifi9ate shall ;e in a for: Areviously aAAroved ;y the o::issioner. 1&E . 358. ! :utual ;enefit asso9iation :ay, ;y reinsuran9e agree:ent, 9ede in whole or in Aart any individual ris> or ris>s under 9ertifi9ates of insuran9e issued ;y it, only to a life insuran9e 9o:Aany authoriHed to transa9t ;usiness or to a Arofessional reinsurer authoriHed to a99eAt life ris>s in the PhiliAAines< Provided, "hat a 9oAy of the draft of su9h reinsuran9e agree:ent shall ;e su;:itted to the o::issioner for his aAAroval. "he asso9iation :ay ta>e 9redit for the reserves on su9h 9eded ris>s to the eBtent reinsured. 1&E . 354. "he 9onstitution or ;ylaws of a :utual ;enefit asso9iation :ust distin9tly state the AurAose for whi9h dues andKor assess:ents are :ade and 9olle9ted and the Aortion thereof whi9h :ay ;e used for eBAenses. 1)eath ;enefit and other relief funds shall ;e 9reated and used eB9lusively for Aaying ;enefits due the :e:;ers under their resAe9tive :e:;ershiA 9ertifi9ates. ! general fund shall li>ewise ;e 9reated and used for eBAenses of ad:inistration of the asso9iation. 1! :utual ;enefit asso9iation shall only :aintain free and unassigned surAlus of not :ore than twenty Aer9ent D.5LE of its total lia;ilities as verified ;y the o::issioner. !ny a:ount in eB9ess shall ;e returned to the :e:;ers ;y way of dividends, enhan9ing the eCuity value or Aroviding

;enefits in >ind and other relevant servi9es. In addition, su;Ie9t to the aAAroval of the o::issioner, a :utual ;enefit asso9iation :ay allo9ate a Aortion for 9aAa9ity ;uilding and resear9h and develoA:ent su9h as develoAing new Arodu9ts and servi9es, uAgrading and i:Aroving oAerating syste:s and eCuiA:ent and 9ontinuing :e:;er edu9ation. 1&E . 357. Every outstanding :e:;ershiA 9ertifi9ate :ust have an eCuity value eCuivalent to at least fifty Aer9ent D65LE of the total 9ontri;utions 9olle9ted thereon. "he eCuity value only aAAlies to ;asi9 life insuran9e Arodu9t and eB9ludes oAtional Arodu9ts. 1&E . 3-5. Every :utual ;enefit asso9iation :ust a99u:ulate and :aintain, out of the Aeriodi9 dues 9olle9ted fro: its :e:;ers, suffi9ient reserves for the Aay:ent of 9lai:s or o;ligations for whi9h it shall hold funds in se9urities satisfa9tory to the o::issioner 9onsisting of ;onds of the 'overn:ent of the PhiliAAines, or any of its Aoliti9al su;divisions and instru:entalities, or in su9h other good se9urities as :ay ;e aAAroved ;y the o::issioner. 1"he reserve lia;ility shall ;e esta;lished in a99ordan9e with a9tuarial Aro9edures and shall ;e aAAroved ;y the o::issioner. 1"he arti9les of in9orAoration or the 9onstitution and ;ylaws of a :utual ;enefit asso9iation :ust Arovide that if its reserve as to all or any 9lass of 9ertifi9ates ;e9o:es i:Aaired, its ;oard of dire9tors or trustees :ay reCuire that there shall ;e Aaid ;y the :e:;ers to the asso9iation the a:ount of the :e:;ers@ eCuita;le AroAortion of su9h defi9ien9y as as9ertained ;y said ;oard and that if the Aay:ent ;e not :ade it shall stand as an inde;tedness against the :e:;ershiA 9ertifi9ates of the defaulting :e:;ers and

draw interest not to eB9eed five Aer9ent D6LE Aer annu: 9o:Aounded annually. 1&E . 3--. ! :utual ;enefit asso9iation :ay invest su9h Aortion of its funds as shall not ;e reCuired to :eet Aending 9lai:s and other o;ligations in any of the 9lasses of invest:ents or tyAes of se9urities in whi9h life insuran9e 9o:Aanies doing ;usiness in the PhiliAAines :ay invest. 1It :ay also grant loans to :e:;ers on the se9urity of a Aledge or 9hattel :ortgage of Aersonal AroAerties of the ;orrowers, or in the a;sen9e thereof, on the se9urity of the :e:;ershiA 9ertifi9ate of the ;orrowing :e:;ers, in whi9h event su9h loan shall ;e9o:e a first lien on the Aro9eeds thereof. 1&E . 3-.. "he o::issioner or any of his duly designated reAresentatives, shall have the Aower of visitation, audit and eBa:ination into the affairs, finan9ial 9ondition, and :ethods of doing ;usiness of all :utual ;enefit asso9iations, and he shall 9ause su9h eBa:ination to ;e :ade at least on9e every two D.E years or whenever it :ay ;e dee:ed AroAer and ne9essary. +ree a99ess to the ;oo>s, re9ords and do9u:ents of the asso9iation shall ;e a99orded to the o::issioner, or to his reAresentatives, in su9h :anner that the o::issioner or his reAresentatives :ay readily verify or deter:ine the true affairs, finan9ial 9ondition, and :ethod of doing ;usiness of su9h asso9iation. In the 9ourse of su9h eBa:ination, the o::issioner or his duly designated reAresentatives shall have authority to ad:inister oaths and ta>e testi:ony or other eviden9e on any :atter relating to the affairs of the asso9iation. 1!ll :inutes of the Aro9eedings of the ;oard of dire9tors or trustees of the asso9iation, and those of the regular or sAe9ial :eetings of the :e:;ers, shall ;e ta>en, and a 9oAy

thereof, in English or in PiliAino, shall ;e su;:itted to the o::issioner@s reAresentatives or eBa:iners in the 9ourse of su9h eBa:ination. 1! 9oAy of the findings of su9h eBa:ination, together with the re9o::endations of the o::issioner, shall ;e furnished the asso9iation for its infor:ation and 9o:Alian9e, and the sa:e shall ;e ta>en uA i::ediately in the :eetings of the ;oard of dire9tors or trustees and of the :e:;ers of the asso9iation. 1&E . 3-G. Every :utual ;enefit asso9iation shall, annually on or ;efore the thirtieth day of !Aril of ea9h year, render to the o::issioner an annual state:ent in su9h for: and detail as :ay ;e Ares9ri;ed ;y the o::issioner, signed and sworn to ;y the Aresident, se9retary, treasurer, and a9tuary of the asso9iation, showing the eBa9t 9ondition of its affairs on the Are9eding thirty-first day of )e9e:;er. 1&E . 3-3. #o :oney, aid or ;enefit to ;e Aaid, Arovided or tendered ;y any :utual ;enefit asso9iation, shall ;e lia;le to atta9h:ent, garnish:ent, or other Aro9ess, or ;e seiHed, ta>en, aAAroAriated, or aAAlied ;y any legal or eCuita;le Aro9ess to Aay any de;t or lia;ility of a :e:;er or ;enefi9iary, or any other Aerson who :ay have a right thereunder, either ;efore or after Aay:ent. 1&E . 3-6. !ny :e:;er of a :utual ;enefit asso9iation shall have the right at all ti:es to 9hange the ;enefi9iary or ;enefi9iaries or add another ;enefi9iary or other ;enefi9iaries in a99ordan9e with the rules and regulations of the asso9iation unless he has eBAressly waived this right in the :e:;ershiA 9ertifi9ate. Every asso9iation :ay, under su9h rules as it :ay adoAt, li:it the s9oAe of ;enefi9iaries and Arovide that no ;enefi9iary shall have or o;tain any

vested interest in the Aro9eeds of any 9ertifi9ate until the 9ertifi9ate has ;e9o:e due and Aaya;le under the ter:s of the :e:;ershiA 9ertifi9ate. 1&E . 3-,. !ny 9haAter affiliate indeAendently li9ensed as a :utual ;enefit asso9iation :ay 9onsolidate or :erge with any other si:ilar 9haAter affiliate or with the :other asso9iation. 1&E . 3-8. !ny :utual ;enefit asso9iation :ay ;e 9onverted into and li9ensed as a :utual life insuran9e 9o:Aany ;y 9o:Alying with the reCuire:ents of the Aertinent Arovisions of this ode and su;:itting the sAe9ifi9 Alan for su9h 9onversion to the o::issioner for his aAAroval. &u9h Alan, as aAAroved, shall then ;e su;:itted to the :e:;ers either in the regular :eeting or in a sAe9ial :eeting 9alled for the AurAose for their adoAtion. "he affir:ative vote of at least two-thirds D.KGE of all the :e:;ers shall ;e ne9essary in order to 9onsider su9h Alan as adoAted. 1#o su9h 9onversion shall ta>e effe9t unless and until aAAroved ;y the o::issioner. 1&E . 3-4. #o :utual ;enefit asso9iation shall ;e dissolved without first notifying the o::issioner and furnishing hi: with a 9ertified 9oAy of the resolution authoriHing the dissolution, duly adoAted ;y the affir:ative vote of two-thirds D.KGE of the :e:;ers at a :eeting 9alled for that AurAose, the finan9ial state:ents as of the date of the resolution, and su9h other AaAers or do9u:ents as :ay ;e reCuired ;y the o::issioner. 1#o dissolution shall Aro9eed until and unless aAAroved ;y the o::issioner and all Aro9eedings in 9onne9tion therewith shall ;e witnessed and attested ;y his duly designated reAresentative.

1#o :utual ;enefit asso9iation shall ;e offi9ially de9lared as dissolved until after the o::issioner so 9ertifies that all outstanding 9lai:s against the asso9iation have ;een duly settled and liCuidated. 1&E . 3-7. "he o::issioner shall, after noti9e and hearing, have the Aower either to susAend or revo>e the li9ense issued to a :utual ;enefit asso9iation if he finds that the asso9iation has< 1DaE +ailed to 9o:Aly with any Arovision of this odeF 1D;E +ailed to 9o:Aly with any other law or regulation o;ligatory uAon itF 1D9E +ailed to 9o:Aly with any order, ruling, instru9tion, reCuire:ent or re9o::endation of the o::issionerF 1DdE EB9eeded its Aower to the AreIudi9e of its :e:;ersF 1DeE ondu9ted its ;usiness fraudulently or haHardouslyF 1DfE Rendered its affairs and 9ondition to one of insolven9yF or 1DgE +ailed to 9arry out its ai:s and AurAoses for whi9h it was organiHed due to any 9ause. 1!fter re9eiAt of the order fro: the o::issioner susAending or revo>ing the li9ense, the asso9iation :ust i::ediately eBert efforts to re:ove su9h 9ause or 9auses whi9h ;rought a;out the order and, uAon AroAer showing, :ay aAAly with the o::issioner for the lifting of the order and restoration or revival of the li9ense so revo>ed or susAended.

1&E . 3.5. +or failure to re:ove su9h 9ause or 9auses whi9h ;rought a;out the susAension or revo9ation of the li9ense of a :utual ;enefit asso9iation, the o::issioner shall aAAly under this ode for an order fro: the AroAer 9ourt to liCuidate su9h asso9iation. 1"he Arovisions of "itles -3 and -6, haAter III, Aertaining to the aAAoint:ent of a 9onservator and Aro9eedings uAon insolven9y of an insuran9e 9o:Aany shall, insofar as Ara9ti9a;le, aAAly to :utual ;enefit asso9iations. 1&E . 3.-. "o se9ure the enfor9e:ent of any Arovision under this title, the o::issioner :ay issue su9h rules, rulings, instru9tions, orders and 9ir9ulars. 1&E . 3... "he violation of any Arovision of this title shall su;Ie9t the Aerson violating or the offi9er of the asso9iation resAonsi;le therefor to a fine of not less than "en thousand Aesos DP-5,555.55E, or i:Arison:ent of not eB9eeding three DGE years, or ;oth su9h fine and i:Arison:ent, at the dis9retion of the 9ourt. 1&E . 3.G. !ll Arovisions of this ode governing life insuran9e 9o:Aanies and su9h other Arovisions whenever Ara9ti9a;le and ne9essary, shall ;e aAAli9a;le to :utual ;enefit asso9iations. 1"I"LE . 1"RU&"& +$R (!RI"!BLE U&E& 1&E . 3.3. "he ter: trust for charitable uses, within the intent of this ode, shall in9lude, all the real or Aersonal AroAerties or funds, as well as those a9Cuired with the fruits or in9o:e therefro: or in eB9hange or su;stitution thereof, given to or re9eived ;y any Aerson, 9orAoration, asso9iation,

foundation, or entity, eB9eAt the #ational 'overn:ent, its instru:entalities or Aoliti9al su;divisions, for 9harita;le, ;enevolent, edu9ational, Aious, religious, or other uses for the ;enefit of the Au;li9 at large or a Aarti9ular Aortion thereof or for the ;enefit of an indefinite nu:;er of Aersons. 1&E . 3.6. "he ter: trustee shall in9lude any individual, 9orAoration, asso9iation, foundation, or entity, eB9eAt the #ational 'overn:ent, its instru:entalities or Aoliti9al su;divisions, in 9harge of, or a9ting for, or 9on9erned with the ad:inistration of, the trust referred to in the se9tion i::ediately Are9eding and with the AroAer aAAli9ation of trust AroAerty. 1&E . 3.,. "he ter: trust property shall in9lude all real or Aersonal AroAerties or funds Aertaining to the trust as well as those a9Cuired with the fruits or in9o:e therefro: or in eB9hange or su;stitution thereof. 1&E . 3.8. !ll trustees shall, ;efore entering in the Aerfor:an9e of the duties of their trust, o;tain a 9ertifi9ate of registration fro: the o::issioner. "he registration shall eBAire on )e9e:;er G- of the third year following its issuan9e unless it is renewed. 1!ll Arovisions of this ode governing :utual ;enefit asso9iations and su9h other Arovisions herein, whenever Ara9ti9a;le and ne9essary, shall ;e aAAli9a;le to trusts for 9harita;le uses. 1&E . 3.4. "he treasurer of a 9harita;le trust shall file a fidelity ;ond in the a:ount 9o::ensurate with the value of the trust AroAerty in his 9ustody, as :ay ;e deter:ined ;y the o::issioner. 1 (!P"ER =III

1"RU&" BU&I#E&& I# 'E#ER!L 1&E . 3.7. !n insuran9e 9o:Aany :ay engage in li:ited trust ;usiness, 9onsisting of :anaging funds Aertaining only to retire:ent and Are-need Alans, Arovided it has se9ured a li9ense to do so fro: the Bang>o &entral ng PiliAinas. "his trust ;usiness shall ;e seAarate and distin9t fro: the general ;usiness of the insuran9e 9o:Aany and shall ;e su;Ie9t to rules and regulations as :ay ;e Aro:ulgated ;y the Bang>o &entral ng PiliAinas in 9onsultation with the o::issioner. 1 (!P"ER IR 1RE'I&"R!"I$#, RE&P$#&IBILI"IE& !#) $=ER&I'(" $+ &EL+-RE'UL!"$R* $R'!#IM!"I$#& 1&E 3G5. "he o::issioner shall have the Aower to register as a self-regulatory organiHation, or otherwise grant li9enses, and to regulate, suAervise, eBa:ine, susAend or otherwise dis9ontinue, as a 9ondition for the oAeration of organiHations whose oAerations are related to or 9onne9ted with the insuran9e :ar>et su9h as, ;ut not li:ited to, asso9iations of insuran9e 9o:Aanies, whether life or non-life, reinsurers, a9tuaries, agents, ;ro>ers, dealers, :utual ;enefit asso9iations, trusts, rating agen9ies, and other Aersons regulated ;y the o::issioner, whi9h are engaged in the ;usiness regulated ;y this ode. 1"he o::issioner :ay Ares9ri;e rules and regulations whi9h are ne9essary or aAAroAriate in the Au;li9 interest or for the Arote9tion of investors to govern selfregulatory organiHations and other organiHations li9ensed or regulated Aursuant to the authority granted hereunder in9luding, ;ut not li:ited to, the reCuire:ent of

9ooAeration within and a:ong all Aarti9iAants in the insuran9e :ar>et to ensure transAaren9y and fa9ilitate eB9hange of infor:ation. 1&E . 3G-. !n asso9iation 9annot ;e registered as a self-regulatory organiHation unless the o::issioner deter:ines that< 1DaE "he asso9iation is so organiHed and has the 9aAa9ity to ;e a;le to 9arry out the AurAoses of this ode and to 9o:Aly with, and to enfor9e 9o:Alian9e ;y its :e:;ers and Aersons asso9iated with its :e:;ers, with the Arovisions of this ode, the rules and regulations thereunder, and the rules of the asso9iation. 1D;E "he rules of the asso9iation, notwithstanding anything in the orAoration ode to the 9ontrary, Arovide the following< 1D-E Sualifi9ations and the disCualifi9ations on :e:;ershiA of the asso9iationF 1D.E ! fair reAresentation of its :e:;ers to serve on the ;oard of dire9tors of the asso9iation and the ad:inistration of its affairs, and that any natural Aerson asso9iated with a Iuridi9al entity that is a :e:;er shall also ;e dee:ed to ;e a :e:;er for this AurAoseF 1DGE "he Aresident of the asso9iation and at least two D.E indeAendent dire9tors as :e:;ers of the ;oard of dire9tors of the asso9iationF 1D3E ECuita;le allo9ation of reasona;le dues, fees, and other 9harges a:ong :e:;ers and other Aersons using any fa9ility or syste: whi9h the asso9iation oAerates or 9ontrolsF 1D6E "he Arevention of fraudulent and :aniAulative a9ts and Ara9ti9es to Arote9t

the insuring Au;li9 and the Aro:otion of Iust and eCuita;le Arin9iAles of ;usinessF 1D,E Me:;ers and Aersons asso9iated with its :e:;ers su;Ie9t to dis9iAline for violation of any Arovision of this ode, the rules or regulations thereunder, or the rules of the asso9iationF 1D8E +air Aro9edure for the dis9iAlining of :e:;ers and Aersons asso9iated with :e:;ersF and 1D4E "he Arohi;ition or li:itation of a99ess to servi9es offered ;y the asso9iation or a :e:;er thereof. 1&E . 3G.. ! self-regulatory organiHation :ay eBa:ine and verify the Cualifi9ations of an aAAli9ant to ;e9o:e a :e:;er in a99ordan9e with Aro9edures esta;lished ;y the rules of the asso9iation. 1! self-regulatory organiHation shall deny :e:;ershiA or 9ondition the :e:;ershiA of an entity, if it does not :eet the standards of finan9ial resAonsi;ility, oAerational 9aAa;ility, training, eBAerien9e, or 9o:Aeten9e that are Ares9ri;ed ;y the rules of the asso9iationF or has engaged, and there is a reasona;le li>elihood it will again engage, in a9ts or Ara9ti9es in9onsistent with Iust and eCuita;le Arin9iAles of fair trade. 1! self-regulatory organiHation :ay deny :e:;ershiA to an entity not engaged in a tyAe of ;usiness in whi9h the rules of the asso9iation reCuire :e:;ers to ;e engaged. 1&E . 3GG. UAon the filing of an aAAli9ation for registration as a self-regulatory organiHation under this title, the o::issioner shall have ninety D75E days within whi9h to either grant registration or institute a Aro9eeding to deter:ine whether registration should ;e denied. In the event

Aro9eedings are instituted, the o::issioner shall have two hundred seventy D.85E days within whi9h to 9on9lude su9h Aro9eedings at whi9h ti:e he shall, ;y order, grant or deny su9h registration. 1&E . 3G3. Every self-regulatory organiHation shall 9o:Aly with the Arovisions of this ode, the rules and regulations thereunder, and its own rules, and enfor9e 9o:Alian9e therewith ;y its :e:;ers, Aersons asso9iated with its :e:;ers or its Aarti9iAants, notwithstanding any Arovision of the orAoration ode to the 9ontrary. 1&E . 3G6. Ea9h self-regulatory organiHation shall su;:it to the o::issioner for Arior aAAroval any AroAosed rule or a:end:ent thereto, together with a 9on9ise state:ent of the reason and effe9t of the AroAosed a:end:ent. 1/ithin siBty D,5E days after su;:ission of a AroAosed a:end:ent, the o::issioner shall, ;y order, aAArove the AroAosed a:end:ent. $therwise, the sa:e :ay ;e :ade effe9tive ;y the self-regulatory organiHation. 1In the event of an e:ergen9y reCuiring a9tion for the Arote9tion of the insuring Au;li9, a self-regulatory organiHation :ay Aut a AroAosed a:end:ent into effe9t su::arily< Provided, ho ever, "hat a 9oAy of the sa:e shall ;e i::ediately su;:itted to the o::issioner. 1"he o::issioner is further authoriHed, if after :a>ing aAAroAriate reCuest in writing to a self-regulatory organiHation that su9h organiHation effe9t on its own ;ehalf sAe9ified 9hanges in its rules and Ara9ti9es and, after due noti9e and hearing, it deter:ines that su9h 9hanges have not ;een

effe9ted, and that su9h 9hanges are ne9essary, ;y rule or regulation or ;y order, :ay alter, a;rogate or suAAle:ent the rules of su9h self-regulatory organiHation insofar as ne9essary or aAAroAriate to effe9t su9h 9hanges in resAe9t of su9h :atters as< 1DaE &afeguards in resAe9t of the finan9ial resAonsi;ility of :e:;ers and adeCuate Arovision against the evasion of finan9ial resAonsi;ility through the use of 9orAorate for:s or sAe9ial AartnershiAsF 1D;E "he suAervision of :ar>et Ara9ti9esF 1D9E "he :anner, :ethod and Ala9e of soli9iting ;usinessF 1DdE "he fiBing of reasona;le rates of fees, interest, listing and other 9harges, ;ut not rates of 9o::issionF and self-regulatory organiHationF and 1DeE "he suAervision, dis9iAlining of :e:;ers. auditing and

1In addition to the general Aowers of the o::issioner over the entities under suAervision, the o::issioner, after due noti9e and hearing, is authoriHed, in the Au;li9 interest and to Arote9t the insuring Au;li9< 1D-E "o susAend for a Aeriod not eB9eeding twelve D-.E :onths or to revo>e the registration of a self-regulatory organiHation, or to 9ensure or i:Aose li:itations on the a9tivities, fun9tions and oAerations of su9h self-regulatory organiHation, if the o::ission finds that su9h a self-regulatory organiHation has willfully violated or is una;le to 9o:Aly with any Arovision of this ode or of the rules and regulations thereunder, or its own rules, or has failed to enfor9e 9o:Alian9e therewith ;y a :e:;er of, Aerson asso9iated with a :e:;er, or a

Aarti9iAant in organiHationF

su9h

self-regulatory

1D.E "o eBAel fro: a self-regulatory organiHation any :e:;er thereof or any Aarti9iAant therein who is found to have willfully violated any Arovision of this ode or susAend for a Aeriod not eB9eeding twelve D-.E :onths for violation of any Arovision of this ode or any other law ad:inistered ;y the o::ission, or the rules and regulations thereunder, or effe9ted, dire9tly or indire9tly, any transa9tion for any Aerson who, su9h :e:;er or Aarti9iAant had reason to ;elieve, was violating in resAe9t of su9h transa9tion any of su9h ArovisionsF and 1DGE "o re:ove fro: offi9e or 9ensure any offi9er or dire9tor of a self-regulatory organiHation if it finds that su9h offi9er or dire9tor has violated any Arovision of this ode, any other law ad:inistered ;y the o::issioner, the rules or regulations thereunder and the rules of su9h selfregulatory organiHation, or has a;used his authority, or without reasona;le Iustifi9ation or eB9use has failed to enfor9e 9o:Alian9e with any of su9h Arovisions. 1&E . 3G,. DaE ! self-regulatory organiHation is authoriHed to dis9iAline a :e:;er of or Aarti9iAant in su9h selfregulatory organiHation, or any Aerson asso9iated with a :e:;er, in9luding susAending or eBAelling su9h :e:;er or Aarti9iAant, or susAending or ;arring su9h Aerson fro: ;eing asso9iated with a :e:;er, if engaged in a9ts or Ara9ti9es in9onsistent with Iust and eCuita;le Arin9iAles of fairness or in willful violation of any Arovision of this ode, any other law ad:inistered ;y the o::ission, the rules or regulations thereunder, or the rules of the self-regulatory organiHation. In any dis9iAlinary Aro9eeding ;y a self-regulatory organiHation Dother than a su::ary

Aro9eeding Aursuant to AaragraAh D;E of this se9tionE the self-regulatory organiHation shall ;ring sAe9ifi9 9harges, Arovide noti9e to the Aerson 9harged, afford the Aerson 9harged with an oAAortunity to defend against the 9harges, and >eeA a re9ord of the Aro9eedings. ! deter:ination to i:Aose a dis9iAlinary san9tion shall ;e suAAorted ;y a written state:ent of the offense, a su::ary of the eviden9e Aresented and a state:ent of the san9tion i:Aosed. 1D;E ! self-regulatory organiHation :ay su::arily< 1D-E &usAend a :e:;er, Aarti9iAant or Aerson asso9iated with a :e:;er who has ;een or is eBAelled or susAended fro: any other self-regulatory organiHationF or 1D.E &usAend a :e:;er who the selfregulatory organiHation finds to ;e in su9h finan9ial or oAerating diffi9ulty that the :e:;er or Aarti9iAant 9annot ;e Aer:itted to 9ontinue to do ;usiness as a :e:;er with safety to investors, 9reditors, other :e:;ers, Aarti9iAants or the self-regulatory organiHation< Provided, "hat the selfregulatory organiHation i::ediately notifies the o::ission of the a9tion ta>en. !ny Aerson aggrieved ;y a su::ary a9tion Aursuant to this AaragraAh shall ;e Aro:Atly afforded an oAAortunity for a hearing ;y the asso9iation in a99ordan9e with the Are9eding AaragraAh. "he o::issioner, ;y order, :ay stay a su::ary a9tion on his own or uAon aAAli9ation ;y any Aerson aggrieved there;y, if the o::issioner deter:ines su::arily or after due noti9e and hearing Dwhi9h hearing :ay 9onsist solely of the su;:ission of affidavits or Aresentation of oral argu:entsE, that a stay is 9onsistent with the Au;li9 interest and the Arote9tion of the insuring Au;li9.

1D9E ! self-regulatory organiHation shall Aro:Atly notify the o::ission of any dis9iAlinary san9tion on any :e:;er thereof or Aarti9iAant therein, any denial of :e:;ershiA or Aarti9iAation in su9h organiHation, or the i:Aosition of any dis9iAlinary san9tion on a Aerson asso9iated with a :e:;er or a ;ar of su9h Aerson fro: ;e9o:ing so asso9iated. /ithin thirty DG5E days after su9h noti9e, any aggrieved Aerson :ay aAAeal to the o::issioner fro:, or the o::issioner on its own :otion within su9h Aeriod, :ay institute review of, the de9ision of the self-regulatory organiHation, at the 9on9lusion of whi9h, after due noti9e and hearing Dwhi9h :ay 9onsist solely of review of the re9ord ;efore the selfregulatory organiHationE, the o::issioner shall affir:, :odify or set aside the san9tion. In su9h Aro9eeding, the o::issioner shall deter:ine whether the aggrieved Aerson has engaged or o:itted to engage in the a9ts and Ara9ti9es as found ;y the self-regulatory organiHation, whether su9h a9ts and Ara9ti9es 9onstitute willful violations of this ode, any other law ad:inistered ;y the o::ission, the rules or regulations thereunder, or the rules of the self-regulatory organiHation as sAe9ified ;y su9h organiHation, whether su9h Arovisions were aAAlied in a :anner 9onsistent with the AurAoses of this ode, and whether, with due regard for the Au;li9 interest and the Arote9tion of investors, the san9tion is eB9essive or oAAressive. 1 (!P"ER R 1"(E I#&UR!# E $MMI&&I$#ER 1"I"LE l 1!)MI#I&"R!"I=E !)JU)I !"$R* P$/ER& !#)

1&E . 3G8. "he Insuran9e o::issioner shall ;e aAAointed ;y the President of the ReAu;li9 of the PhiliAAines for a ter: of siB D,E years without reaAAoint:ent and who shall serve as su9h until the su99essor shall have ;een aAAointed and Cualified. If the Insuran9e o::issioner is re:oved ;efore the eBAiration of his ter: of offi9e, the reason for the re:oval :ust ;e Au;lished. 1"he Insuran9e o::issioner shall have the duty to see that all laws relating to insuran9e, insuran9e 9o:Aanies and other insuran9e :atters, :utual ;enefit asso9iations, and trusts for 9harita;le uses are faithfully eBe9uted and to Aerfor: the duties i:Aosed uAon hi: ;y this ode, and shall, notwithstanding any eBisting laws to the 9ontrary, have sole and eB9lusive authority to regulate the issuan9e and sale of varia;le 9ontra9ts as defined in &e9tion .G4 hereof and to Arovide for the li9ensing of Aersons selling su9h 9ontra9ts, and to issue su9h reasona;le rules and regulations governing the sa:e. 1"he o::issioner :ay issue su9h rulings, instru9tions, 9ir9ulars, orders and de9isions as :ay ;e dee:ed ne9essary to se9ure the enfor9e:ent of the Arovisions of this ode, to ensure the effi9ient regulation of the insuran9e industry in a99ordan9e with glo;al ;est Ara9ti9es and to Arote9t the insuring Au;li9. EB9eAt as otherwise sAe9ified, de9isions :ade ;y the o::issioner shall ;e aAAeala;le to the &e9retary of +inan9e. 1In addition to the foregoing, the o::issioner shall have the following Aowers and fun9tions<

1DaE +or:ulate Aoli9ies and re9o::endations on issues 9on9erning the insuran9e industry, advise ongress and other govern:ent agen9ies on all asAe9ts of the insuran9e industry and AroAose legislation and a:end:ents theretoF 1D;E !AArove, reIe9t, susAend or revo>e li9enses or 9ertifi9ates of registration Arovided for ;y this odeF 1D9E I:Aose san9tions for the violation of laws and the rules, regulations and orders issued Aursuant theretoF 1DdE PreAare, aAArove, rules, regulations and oAinions and Arovide suAervise 9o:Alian9e regulations and ordersF a:end or reAeal orders, and issue guidan9e on and with su9h rules,

a99ounts of any entity or Aerson under investigation as :ay ;e ne9essary for the AroAer disAosition of the 9ases ;efore it, su;Ie9t to the Arovisions of eBisting lawsF 1DIE &usAend or revo>e, after AroAer noti9e and hearing, the li9ense or 9ertifi9ate of authority of any entity or Aerson under its regulation, uAon any of the grounds Arovided ;y lawF 1D>E ondu9t an eBa:ination to deter:ine 9o:Alian9e with laws and regulations if the 9ir9u:stan9es so warrant as deter:ined ;y aAAroAriate rules and regulationsF 1DlE Investigate not oftener than on9e a year fro: the last date of eBa:ination to deter:ine whether an institution is 9ondu9ting its ;usiness on a safe and sound ;asis< Provided, "hat, the defi9ien9iesKirregularities found ;y or dis9overed ;y an audit shall ;e i::ediately addressedF 1D:E InCuire into the solven9y and liCuidity of the institutions under its suAervision and enfor9e Aro:At 9orre9tive a9tionF 1DnE "o retain and utiliHe, in addition to its annual ;udget, all fees, 9harges and other in9o:e derived fro: the regulation of insuran9e 9o:Aanies and other suAervised Aersons or entitiesF 1DoE "o fiB and assess fees, 9harges and Aenalties as the o::issioner :ay find reasona;le in the eBer9ise of regulationF and 1DAE EBer9ise su9h other Aowers as :ay ;e Arovided ;y law as well as those whi9h :ay ;e i:Alied fro:, or whi9h are ne9essary or in9idental to the eBAress Aowers granted the o::ission to a9hieve the o;Ie9tives and AurAoses of this ode.

1DeE Enlist the aid and suAAort of, andKor deAutiHe any and all enfor9e:ent agen9ies of the govern:ent in the i:Ale:entation of its Aowers and fun9tions under this odeF 1DfE Issue 9ease and desist orders to Arevent fraud or inIury to the insuring Au;li9F 1DgE Punish for 9onte:At of the o::issioner, ;oth dire9t and indire9t, in a99ordan9e with the Aertinent Arovisions of and Aenalties Ares9ri;ed ;y the Rules of ourtF 1DhE o:Ael the offi9ers of any registered insuran9e 9orAoration or asso9iation to 9all :eetings of sto9>holders or :e:;ers thereof under its suAervisionF 1DiE Issue su;Aoena duces tecum and su::on witnesses to aAAear in any Aro9eeding of the o::ission and, in aAAroAriate 9ases, order the eBa:ination, sear9h and seiHure of all do9u:ents, AaAers, files and re9ords, taB returns, and ;oo>s of

1"he o::ission shall inde:nify the o::issioner, )eAuty o::issioner, and other offi9ials of the o::ission, in9luding Aersonnel Aerfor:ing suAervision and eBa:ination fun9tions, for all 9osts and eBAenses reasona;ly in9urred ;y su9h Aersons in 9onne9tion with any 9ivil or 9ri:inal a9tions, suits or Aro9eedings to whi9h they :ay ;e :ade a Aarty to ;y the reason of the Aerfor:an9e of their duties and fun9tions, unless they are finally adIudged in su9h a9tions, suits or Aro9eedings to ;e lia;le for negligen9e or :is9ondu9t. 1In the event of settle:ent or 9o:Aro:ise, inde:nifi9ation shall ;e Arovided only in 9onne9tion with su9h :atters 9overed ;y the settle:ent as to whi9h the o::ission is advised ;y eBternal 9ounsel that the Aersons to ;e inde:nified did not 9o::it any negligen9e or :is9ondu9t< 1"he 9osts and eBAenses in9urred in defending the afore:entioned a9tion, suit or Aro9eeding :ay ;e Aaid ;y the o::ission in advan9e of the final disAosition of su9h a9tion, suit or Aro9eeding uAon re9eiAt of an underta>ing ;y or on ;ehalf of the o::issioner, )eAuty o::issioner, offi9er or e:Aloyee to reAay the a:ount advan9ed should it ulti:ately ;e deter:ined ;y the o::ission that the Aerson is not entitled to ;e inde:nified. 1&E . 3G4. In addition to the ad:inistrative san9tions Arovided elsewhere in this ode, the Insuran9e o::issioner is here;y authoriHed, at his dis9retion, to i:Aose uAon insuran9e 9o:Aanies, their dire9tors andKor offi9ers andKor agents, for any willful failure or refusal to 9o:Aly with, or violation of any Arovision of this ode, or any order, instru9tion, regulation, or ruling of the Insuran9e o::issioner, or any 9o::ission or irregularities, andKor 9ondu9ting ;usiness in an unsafe or unsound

:anner as :ay ;e deter:ined ;y the Insuran9e o::issioner, the following< 1DaE +ines not less than +ive thousand Aesos DP6,555.55E and not :ore than "wo hundred thousand Aesos DP.55,555.55EF and 1D;E &usAension, or after due hearing, re:oval of dire9tors andKor offi9ers andKor agents. 1&E . 3G7. "he o::issioner shall have the Aower to adIudi9ate 9lai:s and 9o:Alaints involving any loss, da:age or lia;ility for whi9h an insurer :ay ;e answera;le under any >ind of Aoli9y or 9ontra9t of insuran9e, or for whi9h su9h insurer :ay ;e lia;le under a 9ontra9t of suretyshiA, or for whi9h a reinsurer :ay ;e sued under any 9ontra9t of reinsuran9e it :ay have entered intoF or for whi9h a :utual ;enefit asso9iation :ay ;e held lia;le under the :e:;ershiA 9ertifi9ates it has issued to its :e:;ers, where the a:ount of any su9h loss, da:age or lia;ility, eB9luding interest, 9ost and attorney@s fees, ;eing 9lai:ed or sued uAon any >ind of insuran9e, ;ond, reinsuran9e 9ontra9t, or :e:;ershiA 9ertifi9ate does not eB9eed in any single 9lai: +ive :illion Aesos DP6,555,555.55E. 1"he Aower of the o::issioner does not 9over the relationshiA ;etween the insuran9e 9o:Aany and its agentsK;ro>ers ;ut is li:ited to adIudi9ating 9lai:s and 9o:Alaints filed ;y the insured against the insuran9e 9o:Aany. 1"he o::issioner :ay authoriHe any offi9er or grouA of offi9ers under hi: to 9ondu9t investigation, inCuiry andKor hearing and de9ide 9lai:s and he :ay issue rules governing the 9ondu9t of adIudi9ation and resolution of 9ases. "he Rules of ourt shall have suAAletory aAAli9ation.

1"he Aarty filing an a9tion Aursuant to the Arovisions of this se9tion there;y su;:its his Aerson to the Iurisdi9tion of the o::issioner. "he o::issioner shall a9Cuire Iurisdi9tion over the Aerson of the i:Aleaded Aarty or Aarties in a99ordan9e with and Aursuant to the Arovisions of the Rules of ourt. 1"he authority to adIudi9ate granted to the o::issioner under this se9tion shall ;e 9on9urrent with that of the 9ivil 9ourts, ;ut the filing of a 9o:Alaint with the o::issioner shall Are9lude the 9ivil 9ourts fro: ta>ing 9ogniHan9e of a suit involving the sa:e su;Ie9t :atter. 1!ny de9ision, order or ruling rendered ;y the o::issioner after a hearing shall have the for9e and effe9t of a Iudg:ent. !ny Aarty :ay aAAeal fro: a final order, ruling or de9ision of the o::issioner ;y filing with the o::issioner within thirty DG5E days fro: re9eiAt of 9oAy of su9h order, ruling or de9ision a noti9e of aAAeal to the ourt of !AAeals in the :anner Arovided for in the Rules of ourt for aAAeals fro: the Regional "rial ourt to the ourt of !AAeals. 1+or the AurAose of any Aro9eeding under this se9tion, the o::issioner, or any offi9er thereof designated ;y hi: is e:Aowered to ad:inister oaths and affir:ation, su;Aoena witnesses, 9o:Ael their attendan9e, ta>e eviden9e, and reCuire the Arodu9tion of any ;oo>s, AaAers, do9u:ents, or 9ontra9ts or other re9ords whi9h are relevant or :aterial to the inCuiry. 1! full and 9o:Alete re9ord shall ;e >eAt of all Aro9eedings had ;efore the o::issioner, or the offi9ers thereof designated ;y hi:, and all testi:ony shall ;e ta>en down and trans9ri;ed ;y a

stenograAher o::issioner.

aAAointed

;y

the

1In order to Aro:ote Aarty autono:y in the resolution of 9ases, the o::issioner shall esta;lish a syste: for resolving 9ases through the use of alternative disAute resolution. 1"I"LE . 1+EE& !#) $"(ER &$UR E& $+ +U#)& 1&E . 335. DaE +or the issuan9e or renewal of 9ertifi9ates of authority, li9enses and 9ertifi9ates of registration, Aursuant to Aertinent Arovisions of this ode, the o::issioner shall 9olle9t and re9eive fees whi9h shall ;e not less than the following< 1+or ea9h 9ertifi9ate of authority issued to an insuran9e 9o:Aany doing ;usiness in the PhiliAAines, "wo hundred Aesos DP.55.55E. 1+or ea9h sAe9ial 9ertifi9ate of authority issued to a servi9ing insuran9e 9o:Aany, $ne hundred Aesos DP-55.55E. 1+or ea9h li9ense issued to a general agent of an insuran9e 9o:Aany, +ifty Aesos DP65.55E. 1+or ea9h li9ense issued to an insuran9e agent, "wenty-five Aesos DP.6.55E. 1+or ea9h li9ense issued to an agent of varia;le 9ontra9t Aoli9y, "wenty-five Aesos DP.6.55E. 1+or ea9h li9ense issued to an insuran9e ;ro>er, $ne hundred Aesos DP-55.55E. 1+or ea9h li9ense issued to a reinsuran9e ;ro>er, $ne hundred Aesos DP-55.55E.

1+or ea9h li9ense issued to an insuran9e adIuster, $ne hundred Aesos DP-55.55E. 1+or ea9h 9ertifi9ate of registration issued to an a9tuary, +ifty Aesos DP65.55E. 1+or ea9h 9ertifi9ate of registration issued to a resident agent, +ifty Aesos DP65.55E. 1+or ea9h li9ense issued to a rating organiHation, $ne hundred Aesos DP-55.55E. 1+or ea9h 9ertifi9ate of registration issued to a non-life 9o:Aany underwriter, +ifty Aesos DP65.55E. 1+or ea9h li9ense issued to a :utual ;enefit asso9iation, "en Aesos DP-5.55E. 1+or ea9h 9ertifi9ate of registration issued to a trust for 9harita;le uses, "en Aesos DP-5.55E. 1!ll 9ertifi9ates of authority and all other li9enses, as well as all 9ertifi9ates of registration, issued to any Aerson, AartnershiA, asso9iation or 9orAoration under the Aertinent Arovisions of this ode for whi9h no eBAiration date has ;een Ares9ri;ed, shall eBAire on the last day of )e9e:;er of the third year fro: its issuan9e and shall ;e renewed uAon aAAli9ation therefor and Aay:ent of the 9orresAonding fee, if the li9ensee or holder of su9h li9ense or 9ertifi9ate is 9ontinuing to 9o:Aly with all the aAAli9a;le Arovisions of eBisting laws, and of rules, instru9tions, orders and de9isions of the o::issioner. 1D;E +or the filing of the annual state:ent referred to in &e9tion ..7, the o::issioner shall 9olle9t and re9eive fro: the insuran9e 9o:Aany so filing a fee of not less than +ive hundred Aesos DP655.55E< Provided, "hat a fine of not less than $ne hundred Aesos DP-55.55E shall ;e i:Aosed

and 9olle9ted ;y the o::issioner for ea9h wee> of delay, or any fra9tion thereof, in the filing of the annual state:ent. 1+or the filing of annual state:ent referred to in &e9tion 3-G, the o::issioner shall 9olle9t and re9eive fro: the :utual ;enefit asso9iation so filing a fee of not less than "en Aesos DP-5.55E< Provided, "hat a fine of not less than "en Aesos DP-5.55E shall ;e i:Aosed and 9olle9ted ;y the o::issioner for ea9h wee> of delay, or any fra9tion thereof, in the filing of the annual state:ent. 1D9E +or the eBa:ination Ares9ri;ed in &e9tion .6G, the o::issioner shall 9olle9t and re9eive fees a99ording to the a:ount of its total assets, in the 9ase of a do:esti9 9o:Aany, or of its assets in the PhiliAAines, in the 9ase of a foreign 9o:Aany, not less than the a:ount as follows< 1D-E "wo :illion Aesos or :ore ;ut less than +our :illion Aesos, +our hundred Aesos DP355.55EF 1D.E +our :illion Aesos or :ore ;ut less than &iB :illion Aesos, Eight hundred Aesos DP455.55EF 1DGE &iB :illion Aesos or :ore ;ut less than Eight :illion Aesos, $ne thousand two hundred Aesos DP-,.55.55EF 1D3E Eight :illion Aesos or :ore ;ut less than "en :illion Aesos, $ne thousand siB hundred Aesos DP-,,55.55EF 1D6E "en :illion Aesos or :ore, "wo thousand Aesos DP.,555.55EF 1Provided, "hat if the said eBa:ination is :ade in Ala9es outside the MetroAolitan Manila area, ;esides these fees, the o::issioner shall reCuire of the 9o:Aany eBa:ined the Aay:ent of the a9tual and

ne9essary travelling and su;sisten9e eBAenses of the eBa:iner or eBa:iners 9on9erned. 1+or the eBa:ination Ares9ri;ed in &e9tion 3-., the o::issioner shall 9olle9t and re9eive a :ini:u: fee of not less than $ne hundred Aesos DP-55.55E fro: the :utual ;enefit asso9iation eBa:ined< Provided, "hat if su9h asso9iation has total assets of :ore than $ne hundred thousand Aesos DP-55,555.55E, an additional fee of not less than "en Aesos DP-5.55E for every +ifty thousand Aesos DP65,555.55E in eB9ess thereof shall ;e i:Aosed< 1DdE +or the filing of an aAAli9ation to withdraw fro: the PhiliAAines under "itle -4, the o::issioner shall 9olle9t and re9eive fro: the foreign 9o:Aany so withdrawing a fee of not less than $ne thousand Aesos DP-,555.55E. 1DeE "he o::issioner :ay fiB and 9olle9t fees or 9harges for do9u:ents, trans9riAts, or other :aterials whi9h :ay ;e furnished ;y hi: not in eB9ess of reasona;le 9ost. 1&E . 33-. "he o::issioner, in a99ordan9e with the rules and regulations of the )eAart:ent of Budget and Manage:ent and other relevant regulatory agen9ies, shall sour9e the salary, allowan9es and other eBAenses fro: the retained a:ount of the fees, 9harges, Aenalties and other in9o:e fro: the regulation of insuran9e 9o:Aanies and other 9overed Aersons and entities, and fro: the Insuran9e +und, whi9h is 9reated out of the Aro9eeds of taBes on insuran9e Are:iu:s :entioned in &e9tion .66 of the #ational Internal Revenue ode, as a:ended. 1MI& ELL!#E$U& PR$=I&I$#&

1&E . 33.. !ny Aerson, 9o:Aany or 9orAoration su;Ie9t to the suAervision and 9ontrol of the o::issioner who violates any Arovision of this ode, for whi9h no Aenalty is Arovided, shall ;e dee:ed guilty of a Aenal offense, and uAon 9onvi9tion ;e Aunished ;y a fine not eB9eeding "wo hundred thousand Aesos DP.55,555.55E or i:Arison:ent of siB D,E :onths, or ;oth, at the dis9retion of the 9ourt. 1If the offense is 9o::itted ;y a 9o:Aany or 9orAoration, the offi9ers, dire9tors, or other Aersons resAonsi;le for its oAeration, :anage:ent, or ad:inistration, unless it 9an ;e Aroved that they have ta>en no Aart in the 9o::ission of the offense, shall li>ewise ;e guilty of a Aenal offense, and uAon 9onvi9tion ;e Aunished ;y a fine not eB9eeding "wo hundred thousand Aesos DP.55,555.55E or i:Arison:ent of siB D,E :onths, or ;oth, at the dis9retion of the 9ourt. 1&E . 33G. !ll 9ri:inal a9tions for the violation of any of the Arovisions of this ode shall Ares9ri;e after three DGE years fro: the dis9overy of su9h violation< Provided, "hat su9h a9tions shall in any event Ares9ri;e after ten D-5E years fro: the 9o::ission of su9h violation. 1&E . 333. !ny Aerson, AartnershiA, asso9iation or 9orAoration heretofore authoriHed, li9ensed or registered ;y the o::issioner shall ;e dee:ed to have ;een authoriHed, li9ensed or registered under the Arovisions of this ode and shall ;e governed ;y the Arovisions thereof< Provided, ho ever, "hat where any su9h Aerson, AartnershiA, asso9iation or 9orAoration is affe9ted ;y the new reCuire:ents of this ode, said Aerson, AartnershiA, asso9iation or 9orAoration shall, unless otherwise herein Arovided, ;e given a Aeriod of one D-E year fro: the effe9tivity of

this ode within whi9h to 9o:Aly with the sa:e. 1&E . 336. 'ransitory Provision. T Renewal of eBisting li9enses, 9ertifi9ates of authority or a99reditation whi9h will eBAire on June G5, .5-G shall ;e valid until )e9e:;er G-, .5-6. "hereafter, renewal shall ;e filed on the last day of )e9e:;er every third year following the date of eBAiry of the li9ense, 9ertifi9ate of authority or a99reditation. 1&E . 33,. Repealing Clause. T EB9eAt as eBAressly Arovided ;y this ode, all laws, de9rees, orders, rules and regulations or Aarts thereof, in9onsistent with any Arovision of this ode shall ;e dee:ed reAealed, a:ended or :odified a99ordingly. 1&E . 338. Separability Clause. T If any Arovision of this ode or any Aart hereof ;e de9lared invalid or un9onstitutional, the re:ainder of the law or other Arovisions not otherwise affe9ted shall re:ain valid and su;sisting. 1&E . 334. "his ode shall ta>e effe9t fifteen D-6E days following its Au;li9ation in a newsAaAer of general 9ir9uation.2 !AAroved, D&gd.E JI !!"#D&gd.E F$'ICI% " $J$RCIT" ($'M" T$ JR) $STR%&% Secretary +eneral *cting Senate House of President Representatives "his !9t whi9h is a 9onsolidation of (ouse Bill #o. 34,8 and &enate Bill #o. G.45 was finally Aassed ;y the (ouse of ReAresentatives and the &enate on +e;ruary ,, .5-G. D&gd.E $MM%D&gd.E M%RI'# () 'IRI"*R$#$S (%R+%*#%P Secretary of the Secretary +eneral Senate House of Representatives !AAroved< !U' -6 .5-G D&gd.E ($ I! " S) %,+I " III President of the Philippines