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Article 1318. There is no contract unless the following requisites concur:


(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established. (1261)
Article 1319. Consent is manifested by the meeting of the offer and the acceptance
upon the thing and the cause which are to constitute the contract. The offer must be
certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the time it
came to his knowledge. The contract, in such a case, is presumed to have been entered
into in the place where the offer was made. (1262a)
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Section 184. For purposes of this Code, the term "insurer" or "insurance company"
shall include all individuals, partnerships, associations, or corporations, including
government-owned or controlled corporations or entities, engaged as principals in the
insurance business, excepting mutual benefit associations. Unless the context
otherwise requires, the terms shall also include professional reinsurers defined in
section two hundred eighty. "Domestic company" shall include companies formed,
organized or existing under the laws of the Philippines. "Foreign company" when used
without limitation shall include companies formed, organized, or existing under any laws
other than those of the Philippines.
Section 185. Corporations formed or organized to save any person or persons or other
corporations harmless from loss, damage, or liability arising from any unknown or future
or contingent event, or to indemnify or to compensate any person or persons or other
corporations for any such loss, damage, or liability, or to guarantee the performance of
or compliance with contractual obligations or the payment of debt of others shall be
known as "insurance corporations".
The provisions of the Corporation Law shall apply to all insurance corporations now or
hereafter engaged in business in the Philippines insofar as they do not conflict with the
provisions of this chapter.

ection 187. No insurance company shall transact any insurance business in the
Philippines until after it shall have obtained a certificate of authority for that purpose
from the Commissioner upon application therefor and payment by the company
concerned of the fees hereinafter prescribed.
The Commissioner may refuse to issue a certificate of authority to any insurance
company if, in his judgment, such refusal will best promote the interest of the people of
this country. No such certificate of authority shall be granted to any such company until
the Commissioner shall have satisfied himself by such examination as he may make
and such evidence as he may require that such company is qualified by the laws of the
Philippines to transact business therein, that the grant of such authority appears to be
justified in the light of economic requirements, and that the direction and administration,
as well as the integrity and responsibility of the organizers and administrators, the
financial organization and the amount of capital, notwithstanding the provisions of
section one hundred eighty-eight, reasonably assure the safety of the interests of the
policyholders and the public.
In order to maintain the quality of the management of the insurance companies and
afford better protection to policyholders and the public in general, any person of good
moral character, unquestioned integrity and recognized competence may be elected or
appointed director or officer of insurance companies. The Commissioner shall prescribe
the qualifications of the executive officers and other key officials of insurance companies
for purposes of this section.
No person shall concurrently be a director and/or officer of an insurance company and
an adjustment company.
Incumbent directors and/or officers affected by the above provisions are hereby allowed
to hold on to their positions until the end of their terms or two years from the effectivity
of this decree, whichever is shorter.
Before issuing such certificate of authority, the Commissioner must be satisfied that the
name of the company is not that of any other known company transacting a similar
business in the Philippines, or a name so similar as to be calculated to mislead the
public.
Such certificate of authority shall expire on the last day of June of each year and shall
be renewed annually if the company is continuing to comply with the provisions of this
Code or the circulars, instructions, rulings or decisions of the Commissioner. Every
company receiving any such certificates of authority shall be subject to the provisions of

this Code and other related laws and to the jurisdiction and supervision of the
Commissioner.
No insurance company may be authorized to transact in the Philippines the business of
life and non-life insurance concurrently unless specifically authorized to do so; Provided,
That the terms "life" and "non-life" insurance shall be deemed to include health,
accident and disability insurance.
No insurance company shall have equity in an adjustment company and neither shall an
adjustment company have an equity in an insurance company.
Insurance companies and adjustment companies presently affected by the above
provision shall have two years from the effectivity of this Decree within which to divest of
their stockholdings. (As amended by Presidential Decree No. 1455).
Section 262. Any domestic stock life insurance company doing business in the
Philippines may convert itself into an incorporated mutual life insurer. To that end it may
provide and carry out a plan for the acquisition of the outstanding shares of its capital
stock for the benefit of its policyholders, or any class or classes of its policyholders, by
complying with the requirements of this chapter.
Section 280. Except as otherwise provided in this Code, no person, partnership,
association or corporation shall transact any business in the Philippines as a
professional reinsurer until it shall have obtained a certificate of authority for that
purpose from the Commissioner upon the application therefor and payment by such
person, partnership, association or corporation of the fees hereinafter prescribed. As
used in this Code, the term "professional reinsurer" shall mean any person, partnership,
association or corporation that transacts solely and exclusively reinsurance business in
the Philippines.
The Commissioner may refuse to issue a certificate of authority to any such person,
partnership, association or corporation if, in his judgment, such refusal will best promote
public interest. No such certificate of authority shall be granted to any such person,
partnership, association or corporation unless and until the Commissioner shall have
satisfied himself by such examination as he may make and such evidence as he may
require that such person, partnership, association or corporation is qualified by the laws
of the Philippines to transact business therein as a professional reinsurer.
Before issuing such certificate of authority of the Commissioner must be satisfied that
the name of the applicant is not that of any other known company transacting insurance

or reinsurance business in the Philippines, or a name so similar as to be calculated to


mislead the public.
Such certificate of authority shall expire on the last day of June of each year and shall
be renewed annually if such person, partnership, association, or corporation is
continuing to comply with provisions of this Code, or the circulars, instructions, rulings,
or decisions of the Commissioner and such other pertinent law, rules and regulations.
Every such person, partnership, association, or corporation receiving such certificate of
authority shall be subject to the provisions of this Code and other related laws, and to
the jurisdiction and supervision of the Commissioner.
Section 390. Any society, association or corporation, without capital stock, formed or
organized not for profit but mainly for the purpose of paying sick benefits to members, or
of furnishing financial support to members while out of employment, or of paying to
relatives of deceased members of fixed or any sum of money, irrespective of whether
such aim or purpose is carried out by means of fixed dues or assessments collected
regularly from the members, or of providing, by the issuance of certificates of insurance,
payment of its members of accident or life insurance benefits out of such fixed and
regular dues or assessments, but in no case shall include any society, association, or
corporation with such mutual benefit features and which shall be carried out purely from
voluntary contributions collected not regularly and or no fixed amount from whomsoever
may contribute, shall be known as a mutual benefit association within the intent of this
Code.
Any society, association, or corporation principally organized as labor union shall be
governed by the Labor Code notwithstanding any mutual benefit feature provisions in its
charter as incident to its organization.
In no case shall a mutual benefit association be organized and authorized to transact
business as a charitable or benevolent organization, and whenever it has this feature as
incident to its existence, the corresponding charter provision shall be revised to conform
with the provision of this section. Mutual benefit association, already licensed to transact
business as such on the date this Code becomes effective, having charitable or
benevolent feature shall abandon such incidental purpose upon effectivity of this Code if
they desire to continue operating as such mutual benefit associations. (As amended by
Presidential Decree No. 1455)
Section 361. No insurance company doing business in the Philippines or any agent
thereof, no insurance broker, and no employee or other representative of any such
insurance company, agent, or broker, shall make, procure or negotiate any contract of

insurance or agreement as to policy contract, other than is plainly expressed in the


policy or other written contract issued or to be issued as evidence thereof, or shall
directly or indirectly, by giving or sharing a commission or in any manner whatsoever,
pay or allow or offer to pay or allow to the insured or to any employee of such insured,
either as an inducement to the making of such insurance or after such insurance has
been effected, any rebate from the premium which is specified in the policy, or any
special favor or advantage in the dividends or other benefits to accrue thereon, or shall
give or offer to give any valuable consideration or inducement of any kind, directly or
indirectly, which is not specified in such policy or contract of insurance; nor shall any
such company, or any agent thereof, as to any policy or contract of insurance issued,
make any discrimination against any Filipino in the sense that he is given less
advantageous rates, dividends or other policy conditions or privileges than are accorded
to other nationals because of his race.
Section 362. No insurance company doing business in the Philippines, and no officer,
director, or agent thereof, and no insurance broker or any other person, partnership or
corporation shall issue or circulate or cause or permit to be issued or circulated any
literature, illustration, circular or statement of any sort misrepresenting the terms of any
policy issued by any insurance company of the benefits or advantages promised
thereby, or any misleading estimate of the dividends or share of surplus to be received
thereon, or shall use any name or title of any policy or class of policies misrepresenting
the true nature thereof; nor shall any such company or agent thereof, or any other
person, partnership or corporation make any misleading representation or incomplete
comparison of policies to any person insured in such company for the purpose of
inducing or tending to induce such person to lapse, forfeit, or surrender his said
insurance.
Section 53. The insurance proceeds shall be applied exclusively to the proper interest
of the person in whose name or for whose benefit it is made unless otherwise specified
in the policy.
Section 180. An insurance upon life may be made payable on the death of the person,
or on his surviving a specified period, or otherwise contingently on the continuance or
cessation of life.
Every contract or pledge for the payment of endowments or annuities shall be
considered a life insurance contract for purpose of this Code
In the absence of a judicial guardian, the father, or in the latter's absence or incapacity,
the mother, or any minor, who is an insured or a beneficiary under a contract of life,
health or accident insurance, may exercise, in behalf of said minor, any right under the

policy, without necessity of court authority or the giving of a bond, where the interest of
the minor in the particular act involved does not exceed twenty thousand pesos. Such
right may include, but shall not be limited to, obtaining a policy loan, surrendering the
policy, receiving the proceeds of the policy, and giving the minor's consent to any
transaction on the policy.
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Art. 43. The termination of the subsequent marriage referred to in the preceding Article
shall produce the following effects:
(4) The innocent spouse may revoke the designation of the other spouse who acted in
bad faith as beneficiary in any insurance policy, even if such designation be stipulated
as irrevocable;
Art. 42. The subsequent marriage referred to in the preceding Article shall be
automatically terminated by the recording of the affidavit of reappearance of the absent
spouse, unless there is a judgment annulling the previous marriage or declaring it void
ab initio.
A sworn statement of the fact and circumstances of reappearance shall be recorded in
the civil registry of the residence of the parties to the subsequent marriage at the
instance of any interested person, with due notice to the spouses of the subsequent
marriage and without prejudice to the fact of reappearance being judicially determined
in case such fact is disputed.
Art. 50. The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43 and by
Article 44 shall also apply in the proper cases to marriages which are declared ab initio
or annulled by final judgment under Articles 40 and 45.
The final judgment in such cases shall provide for the liquidation, partition and
distribution of the properties of the spouses, the custody and support of the common
children, and the delivery of third presumptive legitimes, unless such matters had been
adjudicated in previous judicial proceedings.
All creditors of the spouses as well as of the absolute community or the conjugal
partnership shall be notified of the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot on which it is situated, shall be
adjudicated in accordance with the provisions of Articles 102 and 129.

Art. 64. After the finality of the decree of legal separation, the innocent spouse may
revoke the donations made by him or by her in favor of the offending spouse, as well as
the designation of the latter as beneficiary in any insurance policy, even if such
designation be stipulated as irrevocable. The revocation of the donations shall be
recorded in the registries of property in the places where the properties are located.
Alienations, liens and encumbrances registered in good faith before the recording of the
complaint for revocation in the registries of property shall be respected. The revocation
of or change in the designation of the insurance beneficiary shall take effect upon
written notification thereof to the insured.
The action to revoke the donation under this Article must be brought within five years
from the time the decree of legal separation become final.