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HISTORY OF INSURANCE COMMISSION

During the Pre-Hispanic Era, the concept of insurance as we know it today is non-existent.
The Pre-Hispanic Filipinos, relying mostly on hunting and gathering for their subsistence,
did not have the need for it as they are more concerned on how they will survive. Thus,
every loss of a family or tribe member was borne alone by the person, family, or tribe where
the deceased belonged to.

When the Spaniards came and colonized our country, insurance, in its present concept, was
introduced in the Philippines. The Lloyds of London, simply known as Lloyds, is an
insurance market located in London's primary financial district, the City of London. It
introduced the concept of insurance to the Philippines by appointing Strachman, Murray &
Co., Inc. as its representative in the country.

Along with the introduction of the insurance industry in the country came the need for laws
to regulate it. During the Spanish colonization, the laws on insurance were found in Title
VII of Book II and Section III of Title III of Book III of the Spanish Code of Commerce;
and in Chapters II and IV of Tile XII of Book IV of the Spanish Civil Code of 1889.

The introduction of the concept of insurance protection brought about by the establishment
of Strachman, Murray & Co., Inc. in the Philippines Islands stimulated the influx of foreign
insurance companies in the country. In 1898, life insurance was introduced with the entry of
Sun Life Assurance of Canada in the local insurance market.

Not long after, in 1906, the first domestic non-life insurance company, the Yek Tong Lin
Insurance Company, was organized. Shortly after, the Insular Life Assurance Co., Ltd., the
first domestic life insurance company in the country, was established in 1910.

Due to the fast-paced growth of the insurance industry in the Philippines, the Philippine
Legislature, on December 11, 1914, enacted Act 2427, also known as the Insurance Act.
This Act took effect on July 1, 1915 and repealed the provisions of the Spanish Code of
Commerce on Insurance. Under the Insurance Act, the Insular Treasurer, in addition to his
official title, was designated as the Insurance Commissioner ex-officio. The government
agency which supervised insurance business in the country was called the Insurance
Division of the Bureau of Treasury.

The viability of the insurance market in the Philippines encouraged more foreign insurance
companies to open shop in the country. In 1939, the Union Insurance Society of Canton
appointed Russel & Surgis as its agent in Manila, transacting business limited to non-life
insurance.

During the Second World War, the Insurance Division was separated from the Bureau of
Treasury and attached to the Bureau of Banking. After the war, the Division returned to the
Bureau of Treasury. However, in 1947, the government saw the synergy and practical
advantage of merging Insurance Division with the Bureau of Banking. Hence, the former
was detached once more from the Bureau of Treasury and re-merged with the Bureau of
Banking.

As the industry prospered, the state recognized the need to establish an independent office
to administer all matters pertaining to the countrys insurance industry. Therefore, on
January 3, 1949, along with the formal opening of the Central Bank of the Philippines, the
Bureau of Banking was renamed as the Office of the Insurance Commissioner, by virtue of
Republic Act No. 275. Likewise, the Bank Commissioner and Assistant Bank
Commissioner were renamed to Insurance Commissioner and Assistant Insurance
Commissioner, respectively

On December 18, 1974, Presidential Decree No. 612 was promulgated, ordaining and
instituting the Insurance Code of the Philippines, thereby repealing Act 2427 or the
Insurance Act. Presidential Decree Nos. 63, 123, and 317 were issued, amending PD 612.
Among other things, Presidential Decree No. 63 provided that the Office of the Insurance
Commissioner be renamed as the Insurance Commission. Finally, on June 11, 1976,
Presidential Decree No. 1460 took effect and consolidated all insurance laws into a single
code resulting to what we know now as the Insurance Code of 1978.

The dynamic environment of the insurance industry saw the enactment on July 27, 2009 of
Republic Act No. 9829, otherwise known as the Pre-Need Code of the Philippines. By
virtue of the Pre-Need Code, the regulation and supervision of all pre-need companies
conducting business in the country is vested on the Insurance Commission.

On August 15, 2013, Republic Act No. 10607, otherwise known as the Amended Insurance
Code, was signed by President Benigno S. Aquino III. One of the amendments included in
the said law is the progressive increase of capital requirements for life and non-life
insurance companies every three years until 2012.

The revisions embodied in the Amended Insurance Code are intended to reinforce the
provisions of the previous code so as to further strengthen the insurance industry and ensure
the economic viability and financial stability of companies operating in the country, to the
end that each and every Filipino is amply protected and secured.

History of Insurance in The Philippines


TIMELINE

Development of Insurance in The Philippines


Pre-Spanish Era - there was no insurance; every loss was borne by the person or the family who
suffered the misfortune.
Spanish era Insurance, in its present concept, was introduced in the Philippines when Lloyds
of London appointed Strachman, Murray & Co., Inc. as its representative here.

1898 Life insurance was introduced in this country with the entry of Sun Life Assurance of
Canada in the local insurance market.

1906 First domestic non-life insurance company, the Yek Tong Lin Insurance Company, was
organized

1910 First domestic life insurance company, the Insular Life Assurance Co., Ltd., was
organized

1939 Union Insurance Society of Canton appointed Russel & Surgis as its agent in
Manila. The business transacted the Philippines was then limited to non-life insurance.

1936 Social insurance was established with the enactment of Commonwealth Act no. 186
which created the Government Service Insurance System (GSIS) which started operations in
1937. The Act covers govt employees.

1949 Government agency was formed to handle insurance affairs, where the Insular Treasurer
was appointed commissioner ex-officio.

1950 Reinsurance was introduced by the Reinsurance Company of the Orient when it wrote
treaties for both life and non life.

1951 First workmens compensation pool was organized as the Royal Group Incorporated.

1954 RA 1161 was enacted which provided for the organization of the Social Security System
(SSS) covering employees of the private sector.

At present, there are 130 insurance companies registered with the Office of the Insurance
Commissioner. Of these, 2 are composite insurance companies (engaged in both life and non-
life insurance), 23 are life insurance companies, 101 are non-life insurance companies and 4 are
reinsurance companies.
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