WHEREAS, the
Insurance Commissioner is entrusted
with the duty to see that all laws relating to insurance, insurance
companies and other insurance matters are faithfully executed and to
perform the duties imposed upon him by the Insurance Code;
WHEREAS, considering the nature
of insurance
transactions which depend entirely on utmost good faith especially on
the part of the insurer, and where an insurance company has become
insolvent or cannot continue to resume business with safety to its
policyholders and other creditors, its assets must be preserved to
settle satisfactorily and expeditiously as possible its debts and
accounts; and,
WHEREAS, the action of the
Insurance Commissioner
in connection therewith should not be hampered unnecessarily by tedious
and protracted court litigations;
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President
of the Philippines, by virtue of the powers in me vested by the
Constitution, do hereby decree and order the amendment of Presidential
Decree No. 612, otherwise known as the Insurance Code, as
follows:
SECTION 1. Section 249, Title
15, Presidential Decree No. 612, is hereby amended to read as follows:
"TITLE 15.
PROCEEDINGS UPON INSOLVENCY
"Sec. 249. Whenever, upon
examination or other
evidence, it shall be disclosed that the condition of any insurance
company doing business in the Philippines is one of insolvency, or that
its continuance in business would be hazardous to its policyholders and
creditors, the Commissioner shall forthwith order the company to cease
and desist from transacting business in the Philippines and shall
designate a receiver to immediately take charge of its assets and
liabilities, as expeditiously as possible collect and gather all the
assets and administer the same for the benefit of its policyholders and
creditors, and exercise all the powers necessary for these purposes
including, but not limited to, bringing suits and foreclosing mortgages
in the name of the insurance company.
"The Commissioner shall thereupon determine within thirty
days
whether the insurance company may be reorganized or otherwise placed in
such condition so that it may be permitted to resume business with
safety to its policyholders and creditors and shall prescribe the
conditions under which such resumption of business shall take place as
well as the time for fulfillment of such conditions. In such case, the
expenses and fees in the collection and administration of the insurance
company shall be determined by the Commissioner and shall be paid out of
the assets of such company.
"If the Commissioner shall determine and confirm within the
said
period that the insurance company is insolvent, as defined hereunder, or
cannot resume business with safety to its policyholders and creditors,
he shall if the public interest requires, order its liquidation,
indicate the manner of its liquidation and approve a liquidation plan.
The Commissioner shall, by the Solicitor General, file a petition in the
Court of First Instance reciting the proceedings which have been taken
and praying the assistance of the Court in the liquidation of the
insurance company. The court shall have jurisdiction in the same
proceedings to adjudicate disputed claims against the stockholders and
do all that is necessary to preserve the assets of the insurance company
and to implement the liquidation plan approved by the Commissioner. The
Commissioner shall designate a competent and qualified person as
liquidator who shall take over the functions of the receiver previously
designated and, with all convenient speed, reinsure all its outstanding
policies, convert the assets of the insurance company to cash, or sell,
assign or otherwise dispose of the same to the policyholders, creditors
and other parties for the purpose of settling the liabilities or paying
the debts of such company and he may, in the name of the company,
institute such actions as may be necessary in the appropriate Court to
collect and recover accounts and assets of the insurance company.
"The provisions of any law to the contrary notwithstanding,
the
actions of the Commissioner under this Section shall be final and
executory, and can be set aside by the Court only if there is convincing
proof that the action is plainly arbitrary and made in bad faith. No
restraining order or injunction shall be issued by the Court enjoining
the Commissioner from implementing his actions under this Section unless
there is convincing proof that the action of the Commissioner is
plainly arbitrary and made in bad faith and the petitioner or plaintiff
files with the Clerk or Judge of the Court in which the action is
pending a bond executed in favor of the Commissioner in an amount to be
fixed by the Court. The restraining order or injunction shall be refused
or, if granted, shall be dissolved upon filing by the Commissioner, if
he so desires, of a bond in an amount twice the amount of the bond of
the petitioner or plaintiff conditioned that it will pay the damages
which the petitioner or plaintiff may suffer by the refusal or the
dissolution of the injunction. The provisions of Rule 58 of the New
Rules of Court insofar as they are applicable shall govern the issuance
and dissolution of the restraining order or injunction contemplated in
this Section.
"All proceedings under this Article shall be given
preference in
the Courts. The commissioner shall not be required to pay any fee to any
public officer for filing, recording, or in any manner authenticating
any paper or instrument relating to the proceedings.
"As used in this Title, the term "Insolvency" shall mean
the
inability of an insurance company to pay its lawful obligations as they
fall due in the usual and ordinary course of business as may shown by
its failure to maintain the margin of solvency required under Section
194 of this Code."
SEC. 2. This Decree shall take
effect immediately.
Done in the City of Manila, this 25th day of May, in the year
of Our Lord Nineteen hundred and seventy-seven.
(Sgd.)
FERDINAND E. MARCOS
President of the Philippines
By the President:
(Sgd.) JUAN C. TUVERA
Presidential Executive Assistant
