SEC. 252. Upon prior notice to the Commissioner, two or more
domestic insurance companies, acting through their respective boards of
directors, may negotiate to merge into a single corporation which shall
be one of the constituent corporations, or consolidate into a single
corporation which shall be a new corporation to be formed by the
consolidation. A common agreement of the proposed merger or
consolidation shall be drawn up for submission to the stockholders or
members of the constituent companies for adoption and approval in
accordance with the provisions of the respective by-laws of the
constituent companies and all existing laws that may be pertinent.
SEC. 253. Such agreement shall include, aside from the
proposed merger or consolidation, provisions relative to the manner of
transfer of assets to and assumption of liabilities by the absorbing or
acquiring company from the absorbed or dissolved company or companies;
the proposed articles of merger or consolidation and by-laws of the
surviving or acquiring company; the corporate name to be adopted which
should not be that of any other existing company transacting similar
business or one so similar as to be calculated to mislead the public;
the rights of the stockholders or members of the absorbed or dissolved
companies; date of effectivity of the merger or consolidation; and such
particulars as may be necessary to explain and make manifest the objects
and purposes of the absorbing or acquiring company.
SEC. 254. Upon execution of such agreement to merge or
consolidate by and between or among the boards of directors of the
constituent companies, notice thereof shall be mailed immediately to
their policyholders and creditors. The company or companies to be
absorbed or dissolved shall discharge all its accrued liabilities;
otherwise, such liabilities shall, with the consent of its creditors, be
transferred to and assumed by the absorbing or acquiring company, or
such liabilities be reinsured by the latter. In the case of such
policies as are subject to concellation by the company or companies to
be absorbed or dissolved, same may be cancelled pursuant to the terms
thereof in lieu of such transfer, assumption, or reinsurance.
SEC. 255. Upon approval or adoption in the meetings of the
stockholders or members called for the purpose in each of the
constituent companies of the agreement to merge or consolidate, all
stockholders or members dissenting or objecting to the merger or
consolidation shall be paid the value of their shares by the company
concerned in accordance with the by-laws thereof.
SEC. 256. Upon approval or adoption of the agreement to
merge or consolidate by the stockholders or members of the constituent
companies, the corresponding articles of merger or of consolidation
shall be duly executed by the presidents and attested by the corporate
secretaries and shall bear the corporate seals of the merging or
consolidating companies setting forth:
The plan of merger or the plan of consolidation;
As to each corporation, the number of shares outstanding, or in
case of mutual corporations, the number of members; and
As to each corporation, the number of shares or members voted for
and against such plan, respectively. Thereafter, a certified copy of
such articles of merger or consolidation, together with a certificate of
approval or adoption by the stockholders or members of such articles of
merger or consolidation, verified by affidavits of such officers and
under the seal of the constituent companies, shall be submitted to the
Commissioner, together with such other papers or documents which the
Commissioner may require, for his consideration.
SEC. 257. The articles of merger or of consolidation, signed and
verified as hereinabove required, shall be filed with the Securities and
Exchange Commission for its examination and approval.
SEC. 258. Upon receipt from the Securities and Exchange
Commission of the certificate of merger or of consolidation, the
constituent companies shall surrender to the Commissioner their
respective certificates of authority to transact insurance business. The
absorbing or surviving company in case of merger, or the newly formed
company in case of consolidation, shall immediately file with the
Commissioner the corresponding application for issuance of a new
certificate of authority to transact insurance business, together with a
certified copy of the certificate of merger or of consolidation, and of
the certificate of increase of stocks, if there is any, issued by the
Securities and Exchange Commission.
SEC. 259. Nothing in this title shall be construed to
enlarge the powers of the absorbing or surviving company in case of
merger, or the newly formed company in case of consolidation except
those conferred by the certificate of merger or of consolidation and the
articles of merger or consolidation, or the amended articles of
incorporation, as registered with the Securities and Exchange
Commission.
SEC. 260. No director, officer, or stockholder of any such
constituent companies shall receive any fee, commission, compensation,
or other valuable consideration whatsoever directly or indirectly, for
in any manner aiding, promoting or assisting in such merger or
consolidation.
SEC. 261. The merger or consolidation of companies under
this Code shall be subject to the provisions of the Corporation Law,
and, in those cases specified in Republic Act No. 5455, as amended, be
further subject to the provisions of said law.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
