SEC. 282. As used in this title, the following terms shall have
the respective meanings hereinafter set forth unless the context shall
otherwise require:
"Person" means an individual, partnership, firm, association,
corporation, trust, any similar entity or any combination of the
foregoing acting in concert:
"Control", including the terms "controlling", "controlled by" and
"under common control with", means the possession directly or indirectly
of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities
by a contract other than a commercial contract for goods or
non-management services, or otherwise. Subject to section two hundred
eighty-four, control shall be presumed to exist if any person directly
or indirectly owns, controls or holds with the power to vote forty per
centum or more of the voting securities of any other person; Provided,
That no person shall be deemed to control another person solely by
reason of his being an officer or director of such other person;
"Holding company" means any person who directly or indirectly
controls any authorized insurer;
"Controlled insurer" means an authorized insurer controlled
directly or indirectly by a holding company;
"Controlled person" means any person, other than a controlled
insurer, who is controlled directly or indirectly by a holding company;
"Holding company system" means a holding company together with its
controlled insurers and controlled persons.
SEC. 283. Notwithstanding paragraph (b) of section two hundred
eighty-two, the Commissioner may determine after notice and opportunity
to be heard, that a person exercises directly or indirectly either alone
or pursuant to an agreement with one or more other persons such a
controlling influence over the management or policies of an authorized
insurer as to make it necessary or appropriate in the public interest or
for the protection of policyholders or stockholder of the insurer that
the person be deemed to control the insurer.
SEC. 284. The Commissioner may determine upon application
that any person, either alone or pursuant to agreement with one or more
other persons, does not or will not upon the taking of some proposed
action control another person. The filing of an application hereunder in
good faith by any person shall relieve the applicant from any
obligation or liability imposed by this title with respect to the
subject of the application, except as contained in section two hundred
ninety-four, until the Commissioner has acted upon the application.
Within thirty days or such further period as he may prescribe, the
Commissioner may prospectively revoke or modify his determination, after
notice and opportunity to be heard, whenever in his judgment revocation
or modification is consistent with this title.
SEC. 285. Notwithstanding any other provisions of this
title, the following shall not be deemed holding companies:
authorized insurers or reinsurers or their subsidiaries;
the Government of the Philippines, or any political subdivision,
agency or instrumentality thereof, or any corporation which is wholly
owned directly or indirectly by one or more of the foregoing.
The Commissioner may conditionally or unconditionally exempt any
specified person or class of persons from any of the obligations or
liabilities imposed under this title, if and to the extent he finds the
exemption necessary or appropriate in the public interest or not adverse
to the interests of policyholders or stockholders and consistent with
the purposes of this title.
SEC 286. (1) Every person who on the date this Code takes effect
is a controlled insurer and every person who thereafter becomes a
controlled insurer, shall within sixty days thereafter, or within thirty
days after becoming a controlled insurer, whichever is later, register
with the Commissioner. Such registration shall be amended within thirty
days following any change in the identity of its holding company. The
Commissioner may grant one or more reasonable extensions of the time to
register.
Every registrant shall furnish the Commissioner with the
following information concerning its holding company (a) a copy of its
charter or articles of incorporation and its by-laws, (b) the identities
of its principal shareholders, officers, directors and controlled
persons, and (c) information as to its capital structure and financial
condition, and a description of its principal business activities.
SEC. 287. Every controlled insurer shall file with the
Commissioner such reports or material as he may direct for the purpose
of disclosing information concerning the operations of persons within
the holding company system which may materially effect the operations,
management or financial condition of the insurer.
SEC. 288. Every holding company and every controlled
person within a holding company system shall be subject to examination
by order of the Commissioner if he has cause to believe that the
operations of such persons may materially affect the operations,
management or financial condition of any controlled insurer with the
system and that he is unable to obtain relevant information from such
controlled insurer. The grounds relied upon by the Commissioner for such
examination shall be stated in his order, which order shall be subject
to judicial review only at the instance of the person sought to be
examined. Such examination shall be confined to matters specified in the
order. The cost of such examination shall be assessed against the
person examined and no portion thereof shall therafter be reimbursed to
it directly or indirectly by the controlled insurer.
SEC. 289. The Commissioner shall keep the contents of each
report made pursuant to this title and any information obtained by him
in connection therewith confidential and shall not make the same public
without the prior written consent of the controlled insurer to which it
pertains unless the Commissioner after notice and an opportunity to be
heard shall determine that the interests of policy-holders, stockholders
or the public will be served by the publication thereof. In any action
or proceeding by the Commissioner against the person examined or any
other person within the same holding company system a report of such
examination published by him shall be admissible as evidence of the
facts stated therein.
SEC. 290. Transactions within a holding company system to
which a controlled insurer is a party shall be subject to the following:
the terms shall be fair and equitable;
charges or fees for services performed shall be reasonable;
expenses incurred and payments received shall be allocated to the
insurer on an equitable basis in conformity with customary insurance
accounting practices consistently applied.
The books, accounts and records of each party to all such transactions
shall be so maintained as to clearly and accurately disclose the nature
and details of the transactions including such accounting information as
is necessary to support the reasonableness of the charges or fees to
the respective parties.
SEC. 291. The prior written approval of the Commissioner shall be
required for the following transactions between a controlled insurer
and any person in its holding company system: sales, purchases,
exchanges, loans or extensions of credit, or investments, involving five
per centum or more of the insurer's admitted assets as of the
thirty-first day of December next preceding.
SEC. 292. The following transactions between a controlled
insurer and any person in its holding company system may not be entered
into unless the insurer has notified the Commissioner in writing of its
intention to enter into any such transaction at least thirty days prior
thereto, or such shorter period as he may permit, and he has not
disapproved it within such period:
sales, purchases, exchanges, loans or extensions of credit, or
investments, involving more than one-half of one per centum but
less than five per centum of the insurer's admitted assets as of
the thirty-first day of December next preceding;
reinsurance treaties or agreements;
rendering of services on a regular or systematic basis; or
any material transaction, specified by regulation, which the
Commissioner determines may adversely affect the interest of the
insurer's policyholders or stockholders or of the public.
Nothing herein contained shall be deemed to authorize or permit any
transaction which, in the case of a non-controlled insurer, would be
otherwise contrary to law.
SEC. 293. The Commissioner, in reviewing transactions pursuant to
sections two hundred ninety-one and two hundred ninety-two, shall
consider whether the transactions comply with the standard set forth in
section two hundred ninety and whether they may adversely affect the
interests of policyholders. This section shall not apply to transactions
subject to other sections of this Code which impose notice or approval
requirements greater than those prescribed by this title.
SEC. 294. (1) No person, other than an authorized insurer,
shall acquire control of any domestic insurer, whether by purchasee of
its securities or otherwise, except (a) after twenty days' written
notice to its insurer or such shorter period as the Commissioner may
permit, of its intention to acquire control, and (b) with the prior
written approval of the Commissioner.
The Commissioner shall disapprove the acquisition of control of a
domestic insurer if he determines, after notice and an opportunity to
be heard, that such action is reasonably necessary to protect the
interests of the people of this country. The following shall be the only
factors to be considered by him in reaching the foregoing
determination: (a) the financial condition of the acquiring person and
the insurer; (b) the trustworthiness of the acquiring person or any of
its officers or directors; (c) a plan for the proper and effective
conduct of the insurer's operations; (d) the source of the funds or
assets for the acquisition; (e) the fairness of any exchange of stock,
assets, cash or other consideration for the stock or assets to be
received; (f) whether the effect of the acquisition may be substantially
to lessen competition in any line of commerce in insurance or to tend
to create a monopoly therein; and (g) whether the acquisition is likely
to be hazardous or prejudicial to the insurer's policy-holders or
stockholders.
The following conditions affecting any controlled insurer,
regardless of when such control has been acquired, are violations of
this title: (a) the controlling person or any of its officers directors
have demonstrated untrustworthiness; and (b) the effect of retention of
control may be substantially to lessen competition in any line of
commerce in insurance in this country or to tend to create a monopoly
therein. If after notice and an opportunity to be heard, the
Commissioner determines that any of the foregoing violations exists, he
shall reduce his findings to writing and shall issue an order based
thereon and cause the same to be served upon the insurer and upon all
persons affected thereby directing any person found to be in violation
thereof to take appropriate action to cure such violation. Upon the
failure of any such person to comply with such order, section two
hundred ninety-eight shall become applicable.
The Commissioner may require the submission of such information
as he deems necessary to determine whether any acquisition or retention
of control complies with this title and may require, as a condition of
approval of such acquisition or retention of control, that all or any
portion of such information be disclosed to the insurer's stockholders.
Unless subject to registration under section two hundred
eighty-six or unless acquisition of its control is subject to paragraphs
one and two hereof, every authorized insurer shall, on or before the
first day of July, nineteen hundred seventy-five, or within thirty days
after any event requiring notice hereunder, which ever is later, notify
the Commissioner in writing of the identity of any person whom the
insurer then knows or has reason to believe controls or has taken any
action, other than preliminary negotiations or discussion, to acquire
control of the insurer.
SEC. 295. (1) Notwithstanding the control of an authorized
insurer by any person, the officers and directors of the insurer shall
not thereby be relieved of any obligation or liability to which they
would otherwise be subject by law, and the insurer shall be managed so
as to assure its separate operating identity consistent with this title.
Nothing herein shall preclude an authorized insurer from having or
sharing a common management or cooperative or joint use of personnel,
property or services with one or more other persons under arrangements
meeting the standards of section two hundred ninety.
SEC. 296. To the extent that any information or material is set
forth in forms or other matter on file with any government agency or in a
registration form filed with the Commissioner by another person within
the same holding company system, the controlled insurer may comply with
the registration or reporting requirements of this title by referring in
its registration form or report to such other filed matter and
attaching a copy thereof certified by the insurer as a true and complete
copy, to such registration form or report or, if such other filed
matter is on file with the Commissioner, incorporating such matter by
reference.
SEC. 297. No holding company or controlled person shall
directly or indirectly or through another person do or cause to be done
for or in behalf of the controlled insurer any act intended to affect
the insurance operations of the insurance which, if done by the insurer,
would violate any provision of this Code.
SEC. 298. In addition to any other penalty provided by
law, the Commissioner may, upon the willful failure of any person within
a holding company system to comply with this title or any regulation or
order promulgated hereunder:
proceed under title fourteen or title fifteen, Chapter III, of this
Code with respect to insurer within the holding company system; or
revoke or refuse to renew the authority to do business in this
country of an insurer within the holding company system or refuse to
issue such authority to any other insurer in the system; or
direct that, in addition to any other penalty provided by law,
such person forfeit to the people of this country a sum not exceeding
five hundred pesos for a first violation and two thousand five hundred
pesos for any subsequent violation. An additional sum not exceeding two
thousand five hundred pesos shall be imposed for each month during which
any such violation shall continue.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
