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PRESIDENTIAL DECREE NO. 1141
PRESIDENTIAL DECREE NO. 1141 -
AMENDING Section 249, TITLE 15, PRESIDENTIAL DECREE NO. 612, OTHERWISE
KNOWN AS THE INSURANCE CODE
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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;chanroblesvirtualawlibrary
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, chanroblesvirtualawlibrary
WHEREAS, the action of the Insurance Commissioner in connection
therewith should not be hampered unnecessarily by tedious and
protracted court litigations;chanroblesvirtualawlibrary
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:cralaw:red
Section 1. Section 249, Title 15, Presidential Decree
No. 612, is hereby amended to read as follows: chanroblesvirtualawlibrary
"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. chanroblesvirtualawlibrary
"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. chanroblesvirtualawlibrary
"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. chanroblesvirtualawlibrary
"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."
Section 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.
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