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PRESIDENTIAL DECREE NO. 1280
PRESIDENTIAL DECREE NO. 1280 -
AMENDING TITLE 17, CHAPTER III, OF PRESIDENTIAL DECREE NO. 612,
OTHERWISE KNOWN AS THE INSURANCE CODE, ON THE MUTUALIZATION OF STOCK
LIFE INSURANCE COMPANIES
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WHEREAS,
under Title 17, Chapter III, of Presidential Decree No. 612, otherwise
known as the Insurance Code, a domestic stock life insurance company
doing business in the Philippines may convert itself into an
incorporated mutual life insurer;chanroblesvirtualawlibrary
WHEREAS, a big majority of the stockholders of one such stock life
insurance company, recognizing the contribution made by the
policyholders to the total assets of the company over the years, and
fully believing that the social, economic and political development of
the country will enhanced by the wider ownership of companies, have
decided to mutualized under the provision of the aforementioned Title
17, Chapter III, of the Insurance Code, and thus achieve the widest
conceivable distribution of ownership of the company;chanroblesvirtualawlibrary
WHEREAS, under the aforementioned provisions of the Insurance Code, a
stock life insurance company becomes mutualized only when all
outstanding shares of its capital stock are purchased and surrendered
for cancellation of retired, and the articles of incorporation are
amended to formalize the conversion; chanroblesvirtualawlibrary
WHEREAS, there is need to amend the aforementioned provisions of the
Insurance Code in order that the desire of the big majority of the
stockholders of a stock life insurance company may not be thwarted by
the obstinacy or disapproval of a few of such stockholders.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
decree and order:cralaw:red
Section 1. Title 17, Chapter III, of Presidential
Decree No. 612, otherwise known as the Insurance Code, is hereby
amended by inserting between sections two hundred sixty-nine and two
hundred seventy thereof the following:cralaw:red
"Sec. 269-A. If at any time within the period
provided in the plan for the acquisition of the outstanding shares of
stock of the insurer, ninety percent thereof has already been acquired
and transferred to the trustees under the plan, the insurer by a vote
of majority of the directors may determine to make an offer, with the
permission of the Commissioner and subject to such requirement as he
may specify, to acquire by purchase all of the shares not theretofore
acquired under the plan, at a specified price which the insurer
considers to be their fair value as of the date of making such offer.
If the offer to acquire is permitted by the Commissioner the insurer
shall make a written offer by registered mail to each shareholder whose
shares have not theretofore been acquired under the plan or otherwise,
offering to acquire all his shares at such price if accepted in writing
within thirty days after the mailing of such offer. Any shareholder
accepting such offer within the time therefor shall, within sixty days
after his acceptance, transfer to the insurer the certificate
representing such shares and, upon doing so, shall be paid by the
insurer the amount of such offer for his shares. Any share so acquired
shall be assigned and transferred to the trustees under the plan and
held them as shares acquired pursuant to the plan. chanroblesvirtualawlibrary
Each shareholder who does not accept such offer to acquire his shares
within the time stated in such offer for acceptance thereof shall
within fifteen days after the expiration of such offer apply to the
Secretary of Finance for a determination of the fair value of his
shares as of the date of making such offer. The Secretary of Finance
may himself, after due notice and hearing, determine upon the evidence
received the fair value of the shares as of the date of making such
offer, or appoint three impartial and disinterested persons to appraise
the fair value of such shares with such direction as he shall deem
proper and necessary to expedite the proceedings. Upon completion of
the appraisal proceedings, the appraisers shall file with the Secretary
of Finance their report in writing stating the fair value of such
shares as of the date of the making of such offer and setting forth
their findings in support of such statement. The appraisers shall
furnish each party to the proceedings a copy of their appraisal report,
and within ten days after receipt thereof any such party may signify
his objection, if any, to the report or move for the approval thereof.
Upon the expiration of the period of ten days referred to above, the
report shall be set for hearing, after which the Secretary of Finance
shall issue an order adopting, modifying or rejecting the report in
whole or in part or he may receive further evidence or may recommit it
with instructions. Whenever the Secretary of Finance shall determine in
any manner, as aforesaid, the fair value of such shares, he may also
determine the terms of payment thereof by the insurer. The expenses
incidental to the proceedings including charges of the appraisers, if
any, shall be paid equally by the insurer and the shareholder.
The findings of the Secretary of Finance on all questions of fact
raised at the hearing of the application for determination of the fair
value of such shares shall be conclusive upon all parties to the
proceedings. The order of the Secretary of Finance determining the fair
value of the shares and the terms of payment thereof shall have the
force and effect of a judgment which shall be appealable on any
question of law. Such order shall become final and executory fifteen
days after receipt thereof by the parties to the proceedings.
Upon any such order becoming final and from which no appeal is pending,
or when the time to appeal therefrom has expired, each shareholder
party to the proceedings shall transfer his shares to the insurer and
surrender to said insurer shall make payment therefor as provided in
such order. Any shares so acquired by the insurer shall be assigned and
transferred to the trustees and held by them as shares acquired
pursuant to the plan.
Any shareholder who does not apply to the Secretary of finance in the
manner and within the time hereinbefore prescribed shall be deemed to
have accepted the offer referred to above, effective, however, upon the
expiration of the time hereinabove prescribed for making such
applications, and such shareholder's time for accepting such offer
shall, for that purpose only, be deemed to have been extended
accordingly.
Any offer to acquire shares made pursuant to this Section, shall,
except as otherwise provided herein, be irrevocable until all
proceedings upon such offer have been completed or all shares have
otherwise been earlier acquired by the insurer.
Any shareholder who has expressly or impliedly accepted the plan or the
offer to acquire his shares not theretofore acquired under the plan,
any shareholder who has rejected such plan or such offer and has
applied as aforesaid, to the Secretary of Finance for a determination
of the fair value of his shares subsequent to which an agreement has
been reached or a final order issued fixing such fair value but who
fails to surrender his certificates for cancellation upon payment of
the amount to which he is entitled, may be compelled to do so by an
order of the Secretary of Finance for that purpose and such order may
provide that upon failure of such shareholder to surrender such
certificates for cancellation such order shall stand in lieu of such
surrender and cancellation.
Section 2. All laws, decrees, and regulations which
are inconsistent herewith are hereby repealed or modified accordingly.
Section 3. This decree shall take effect
immediately. chanroblesvirtualawlibrary
DONE in the City of Manila,
this 6th day of January, in the year of Our Lord, nineteen hundred and
seventy-eight.
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Since 19.07.98
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