WHEREAS,
under Presidential Decree No. 1467, the Philippine Crop Insurance
Corporation was created to provide insurance protection to farmers
against losses arising from natural disasters, as well as plant
diseases and pest infestation;chanroblesvirtualawlibrary
WHEREAS, it is the policy of the state to provide integration of the
system of crop insurance into the country's economic and social
development and for this reason has made the participation therein
compulsory for all farmers obtaining production loans for palay under
the supervised credit program; chanroblesvirtualawlibrary
WHEREAS, the effective implementation of the compulsory requirement of
the law requires the full support and cooperation of lending
institutions participating in the government's supervised credit
program;chanroblesvirtualawlibrary
WHEREAS, to insure the attainment of the objective of the law, there is
a need to strengthen Presidential Decree No. 1467 by defining therein
the duties and obligations of the said lending institutions and
providing penal sanctions for violation of the provisions of said
decree.
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. Section 4 of Presidential Decree No. 1467
is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 4. Who shall be insured. — Participation in the
palay crop insurance shall be compulsory for all farmers obtaining
production loans for palay under the supervised credit program and
optional on the part of self-financed farmers provided that they agree
to place themselves under the supervision of agricultural production
technicians. No lending institution shall approve or grant production
loan for palay under the supervised credit program unless the same is
covered by a crop insurance pursuant to this Decree. The term
"supervised credit program" as used in this Decree shall mean the
production credit program wherein the farmer who obtained production
loans for palay agrees in writing that he will apply proven farm
practices necessary to conserve the land, improve its fertility and
increase its production, and abide by the approved farm plan and budget
jointly prepared by him and the duly accredited supervised credit
technician. The term "supervision of agricultural production
technician" shall mean the supervision undertaken by agricultural
production technicians who are duly accredited by the appropriate
government agencies concerned, as required under the supervised credit
system."
Section 2. A new section is inserted between Sections
14 and 15 of the said Decree, to be designated as Section 14-A which
shall read as follows:cralaw:red
"Sec. 14-A. All lending institutions granting
production loans for palay under the supervised credit program of the
government shall automatically act as underwriters for and on behalf of
the corporation. As such, they shall receive and process applications
for insurance coverage, approved those found in order and collect
premiums therefor. Premiums so collected, together with the premium
payable by the lending institution itself, shall be remitted to the
corporation in the manner and within such period as may be prescribed
by the corporation." chanroblesvirtualawlibrary
Section 3. A new section is inserted between Sections
18 and 19, to be designated as Section 18-A, which shall read as
follows:cralaw:red
"Sec. 18-A. Any person or entity granting production
loan for palay under the supervised credit program of the government
without requiring crop insurance therefor or having collected premiums
from farmers, would fail to remit the same within the time and place
specified in the rules and regulations of the corporation shall, upon
conviction, be punished by a fine not exceeding Ten Thousand Pesos
(P10,000.00) or imprisonment of not exceeding six (6) months, or both,
at the discretion of court.
"Any person or entity who shall violate any provision of this Decree or
any rules and regulations issued for its implementation, for which no
penalty is provided, shall be deemed guilty of a penal offense, and
upon conviction, be punished by a fine not exceeding Five Thousand
Pesos (P5,000.00) or imprisonment of two (2) months, or both, at the
discretion of the court. chanroblesvirtualawlibrary
"Whenever any violation of the provisions of this section is committed
by a corporation or association, or by a government office or entity,
the executive officer or officers of said corporation, association or
government office or entity who shall have knowingly permitted, or
failed to prevent, said violation shall be held liable as principal."
Section 4. All existing laws, rules and regulations
which are inconsistent herewith are hereby repealed or amended
accordingly.
Section 5. This Decree shall take effect immediately.
Done in the City of Manila,
this 21st day of October, in the year of Our Lord nineteen hundred and
eighty.
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