Section 1. Title. — This Act shall be known as the "Revised
Charter of the Philippine Crop Insurance Corporation Act of 1995."
Sec. 2. Declaration of Policy. — It is the policy of
the State to develop and support an adequate agricultural insurance
program as a mechanism for managing the risks inherent in agriculture
and stabilizing the financial fluctuations suffered by agricultural
producers in case of loss on crops, including the agricultural
facilities and related infrastructures, with the end in view of
encouraging lending institutions to extend credit to the agricultural
sector.
Considering that a major sector of our farming economy is composed of
marginalized subsistence farmers, who by definition shall be farmers
who depend primarily on farming for their subsistence and till their
own land with the help of members of their household (hereinafter
referred to as 'subsistence farmers'), it is likewise declared a policy
of the State to extend to said farmers such, subsidies as may be called
for in order to bring the benefits of this program within their reach.
In pursuit of this policy, and in order to maximize the benefits under
this program, the State shall encourage the information, development
and promotion of people's organizations and/or associations such as
cooperatives as provided for by Sec. 23 of Article II, Section s 15
and 16 of Article XII, and Section s 15 and 16 of Article XIII of the
Constitution, as service channels through which such benefits shall
preferably be extended.
Sec. 3. Section 1 of Presidential Decree No. 1467, as
amended, is hereby further amended, to read as follows:
"Section 1. Creation of the Philippine Crop Insurance
Corporation. — There is hereby created a body corporate to be known as
the "Philippine Crop Insurance Corporation" (PCIC and herein called the
Corporation) which shall be attached to the Department of Agriculture
for budgetary purposes. The Corporation shall insure qualified farmers
against losses arising from natural calamities, plant diseases, and
pest infestations. Initially, the Corporation shall provide insurance
coverage for palay crops, and later on to other crops, without
prejudice to the inclusion of other non-crop agricultural assets such
as but not limited to machineries, equipment, transport facilities, and
other related infrastructures, as the Board of Directors of the
Corporation may determine. Such crop insurance shall cover, in every
case, the cost of production inputs, the value of the farmer's own
labor and those of the members of his household, including the value of
the labor of hired workers, and a portion of the expected yield as the
Board of Directors, in its discretion, decide to insure. Such insurance
protection, however, shall exclude losses arising from avoidable risks
emanating from or due to the negligence, malfeasance or fraud committed
by the insured or any member of his immediate farm household or
employee or the failure of the insured to follow proven farm practices."
Sec. 4. Subsection 3.11 of Sec. 3 of Presidential
Decree No. 1467, as amended, is hereby further amended to read as
follows:
"3.11 To generate internal funds by floating bonds,
expansion to other insurance lines and extending coverage to other
areas of agriculture in order to address insurance needs of the target
sector and to do and perform acts and things and to exercise all the
general powers conferred by law upon the Corporation as are incidental
or conducive to the attainment of the objectives of the Corporation."
Sec. 5. Sec. 5 of Presidential Decree No. 1467, as
amended, is hereby further amended, to read as follows:
"Sec. 5. Rate of Premium and Its Sharing. — The rate
of premium, as well as the allocated sharing thereof by the farmers,
the lending institutions, the Government of the Republic of the
Philippines (herein called the Government) and other parties, shall be
determined by the Board of Directors of the Corporation: provided, that
the share of the Government in the premium cost, in the form of premium
subsidy, shall be limited to subsistence farmers: provided, however,
that each of these subsistence farmers is cultivating not more than
seven (7) hectares by themselves or with the help of the labor of the
members of their households or hired labor, the premium rate and
sharing to be determined by the Board of Directors subject to approval
by the President of the Philippines: provided, further, that the
premium share of the subsistence farmer shall be reasonably affordable
by him: provided, furthermore, that the Government shall share in the
premium cost only in insurance coverage against unforeseen and
unavoidable risks such as, but not limited to, typhoons, droughts,
outbreaks or pests and diseases: provided, finally, that premium
subsidy and/or insurance benefits shall, upon the accumulation of
surplus funds, be increased to such amount as may be determined by the
Board, taking into consideration that the Corporation has been
established not only for profit but mainly to help the insured in their
direst hours of need."
Sec. 6. Sec. 6 of Presidential Decree No. 1467, as
amended, is hereby amended by adding three (3) new paragraphs to be
designated as subsections 6.3, 6.4 and 6.5 to read as follows:
"6.3 Unappropriated and/or unreleased government
premium subsidy for policies written for the period from May 1, 1981 up
to the approval of this Act computed on the basis of premium rates and
sharing previously approved by the President as authorized by law shall
be programmed for payment by the Government within a period of ten (10)
years from the approval of this Act, and the yearly sums shall be
included in the budgetary appropriations for submission to Congress,
starting the fiscal year following approval hereof, in addition to the
premium subsidy requirement for the year involved.
"6.4 Calamity funds earmarked by the Government shall
include a certain percentage for crop insurance and shall be released
to and administered by the Corporation.
"6.5 Ten percent (10%) of the net earnings of the
Philippine Charity Sweepstakes Office (PCSO) from its lotto operation
shall be earmarked for the Crop Insurance Program and said amount shall
be directly remitted by the PCSO to the Corporation every six (6)
months until the amount of government subscription is fully paid."
Sec. 7. Subsections 8.1 and 8.3 of Sec. 8 of
Presidential Decree No 1467 as amended, are hereby further amended, to
read as follows:
"8.1. The authorized capital stock of the Corporation
is Two billion pesos (P2,000,000,000) divided into Fifteen million
(15,000,000) common shares with a par value of One hundred pesos (100)
each share, which shall be fully subscribed by the Government; and Five
million (5,000,000) preferred shares with a par value of One hundred
pesos (P100) per share, which shall have the features as provided in
Sec. 8.4 hereof and shall be issued in accordance with the
provisions of Sec. 8,5 hereof.
"8.3. The additional common capital stock of One
billion pesos (P1,000,000,000) shall be fully subscribed by the
Government and the necessary funds shall be appropriated by Congress
unless otherwise provided by existing laws: provided, that Congress
shall provide, on an annual basis, at least fifty percent (50%) of the
needed capital, until the authorized capital stock is fully paid up."
Sec. 8. A new subparagraph is hereby added to Sec. 8 of Presidential Decree No. 1467, as amended, designated as
subparagraph 8.6. to read as follows:
"8.6 The additional common capital stock shall not be
used, in any case, to expand the present manpower of the Corporation."
Sec. 9. Two (2) new sections are hereby inserted
between Section s 8 and 9 of Presidential Decree No. 1467, as amended,
designated as Section s 8-A and 8-B, to read as follows:
"Sec. 8-A. A state reserve fund for catastrophic
losses in the amount of Five hundred million pesos (P500,000,000) shall
be created exclusively to answer for the proportion of all loses in
excess of risk (pure) premium under the Corporation's Crop Insurance
Program for small farmers. The Fund shall be administered by a
government financial institution to be designated by the Corporation's
Board of Director. Such sum as may be necessary for the purpose shall
be funded by the National Government through the annual General
Appropriations Act starting the calendar year immediately following the
approval of this Act and every year thereafter until the full amount is
completed. The mechanics of claims against the fund and to what extent
the Fund shall be liable shall be determined jointly by the financial
institution administering the Fund, subject to the approval by the
President.
"Sec. 8-B. In order to spread the risk of the
Corporation, the PCIC is hereby authorized to seek reinsurance
protection whenever it may be available."
Sec. 10. Subsection 9.1 of Sec. 9 of Presidential
Decree No. 1467, as amended, is hereby further amended to read as
follows:
"9.1. The powers of the Corporation shall be vested
in and exercised by a Board of Directors now composed of seven (7)
members, and made up of the following: the President of the Land Bank
of the Philippines (LBP), the President of the Corporation, the
Executive Director of the Agricultural Credit Policy Council (ACPC), a
representative from the private insurance industry to be nominated by
the Secretary of Finance and three (3) representatives from the
subsistence farmer's sector, preferably representing agrarian reform
beneficiaries/cooperatives/associations coming from Luzon, Visayas, and
Mindanao, who shall be selected and nominated by the different farmers
organizations and/or cooperatives. The respective nominees of the
private insurance industry and the farmer's sector shall be submitted
to and appointed by the President. The chairman of the Board of
Directors shall be appointed by the President from among the members of
the Board of Directors. The President of the Corporation shall also be
appointed by the President and shall be ex-officio vice chairman who
shall assist the chairman and act in his stead in case of absence or
incapacity. In case of absence or incapacity of both the chairman and
the vice chairman, the Board of Directors shall designate a temporary
chairman from among its members. Except for the President of the LBP
and the Executive Director of the ACPC, all members of the Board of
Directors, including the President of the Corporations, shall be
appointed by the President within a reasonable period of time after the
approval of this Act."
Sec. 11. Subsection 9.4 of Sec. 9 of Presidential
Decree No. 1467, as amended. is hereby further amended, to read as
follows:
"9.4. The Chairman and the members of the Board shall
each receive a per diem of not less than One thousand five hundred
pesos (P1,500) for each meeting of the Board personally attended, but
in no case to exceed Seven thousand five hundred pesos (P7,500) a
month: provided, however, that in the case of the representatives of
subsistence farmers' sector, the Board is authorized to determine
reasonable traveling and, if necessary, subsistence expenses in going
to and returning from said Board meetings to be disbursed to them in
addition to their per diem."
Sec. 12. Subsection 10.3 of Section 10 of
Presidential Decree No. 1467, as amended, is hereby further amended, to
read as follows:
"10.3. To borrow funds from local and international
financing sources or institutions and issue bonds up to five (5) times
the value of its authorized capital stock for the purpose of financing
the programs and projects deemed vital for the attainment of the
Corporation's goals and objectives."
Sec. 13. Anew section is hereby inserted between
Section s 11 and 12 of Presidential Decree No. 1467, as amended,
designated as Section 11-A, to read as follows:
"Sec. 11-A. Settlement of Claims. —
"11-A. 1. Claims for indemnity against the
Corporation shall be settled by the Corporation's regional manager
concerned or the appropriate officer to whom he may delegate the
function. However, if in the opinion of the regional manager the claim
is novel, difficult or controversial, the matter may be elevated by the
regional manager to the President of the Corporation for decision.
"11-A. 2. The claimant aggrieved by the decision of
the regional manager may within thirty (30) days from receipt of the
decision, request for reconsideration thereof, and if not satisfied
therewith, may be elevate the matter to the President of the
Corporation.
"11-A.3. Any party aggrieved by a decision, order or
ruling of the President of the Corporation may appeal said decision,
order, or ruling to the Corporation's Board of Directors.
"11-A.4. Any claim not acted upon within sixty (60)
days from submission by the affected farmer of complete claim documents
to the Corporation shall be considered approved."
Sec. 14. Presidential Decree No. 1467, as amended, is
hereby further amended by adding a new section thereof to read as
follows:
"Sec. 11-B. No Claim Benefits. — Any insured farmer
who has not filed any claim during the immediately preceding three (3)
crop seasons shall be entitled to a no-claim benefit of at least ten
percent (10%) of his premium share paid for said crop seasons to be
deposited in a trust fund and to be managed by the Corporation. Such
trust fund may be used to finance premium rebate or premium credit
applicable to the immediately following crop seasons as determined by
the Board of Directors of the Corporation."
Sec. 15. Section 15 of Presidential Decree No. 1467,
as amended, is hereby further amended to read as follows:
"Sec. 15. Utilization of Profits. — The profits of
the Corporation shall be determined on a calendar year basis and the
manner of its distribution shall be determined by law."
Sec. 16. A new section id hereby inserted between
Section s 17 and 18 of the same decree, as amended, to be designated as
Section 17-A, to read as follows:
"Sec. 17-A. Penal Provisions. — Any person who
through malfeasance, misfeasance or nonfeasance allows a spurious claim
to be paid, including the claimant himself, shall, upon final
conviction, be punished by imprisonment of not less than one (1) year
but not more than six (6) years or a fine of not less than Fifty
thousand pesos (P50,000) but not more than Five hundred thousand pesos
(P500,000) or both at the discretion of the court. The PCIC personnel
who allowed the commission of the offense shall, in addition, be
dismissed from office, and forfeit all privileges and benefits which
may accrue to him."
Sec. 17. Review. — The PCIC Board shall undertake
periodic review of the Corporation's activities and shall submit to
both Houses of Congress at least once every two (2) years a report
which shall include, among others, a recommendation for improving
services to the target sectors and the financial viability of the
Corporation.
Sec. 18. Separability Clause. — If any provision or
part hereof is held unconstitutional or invalid, the remainder of the
law, or the provisions not otherwise affected shall remain valid and
subsisting.
Sec. 19. Repealing Clause. — Any provisions of
Presidential Decree No. 1467, as amended, and all other laws,
inconsistent herewith is hereby repealed or modified accordingly.
Sec. 20. Effectivity. — This Act shall take effect
fifteen (15) days after its complete publication in at least two (2)
newspaper of general circulation.
Approved: Lapsed into law on
December 29, 1995 without the signature of the President, in accordance
with Article VI, Sec. 27 (1) of the Constitution.
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