II. Insurance Law (PD 612, as amended by RA 10607)

Authorization, Capitalization, and Regulation of Insurance Companies

Under the Insurance Code, an insurer or insurance company includes all partnerships, associations, cooperatives, or corporations, including government-owned or -controlled corporations or entities, engaged as principals in the insurance business, excepting mutual benefit associations, as well as professional reinsurers¹. No insurance company may transact any insurance business in the Philippines without first obtaining a certificate of authority from the Insurance Commissioner². The Commissioner may refuse to issue such certificate if refusal will best promote the interest of the people, and may grant it only upon being satisfied that the company is qualified under Philippine laws, that the authority is economically justified, and that the management, financial organization, and capital reasonably assure the safety of policyholders and the public². Furthermore, the provisions of the Corporation Code apply to all insurance corporations insofar as they do not conflict with the Insurance Code¹.

For a foreign insurance company organized or existing under foreign laws to engage in business in the Philippines, it must possess unimpaired capital or assets and reserve of not less than one billion pesos (₱1,000,000,000.00)³. In addition, it must deposit with the Commissioner satisfactory securities consisting of good securities of the Philippines to the actual market value of not less than the required minimum amount, at least fifty percent of which must consist of bonds or other instruments of debt of the Government of the Philippines, its political subdivisions and instrumentalities, or government-owned or -controlled corporations, including the Bangko Sentral ng Pilipinas³. The total investment of a foreign insurance company in any registered enterprise cannot exceed twenty percent of its net worth nor twenty percent of the enterprise's capital without previous written authorization from the Commissioner³.

In Industrial Personnel and Management Services, Inc. v. Country Bankers Insurance Corporation, G.R. No. 194126, 1 July 2019, the Supreme Court highlighted the distinction between the regulatory and adjudicatory functions of the Insurance Commission⁴. When the Insurance Commission acts in its regulatory capacity rather than as an adjudicator of claims, it may initiate disciplinary actions against an insurer for unreasonable delays, but the determination of specific liabilities must be referred back for proper administrative assessment⁴. Under Section 92 of the Insurance Code, the failure to attach official receipts or supporting documents evidencing incurred expenses, even if considered a defect on the required proof of loss, is deemed waived as a ground for objecting to the claim⁴.