By Jess Diaz (The Philippine Star) Updated November 02, 2011 12:00 AM
MANILA, Philippines - The House of Representatives has approved on
second reading several amendments to the Insurance Code, which aim to
further develop and strengthen the insurance industry.
The chamber passed a consolidated bill endorsed by the committee on
banks and financial institutions, which Leyte Rep. Sergio Apostol chairs.
The bill is a fusion of four similar measures authored by
Representatives Hermilando Mandanas of Batangas, Juan Edgardo Angara of
Aurora, Teodorico Haresco of the party-list group Ang Kasangga, and
Joseph Victor Ejercito of San Juan.
The consolidated version, Bill 4867, expands the definition of "doing an
insurance business to include the practice of self-insurance by any
person or entity extending life insurance or similar protection to
his/her/its borrowers, depositors, clients, or third parties."
It deems irrevocable the designation of a beneficiary in the event the
insured does not change the beneficiary during his lifetime.
The bill provides that the interest of a beneficiary in a life insurance
policy shall be forfeited when the beneficiary is the principal,
accomplice, or accessory in willfully bringing about the death of the
insured.
In such case, the share forfeited shall pass on to other beneficiaries,
unless otherwise disqualified. In the absence of other beneficiaries,
the proceeds shall be paid in accordance with the policy contract, and
if the policy contract is silent, the proceeds shall be paid to the
estate of the insured.
The measure allows payment of insurance premiums and loan obligations by
government employees through salary deduction.
It also provides for regulations on micro insurance, which the bill
defines as "any activity providing specific insurance that meets the
needs of the low-income sector for risk protection and relief against
distress, misfortune and other contingent events."
It requires a domestic insurance company to have a paid-up capital by
Dec. 31, 2012 of P175 million if it has less than 40-percent foreign
equity, P350 million if its foreign equity is 40-percent to 59-percent
foreign equity, and P500 million for an insurance company with at least
60-percent foreign equity.
The measure adds new forms of admitted assets such as mutual funds, real
estate investment trusts, salary loans, unit investment trust funds, and
special deposit accounts and other assets that are deemed by the
Insurance Commissioner to be readily realizable and available for the
payment of losses and claims at values to be determined by him.
It also grants the Insurance Commissioner the authority to register
self-regulatory organizations whose operations are related to or
connected to insurance.
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