OUTLINE QUESTIONS FOR INSURANCE CODE

FOR JAN. 6 TO 11 TOPICS (ONLINE CLASS)

Villegas, Jeeann G. January 13,2025
BSA 3-5

H. CLASSES OF INSURANCE

A. Marine Insurance
1. What is marine insurance?
➢ Marine insurance is a contract that provides financial protection against loss or
damage related to maritime activities. It covers both property and liability risks
associated with the transportation of goods, vessels, and related assets across
waterways. Simply put, Marine insurance safeguards property, vessels, and
individuals from financial losses due to maritime risks, including navigation hazards
and transportation-related incidents.

A. Physical Loss or Damage:Protection for vessels, cargo, aircraft, vehicles, and

valuable papers against risks during navigation, transit, transportation, and
shipment preparation, including war and marine builder’s risks.

B. Liability Coverage: Protection against legal liability for loss or damage related to
the construction, repair, maintenance, or use of insured property, excluding life
insurance and automobile-related injury coverage.

C. Valuable Goods Protection:Coverage for precious stones, jewelry, and precious

metals during transportation or otherwise.

D. Infrastructure Coverage: Protection for transportation structures like bridges,

tunnels, piers, docks, and other aids to navigation and transportation, excluding
buildings and their fixed contents.

E. Marine Protection and Indemnity (P&I) Insurance: Insurance for liabilities

arising from vessel ownership and operations, including personal injury, death, or
damage to third-party property.

2. Who has insurable interest in marine insurance?

• In marine insurance, insurable interest refers to the legal right of a person to insure
a subject matter against loss or damage due to maritime risks. Those with insurable
interest include:
A. Shipowner:

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

o He always has an insurable interest in the ship, even when chartered by

another who agrees to pay its value in case of loss. However, the insurer is only
liable for the part of the loss that the shipowner cannot recover from the
charterer.

o If the ship is hypothecated (pledged as security) through bottomry, the

insurable interest of the shipowner is only the excess of its value over the
amount secured by bottomry.

o The shipowner has insurable interest likewise in freightage.

- Freightage, in the sense of a policy of marine insurance, signifies all

the benefits derived by the owner, either from the chartering of the
ship or its employment for the carriage of his own goods or those of
others.

- The owner of a ship has an insurable interest in expected freightage

which according to the ordinary and probable course of things he
would have earned but for the intervention of a peril insured against
or other peril incident to the voyage.

o The shipowner also has insurable interest on the cargo or goods loaded into
the ship and subject by a contract of carriage. His insurable interest is the
extent he will be damnified if the goods are damaged or lost.

B. Cargo Owner:
o Has insurable interest over the cargo being transported under a contract of
carriage, as they would suffer financial loss if the cargo were damaged or lost.
C. Charterer:
o The charterer of the ship has an insurable interest in it, to the extent that he is
liable to be damnified by its loss.
o Has insurable interest in the ship to the extent of their potential
financial loss or liability due to its damage or loss.
o Has insurable interest in the cargo if covered under a contract of
carriage between the charterer and the cargo owner.

3. What peril may be insured against?

• In marine insurance, perils insured against generally refer to unforeseen and
extraordinary risks arising from maritime operations. Coverage is primarily for perils
of the sea, though broader coverage can be provided under an all-risk policy.
• Perils of the Sea:
- To claim under marine insurance, the proximate cause of the loss must be
a peril of the sea.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

- These are unexpected, fortuitous events specific to maritime navigation,

such as:
o Storms and tempests
o Collisions and shipwrecks
o Stranding and grounding
o Sudden, extraordinary waves

• Exclusions (Not Covered as Perils of the Sea):

- Ordinary and natural actions of the sea (e.g., gradual tide movement)
- Ordinary wear and tear of the vessel
- Unseaworthiness of the ship (if the ship was not fit for navigation at the
start of the voyage)
- Perils of the ship (loss due to the vessel's inherent issues rather than
external risks) (e.g.,improper maintenance)

All-Risk Policy:
- If an all-risk policy is agreed upon, it covers all losses related to the voyage
or transportation, except those explicitly excluded in the policy terms.

4. Define perils of the sea.

• Perils of the Sea refer to unexpected and extraordinary events or accidents directly
related to maritime navigation that cause loss or damage to a vessel or cargo. These
perils arise from unusual violence or extraordinary circumstances beyond human
control and cannot be prevented by ordinary skill or caution.

• Examples of Perils of the Sea:

- Storms, tempests, and hurricanes
- Collisions with other vessels or submerged objects
- Shipwreck or stranding
- Sudden flooding due to external causes

• Exclusions (Not Considered Perils of the Sea):

- Ordinary wear and tear
- negligent failure of the ship’s owner to provide the vessel with the
adequate crew complement and proper equipment to convey the cargo
under ordinary conditions.

5. Is the rusting of steel pipes in the course of voyage a “peril of the sea”?
• Yes, rusting of steel pipes during a voyage can be considered a peril of the sea,
especially in cases where the damage is caused by the harsh conditions encountered
at sea, such as wind, water, and salt exposure. In the case of Cathay Insurance Co. v.
Hon. Court of Appeals and Remington Industrial Sales Corporation (G.R. No. 76145,
June 30, 1987), the court ruled that the rusting of steel pipes during the course of a

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

voyage fell under perils of the sea due to the natural toll these environmental factors
can take on the cargo.

6. Define perils of the ship. Site examples

• Perils of the ship refer to losses or damages that arise from the natural and inevitable
action of the sea, inherent conditions of the vessel itself such as the ordinary wear
and tear of the ship, or from the negligent failure of the ship’s owner to provide the
vessel with the adequate crew complement and proper equipment to convey the
cargo under ordinary conditions rather than from external maritime risks. These
losses are generally caused by factors that are within the control or responsibility
of the shipowner, and they are not typically covered by marine insurance unless
specifically included under broader terms.

• Examples:
A. Unseaworthiness of the Ship: The ship sets sail with a cracked hull, making it
prone to taking on water and eventually sinking. This condition could have been
prevented by proper inspection and repairs.
B. Ordinary Wear and Tear: The vessel’s engine suffers from mechanical failure due
to normal usage and lack of timely maintenance. Routine degradation that
happens over time and is expected during the ship's operational life.
C. Rusting or Corrosion of the Ship’s Hull: The steel hull of the ship starts rusting
due to prolonged exposure to saltwater, weakening its structural integrity. Rusting
is a predictable effect of the sea environment and typically falls under perils of the
ship.
D. Lack of Proper Crew: The shipowner fails to provide a sufficient or qualified crew,
leading to errors in navigation or handling, causing a collision or cargo [Link]
the ship is not adequately staffed, negligence may occur, resulting in loss or
damage.
E. Neglect of Equipment Maintenance:The ship's lifeboats or safety equipment are
not in working condition due to lack of regular inspections, endangering the crew
during an emergency. Failure to maintain essential equipment is the responsibility
of the shipowner and can lead to preventable accidents.

7. What is an “all risk” policy?

• An "all risks" policy in marine insurance provides broad coverage against all types of
losses arising from accidental causes. It protects the insured against any loss or
damage occurring by chance, fortuitously, or without intention and design. The losses
covered under this policy must be unexpected, unusual, and unforeseen. This type of
policy extends protection beyond the usual risks covered by standard marine
insurance policies, offering a wider safety net for the insured.

The term "all risks" is meant to be interpreted in its broadest sense, covering any
accidental loss unless it results from the willful misconduct or fraudulent acts of the

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

insured. It ensures comprehensive protection against a wide range of maritime

hazards and incidents, as long as the event is not intentionally caused by the
policyholder.

Under an "all risks" policy, the burden of proof initially rests on the insured to
demonstrate that the cargo was in good condition when the policy took effect and
that it was damaged upon unloading. Once this has been established, the
responsibility shifts to the insurer to prove that the loss occurred due to an excluded
peril. If the insurer cannot demonstrate that the damage falls under an exclusion, they
remain liable for compensation.

8. What is “barratry”?
• Barratry in marine insurance refers to willful misconduct committed by the ship's
master or crew for a fraudulent or unlawful purpose, without the shipowner's
consent, and to the owner's detriment. This deliberate wrongdoing typically involves
actions intended to harm the vessel, cargo, or the owner's financial interests.

The misconduct can take various forms, including theft of cargo, scuttling (deliberate
sinking of the vessel), deviation from the agreed route without justification, or illegal
trading activities. The essential elements of barratry are intentional misconduct, lack
of the owner's consent, and resulting damage or financial loss.

Marine insurance often covers losses resulting from barratry, as it involves

unforeseen acts of dishonesty by those entrusted with the vessel's operation.
However, if the shipowner is complicit in the wrongful act, the coverage may be
voided, as the policy protects against dishonest acts by the crew, not the owner.

9. What are the implied warranties in marine insurance?

• Implied warranties in marine insurance are obligations automatically included in a
marine insurance contract, even if not expressly stated. These warranties must be
strictly observed for the insured to claim compensation under the policy. The primary
implied warranties in marine insurance are:
A. Seaworthiness of the Vessel
- The ship must be seaworthy at the commencement of the voyage and
capable of safely making the insured trip. This means the vessel should be
properly equipped, staffed with a competent crew, and in a condition to
carry the specified cargo. If the vessel is unseaworthy at the start of the
voyage, the insurer may deny coverage for any losses arising from the
unseaworthiness.
B. No Deviation from the Insured Voyage
- The vessel must not deviate from the agreed route or course described in
the insurance policy without a lawful excuse. Unauthorized deviation can
void the insurance coverage, as it may expose the ship and cargo to
unforeseen risks not accounted for by the insurer.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

C. Proper Documentation
- The vessel must carry the necessary papers to establish its nationality or
neutrality and avoid suspicion during its voyage. This includes certificates
of registration and documents required to comply with international
shipping laws. Carrying incorrect or suspicious documents can void
coverage.
D. No Transport of Contraband
- The ship must not carry contraband goods, particularly when sailing
through war zones or belligerent territories. Transporting prohibited or
illegal goods can void the policy since it exposes the vessel to risks
associated with conflict and legal penalties.

10. When is a ship seaworthy?

• A ship is seaworthy when it is reasonably fit to perform the service and to encounter
the ordinary perils of the voyage contemplated by the parties to the policy. A warranty
of seaworthiness extends not only to the condition of the structure of the ship itself,
but requires that it be properly laden, and provided with a competent master, a
sufficient number of competent officers and seamen, and the requisite
appurtenances and equipment, such as ballasts, cables and anchors, cordage and
sails, food, water, fuel and lights, and other necessary or proper stores and
implements for the voyage.
Wen the ship becomes unseaworthy during the voyage to which an insurance
relates, an unreasonable delay in repairing the defect exonerates the insurer on ship
or shipowner’s interest from liability from any loss arising therefrom

11. What is deviation in the context of marine insurance?

• Deviation is a departure from the course of the voyage insured or an unreasonable
delay in pursuing the voyage or the commencement of an entirely different voyage.

12. What is the voyage insured?

• The voyage insured in marine insurance refers to the specific journey covered by
the policy, defined by the places of departure and destination. The insured voyage
must conform to the expected and customary course of travel between those points.
• Key Principles of the Voyage Insured:
o Fixed by Mercantile Usage:
- If there is a commonly accepted sailing route established by trade practices
between the starting and ending points, the insured voyage must follow that
route.
o No Fixed Route:
- If no standard trade route exists, the insured voyage is determined by the
path that a master of ordinary skill and discretion would consider such as
the most:
- Natural: Logically suitable for the voyage.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

- Direct: As short and efficient as possible.

- Advantageous: Balancing safety, speed, and commercial benefit.

13. What is the legal effect of an improper deviation?

• The legal effect of an improper deviation in marine insurance is that the insurer is
not liable for any loss or damage occurring to the insured property after the deviation.
• If the deviation is proper (e.g., to save life, prevent total loss, or due to unavoidable
circumstances), the insurer remains liable for losses arising during the voyage.

14. Under what circumstances can a vessel properly proceed to a port other than its port of
destination? Explain.
• A vessel can properly proceed to a port other than its port of destination under
specific circumstances where the deviation is justified and does not void the marine
insurance policy. These circumstances include:
A. Uncontrollable Circumstances: When the deviation is caused by factors beyond
the control of the ship’s master or owner, such as unforeseen weather conditions
or emergencies.
B. Compliance with a Warranty or Avoiding Peril: If the deviation is necessary to
comply with a policy warranty or to avoid a danger, whether or not the peril is
insured against (e.g., avoiding piracy zones or navigating around hazardous
weather conditions).
C. Good Faith and Reasonable Belief in Danger: When the master deviates in good
faith with reasonable grounds to believe it is necessary to avoid a risk or protect
the vessel and cargo.
D. Saving Human Life or Assisting a Vessel in Distress: A deviation is proper if the
vessel alters course to save lives or assist another vessel in distress, prioritizing
humanitarian obligations over commercial interests.

15. What are the kinds of loss in marine insurance?

• A loss may be either total or partial. Every loss which is not total is partial. A total loss
may be either actual or constructive.
➢ Total Loss:
- Actual Total Loss: This occurs when the subject matter of the insurance is
completely destroyed, lost beyond recovery, or so damaged that it ceases
to exist as the insured item.
- Constructive Total Loss:
This happens when the cost of recovering or repairing the insured item
exceeds its insured value, making it impractical to restore.
➢ A partial loss occurs when the insured item suffers damage or loss but is not
completely destroyed or irrecoverable.

16. When may the insured recover for an actual total loss under a marine insurance?

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

• The insured may recover for an actual total loss under a marine insurance in the
following cases: If the actual total loss is caused by:
(a) Total destruction of the thing insured - cannot be recovered or restored.
(b) The irretrievable loss of the thing by sinking, or by being broken up;
(c) Any damage to the thing which renders it valueless to the owner for the purpose
for which he held it; or
(d) Any other event which effectively deprives the owner of the possession, at the
port of destination, of the thing insured. (ex; Cargo confiscated by authorities or
permanently seized due to piracy)

• An actual loss may be presumed from the continued absence of a ship without being
heard of. The length of time which is sufficient to raise this presumption depends on
the circumstances of the case.

• Upon an actual total loss, a person insured is entitled to payment without notice of
abandonment.

• There is also total loss in case of constructive total loss coupled with abandonment
on the part of the insured. (requires both proof of severe damage and a formal
abandonment by the insured.)

17. What is abandonment?

• Abandonment, in marine insurance, is the act of the insured by which, after a
constructive total loss, he declares the relinquishment(giving up) to the insurer of
his interest in the thing insured.

18. When may a person insured by a contract of marine insurance abandoned the thing
insured?
• A person insured under a marine insurance contract may abandon the insured
property or any separately valued portion of it and claim for a total loss when the loss
arises from a peril insured against under the following circumstances:
A. Severe Damage or Expense: If more than three-fourths (3/4) of the value is
actually lost or would need to be spent to recover the property from the peril.
B. Substantial Reduction in Value: If the property is damaged to the extent that its
value is reduced by more than three-fourths (3/4).
C. Ship's Unfitness for the Voyage:
If the insured ship cannot lawfully complete the voyage without incurring:
- An expense exceeding three-fourths (3/4) of its value.
- A risk that a prudent person would not accept under the circumstances.
D. Cargo or Freightage Issues: If the insured cargo or freightage cannot be delivered
to its destination or another vessel cannot be procured within a reasonable time
and with reasonable diligence without facing the same level of expense or risk

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

mentioned above. However, freightage cannot be abandoned unless the ship

itself is also abandoned.

19. When is there a constructive total loss?

• A constructive total loss occurs in marine insurance when the insured property,
though not entirely destroyed, is so severely damaged or its recovery would be so
costly that it is treated as a total loss. The insured may claim a total loss by
abandoning the property to the insurer.

20. What are the requisites of a valid abandonment?

• The requisites of a valid abandonment are as follows:
A. It must be neither partial nor conditional: The abandonment must be
complete, not partial or conditional. The insured must fully relinquish all rights to
the damaged property.
B. It must be made within a reasonable time after receipt of reliable information of
the loss, but where the information is of a doubtful character, the insured is
entitled to a reasonable time to make inquiry.
C. It is made by giving notice thereof to the insurer, which may be done orally, or in
writing: Provided, That if the notice be done orally, a written notice of such
abandonment shall be submitted within seven (7) days from such oral notice.
- An agent who procured the insurance notice of abandonment for his
principal
D. A notice of abandonment must be explicit, and must specify the particular cause
of the abandonment, but need state only enough to show that there is probable
cause therefor, and need not be accompanied with proof of interest or of loss
E. It can be sustained only upon the notice thereof. (becomes effective only once
the notice is properly given.)
F. It must be accepted by the insurer.
- The acceptance of an abandonment may be either express or implied
from the conduct of the insurer. The mere silence of the insurer for an
unreasonable length of time after notice shall be construed as an
acceptance.
G. An abandonment once made and accepted is irrevocable, unless the ground
upon which it was made proves to be unfounded.
• If an insurer refuses to accept a valid abandonment, he is liaable as upon an actual
total loss, deducting from the amount any proceeds of the thing insured which may
have come to the hands of the insured.

21. What is the effect of abandonment?

• An abandonment which is made after a constructive total loss entitles the insured to
recover for a total loss.
• On the part of the insurer, an abandonment is equivalent to a transfer by the insured
of his interest to the insurer, with all the chances of recovery and indemnity.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

o If a marine insurer pays for a loss as if it were an actual total loss, he is entitled
to whatever may remain of the thing insured, or its proceeds or salvage, as if
there had been a formal abandonment

22. What is the effect of the omission of the insured to abandon?

• He cannot recover for a total loss but he may nevertheless recover his actual loss.
• This means that while the insured forfeits the right to claim compensation for a
constructive total loss, they can still be indemnified for the partial loss actually
incurred.
B. Fire Insurance
1. Enumerate the perils covered under a fire insurance.
• Perils typically covered under a fire insurance policy include:
A. Fire – Damage caused directly by fire, including accidental fire and flames
spreading unintentionally.
B. Lightning – Damage resulting from lightning strikes, such as fire ignition or
structural damage caused by electrical discharge.
C. Windstorm – Loss or damage caused by high winds, hurricanes, and similar
wind-related events when covered under the policy.
D. Tornado – Destruction or damage resulting from tornadoes, including wind
damage and debris impact.
E. Earthquake – Losses caused by ground movement and tremors when
specifically covered.
F. Allied Risks – Other perils like explosion, hail, smoke damage, riot, civil
commotion, and water damage (if specifically included in the policy).

• Note: The insured can only claim compensation for the specific perils listed in the
fire insurance policy.

2. Differentiate open, value and running policy.

A. Open Policy:
o The value of the insured property is not agreed upon in advance.
o The sum insured represents the maximum liability of the insurer.
o The actual value of the property is determined at the time of loss.
o Commonly used when the exact value of the insured item fluctuates or
cannot be predetermined.
B. Valued Policy:
o The value of the insured property is specified and agreed upon at the time the
policy is issued.
o In case of a total loss, the insurer pays the agreed value, not the market value
at the time of the loss.
o Simplifies claims as the amount payable is predetermined.
C. Running Policy:

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

o Designed for continuous coverage, often used in situations involving multiple

shipments or fluctuating goods.
o The insured property is defined periodically through endorsements or
declarations.
o Common in marine insurance and other businesses with changing inventory.

3. What is the effect of alteration in the use or condition of the thing insured?
• An alteration in the use or condition of a thing insured from that to which it is limited
by the policy made without the consent of the insurer, by means within the control of
the insured, and increasing the risks, entitles an insurer to rescind a contract of fire
insurance
• An alteration in the use or condition of a thing insured from that to which it is limited
by the policy, which does not increase the risk, does not affect a contract of fire
insurance.
→The insurer may rescind a fire insurance policy if the following four requisites are met:

A. Use or condition stated in the policy: The specific use or condition of the
insured property must be clearly mentioned in the insurance policy.
B. Alteration occurred: There was a change in the use or condition of the insured
property.
C. Without the insurer's consent: The alteration was made without notifying or
getting approval from the insurer.
D. Increased risk: The alteration resulted in an increased risk of the insured peril
(e.g., fire).

→When the Insurer Cannot Rescind the Contract:

A. If the alteration does not increase the risk or violate the policy's terms, the
insurer cannot rescind the contract.
B. Even if the risk increases but the policy does not prohibit the specific act, the
insurer remains liable.

4. Distinguish friendly fire from hostile fire.

• Friendly fire is a fire that is deliberately started and remains confined within its
intended boundaries and and serves a useful purpose.
• While, hostile fire is a fire that escapes its intended boundaries or becomes
uncontrollable and causes unintended damage.
• For fire insurance to apply, the fire must be classified as hostile.

5. Cite examples of damage caused by friendly fire for which the insurer is not liable
A. Scorch marks on a carpet caused by placing a heated iron on it while ironing
clothes, where no fire spreads beyond the iron.
B. Heat damage to a wall from prolonged use of a space heater placed too close
to the surface without ignition occurring.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

C. Discoloration of walls and ceilings due to long-term exposure to candle

soot or oil lamps without actual fire escaping containment.

6. Cite examples of damage caused by hostile fire.

A. A kitchen fire spreading beyond the stove, causing damage to the cabinets and walls
or the whole house.
B. A candle tipping over and igniting nearby curtains, leading to fire damage throughout
the room.
C. Overheated electrical appliance catching fire and spreading to nearby furniture and
structural elements.
D. Wildfire embers entering a home and igniting the roof or exterior walls.
E. Explosion from a gas leak igniting the surroundings and causing fire damage beyond
the initial point of ignition.

7. What is the measure of indemnity in fire insurance policy?

• The measure of indemnity in a fire insurance policy depends on whether the policy
specifies a valuation:
A. If there is no valuation in the policy: The measure of indemnity is the expense
required to replace the damaged or lost property at the time of the fire, in the
condition it was at the time of the loss.
B. If there is a valuation in the policy: The measure of indemnity is the value of
the property stated in the policy, similar to a valued marine insurance policy.
- If the insured wants a valuation stated in the policy, the property can be
appraised by an independent appraiser to determine its value.
- The cost of the appraisal is paid by the insured.
• In case of total loss, the insurer must pay the full insured value unless the risk
increased without consent or fraud occurred.
• In case of partial loss, the insurer pays the full amount of the partial damage up to
the insured value.
• If multiple policies cover the property, each insurer contributes pro rata
(proportionally) to the loss payment.
• The policy may also allow the parties to agree on options like repairing, rebuilding,
or replacing the damaged property instead of a cash payment.
C. Casualty Insurance
1. What is casualty insurance?

• Casualty insurance is a type of insurance that provides coverage for loss or liability
arising from accidents or unforeseen events, excluding losses traditionally covered
by other types of insurance such as fire or marine insurance.

→It commonly includes:

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

A. Employer’s liability insurance – Protects employers against claims from

employee injuries.
B. Motor vehicle liability insurance – Covers damages and liabilities related to
vehicle accidents.
C. Plate glass insurance – Covers breakage of large glass panes, like those in
storefronts.
D. Burglary and theft insurance – Covers loss from theft or burglary.
E. Personal accident and health insurance – Covers accidental injury or
health-related expenses (when issued by non-life insurers).

D. Life Insurance
1. What is life insurance?
• Life insurance is insurance on human lives and insurance appertaining thereto or
connected therewith. Every contract or undertaking for the payment of annuities
including contracts for the payment of lump sums under a retirement program where
a life insurance company manages or acts as a trustee for such retirement program
shall be considered a life insurance contract for purposes of the Insurance Code.
• Key Features of life insurance:
A. Coverage on Human Lives: Protects against financial loss due to the death
of an insured person.
B. Annuities and Lump Sums: Includes contracts for periodic payments
(annuities) or lump sums, often related to retirement plans.
C. Retirement Management: If a life insurance company manages or acts as a
trustee for a retirement plan involving lump sum payments, it is also classified
as a life insurance contract under the Insurance Code.

2. To whom will the proceeds of the life insurance policy be payable?

A. In case a benefeciary is unlawaful designated → Payable to the
state of the insured. It is because the policy remains valid and only
the designation is void.
B. In case of joint designation beneficiaries and one is unlawfully
designated → the share of the unlawfully designated benefeciary
shall form additional part of the share of the lawfully designated
benefeciary.
a. For example, if a common-law spouse is unlawfully
designated alongside the insured's illegitimate children, the
share meant for the common-law spouse would be forfeited
and divided among the legitimate beneficiaries, such as the
designated illegitimate children. This ensures that only
qualified beneficiaries receive the insurance proceeds,
while the policy remains valid.
C. In case of joint designation of lawfully designated benefeciaries →
Proceeds shall be devided based on terms of policy. If the policy is

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

silent, the proceeds shall be divided equally between or among the

benefeciaries.
D. In case a benefeciary is lawfully designated and the insured dies
ahead of the benefecairy → the proceeds are payable to the
benefeciary.
a. Exception: the benefeciary is the principal, accessory, or
accomplice in willfully bringing about the death of the
insured.
E. If a beneficiary's interest in a life insurance policy is forfeited (e.g.,
due to legal disqualification) → The forfieted benefeciary’s share
will be transferred to the other designated beneficiaries, provided
they are not disqualified.
a. If no other beneficiaries are named or all are disqualified,
the proceeds will be distributed according to the terms of
the insurance policy. However, if the policy is silent on this
matter, the proceeds will revert to the estate of the insured
for distribution under succession laws.
b. Importantly, the insurer remains liable to pay the insurance
proceeds despite the disqualification of the beneficiary,
ensuring the insured's financial protection remains intact.
F. If the benefeciary predeceases the insured
i. If Irrevocable → Proceeds shall inure to the benefit of
the legal representative of the benefeciary
ii. If Revocable → the proceeds shall inure to the estate
of the insured.
iii. If the policy is silent → proceeds will inure to the
estate of the insured because the designation is
recoverable unless otherwise specified in the policy.
G. Life insurance endowmwnt policy
i. If the insured dies before the endownment period
expires → proceeds are payable to the beneficiary
ii. If the insured survives the endowment period →
proceeds become payable directly to the insured.

3. Who will get proceeds of life insurance policy in case insured failed to designate
beneficiaries?
• The proceeds will accrue to the estate of the insured if he failed to designate a
benefeciary, and will be distributed among his legal heirs in accordance with the law
on intestate succession.

4. Explain the following principal types of life insurance:

a. Term Insurance: This type of life insurance provides coverage for a specific term
or period. The insurer is liable to pay the death benefit only if the insured dies

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

during the term of the insurance. If the insured survives the term, there is no
payout, and the policy expires without value.
b. Whole Life or Permanent Insurance: This is a type of life insurance that provides
lifelong coverage, as long as premiums are paid. The insurer guarantees to pay a
death benefit whenever the insured dies, regardless of when that happens.
Additionally, whole life policies often accumulate cash value over time, which the
insured can borrow against or withdraw.
c. Annuity: While not strictly a form of life insurance, an annuity is a financial
product that can be structured alongside life insurance. It involves the insurer
making periodic payments to the insured either for a fixed period or for the
remainder of their life. Annuities can be used to provide income during retirement
or after a certain age.
d. Endowment Policy: This type of policy is designed to pay a lump sum either after
a specified term (maturity) or upon the death of the insured, whichever comes
first. If the insured survives the term, the lump sum benefit is payable to them. If
the insured dies during the term, the lump sum benefit is paid to the beneficiaries.
e. Industrial Life Insurance: This is a type of life insurance policy typically designed
for low-income individuals. The premiums are often paid on a weekly basis, and
the policy generally provides a small death benefit. It is called "industrial"
because it was originally sold to factory workers through industrial life insurance
companies.

5. What is the non-default or forfeiture options in whole life insurance?

• Non-default or forfeiture options in whole life insurance refer to the choices
available to the insured when they decide to discontinue premium payments,
ensuring the policy does not lapse immediately without value. These options allow
the insured to still benefit from the policy in some form based on the accumulated
cash value.
• The three primary non-default options are:
A. Extended Term Insurance:
- The policy’s available cash value is used as a single premium to purchase
a term insurance policy.
- The coverage continues for a limited period based on the cash value but
maintains the original death benefit amount.
B. Reduced Paid-Up Insurance:
- The cash value is used to purchase a fully paid-up life insurance policy.
- The coverage lasts for the lifetime of the insured but with a reduced death
benefit compared to the original policy.
C. Cash Surrender Value:
- The policyholder can surrender the policy and receive the cash value.
- Once surrendered, the policy cannot be reinstated, and coverage ends
permanently.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

• The insured cannot get a refund of the premiums paid but can access the cash value
through these options.
• These choices help the insured retain some benefits even when they stop paying
premiums.

6. When is life insurance payable?

• Upon the death of the insured:
The most common form where the policy pays out the death benefit to the
beneficiary upon the death of the insured.

• Survival of a specified period:

In endowment policies, the benefit is paid if the insured survives a predetermined
period.

• Contingently on the continuance or cessation of life:

The payout can be based on certain life events, such as reaching a specific age or
meeting certain health conditions.

(endowments and annuities fall under life insurance contracts as they involve
payments linked to life expectancy and survival, as governed by the Insurance
Code).

7. Within what period should the claim be paid?

• The period within which a life insurance claim should be paid is as follows:
A. Upon Maturity of the Policy: Proceeds must be paid immediately upon the
policy's maturity unless the policy specifies payment in installments or as an
annuity, in which case payments are made as they become due.

B. Upon Death of the Insured:Proceeds must be paid within 60 days after the
presentation of the claim and filing of proof of death.

• Penalty for Delay: Refusal or failure to pay the claim within the time prescribed
herein will entitle the beneficiary to collect interest on the proceeds of the policy
for the duration of the delay at the rate of twice the ceiling prescribed by the
Monetary Board, unless such failure or refusal to pay is based on the ground that
the claim is fraudulent

8. Is the insurer in the life insurance liable in case of suicide by the insured?
• The insurer in a life insurance contract shall be liable in case of suicide only when it
is committed after the policy has been in force for a period of two (2) years from the
date of its issue or of its last reinstatement, unless the policy provides a shorter
period: Provided, however, that suicide committed in the state of insanity shall be
compensable regardless of the date of commission
• The insurer, however, is not liable if suicide in an excepted risk.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

9. May a life insurance policy be assigned?

• A policy of insurance upon life may pass by transfer, will or succession to any
person, whether he has an insurable interest or not, and such person may recover
upon it whatever the insured might have recovered.
- can be transferred by assignment, will, or succession to any person
- whether they have an insurable interest in the life of the insured or not.
(Insurable interest is only required at the time the policy is issued, not at
the time of assignment.)
- The assignee can recover the benefits of the policy just as the insured
would have.

• Exception:
- An assignment cannot be used to circumvent the rule on insurable
interest, such as assigning the policy to someone who cannot legally be
designated as a beneficiary under the Insurance Code.

10. Is notice to the insurer of the assignment necessary for its validity?
• No, notice to the insurer of the assignment is not necessary for the validity of a life
or health insurance policy assignment, unless it is expressly required by the policy
terms. This means that the policy remains valid even without informing the insurer,
unless the policy specifically states that notice is required.

11. Is consent of the beneficiary required for the validity of the assignment?
• Consent of the beneficiary is not necessary unless the designation is irrevocable.

12. What is the measure of indemnity under a life insurance policy?

• Unless the interest of a person insured is susceptible of exact pecuniary
measurement, the measure of indemnity under a policy of insurance upon life or
health is the sum fixed in the policy.
• This means that the payout is based on the agreed-upon coverage amount stated in
the policy, rather than the actual financial loss suffered.

E. Microinsurance
1. What is microinsurance?
• Microinsurance is a financial product or service that meets the a. risk protection
needs of the poor where:
A. The amount of contributions, premiums, fees or charges,
computed on a daily basis, does not exceed seven and a half
percent (7.5%) of the current daily minimum wage rate for
nonagricultural workers in Metro Manila; and

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

B. The maximum sum of guaranteed benefits is not more than 1,000

times of the current daily minimum wage rate for
nonagricultural workers in Metro Manila

F. Compulsory motor vehicle liability insurance

1. What is the basis for compulsory motor vehicle liability insurance?
• The basis for compulsory motor vehicle liability insurance is Article 387 of the
Insurance Code, which mandates that: It is unlawful for any land transportation
operator or motor vehicle owner to operate the vehicle on public highways without a
valid insurance policy, guaranty in cash, or surety bond. This coverage must
indemnify for:
- Death
- Bodily injury
- Damage to property
of a third party or passenger arising from the vehicle's use.

2. What is the extent of liability of the insurer under a motor vehicle insurance policy?
• The extent of liability of the insurer under a motor vehicle insurance policy is
determined by the terms and coverage limits specified in the policy.
• The insurer is not solidarily liable with the tortfeasor (the party at fault).

3. When does The right of the insured to be covered under the policy accrue?
• The right of the insured to recover under the policy accrues immediately upon the
occurrence of the injury or event that triggers the liability, regardless of whether a
judgment is obtained against the insured. This means that once the event occurs that
results in a liability (e.g., an accident), the insurer can be held liable to provide
compensation up to the limits of the policy, without needing a judgment from the
injured party against the insured first.

4. What is a “No-Fault Indemnity Clause”?

• The "no fault indemnity" provision in the Insurance Code is designed to provide
compensation for death or injury to a passenger or third party in the event of a motor
vehicle accident, without requiring proof of fault or negligence on the part of the
driver or vehicle owner. This ensures that victims receive quick and direct
compensation without the lengthy process of determining liability.

• Rules under this provision are as follows:

A. Minimum indemnity: The total indemnity for any person injured or killed in
an accident must not be less than P15,000.

B. Proof of loss: The following documents, when submitted under oath, are
sufficient to substantiate the claim:
- Police report of the accident.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

- Death certificate (if applicable) and evidence establishing the proper

payee.
- Medical report and evidence of medical or hospital expenses (if claiming
for injury).
- Claim against one vehicle: Claims can only be made against one motor
vehicle insurer.

C. If the injured party is an occupant of a vehicle, the claim should be made

against the insurer of the vehicle they were riding, mounting, or dismounting
from. In other cases, the claim should be made against the insurer of the
directly offending vehicle (i.e., the one at fault in the accident).

D. Right of recovery: The insurer who pays the claim retains the right to recover
the amount paid from the owner of the vehicle that caused the accident. This
means that even though the insurer pays out a claim under the no-fault
provision, they can seek reimbursement from the party responsible for the
accident.

5. What is an “Authorized driver Clause”?

• An "Authorized Driver Clause" in an insurance policy typically specifies the
conditions under which the insurer will cover damages or liabilities arising from the
operation of a vehicle. It outlines who is considered an "authorized driver" under the
terms of the policy, and generally includes the following points:
a. Driver's Permission: The driver must be authorized or permitted by the
policyholder (the insured) to operate the vehicle. This means the insured has given
consent for that specific individual to drive the car.
b. Legal Qualification: The driver must be legally qualified to drive the vehicle
according to local laws and regulations. For example, the driver should possess a
valid driver's license, which may include specific requirements such as holding a
local or international license, depending on the jurisdiction.
c. No Disqualification: The driver should not be disqualified from driving, meaning
they should not be under any legal restrictions or prohibitions such as a
suspended license or other disqualifying factors that would make them ineligible
to drive.

6. What is a “Theft Clause”?

• A "Theft Clause" in an insurance policy is a provision that covers the loss or damage
to the insured vehicle caused by theft, attempted theft, or unlawful taking of the
vehicle without the consent of the owner. Under this clause, the insurance company
agrees to compensate the policyholder for the loss of or damage to the vehicle
resulting from theft, provided the theft was not caused by the policyholder's own
actions or negligence.

• Typical situations that the Theft Clause covers:

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

a. Actual Theft: When the insured vehicle is stolen, regardless of whether the thief
is caught or the vehicle is recovered.
b. Attempted Theft: If someone attempts to steal the vehicle but the attempt fails,
and there is damage caused by the thief’s actions (such as breaking into the
vehicle).
c. Unauthorized Taking: If the vehicle is taken without the insured's permission,
such as when it is taken by an employee, friend, or family member without
authorization, and it gets stolen or involved in an accident.

G. Compulsory insurance coverage for agency-hired workers

1. What is Compulsory insurance coverage for agency-hired workers?
• Compulsory insurance coverage for agency-hired workers refers to the
mandatory insurance that employers or recruitment agencies are required to
provide to overseas Filipino workers (OFWs) before they are deployed abroad for
employment. This insurance is designed to protect the workers and provide
financial assistance in case of certain unfortunate events that may occur while
they are working abroad. It is a legal requirement under Philippine law, specifically
the Migrant Workers and Overseas Filipinos Act of 1995 (Republic Act No. 8042),
to ensure that OFWs are covered for various risks related to their work overseas.
• The compulsory insurance typically includes coverage for:
A. Accidental Death Benefit – Compensation paid to the beneficiary (usually
the family) in case the OFW dies due to an accident during employment.
B. Natural Death Benefit – Compensation paid in case the OFW dies due to
natural causes (e.g., illness or health conditions) during the contract period.
C. Permanent Total Disablement Benefit – Benefits given if the worker becomes
permanently and totally disabled due to an accident or illness during
employment, preventing them from returning to work.
D. Repatriation Cost Benefit – Coverage for the cost of repatriating the body of
the deceased worker to the Philippines or the cost of bringing the worker back
home if they become ill or injured and unable to continue working.
E. Subsistence Allowance – A daily allowance or stipend provided to the worker
in case they are stranded, unable to return home due to the employer's failure
to provide proper documentation, or if the worker is ill or injured.
F. Money Claim Benefit – Coverage for claims regarding the worker's wages or
compensation, especially if the worker is not paid or if there are issues
regarding their employment contract.
G. Compassionate Visit Benefit – A benefit that covers the cost of a visit from a
family member to the OFW in case of a serious illness or injury, or if the worker
faces a situation requiring family support.
H. Medical Evacuation – Coverage for the cost of transferring the OFW to
another medical facility, if necessary, to receive adequate medical care.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

I. Medical Repatriation – Coverage for the cost of bringing the worker back to
the Philippines for medical treatment if they are unable to continue working
due to injury or illness.

I. VARIABLE CONTRACTS
1. What is a variable contract?
• A Variable Contract is a type of insurance policy or contract, issued by an
insurance company, that allows for benefits or other contractual payments to
fluctuate based on the performance of a designated segregated portfolio of
investments or a separate account. The amounts received in relation to these
contracts are placed in a separate account and are managed apart from other
investments or accounts.
→Features of a Variable Contract are:
A. Investment-Linked: The value or benefits of the contract depend on the
performance of the investments in the separate account. This allows the policyholder
to potentially benefit from investment gains but also exposes them to investment
risks.
B. Variable Benefits: The benefits or values under the contract may vary, meaning they
could increase or decrease based on the success or failure of the investments. This
can include the policy’s cash value, death benefits, or other contract payments.
C. Separate Account: The funds received under the contract are kept in a designated
account, separate from the insurer’s general account, and these funds are invested
in various financial instruments (e.g., stocks, bonds, mutual funds, etc.).
D. Fixed and Variable Components: The contract may provide for benefits that are
either fixed (guaranteed) or variable, or a combination of both. For example, part of
the contract may offer fixed benefits, while other aspects (like the death benefit or
cash value) may be based on the performance of the investments.
E. Not Considered a Security: Even though the contract is tied to investments, it is not
classified as a security under securities law, which distinguishes it from other
investment products like mutual funds or stocks.

J. REQUIREMENTS OF BUSINESS OF INSURANCE

1. What is the requirement for local corporation to engage in the insurance business?
• Insurer or insurance companies are only allowed to engage in the insurance
business if they have a license or a certificate of authority from the Insurance
Commission.

2. What is the requirement for a foreign corporation to transact in insurance business?

• Foreign corporations must first obtain a license to transact business and secure
the proper authorization under existing law.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

3. Does the law make a distinction if the transaction is isolated or in the regular course of
business before the insurance company can secure a license from the insurance
Commission?
• The law makes no distinction whether the transaction is one that is isolated or
in the regular course of business, for an insurance company to secure a license
from the Insurance Commission.

4. Is engaging in insurance without a license from the insurance Commission a criminal

offense?
• Yes, engaging in insurance without license from the Insurance Commission is a
criminal offense. without prejudice to the imposition of administrative sanctions
under [Section] 438 of the IC, which not only subjects the individual or entity to
criminal penalties but also allows for the imposition of administrative sanctions
by the Insurance Commission.

5. Is a license a requirement insurance agent?

• Yes, as stated in Sec.307 of insurance code, no person shall act an insurance
agent without first procuring license from the Insurance Commission.

6. What is the capital requirement for an insurance company?

• P900 million by end 2019 and 1.3 billion by 2022

K. INSURANCE COMMISSIONER AND ITS POWER

1. Who is an insurance commissioner?
• The Insurance Commissioner is a government official who heads the Insurance
Commission, an agency under the Department of Finance (DOF) in the
Philippines. The Insurance Commissioner is responsible for regulating and
supervising the insurance industry in the country to ensure its soundness,
fairness, and protection of policyholders.

2. What are the powers of an insurance commissioner

A. The Insurance Commissioner shall have the duty to see that all laws relating
to insurance, insurance companies and other insurance matters, mutual
benefit associations, and trusts for charitable uses are faithfully executed and
to perform the duties imposed upon him by this Code, and shall,
notwithstanding any existing laws to the contrary, have sole and exclusive
authority to regulate the issuance and sale of variable contracts as defined in
Section 232 and to provide for the licensing of persons selling such contracts,
and to issue such reasonable rules and regulations governing the same;

B. The Commissioner may issue such ruling, instructions, circulars, orders and
decision as he may deem necessary to secure the enforcement of the
provisions of this Code, subject to the approval of the Secretary of Finance.

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

Except as otherwise specified, decisions made by the Commissioner shall be

appealable to the Secretary of Finance;

C. In addition to the foregoing, the Commissioner shall have the following powers
and functions:

(a) Formulate policies and recommendations on issues concerning the

insurance industry, advise Congress and other government agencies
on all aspects of the insurance industry and propose legislation and
amendments thereto;
(b) Approve, reject, suspend or revoke licenses or certificates of
registration provided for by the Code;
(c) Impose sanctions for the violation of laws and the rules, regulations
and orders issued pursuant thereto;
(d) Prepare, approve, amend or repeal rules, regulations and orders, and
issue opinions and provide guidance on and supervise compliance
with such rules, regulations and orders;
(e) Enlist the aid and support of, and/or deputize any and all enforcement
agencies of the government in the implementation of its powers and
functions under the Code;
(f) Issue cease and desist orders to prevent fraud or injury to the insuring
public;
(g) Punish for contempt of the Commissioner, both direct and indirect, in
accordance with the pertinent provisions of and penalties prescribed
by the Rules of Court;
(h) Compel the officers of any registered insurance corporation or
association to call meetings of stockholders or members thereof under
its supervision;
(i) Issue subpoena duces tecum and summon witnesses to appear in any
proceeding of the Commission and, in appropriate cases, order the
examination, search and seizure of all documents, papers, files and
records, tax returns, and books of accounts of any entity or person
under investigation as may be necessary for the proper disposition of
the cases before it, subject to the provisions of existing laws;
(j) Suspend or revoke, after proper notice and hearing, the license or
certificate of authority of any entity or person under its regulation, upon
any of the grounds provided by law;
(k) Conduct an examination to determine compliance with laws and
regulations if the circumstances so warrant as “(1) determined by
appropriate rules and regulations;
(l) determined by appropriate rules and regulations; Investigate not
oftener than once a year from the last date of examination to determine
whether an institution is conducting its business on a safe and sound

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)
 OUTLINE QUESTIONS FOR INSURANCE CODE

basis: Provided, That, the deficiencies/irregularities found by or

discovered by an audit shall be immediately addressed;
(m) Inquire into the solvency and liquidity of the institutions under its
supervision and enforce prompt corrective action;
(n) To retain and utilize, in addition to its annual budget, all fees, charges
and other income derived from the regulation of insurance companies
and other supervised persons or entities;
(o) To fix and assess fees, charges and penalties as the Commissioner may
find reasonable in the exercise of regulation; and
(p) Exercise such other powers as may be provided by law as well as those
which may be implied from, or which are necessary or incidental to the
express powers granted the Commission to achieve the objectives and
purposes of the Code.

D. In addition to the administrative sanctions provided in the Code, the

Commissioner is also authorized, at his discretion, to impose upon insurance
companies, their directors and/or officers and/or agents, for any willful failure
or refusal to comply with, or violation of any provision of the Code, or any order,
instruction, regulation, or ruling of the Commissioner, or any commission or
irregularities, and/or conducting business in an unsafe or unsound manner as
may be determined by the Commissioner, the following:
(a) Fines not less than Five thousand pesos (P5,000.00) and not more than
Two hundred thousand pesos (P200,000.00); and
(b) Suspension, or after due hearing, removal of directors and/or officers
and/or agents.3

"So, whether you eat or drink, or whatever you do, do everything for the glory of God".
1 Corinthians 10:31

--- NOTHING FOLLOWS ---

Prepared by: Atty. Alexandra Mae D. Geñorga

Book Reference: Divina on Commercial Law, A Comprehensive Guide (Volume I, 2021 edition)