Amending Certain Sections Of Presidential Decree No. 1460, Otherwise Known As The Insurance Code

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M a n i l a

PRESIDENTIAL DECREE No. 1814

AMENDING CERTAIN SECTIONS OF PRESIDENTIAL DECREE NO. 1460, OTHERWISE KNOWN AS THE INSURANCE CODE

WHEREAS, Presidential Decree No. 1460, otherwise known as the Insurance Code, was promulgated primarily to promote and develop a strong national insurance industry and to provide the necessary operating conditions for its integration in the economic and social development of the Philippines;

WHEREAS, the prevailing economic conditions necessitate the amendment of said Decree to ensure the due execution and performance of insurance contracts in the interests of the sound development of the national economy;

WHEREAS, there is a need to amend the said Decree to further assure reasonable insurance services for the protection of the interests of the policy holders and the public;

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 the amendment of Presidential Decree No. 1460 otherwise known as the Insurance Code, as follows:

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Summary of Presidential Decree No. 1814 Amending the Insurance Code:

Grounds for Refusal, Suspension or Revocation of Insurance Agent/Broker License
- Willful violation of the Code (Sec. 1)
- Material misstatement in application (Sec. 1)
- Obtaining license through fraud or misrepresentation (Sec. 1)
- Fraudulent or dishonest practices (Sec. 1)
- Misappropriation or conversion of fiduciary funds (Sec. 1)
- Lack of trustworthiness and competence to safeguard public interest (Sec. 1)
- Misrepresentation of policy terms and conditions (Sec. 1)
- Failure to pass written examination, if required (Sec. 1)
- Not actively engaged as agent/broker (Sec. 1)

Definition of "Third Party"
- Any person other than a passenger (Sec. 2)
- Excludes household/family members within second degree of consanguinity or affinity of motor vehicle owner/transportation operator (Sec. 2)
- Excludes employee of motor vehicle owner/transportation operator for work-related death/injury (Sec. 2)

Definition of "Insurance Policy" or "Policy"
- Contract of insurance against passenger and third-party liability for death or bodily injuries arising from motor vehicle accidents (Sec. 3)

Compulsory Insurance Coverage
- Unlawful to operate motor vehicle on public highways without insurance policy, surety bond, or cash deposit to indemnify death or bodily injury of third party or passenger (Sec. 4)

Insurance/Surety Bond/Cash Deposit Requirements
- Land transportation operators must secure insurance policy, surety bond, or cash deposit before vehicle registration/renewal (Sec. 5)
- Minimum liability limits for land transportation operators (Sec. 5):
- ₱12,000 per passenger/third party
- ₱50,000 per accident for vehicles with 26+ passenger capacity
- ₱40,000 per accident for vehicles with 12-25 passenger capacity
- ₱30,000 per accident for vehicles with 6-11 passenger capacity
- ₱5,000 x authorized capacity per accident for vehicles with 1-5 passenger capacity
- Cash deposits may be invested in government bonds/securities (Sec. 5)
- Minimum liability limits for private vehicle owners (Sec. 5):
- Private Cars: ₱20,000 (Bantam), ₱20,000 (Light), ₱30,000 (Heavy)
- Other Vehicles: ₱12,000 (tricycles/motorcycles/scooters), ₱20,000 (≤2,600 kg unladen weight), ₱30,000 (2,601-3,930 kg unladen weight), ₱50,000 (>3,930 kg unladen weight)

Denial of Insurance Policy/Surety Bond
- Insurance companies cannot unreasonably deny required policy/surety bond (Sec. 6)
- If denied, Land Transportation Commission shall require cash deposit from operator/owner (Sec. 6)
- Insurance companies must be authorized to issue required policy/surety bond (Sec. 6)
- Authority may be withdrawn for unjustified refusal to issue/renew policy/bond (Sec. 6)

Claims Procedure
- Written notice of claim with injury details certified by physician must be filed with insurance company within 6 months from accident date (Sec. 7)
- Claim deemed waived if notice not filed within 6 months (Sec. 7)
- Action/suit for recovery must be brought within 1 year from accident date (Sec. 7)
- Right of action prescribes if not brought within 1 year (Sec. 7)