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IC Imposes Tighter Criteria On Appointing Foreign Insurers' Agents

The Insurance Commission is imposing stricter requirements for appointing resident agents of unauthorized foreign insurers to ensure legal processes can be brought against these foreign insurers for transactions with local insurers. Under a new circular, unauthorized foreign insurers must meet capitalization standards equivalent to domestic insurers or achieve certain financial strength ratings. Resident agents must be authorized to accept legal notices for the foreign insurer and submit documents like audited financial statements and tax returns. The circular aims to ensure legal recourse for domestic insurers that transact with unauthorized foreign insurers through requirements like appointing resident agents in the Philippines.

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Ronadale Zapata-Acosta
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93 views3 pages

IC Imposes Tighter Criteria On Appointing Foreign Insurers' Agents

The Insurance Commission is imposing stricter requirements for appointing resident agents of unauthorized foreign insurers to ensure legal processes can be brought against these foreign insurers for transactions with local insurers. Under a new circular, unauthorized foreign insurers must meet capitalization standards equivalent to domestic insurers or achieve certain financial strength ratings. Resident agents must be authorized to accept legal notices for the foreign insurer and submit documents like audited financial statements and tax returns. The circular aims to ensure legal recourse for domestic insurers that transact with unauthorized foreign insurers through requirements like appointing resident agents in the Philippines.

Uploaded by

Ronadale Zapata-Acosta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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IC imposes tighter criteria on appointing

foreign insurers agents


THE Insurance Commission is imposing stricter
requirements on the appointment of resident agents
of unauthorized foreign insurers to ensure that legal
processes may be brought against these foreign
insurers in connection with their transactions with
local insurance companies.
Insurance Commissioner Emmanuel F. Dooc has
issued Circular Letter 2015-2016, prescribing the
rules and processes in the appointment of resident
agents of unauthorized foreign insurers, reinsurers or
brokers with whom local insurance companies
transact with, mainly through reinsurance contracts.
Under current jurisprudence, unauthorized
corporations that have transacted business in the
Philippines can bring suit to assert a claim against
persons they transact with, despite an express
prohibition in the Corporation Code that prevents
foreign corporations from transacting business in the
Philippines without a license from maintaining a suit
here.
Doocs new circular ensures the appointment of a
resident agent by such unauthorized foreign
insurance companies to ensure that domestic
insurance companies that have transacted business
with these foreign insurers can sue back, and that
Philippine courts can easily acquire jurisdiction over
the foreign insurers through their resident agents
here.
The appointment of resident agents is mandated by
Section 223 of the amended Insurance Code, which
provides that, No insurance company doing
business in the Philippines shall cede all or part of
any risks situated in the Philippines by way of
reinsurance directly to any foreign insurer not
authorized to do business in the Philippines, unless
such foreign insurer or, if the services of a

nonresident broker are utilized, such nonresident


broker is represented in the Philippines by a resident
agent duly registered with the commissioner as
required in this code.
The provisions on the appointment of a resident
agent of unauthorized foreign insurance companies
are meant to ensure that legal processes could be
brought against these foreign corporations should
disputes arise out of their transactions with domestic
insurance companies.
The circular letter provides the requirements for the
application and renewal of certificates of registration
to act as resident agents of unauthorized foreign
insurance companies. These requirements include
capitalization requirements for the principal, and
proof of authorization and financial capacity of the
resident agent.
In order to ensure the financial capacity of the
[unauthorized foreign insurers], they must [a] meet
the capitalization requirements equivalent to what is
required of their domestic counterparts, or [b] must
have a minimum financial strength rating duly
certified by any of the following rating organizations:
A.M. Best [A- rating]; Fitch [AA rating]; Moodys
[Aa rating]; Standard and Poors [AA rating], the
circular said regarding the required capitalization of
the unauthorized foreign insurer.
The resident agent must also submit the audited
financial statements for the last three years of the
unauthorized foreign insurer.
As to the resident agent, the requirements include a
copy of the power of attorney authorizing the
applicant to receive notices, summons and legal
processes for and in behalf of the foreign insurer in
connection with the actions or legal proceedings in
the Philippines against such foreign insurer, such
power of attorney duly notarized and authenticated
by the Philippine consul in the place where the
foreign insurer is domiciled; and the income-tax
return of the resident agent.

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