Republic of the PhilippinesDepartment of Finance

INSURANCE COMMISSIONI 071 United Nations Avenue

I\z{anila

CIRCULAR LETTER

TO

SUBJECT

All lnsurance Companies Concerned

: Definition and Licensing of "Seruicing lnsuranceCompanies"

Pursuant to the Administrative Powers of the lnsurance Commissioner under Section437 of the amended lnsurance Code (R.A. 10607), the following Circular onDefinition and Licensing of "Servicing lnsurance Companies" is hereby issuedfor the guidance, compliance and implementation of all lnsurance Companies doingbusiness in the Philippines:

A "servicing insurance company" may either be:

1. A domestic insurance company which is (a) in a state of "run-off"1; (b)"running-off" towards closure; (c) expressly allowed by the lnsuranceCommission to "run-off"; or (d) a dr.sfressed company expressly prohibited bythe lnsurance Commr.ssion to sell policies, whose business transactions areconfined to:

accepting periodic premium payments from its policyholders, orgranting policy loans and paying cash surrender values of outstandingpolicies to its policyholders, orreviving lapsed policies of its policyholders, andsuch other related services.

i.ii.

iii.iv.

t "Run-off is defined as "the process

business or investment fund that hasbusiness". (http://www.encyclo.co. uk)

of managing accounts and settling claims for an insurancestopped accepting new risks or has been closed to new

Circular Letter (CL) No.: 201 4-1 4Date: 12 ttey 2014Supersedes: None

Head Office: P.O. Box 3589 Manila FAX No.522-14-34 Tel. Nos. 523-84-61 to 70 Website: www.insurance.gov.ph

Hence, all distressed companies under the Conservatorship, Receivership andLiquidation Division engaged in the above-mentioned business transactions shouldstill obtain licenses as "Seryicing lnsurance Companies".

A separate circular on the procedure for distressed companies shall be issued.

Or,

2. A foreign life insurance company that withdraws from the Philippines whosebusiness transactions are confined to accepting periodic premium payments from, orgranting policy loans and paying cash surrender values of outstanding policies to, orreviving lapsed policies of, Philippine policyholders, and such other related services.(Section 286 of the amended lnsurance Code)

Provided that, such domestic or foreign insurance company has obtained from thelnsurance Commissioner a special certificate of authority to act solely andexclusively as a servicing company, as defined herein, upon application therefor andpayment by the company of the prescribed fees. (Section 287 of the amendedlnsurance Code)

Accordingly, the Licensing Division may issue Certificates of Authority for "servicinglnsurance Companies", in accordance with this Circular.

The Deputy lnsurance Commissioner for Legal Services, Atty. Dennis B. Funa, shallcoordinate this matter with the Licensing Division and the Conservatorship,Receivership and Liquidation Division.

For information and guidance.

EMMANUEL