Philam v Arnaldo G.R. No. 76452 July 26, 1994

J. Quiason

Facts:

One Ramon Paterno complained about the unfair practices committed by the company against its agents, employees and consumers. The Commissioner called for a hearing where Paterno was required to specify which acts were illegal. Paterno then specified that the fees and charges stated in the Contract of Agency between Philam and its agents be declared void. Philam, on the other hand, averred that there Paterno must submit a verified formal complaint and that his letter didn’t contain information Philam was seeking from him. Philam then questioned the Insurance Commission’s jurisdiction over the matter and submitted a motion to quash. The commissioner denied this. Hence this petition.

Issue: Whether or not the resolution of the legality of the Contract of Agency falls within the jurisdiction of the Insurance Commissioner.

Held: No. Petition granted.

Ratio:

According to the Insurance code, the Insurance Commissioner was authorized to suspend, directors, officers, and agents of insurance companies. In general, he was tasked to regulate the insurance business, which includes:

(2)          The term "doing an insurance business" or "transacting an insurance business," within the meaning of this Code, shall include

(a) making or proposing to make, as insurer, any insurance contract;

(b) making, or proposing to make, as surety, any contract of suretyship as a vocation and not as merely incidental to any other legitimate business or activity of the surety; (c) doing any kind of business, including a reinsurance business, specifically recognized as constituting the doing of an insurance business within the meaning of this Code; (d) doing or proposing to do any business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of this Code. (Insurance Code, Sec. 2[2])

The contract of agency between Philamlife and its agents wasn’t included with the Commissoner’s power to regulate the business. Hence, the Insurance commissioner wasn’t vested with jurisidiction under the rule “expresio unius est exclusion alterius”.

The respondent contended that the commissioner had the quasi-judicial power to adjudicate under Section 416 of the Code. It stated:

The Commissioner shall have the power to adjudicate claims and complaints involving any loss, damage or liability for which an insurer may be answerable under any kind of policy or contract of insurance, or for which such insurer may be liable under a contract of suretyship, or for which a reinsurer may be used under any contract or reinsurance it may have entered into, or for which a mutual benefit association may be held liable under the membership certificates it has issued to its members, where the amount of any such loss, damage or liability, excluding interest, costs and attorney's fees, being claimed or sued upon any kind of insurance, bond, reinsurance contract, or membership certificate does not exceed in any single claim one hundred thousand pesos.

This was, however, regarding complaints filed by the insured against the Insurance company.

 Also, the insurance code only discusses the licensing requirements for agents and brokers. The Insurance Code does not have provisions governing the relations between insurance companies and their agents.

Investment Planning Corporation of the Philippines v. Social Security Commission- “that an insurance company may have two classes of agents who sell its insurance policies: (1) salaried employees who keep definite hours and work under the control and supervision of the company; and (2) registered representatives, who work on commission basis.”

The agents under the 2^nd sentence are governed by the Civil Code laws on agency. This means that the regular courts have jurisdiction over this category.