Bonds Running for Less Than One Year
- Annual premium charged in full, no pro-rating, except for promissory notes.
- Extensions by endorsement for the remainder of the year do not incur additional premiums.
- Additional works requiring extra payment entail additional pro-rated premiums.
- New bond issuance for the same undertaking charges full annual premium.
Renewals and Continuing Bonds
- Renewals or extensions longer than one year have premiums pro-rated for the entire extension term at applicable rates.
- Continuing bonds with indefinite terms pay full annual premium with advance payment for each yearly renewal.
Performance and Surety Bonds
- Premium rates specified by bond amount and type (callable vs non-callable) with minimums set.
- Different rates apply for performance and surety bonds.
- Government infrastructure projects under RA 9184 require specific Performance Bond forms with added premiums for defects liability period.
- Non-infrastructure government projects use older bond forms with corresponding premium rates.
Minimum Rate and Combination Bonds
- Minimum premium on any bond is ₱500.
- If multiple bond types are combined in one bond, the highest premium rate applies.
Secured Bonds
- 50% reduction in annual premium for bonds fully secured by:
- Bank deposits assignments
- Philippine government-guaranteed securities
- Other allowable securities per Insurance Code
- Real estate
- Such bonds must be stamped "FULLY SECURED" and securities presented upon request.
Bond Forms and Issuance Procedures
- Bond forms must be approved by the Insurance Commission.
- All bonds must be in duplicate, consecutively and serially pre-numbered.
- Signed blank bonds not allowed; original authorized signatures only.
- Bonds must display rate, premium amount including taxes, and period covered.
- Bonds coded and numbered per Insurance Commission guidelines, with regional office codes included.
Spoiled, Cancelled, and Lost Bonds
- Spoiled or canceled bonds marked clearly and kept in separate files.
- Lost bond forms require immediate sworn statements from company officials confirming non-issuance.
Bond Registry Maintenance
- Insurance companies must maintain bond registry books open to public and Commission representatives.
- Entries include bond number, date/place of issue, amount, bond type, secured obligation nature, beneficiary, and status.
- Loss or destruction requires sworn explanations and reconstitution; issuing new bonds suspended until registry restored.
- Upon license suspension or revocation, bond registry and unused forms must be surrendered.
Liability Registers
- Insurance companies must maintain liability registers recording all bonds issued.
- Subsidiary registers per bond type, recorded numerically and chronologically.
Authorized Signatories
- Companies to submit annually updated list of authorized signatories and specimen signatures to the Insurance Commission by June 30.
- Immediate notification to the Commission is required upon any changes.
Sanctions and Penalties
- Violations of rules can lead to license suspension, revocation, penalties, or both.
Repealing Clause
- This circular supersedes previous Insurance Commission letters and Memorandum Circular No. 1-77.
- All conflicting rules, orders, and regulations are repealed or amended.
Effectivity
- The circular takes effect immediately upon publication on the Insurance Commission website.