Guidelines on Issuance of Stay Orders

The guidelines rest on the Insurance Commissioner’s statutory authority to prepare and approve rules, regulations, and orders concerning the insurance, pre-need, and HMO industries under Section 437 of Republic Act No. 10607 (Amended Insurance Code of the Philippines), Section 6 of Republic Act No. 9829 (Pre-Need Code of the Philippines), and Section 4 of Executive Order No. 192, s. 2015.
Conservatorship and receivership processes under Sections 255 & 256 of Republic Act No. 10607 supply the framework for regulated entities under distress.
Pre-need conservatorship and receivership processes under Sections 49 & 50 of Republic Act No. 9829 also align with the objectives stated in the circular letter.
Corporate rehabilitation courts’ power to issue stay or suspension orders under Section 16 of Republic Act No. 10142 (Financial Rehabilitation and Insolvency Act) is treated as an enabling reference for analogous authority in the regulated conservatorship/receivership setting.
The circular letter directs strict observance of Circular Letter No. 2016-34 dated 21 June 2016 regarding publication of stay orders.

Stay orders are issued to support statutory objectives in conservatorship and receivership: restore distressed regulated companies to financial viability and preserve and administer the assets for the benefit of policyholders, planholders, members, and creditors.
The circular letter is intended to facilitate conservatorship and receivership processes through uniform guidelines on issuance of stay orders.
Stay orders are framed as a tool to achieve objectives of financial rehabilitation and asset preservation for affected stakeholders.

In conservatorship, a stay order may be issued by the Insurance Commission upon the favorable recommendation of the duly appointed conservator and/or this Commissionas CRL Division.
The recommendation for a stay order must be substantiated by findings that the stay order is necessary to:
- Achieve the objectives of the financial rehabilitation of the concerned company; and/or
- Preserve the assets of the company for the benefit of its policyholders, planholders, members, and/or creditors.
In receivership, a stay order shall be issued simultaneously with the order placing the concerned company under receivership.

Every stay order issued pursuant to the circular letter must provide that all actions or proceedings in court or otherwise to enforce claims against the concerned company under conservatorship or receivership are suspended; all such claims must be referred or endorsed to the concerned conservator or receiver for appropriate action.
Every stay order must provide that all actions to enforce any judgment, attachment, or other provisional remedies against the concerned company are suspended; any final and executory judgment from a court, tribunal, office, or agency of competent jurisdiction must be treated by the conservator or receiver as a non-disputed claim.
Every stay order must prohibit the company from selling, encumbering, transferring, or disposing of any of its properties in any manner, except in the ordinary course of business and/or as approved by the Insurance Commissioner upon the favorable recommendation by the appointed conservator, receiver, and/or this Commissionas CRL Division.
Every stay order must prohibit the company from making any payment of its liabilities as of the date of issuance of the stay order, except for:
- Approved administrative expenses; and/or
- Payments approved by the Insurance Commissioner upon the favorable recommendation by the appointed conservator, receiver, and/or this Commissionas CRL Division.

The issuance of the stay order does not diminish or impair the right(s) of policyholders, planholders, members, and/or creditors to their respective claims.
The stay order only suspends the creditors’ right to enforce those claims during the term of the stay order.

The stay order does not apply to cases already pending appeal in the Honorable Supreme Court at the time of issuance of the stay order; any final and executory judgment arising from such appeal must be referred to the conservator or receiver for appropriate action.
The stay order does not apply to any criminal or administrative action against individual owner(s), partner(s), director(s), or officer(s) of the company under conservatorship or receivership.
The stay order does not apply to cases specifically ordered excluded by the Insurance Commissioner upon the favorable recommendation of the conservator, receiver, and/or this Commissionas CRL Division.
Any recommendation for exclusion must be substantiated by findings that exclusion is necessary to:
- Achieve the objectives of the financial rehabilitation of the concerned company; and/or
- Preserve the assets of the company for the benefit of its policyholders, planholders, members, and/or creditors.

Attempts by policyholders, members, planholders, and/or creditors to seek legal or other recourse against the distressed company outside conservatorship or receivership proceedings constitute indirect contempt of the Insurance Commission.
The indirect contempt is punishable under Section 437 (g) of Republic Act No. 10607 or Section 6 (f) of Republic Act No. 9829, depending on the governing regime.

A copy of the stay order, including its annexes if any, must be posted at the entrance or at a conspicuous place at the main office and branches of the concerned company under conservatorship or receivership.
The conservator or receiver must cause publication in a newspaper of general circulation in the Philippines once a week for three (3) consecutive weeks.
The first publication must be made within ten (10) days from the issuance of the stay order.
The conservator or receiver is required to strictly observe Circular Letter No. 2016-34 dated 21 June 2016 in publishing the stay order.
The stay order must also be published in the Insurance Commission’s website.