Licensing Rules for Insurance Agents Circular

No insurance company or agent may pay commissions to any person for insurance services without that person first securing a license from the Insurance Commissioner.
Acting as an insurance agent or general agent without a license is prohibited.
Licenses are granted upon qualification through application and payment of fees, valid until June 30 next year and renewable annually.
Licenses issued to entities only authorize the named individuals; unauthorized exercise causes license revocation or suspension.
Licensed persons must secure or place with the company at least an equal amount of outside business corresponding to their own insurance interests.
Limits on licenses: one life insurance company, one general agent for non-life, and agent for up to seven other non-life companies.
Agents or general agents cannot cross-license as insurance brokers in the same insurance kind.
General agents must have been licensed and active as ordinary agents for at least one year.
Certain company employees and adjusters are barred from licensing as agents or general agents.

Applicants must be Philippine residents, trustworthy, and pass the written examination unless exempted.
Entities must be domiciled in the Philippines and authorized to transact the business kind applied for.
Individuals named in entity licenses must meet applicant qualifications.

Written examinations are required unless exempted; passing grade is 70%.
Exemptions include previous licensure within 10 years, completion of specified training, or prior company connections demonstrating competence.
Examinations are scheduled by the Insurance Commissioner; fees apply.

Applications must be on prescribed forms and include tax returns for renewals.
Agent license applications must include agency agreement limiting solicitation power.
General agent applications require a general agency agreement and power of attorney.
Certification of active engagement and income from commissions is required for renewals.
Special licenses may be issued to service existing policies if the agent is inactive but has renewal commissions.
Lapsed licenses due to inactivity may be reissued if the applicant undergoes required training.

Grounds include violation of laws or regulations, fraud, dishonesty, incompetence, insolvency, failure to pass exams, and inactivity.
Inactivity defined as earning less than 3,600 pesos commission per year.
License revocation also occurs upon termination of agency contracts with required notification to the Commissioner.

Issuance or renewal fee: 100 pesos for insurance agents, 200 pesos for general agents.
Additional fees apply for multiple individuals named in entity licenses.

This circular amends previous circular No. 2-86 and took effect upon approval on June 28, 1993.