Title
Rules on Insurance Commission Hearings
Law
Ic Insurance Memorandum Circular No. 2-91
Decision Date
May 21, 1991
The Insurance Commission establishes revised procedural rules for hearings on claims and complaints involving insurance policies, ensuring a just, speedy, and cost-effective resolution for amounts not exceeding one hundred thousand pesos.
insurance law
administrative law
claims procedure

Legal basis and liberal construction

  • The Insurance Commission promulgates the rules pursuant to Sections 414 and 416 of the Insurance Code.
  • Section 2 (How Construed) requires liberal construction of the rules to promote adjudication or settlement of claims and complaints.
  • The rules aim for a just, speedy and inexpensive determination of claims and complaints involving losses, damages, or liabilities under insurance, suretyship, reinsurance, or mutual benefit association membership certificates.
  • The rules cover claims and complaints where an insurer may be answerable, where a reinsurer may be sued under reinsurance it entered into, or where a mutual benefit association may be held liable under the membership certificates it issued.

Scope and coverage of covered claims

  • Section 3 (Scope) governs hearings of claims and complaints filed with the Commission where the amount of loss, damage or liability, excluding interest, costs and attorney’s fees, does not exceed ONE HUNDRED THOUSAND PESOS in a single claim.
  • The amount limitation applies to claims arising from any kind of insurance, bond, reinsurance contract, or membership certificate.

Parties, real party in interest, and labels

  • Every action filed with the Commission must be prosecuted in the name of the real party in interest, who may be a natural or juridical person.
  • The person filing a complaint seeking relief from an insurer or mutual benefit association for covered losses, damages, or liabilities is called the Complainant.
  • The insurance company or mutual benefit association against whom relief is directed is called the Respondent.

Commencement of action and required pleadings

  • A person seeking relief must file a verified complaint with the Commission stating the allegations are true of his own knowledge.
  • All pleadings must be legibly written or printed on legal size paper.
  • The Commission accepts the original and three (3) signed copies of every pleading if they conform to the rules.
  • The complaint must state:
    • the names and addresses of the parties;
    • the substance of the claim;
    • the date when the loss occurred;
    • the amount of claim;
    • the grounds of action; and
    • the relief sought.

Docket fees and pauper litigant

  • A docketing fee is required upon filing:
    • any action or proceedings; and
    • a permissive counterclaim or crossclaim against a co-party for any claim arising out of the same transaction or occurrence;
    • a third party complaint;
    • a complaint in intervention; and
    • for all services in the same.
  • The docket fee is based on the principal amount claimed, exclusive of interest and attorney’s fee, as follows:
    • If the principal claim is less than P500: P25.00
    • P500 or more but less than P5,000: 50.00
    • P5,000 or more but less than P10,000: 100.00
    • P10,000 or more but less than P20,000: 150.00
    • P20,000 or more but less than P50,000: 200.00
    • P50,000 or more but not exceeding P100,000: 500.00
  • The rules impose a specific docket fee rule for insurance company claims: an amount of ONE THOUSAND PESOS (P1,000.00) is charged as docket fee against an insurance company claiming recovery of the amount it paid to its assured under its own damage cover against another insurance company.
  • The Commission may authorize a complainant to prosecute as a pauper litigant upon proper showing via verified motion that he has no means to pay legal expenses under the rules.
  • Once authorized, pauper litigant status includes an exemption from payment of docketing and other legal fees, and the legal fees are a lien to any judgment rendered in the case in favor of the pauper.
  • If the Commission otherwise decides, it may alter the consequence of pauper litigant authority.

Service, answer period, and dismissal motions

  • After receipt of the complaint, the Commission forwards a copy to the respondent and requires filing of an answer within fifteen (15) days from receipt.
  • The respondent’s answer must be in writing and must admit or deny specifically the material allegations, or allege a lawful defense.
  • Service by ordinary mail is complete upon the expiration of five (5) days after mailing unless the Commission otherwise provides.
  • Service by registered mail is complete upon actual receipt by the addressee; if the addressee fails to claim the mail from the post office within five (5) days from the date of first notice of the postmaster, service takes effect at the expiration of that period.
  • The Commission specifies that personal service is complete upon actual delivery.
  • Within the time for filing the answer, the respondent may file a motion to dismiss on any of the following grounds:
    • the Commission has no jurisdiction over the subject matter or nature of the action;
    • pendency of another action before the court between the same parties for the same cause of action; or
    • the complaint does not allege facts that involve any claim or complaint where the respondent may be liable under any kind of policy or membership certificate or contract of insurance, or under any guaranty or suretyship.
  • The Commission, in its discretion, may deny or grant the motion, allow amendment of pleadings, or defer determination of the motion until after hearing if the ground does not appear indubitable.
  • If the motion to dismiss is denied or determination is deferred, the movant must file the answer within the period prescribed, computed from the time he received notice of denial or deferment, unless the Commission provides a different period.

Motor vehicle liability under Chapter VI

  • A special procedure applies to claims under the compulsory motor vehicle liability under Chapter VI of the Insurance Code.
  • Upon receipt of the complaint, the Commission forwards it to the respondent requiring an answer within a non-extendible period of fifteen (15) days from service of summons.
  • The complainant must file an answer to the counterclaim, if any, within a non-extendible period of fifteen (15) days.
  • Immediately upon receipt of the last pleading completing the joinder of issues, or upon expiration of the period for filing the same, the Commission sets the case for hearing.
  • On the date of hearing but before receiving evidence, the Commission must endeavor to settle the case amicably.
  • Amicable settlement must not give the complainant less rights, benefits, or advantage than the law grants him.
  • Judgment approving amicable settlement is immediately executory.
  • Absence of counsel or any or both parties is not a ground for postponement provided they were duty notified.

Pre-trial conference and amicable settlement

  • The Commission directs the parties and their counsel to appear for a pre-trial conference before the actual hearing.
  • The pre-trial conference considers:
    • possibility of an amicable settlement;
    • simplification of the issues;
    • amendment to pleadings;
    • obtaining admissions or stipulations of facts;
    • exchange and acceptance of service of exhibits to be offered in evidence;
    • limitation of the number of witnesses;
    • admissibility and relevance of proposed evidence; and
    • other matters aiding just, speedy and inexpensive disposition.
  • All parties and their attorneys attend the pre-trial conference.
  • A party’s presence is indispensable unless his counsel is authorized to enter into agreement on matters considered.
  • Parties inform each other of the nature and character of evidence they propose to offer and the purpose of each item.
  • After the pre-trial conference, the Commission issues an order reciting actions taken, amendments allowed, and agreements on matters considered.
  • The pre-trial order limits issues for formal hearing to those not disposed of by admissions and agreements, and it serves as guide unless modified before formal hearing to prevent manifest injustice.
  • The Commission endeavors to effect an amicable settlement at any stage unless it is prejudicial to public interest or to third parties.
  • Amicable settlement must not be contrary to any law, rule or regulation or against public policy.
  • An amicable settlement is reduced in writing, duly signed by the parties and their counsel, and becomes the basis of an order or decision.

Hearing procedure, evidence, deposits

  • After the respondent files his answer or the answer filing period expires, parties or counsel must be served with notice of hearing at least five (5) days before the hearing date.
  • Hearings are conducted by the Commissioner or hearing officers designated by proper order.
  • Hearing officers may administer oaths and affirmations, issue subpoenas, take evidence, and compel attendance of parties and witnesses and production of relevant or material books, papers, correspondence, memoranda, or other records.
  • Unless the Commission directs otherwise, the order of hearing is:
    • complainant presents evidence supporting the complaint;
    • respondent presents evidence supporting the defense or claim;
    • third or additional party respondent presents evidence on material facts pleaded;
    • rebutting evidence by each party, unless the Commission for good reasons permits evidence on original case;
    • opening and concluding arguments if parties do not agree to submission without argument.
  • Each party has the right to cross-examine witnesses needed for full and true disclosure of facts.
  • Hearing officers receive relevant and material evidence, rule on offers of evidence, exclude irrelevant matters, act according to justice and fairness, and are not bound by technical rules of evidence.
  • The Commission may order depositions of witnesses residing within or without the Philippines under Rule 24 of the Rules of Court.
  • Where witnesses reside in a distant place from Manila and personal appearance would be inconvenient and expensive, the Commissioner may designate a Municipal Judge or any Clerk of Court of the Regional Trial Court to take depositions.
  • The designated official must promptly set dates for deposition, give timely notice to parties, proceed to take depositions, reduce testimony in writing, certify correctness, and forward depositions to the Commission promptly.
  • Parties must furnish stenographers; if none are available, the designated judge/clerks designate persons to take testimony.
  • The Commissioner may designate a notary public to take depositions in the manner provided.
  • Motions for postponement or continuance may be granted or denied in the Commission’s discretion.
  • A postponement motion must be filed with the Commission and the other party must receive a copy at least five (5) days before the hearing date, or it is not considered.
  • No more than three (3) postponements may be granted to any party.

Decisions, reconsideration, and finality

  • Decisions or orders determining merits must be in writing and signed by the Commissioner.
  • The decision or order must clearly state the facts, law and/or rules and regulations on which it is based.
  • The Commission serves the decision or order personally or by registered mail.
  • A decision or order becomes final and executory after fifteen (15) days from date of receipt by the parties unless a motion for reconsideration is filed within the prescribed period.
  • A motion for reconsideration may be filed by the aggrieved party within fifteen (15) days from receipt of the decision or order.
  • If the motion is denied, the movant may appeal during the remaining period for appeal reckoned from notice of denial.
  • The adverse party may file opposition within fifteen (15) days from receipt of the motion for reconsideration and must serve a copy on the movant.
  • After opposition is filed, or after the period for filing opposition expires without opposition, the motion is deemed submitted for resolution unless the Commission needs oral arguments and issues an order or notice.

Appeals to the Court of Appeals; effect

  • Any party affected by a final order, ruling, or decision may file a verified petition for review with the Court of Appeals within fifteen (15) days from notice.
  • The petition must be filed in six (6) legible copies, and copies must be served on the Commission and the adverse party.
  • Proof of service on the Commission and adverse party must be attached to the petition.
  • The petition must contain:
    • a concise statement of facts and issues involved; and
    • grounds relied upon for review.
  • The petition must include a duplicate original or certified true copy of the appealed ruling and certified true copies of material parts of the record referred to, plus other supporting papers.
  • The petition must state the specific material dates showing it was filed within the period fixed.
  • The appeal does not stay the challenged order, ruling, or decision unless the Court of Appeals directs otherwise under just terms.

Contempt and attorney participation rules

  • The Commission may, in its discretion, file an action in the Regional Trial Court for contempt on grounds of:
    • failure or refusal, without just cause, to obey a duly issued subpoena to obey summons, attend and testify, answer lawful inquiry, or produce books, papers, correspondence, memoranda, if within power to do so;
    • disobedience or refusal to comply with or resistance to any lawful writ, process, order, or decision of the Commissioner; or
    • abuse of or unlawful interference with Commission processes or proceedings, not constituting direct contempt.
  • Every attorney appearing before any hearing or investigation must manifest orally or in writing:
    • his appearance for the party,
    • his name and exact address, and
    • his Privilege Tax Receipt for the current year and his IBP Number.
  • Every pleading filed and signed by such attorney must likewise contain the required information.
  • An attorney who fails to comply is not allowed to continue proceeding or defending any suit or claim or to deal with the Commission.
  • The stenographic reporter who attended the hearing must submit to the hearing officer within a reasonable period:
    • a transcript of stenographic notes, duly initialed on each page, and signed on the last page.

Costs, applicability, and supersession

  • Costs are taxed as follows:
    • For the complaint or answer: P15.00
    • For attendance of the prevailing party and that of his attorney, down to and including final judgment: 20.00
    • For each witness necessarily produced, for each day’s attendance: 2.00 plus lawful travelling fees
    • For each deposition lawfully taken and produced in evidence: 5.00
    • For original documents, deeds, or papers produced at the hearing: Nothing
    • For official copies of produced documents, deeds, or papers: the lawful fees paid for obtaining such copies
    • For entering and docketing the action or recording the proceeding, for service of any action, and all lawful fees paid by the prevailing party: all the lawful fees paid by him
  • The Rules of Court apply in an analogous and suppletory character whenever practical and convenient.
  • Effect on prior issuances: Insurance Memorandum Circular Nos. 1-80 and 1-86 are superseded.

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