ilipinas Compañia De Seguros vs. Mandanas CASE DIGEST- INSURANCE

 

Filipinas Compañia De Seguros vs. Mandanas, In His Capacity as Insurance Commissioner, G.R. No. L-19638 June 20, 1966

39 non-life insurance companies and Mandanas assailed the validity of Art 22 of the Constitution of the Philippine Rating Bureau upon the ground that it constitutes an illegal or undue restraint of trade.

Mandanas and 39 non-life insurance companies maintains that under Article 22, in order to secure reinsurance, non-life insurance companies should be a member in good standing of the bureau.

Issue: WON Art 22 is void as it limits reinsurance only to a member of the bureau

Held: No. The the purpose of Art. 22 is to maintain a high degree or standard of ethical practice, so that insurance companies may earn and maintain the respect of the public; that to achieve this purpose it is highly desirable to have cooperative action between said companies in the compilation of their total experience in the business, so that the Bureau could determine more accurately the proper rate of premium to be charged from the insured; that, accordingly, non-life insurance companies need an adequate record of losses and premium collections that will enable them to determine the amount of risk involved in each type of risk and, hence, to determine the rates or premiums that should be charged in insuring every type of risk; that this information cannot be compiled without full cooperation on the part of the companies concerned, which cannot be expected from non-members of the Bureau, over which the latter has no control; and that, in addition to submitting information about their respective experience, said Bureau members must, likewise, share in the rather appreciable expenses entailed in compiling the aforementioned data and in analyzing the same.1äwphï1.ñët

The limitation upon reinsurance contained in the aforementioned Article 22 does not affect the public at all, for, whether there is reinsurance or not, the liability of the insurer in favor of the insured is the same. Besides, there are sufficient foreign reinsurance companies operating in the Philippines from which non-members of the Bureau may secure reinsurance. What is more, whatever the Bureau may do in the matter of rate-fixing is not decisive insofar as the public is concerned, for no insurance company in the Philippines may charge a rate of premium that has not been approved by the Insurance Commissioner.