COMMERCIAL LAW REVIEW CASE DIGESTS - INSURANCE What Constitute and Insurance Business White Gold Marine Services,

petitioner., vs Pioneer Insurance and Surety Corp., and Steamship Mutual Underwriting Assn., respondents. GR No. 154514 July 28, 2005 Facts: Petitioner White Gold procured a protection and indemnity coverage for its vessels from respondent Steamship Mutual through its agent Pioneer Insurance. White Gold was issued the corresponding Certificate of Entry and Accpetance. Pioneer also issued receipts evidencing payments for the coverage. However, Steamship refused to renew the coverage due to the failure of White Gold to fully pay its account. This prompted Steamship to file a complaint against White Gold for collection of sum of money for the recovery of the unpaid account. The latter, however, filed a complaint before the Insurance Commissioner against Steamship alleging that Steamship was operating an insurance business here in the Philippines without securing any certificate of authority to operate as such. Steamship, on the other hand, contended that although it is a protection and indemnity club (P & I Club), it is not engaged in the insurance business in the Philippines. It is merely an association of vessel owners who have come together to provide mutual protection against liabilities incidental to shipowning. The Insurance Commissioner dismissed the complaint and on appeal the CA affirmed the Commissioners decision. Hence, this present petitioner for review. Issue: Whether or not Steamship Mutual, a P & I Club, engaged in the insurance business in the Philippines. Held: Yes. Section 2(2)* of the Insurance Code enumerates what constitutes doing an insurance business or transacting an insurance business. The same provision also provides the fact that no profit is derived from the making of

Section 2(2) Insurance Code: The term doing an insurance business or transacting an insurance business, within the meaning of this Code, shall include: a. making or proposing to make, as insurer, any insurance contract; b. making or proposing to make