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PHILIPPINE AMERICAN LIFE INSURANCE COMPANY and RODRIGO DE LOS REYES

vs.
HON. ARMANDO ANSALDO, in his capacity as Insurance Commissioner, and RAMON MONTILLA PATERNO, JR.
G.R. No. 76452 July 26, 1994
By Richard Troy A. Colmenares
USA College of Law
Start: 6/30/14 11:17:43 PM
Finish: 7/1/14 12:09:14 AM
Nature of the Case
A petition for certiorari and prohibition, with prayer for writ of preliminary injunction or issuance of TRO, against jurisdiction of Insurance
Commission.

Facts
Paterno wrote a letter of complaint to Ansaldo (Insurance Commissioner) alleging problems encountered by workers and public consumers
as a result of Philamlifes practices. Ansaldo sought the comment of De Los Reyes [Philamlife President], who in turn sought a bill of
particulars. Paterno responded that his letter was sufficient in form and sought for a hearing. Philamlife countered that Paternos response
did not enable him to answer the letter of complaint. Thereafter, a hearing on the complaint heard the validity of the Contract of Agency
(CoA) complained of, requiring Paterno to supply the specific provisions in the CoA which he claims to be illegal. Paterno: (1) reiterated his
initial letter of complaint; (2) prayed that the (a) provisions on charges and fees in the CoA; (b) implementing provisions in the agents'
handbook, agency bulletins and circulars, be declared null and void; and (3) to reimburse agents of the amounts deducted from charges and
fees already collected with interest. This was furnished by Ansaldo to Philamlife who thereafter submitted its contentions, to wit: (1) Private
respondent's letter of August 11, 1986 does not contain any of the particular information which Philamlife was seeking from him and which
he promised to submit; and (2) [t]hat since the Commission's quasi-judicial power was being invoked with regard to the complaint, private
respondent must file a verified formal complaint before any further proceedings. Meanwhile, Paterno sought for the resumption of hearing in
re his complaint and about a month later executed his affidavit. Philamlife [through Manuel Ortega, SVP] questioned the jurisdiction of
Ansaldo and the locus standi of Paterno. Ansaldo thereafter notified parties to a hearing. Philamlife [through Ortega] moved for quashal
since subpoena has no legal basis and Insurance Commission has no jurisdiction. The same was however denied by Ansaldo. Hence, this
petition.

Issue(s)
(1). Can the Insurance Commission preside over issues assailing the validity of a Contract of Agency?

Held
(1). No.

The general authority of the Insurance Commissioner is laid down in the Insurance Code, among others, to regulate the business of
insurance. Since a Contract of Agency is not covered in the authority of the Insurance Commission to regulate business of
insurance, jurisdiction of Ansaldo is wanting.

Ansaldo also has no quasi-judicial power to speak of in the Insurance Code since xxx his power is limited to claims and complaints
involving any loss, damage or liability for which an insurer may be answerable under any kind of policy or contract of insurance
xxx". This power does not affect the relationship between an insurance company and its agents. In the same light, although the
Insurance Code provides for the subject Insurance Agents and Brokers, the same only speaks licensing requirements and
limitations imposed on insurance agents and brokers. Thus, it is clear that the Insurance Code does not grant Ansaldo the authority
to take cognizance of the case.

On the other hand, there are two classes of insurance agents: (1) salaried employees who keep definite hours and work under the
control and supervision of the company; and (2) registered representatives, who work on commission basis. The former is
cognizable by the Labor Arbiter (as it involves the Contract of Employment and provisions of the Labor Code) and the latter by
regular courts (as it involves issues on the Contract of Agency and the Civil Code provisions on Agency).

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