IC released Legal Opinion on Electronic Sale of Insurance Products by Intermediaries

In Legal Opinion No. 2023-14 dated May 16, 2023, the Insurance Commission responded to a Request for Legal Opinion on Electronic Sale of Insurance Products by Intermediaries. 


From the Request, it was provided that the MPT Mobility Corporation (MPTM) is a subsidiary of the Metro Pacific Tollways Corporation (Metro Pacific). MPTM operates the MPT DriveHub, a companion mobile application owned by Metro Pacific. MPTM intends to create an electronic marketplace where licensed insurance companies could sell non-life insurance policies, among others. To access the marketplace, MPTM will receive a referral fee or a revenue share. 


From the facts and issues presented, the Insurance Commission arrived at the following conclusions:

I. A juridical person may act as an insurance agent or insurance broker.


Section 307 of the Insurance Code refers to a “person” thereby not limiting the privilege to be an insurance agent or broker to be a natural person. Furthermore, Section 373 determines who shall represent a juridical person when granted a license (the named individual). Furthermore, Insurance Memorandum Circular No. 3-93 and Circular Letter No. 2018-52 define “person” to include even a partnership, association, or corporation.

II. The person named in the insurance agent’s or broker’s license cannot be outsourced.


The individual named in the license cannot be outsourced because the individual has to be empowered under the articles of incorporation of the corporation to transact the business (IMC No. 3-93). Furthermore, in the license for insurance broker, the individual has to be a full-time officer of the corporation (CL No. 2018-52). 


III. MPTM is an insurance provider in offering insurance products through the App. However, it should be licensed.


Circular Letter No. 2014-47 requires that any commercial activity which involves buying, selling, or providing insurance products and services online is an electronic commerce. Engaging in the same requires a license. 


However, MPTM may choose between being an insurance agent and broker, or an insurance aggregator. An insurance aggregator is an internet-based platform which accumulates and provides insurance policy quotations from different insurance companies, depending on a predetermined set of needs specified by the prospective client (CL No. 2018-51). 

IV. Requirements for an intermediary to lawfully engage in the businesses


To engage as an intermediary, MPTM must secure a Certificate of Authority from the SEC for a specific license it seeks to apply. Application for insurance agent license requires compliance with IMC No. 3-93 and corresponding circulars; for broker it is CL No. 2018-52 and related circulars; and for aggregator, it is CL 2018-51. The Citizen’s Charter may be of guidance for the complete process guide. 


Engaging in electronic commerce requires compliance with CL No. 2014-47 as amended, CLNo. 2016-15, CL No. 2016-60, and CL No. 2018-07. Furthermore, MPTM is required to make a proposal for the use of the mobile application and file it before the SEC.


The legal opinion may be read in full here

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