Atty. Rhodora B. Morales

May 6, 1997 Atty. Rhodora B. Morales Pacific Union Insurance Company Valero Tower Condominium, 8/F, 122 Valero St., Salcedo Village, Makati City M a d a m : This refers to your letter dated April 28, 1997 requesting advice on the queries posed therein relative to the implementation of Section 194 of the Insurance Code and the procedure on the transfer of shares of stock of the defaulting stockholders of Pacific Union Insurance Company, who allegedly failed to pay their corresponding contribution required under said provision to cover the capital impairment and margin of solvency deficiency of the company , in favor of those stockholders who paid the required contribution due from the defaulting stockholders. The Commission, on several occasions, had opined that a corporation is not required to secure prior approval from the SEC for transfer of ownership of shares of stocks because the question of whether or not the transfer should be recognized or recorded in its books is an internal matter that the corporation itself should resolve. Further, since the issue raised apparently involves interpretation and application of the Insurance Code , of which the Commission has no jurisdiction to interpret, we are not inclined to render categorical answers to your queries. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner