Atty. Pablito A. Perez,

November 28, 2003 SEC OPINION NO. 62-03 Atty. Pablito A. Perez, Atty. Percival O. Flores Roco Kapunan Migallos Perez & Luna Law Offices 16th Floor, Strata 2000 Building Emerald Avenue, Pasig City Gentlemen : This refers to your letter dated 20 August 2003 requesting the imposition of available sanction against Pacific International Insurance Co.,Inc. for doing business without the necessary license to operate and transact insurance business in the Philippines. Records on file with the Commission show that Pacific International Insurance Co.,Inc is not a duly registered foreign company in the Philippines. As such, it has no license to operate and transact business with any prospective client relative to the issuance of insurance policy. Attached for reference is the certificate of non-registration of subject corporation. Pacific International Insurance Co.,Ltd. is a company engaged in the business of insurance and duly registered and existing by virtue of and under the laws of the Independent State of Samoa and maintains a branch office in Hong Kong for its administrative and claims processing. On 01 May 1992, Mr. William M. Esposo and Pacific International Insurance entered into a contract of health insurance. The policy document was signed by the parties in Western Samoa and premiums were paid in Hong Kong. Based on the information you disclosed to the Commission, the insurance company appears to be doing business in the Philippines. The Foreign Investment Act of 1991 (R.A. 7042) as amended by R.A. 8179 defines the phrase "doing business" "xxx xxx xxx d. the phrase doing business" shall include soliciting orders, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totaling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization: Provided, however, That the phrase "doing business" shall not be deemed to include mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor; nor having a nominee director or officer to represent its interests in such corporation; nor appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own account." To establish the fact that Pacific International Insurance Co., Inc. is "doing business", the act of soliciting medical insurance and collection of premiums from Philippine clients should be clearly and convincingly be supported by hard evidence. If the solicitation of health insurance coverage is made within Philippine jurisdiction, the company is deemed to be "doing business" within the context of the Foreign Investments Act. In the instant case, the contract you attached as annex to your letter shows that it was executed in Western Samoa. Aside from the contract and official receipts showing payment in US Dollars in Hong Kong, no other document was presented with would show that the contract was indeed solicited in the Philippines. Mere allegations that the company is doing business in the Philippines without sufficient basis to consider will not warrant an investigation or imposition of penalty and other available legal remedies against the company. DISHEA A foreign corporation doing business in the without the required license can be sued or proceeded against before the Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws under the doctrine of quasi-estoppel by acceptance of benefits .It shall not be allowed, under any circumstances, to invoke its lack of license to impugn their jurisdiction (Marubeni Nedeland B.V. vs. Tensuan, 190 SCRA 105[1990] .Thus, in the absence of any evidence showing that the company is doing business in the Philippines, the Securities and Exchange Commission or any government instrumentality cannot acquire jurisdiction over the case. Please be guided accordingly. Very truly yours, (SGD.) VERNETTE G. UMALI-PACO General Counsel