Be it enacted by the Senate and House of Representatives of the Philippines in Legislature assembled and by the authority of the same:

SECTION 1. Section sixteen hundred and twenty-eight of the Administrative Code is hereby amended so as to read as follows:      

"SEC. 1628. Mutual benefit, relief, and benevolent society or association defined.—Any society or association, whether incorporated or not, formed or organized for the purpose of paying sick benefits to members, or of furnishing support to members while out of employment, or of furnishing professional assistance to members, or of paying to relatives of deceased members a fixed or any sum of money, irrespective of whether such aim or purpose is carried out by means of fixed dues, assessments, or voluntary contributions, or of providing for any method of accident or life insurance among its members out of dues or assessments collected from the membership, and any society or association making either or any of such purposes incidental features of its organization on the basis of fixed dues or assessments specifically provided for to meet such incidental features, shall be known as mutual benefit, relief, and benevolent society or association within the purview of this article: Provided, however, That any business enterprise or undertaking the controlling interest of which belongs to a mutual benefit, relief, and benevolent society or association shall be subject to the same supervision and examination by the Insular Treasurer as prescribed in this article."

SEC. 2. Article eight, chapter forty-one of the Administrative Code is hereby amended by inserting therein the following sections:    

"SEC. 1628-A. Power to require testimony and documents.—The Insular Treasurer may require of any person, society, order, or association such testimony or documents as will enable him to determine whether or not a society or association comes within the purview of this article, or which may otherwise be needed by him for the proper enforcement of said article. Copies of the constitution and by-laws of a society or association, or of amendments thereto, whether printed or not, shall when duly certified by the secretary or corresponding officer of the society or association, be prima facie evidence of the legal adoption of such constitution and by-laws or amendments.   

"SEC. 1628-B. License—Preservation of records.—Every mutual benefit, relief, and benevolent society or association shall, before transacting business, apply to the Insular Treasurer for a license permitting such society or association to transact business, and shall file with the application a certified copy of its articles of incorporation, by-laws, and rules if incorporated, or, if not incorporated, certified copies of its constitution, by-laws, and rules, and shall from time to time file with the office of the Insular Treasurer duly certified copies of every amendment to, or revision of, the said articles of incorporation, constitution, by-laws, and rules within thirty days after the passage or adoption of such amendment or revision.   

"Any society or association holding a license from the Insular Treasurer to transact business but which has ceased to operate as such for a period of one year or more shall, before resuming business coming within the scope of the provisions of this article, either through reorganization, re-amendment of its constitution and by-laws or otherwise, be required to apply for a new license from the Insular Treasurer: Provided, That societies or associations already existing upon the approval of this Act shall be required to obtain license as required by the provisions of this section within six months after the approval of this Act.   

"Any officer, agent, or other person transacting business or in any way acting for any such society or subordinate body thereof, before the issuance of the new license required herein, shall be subject to the penalties provided for in section two thousand seven hundred and forty-three of this Code.   

"All mutual benefit, relief, and benevolent societies or associations shall keep and carefully preserve a record of all transactions and the minutes of all meetings of, or resolutions adopted by, the directors, officers, or members, which shall be open to the inspection of any director, officer, or member of the society or association.   

"SEC. 1628-C. Duties of Insular Treasurer—Appeal from his decision—Promulgation of rules and regulations.—The Insular Treasurer shall see that all provisions of this  article are faithfully complied with, and he may direct to any agent, officer, or other person in charge of any society or association coming within the purview of this article, any inquiry or recommendation touching the financial affairs thereof and such agent, officer, or other person shall be bound to make prompt and explicit answer to such inquiry or recommendation.   

"The Insular Treasurer may take exception to any provision of the articles of incorporation, constitution, bylaws, or rules, or to any amendment or revision thereof,, of a mutual benefit, relief, and benevolent society or association applying for a license or filing said amendment or revision ifr, in his opinion, .such provision of the articles of incorporation, constitution, by-laws, or rules, or such amendment or revision thereof is (1) contrary to any law in force in the Philippine Islands, or (2) financially unsound, or (3) oppressive or discriminatory in application against any class of the membership of the society or association, or (4) unjust or unreasonable. If he takes exception to any provision of the articles of incorporation, constitution, by-laws, or rules, he shall not issue the license solicited. If exception is taken to any amendment or revision of the articles of incorporation, constitution, by-laws, or rules, such exception shall render the amendment or revision concerned null and void unless appealed from. In either case, he shall notify the society or association of his exception in writing and the reasons therefor. If he finds that the provisions of the articles of incorporation, constitution, by-laws, and rules of any applicant society or association meet with the requirements of the law, he shall issue the license applied for.   

"The society or association or any person who deems himself aggrieved by the decision of the Insular Treasurer may appeal therefrom to the Secretary of Finance without prejudice to any proper court action.   

"The Insular Treasurer shall, subject to the approval of the Secretary of Finance, issue such circulars, rules and regulations, and instructions as lie may from time to time deem necessary to secure enforcement of the provisions of this article.   

"SEC. 1628-D. Distribution of funds.—Every provision of the statutes of any mutual benefit, relief, and benevolent society or association requiring the payment of dues or assessments by the members, whatever form, shall distinctly state the purpose of the same, and the portion thereof which may be used for expenses.   

"SEC. 1628-E. Death benefit and other relief funds kept separate.—The death benefit and other relief funds, including the net accretions thereof, and the moneys collected for relief purposes of any form, of any society or association shall be available only for the purpose of paying the benefit expressly authorized to be paid out of said funds and the expenses directly connected with the operation thereof.   

"SEC. 1628-F. Benefits not attachable.—No money or other benefit, charity or relief, or aid to be paid, provided or rendered, by any such society or association shall be liable to attachment, garnishment or other process, or be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment.   

"SEC 1628-G. Investment of benefit and other relief funds.—No mutual benefit, relief, and benevolent society or fun association shall invest its benefit and other relief funds except such portion thereof as shall not be required to meet pending claims and other obligations of said funds, which portion may be invested only in any of the ways provided herein and in no other manner:   

"(a) In interest-bearing deposits in any bank doing business in the Philippine Islands.   

"(b) In loans to members secured by real estate mortgages, duly registered under 'The Land Registration Act,' or 'Cadastral Act,' in amounts not to exceed sixty per centum of the real or assessed value of the security, whichever may be the smaller: Provided, however, That no such loan to any member shall exceed five per centum of the assets of the funds mentioned in the first paragraph of this section: And provided, further, That the maximum maturity period of any loan so granted shall be five years, unless such loan is made payable in monthly, quarterly, semi-annual, or annual installments, in which case, the maximum maturity shall be ten years.   

"(c) In bonds and other evidences of debt of the Government of the United States or of the Philippine Islands or of the City of Manila or of any province or city or municipality in the Philippine Islands authorized by law to issue bonds at the reasonable market value thereof, and in such other securities as may be approved by the Insular Treasurer.   

"Every society shall render to the Insular Treasurer a monthly statement, in such form and detail as may be required by him, of all investments made under this section.   

"SEC. 1628-H. Voluntary dissolution.—No mutual benefit, relief, and benevolent society or association shall be dissolved without first notifying the Insular Treasurer and furnishing him with a copy of the resolution authorizing the dissolution, duly adopted by the affirmative vote of two-thirds of the members at a meeting called for that purpose, and balance sheet as of the date of the resolution."

SEC. 3. Section sixteen hundred and twenty-nine of the Administrative Code, as amended by Act Numbered Thirty-two hundred and twelve, is hereby further amended so as to read as follows:      

"SEC. 1629. Annual report to Insular Treasurer.—Such societies or associations shall annually, within the month of January, make a full sworn report to the Insular Treasurer of their financial condition, accompanied by a general statement of their receipts and disbursements: Provided, That at the request of any authorized officer of such societies or associations, the Insular Treasurer may grant an extension of time not to exceed three months within which such report and statement shall be submitted to him."

SEC. 4. Section sixteen hundred and thirty of the Administrative Code, as amended by Act Numbered Thirty-two hundred and twelve, is hereby further amended so as to read as follows:   

"SEC. 1630. Examination by Insular Treasurer into financial condition of society—Authority to take testimony.—Once every two years, and whenever he deems it proper or necessary, the said Insular Treasurer, either by himself or his duly authorized representative, must make a careful examination into the financial affairs and condition of such society or association, verify the resources and moneys on hand, check up the expenditures and ascertain its ability to meet its liabilities and to properly carry out the purposes stated in its articles of incorporation, if in corporated, or its constitution, by-laws, rules, or regulations. In the course of such examination, the Insular Treasurer or his duly authorized representative shall have authority to administer oaths and take testimony or evidence in any matter having relation to the affairs of the society or association concerned or its business enterprise or under taking. The Insular Treasurer shall charge thirty pesos for each examination of such association or society if the assets thereof are in excess of five thousand pesos."

SEC. 5. Section sixteen hundred and thirty-one of the Administrative Code is hereby amended so as to read as follows:     

"SEC. 1631. Place of conducting examination.—Such  examination and inspection by the Insular Treasurer shall  be had in the province in which such society or association or branch thereof has its principal place of business, and the Insular Treasurer may call upon the Attorney-General to assist in the conduct of the examination, either in person or by deputy or agent of the Attorney-General duly authorized."

SEC. 6. A new section is hereby inserted immediately after section sixteen hundred and thirty-one of the Administrative Code, reading as follows:    

"SEC. 1631-A. Transcript of Insular Treasurer's records as as evidence of liability.—A transcript of the report or findings of the Insular Treasurer, and of any person he may appoint, as a result of the examination made in accordance with the provisions of this article, with regard to the shortage of an officer, agent, employee, or member, of a society or association, shall be prima facie evidence against such officer, employee, agent, or member; and the refusal, neglect, or failure of such officer, employee, agent, or member, entrusted with funds or property of the society, to produce same on demand by the Insular Treasurer, or any person he may so appoint, shall be prima facie evidence that such funds or property, as the case may be, have been appropriated by the defaulting officer, employee, agent, or member, as the case may be, for his personal use and benefit."

SEC. 7. Section sixteen hundred and thirty-three of the Administrative Code is hereby amended so as to read as follows:     

"SEC. 1633. Revocation of license—Insolvency proceedings.—Whenever the Insular Treasurer shall find that the  society or association has failed to comply with any of the provisions of this article or of any other law or regulation obligatory upon it, or with any recommendations made by the said official in connection with the results of the examination conducted into its business affairs, or that it has exceeded its powers or conducted business fraudulently, or that its condition is one of insolvency and its finances could not be rehabilitated within three months after it has been so found insolvent, or it otherwise appears that the society cannot, through mismanagement, inefficiency, or incompetence of its officers, or indifference of its members, or for any other cause, properly carry out the purposes for which it was organized, the Insular Treasurer shall forthwith revoke its license and forbid it to continue its operation: Provided, however, That an association shall be deemed insolvent within the meaning of this section whenever its assets are insufficient for the payment of its debts, or its death benefit and other relief funds cannot meet the liabilities or obligations properly chargeable thereto under its articles of incorporation, constitution, by-laws, rules, or regulations: And provided, farther, That should said societies or association whose licenses to transact business have been revoked either due to insolvency or other causes herein-above enumerated, fail, within sixty days after such revocation, to show cause convincing to the Insular Treasurer why said license should be renewed, the latter shall inform the Secretary of Finance of the facts, and should the Secretary of Finance find the statements of the Insular Treasurer to be true, he shall direct the said Treasurer to take charge of its assets and report the same to the Attorney-General, who shall, in the name of the Insular Government, file a petition in the Court of First Instance of the province or city where the principal office of such society or association or branch thereof, as the case may be, is situated to dissolve the society or association, or branch, sell its property, collect its assets, and distribute the proceeds to the persons by law entitled to receive the same. In the settlement of the affairs of the organization it shall be within the discretion of the court either to appoint the Insular Treasurer as the agent of the organization to close up the affairs of the organization or to appoint a receiver who shall discharge the same duty."

SEC. 8. Section twenty-seven hundred and forty-three of the Administrative Code, as amended by Act Numbered Thirty-five hundred and nineteen, is hereby further amended so as to read as follows.    

"SEC. 2743. Violation of any provision of article eight of chapter forty-one of this Code or of any rule or regulation issued in conformity therewith.—Any agent, officer, or other person in charge of any society or association coming within the purview of article eight of chapter forty-one of this Code, who, being thereunto required by the Insular Treasurer in writing, shall contrary to the provisions of said article, willfully refuse or neglect to file the required report or permit any lawful examination into the affairs of such society or association, or shall violate any provision of said article or of any rule or regulation issued pursuant thereto, shall be punished by a fine of not more than five hundred pesos or by imprisonment for not more than six months, or both."

SEC. 9. This Act shall take effect upon its approval.

Approved, December 3, 1929.