INSURANCE-beda reviewer.pdf

8/13/2019 INSURANCE-beda reviewer.pdf

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San Beda College of Law31

MEMORY A ID IN C OMMERCIAL LAW

"ost of the terms of the contract donot result from mutual negotiationsbetween the parties as they areprescribed by the insurer in final printed

form to which the insured may adhere/if he chooses but which he cannotchange. (6i7al Surety and Insurance Co.,vs. CA, $$+ SC6A !2). 0rinciple of Subrogation It is a process of legal substitution

where the insurer steps into the shoes of the insured and he avails of the latter8srights against the wrongdoer at the timeof loss. 4he principle of subrogation is a normal

incident of indemnity insurance as alegal effect of payment# it inures to theinsurer without any formal assignment orany e-press stipulation to that effect inthe policy. Said right is not dependentupon nor does it grow out of any privatecontract. 0ayment to the insured makesthe insurer a subrogee in e'uity.("alayan Insurance Co., Inc. v. CA, !+)SC6A )$+# see also Art. 229:, ;CC Purposes$ (The Insurance Code of thePhilippines Annotated, Hector de Leon,2002 ed.)!. 4o make the person who caused the

loss legally responsible for it.2. 4o prevent the insured from

receiving a double recovery from thewrongdoer and the insurer.

$. 4o prevent tortfeasors from beingfree from liabilities and is thusfounded on considerations of publicpolicy.

#ules$!. Applicable only to property insurance.2. 4he insurer can only recover from thethird person what the insured could haverecovered.

$. 4here can be no subrogation in cases


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received from the applicant theinsurance premium and had acceptedthe application sub*ect to processing bythe head office.

Co-e" No e (A* I e" ) A concise and temporary written

contract issued to the insurer through itsduly authori7ed agent embodying theprincipal terms of an e-pected policy of insurance.Purpose$ It is intended to give

temporary insurance protection coverageto the applicant pending the acceptanceor re*ection of his application. uration$ ;ot e-ceeding +9 days unless

a longer period is approved by InsuranceCommissioner (Sec. )2 .

R *e"/ 0rinted stipulations usually attached to

the policy because they constituteadditional stipulations between theparties. (Ang iok Chip vs. Springfield,)+ 0hil. 2:) In case of conflict between a rider and

the printed stipulations in the policy, therider prevails, as being a moredeliberate e-pression of the agreement

of the contracting parties. (C. Al%endia,The La& of Insurance in the Philippines,/ 1 ed.)

C ! /e/ An agreement between the insurer and

the insured on certain matter relating tothe liability of the insurer in case of loss.(Prof. e Leon, p./ )

E *o"/e e / Any provision added to the contract

altering its scope or application. (Prof.

e Leon, p./ )

POLIC OF INSURANCE 4he written instrument in which a

contract of insurance is set forth. (Sec.&@

Co e /3 (Sec. %1)!. Parties2. Amount of insurance, e-cept in open

or running policies#$. Rate of premium#&. Property or life insured#

). Interest of the insured in theproperty if he is not the absoluteowner#

+. Risk insured against# and

:. Duration of the insurance.

Pe"/o / e e* o "eco-e" o eo c5 (/ec. % )3 4he insurance proceedsshall be applied e-clusively to the properinterest of the person in whose name orto whose benefit it is made, unlessotherwise specified in the policy. 7 */3

!. 0 ; 0 5ICB value of thing insuredis not agreed upon, but left to beascertained in case of loss. (Sec. +9

4he actual loss, as determined,will represent the total indemnitydue the insured from the insurere-cept only that the total indemnityshall not e-ceed the face value of the policy. (%evelopment InsuranceCorp. vs. IAC, !&$ SC6A +2

2. A51 % 0 5ICB definite valuation of the property insured is agreed by bothparties, and written on the face of policy. (Sec. +!

In the absence of fraud ormistake, the agreed valuation will bepaid in case of total loss of theproperty, unless the insurance is fora lower amount.

$. 61;;I; 0 5ICB contemplatessuccessive insurances and which providesthat the ob*ect of the policy may fromtime to time be defined (Sec. +2

'. T PES OF INSURANCE CONTRACTS!. Life insurance

a. Individual life ( Secs. !:@ !>$, 22: b. roup life (Secs. )9, last par., 22>c. Industrial life (Secs. 22@ 2$!

2. 3on+life insurancea. "arine (Secs. @@ !++b. 3ire (Secs. !+: !:$c. Casualty (Sec. !:&

$. Contracts of "ondin or suretyship(Secs. !:) !:>

No e3!. ?ealth and accident insurance areeither covered under life (Sec. !>9 orcasualty insurance. (Sec. !:& .2. "arine, fire, and the property aspectof casualty insurance are also referred toas property insurance.

COMMERCIAL LAW C OMMITTEE CHAIRPERSON : Garny Luisa Alegre A SST . C HAIRPERSON : Jayson OS Ramos EDP: ea!ri" I. Ramos S # JECT HEADS :

$ari%&elle De 'era (Nego!ia)le Ins!rumen!s La*+, Jose -ernan o Lla/e (Insuran%e+, Al ri%& Del Rosario (Trans0or!a!ion La*s+,S&irley $ae Ta)ang%ura1 on 'in%en! Agus!in (Cor0ora!ion La*+, 2arl S!e/en Co (S0e%ial La*s+, Jo&n Lemuel Ga! ula ( an3ingLa*s+, Ro)es0ierre C # (La* on In!elle%!ual Pro0er!y+


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b. of any person on whom hedepends wholly or in part foreducation or support#

c. of any person under a legal

obligation to him to pay moneyor respecting property orservices, of which death orillness might delay or preventperformance# and

d. of any person upon whose lifeany estate or interest vested inhim depends. (Sec. !9

; e / o * e< / 3 =hen theinsurance takes effect# not thereafter orwhen the loss occurs. A o 3

5636#AL # L6$ 4here is no limit in theamount the insured can insure his life. 67C6PTI83$ In a creditorDdebtorrelationship where the creditor insuresthe life of his debtor, the limit of insurable interest is e'ual to the amountof the debt.No e3 If at the time of the death of thedebtor the whole debt has already beenpaid, the creditor can no longer recoveron the policy because the principle of indemnity applies.

C. Property very interest in property whether real

or personal, or any relation thereto, orliability in respect thereof, of suchnature that the contemplated perilmight directly damnify the insured (Sec.!$ , which may consist inand @

E99ec / o9 Lo// P!5!: e C ! /ea. 4he contract is deemed to be uponthe interest of the mortgagor# hence, hedoes not cease to be a party to thecontract.b. Any act of the mortgagor prior to theloss, which would otherwise avoid theinsurance affects the mortgagee even if the property is in the hands of themortgagee.c. Any act, which under the contract of

insurance is to be performed by themortgagor, may be performed by themortgagee with the same effect.d. In case of loss, the mortgagee isentitled to the proceeds to the e-tent of his credit.e. 1pon recovery by the mortgagee tothe e-tent of his credit, the debt ise-tinguished.

In case a mortgagee insures his owninterest and a loss occurs, he is entitledto the proceeds of the insurance but he

is not allowed to retain his claim against

the mortgagor as the claim is dischargedbut it passes by subrogation to theinsurer to the e-tent of the money paidby such insurer. (0alileo vs. Cosio

'III. RIS7 =hat may be insured against! #eason$ 4he policy does not represent

a personal agreement between theinsured and the insurer.2. Property insurance It cannot be transferred without the

consent of the insurer. #eason$ 4he insurer approved the

policy based on the personal'ualification and the insurable interestof the insured.3. Casualty insurance It cannot be transferred without the

consent of the insurer. (Paterson cited in de Leon p. 2) #eason < 4he moral ha7ards are as great

as those of property insurance.

C#ANE OF INTEREST IN T#E T#ING

INSURED 4he mere (absolute transfer of thething insured does not transfer thepolicy, but suspends it until the sameperson becomes the owner of both thepolicy and the thing insured. (Sec. )> #eason < Insurance contract is personal. 5636#AL # L6$ A change of interest inany part of a thing insuredunaccompanied by a correspondingchange of interest in the insurancesuspends the insurance to an e'uivalente-tent, until the interests in the thing




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San Beda College of Law3!


and the interest in the insurance arevested in the same person. (Sec. 29

67C6PTI83'$!. In life, health and accident

insurance.(Sec. 29 #2. Change in interest in the thing

insured after occurrence of anin*ury which results in a loss.(Sec. 2! #

$. Change in interest in one ormore of several distinct thingsseparately insured by one policy.(Sec. 22 #

&. Change of interest, by will orsuccession, on the death of theinsured. (Sec. 2$ #

). 4ransfer of interest by one of several partners, *oint owners,or owners in common, who are*ointly insured, to others. (Sec.2& #

+. =hen a policy is so framed thatit will inure to the benefit of whomsoever, during thecontinuance of the risk, maybecome the owner of theinterest insured. (Sec. ): #

:. =hen there is an e-pressprohibition against alienation inthe policy, in case of alienation,the contract of insurance is notmerely suspended but avoided.(Art. !$9+, ;CC .

=I. ASCERTAIN&ENT AND CONTROL OFRIS7 AND LOSS

A. Fo " P" !"5 Co ce" / o9 eP!" e/3!. Correct estimation of the risk#2. 0recise delimitation of the risk#$. Control of the risk#&. %etermining whether a loss occurred

and if so, the amount of such loss.

B. De- ce/ /e* 9o" !/ce" ! + ! *co "o + " /> ! * o//31. Co ce! e A neglect tocommunicate that which a party knowsand ought to communicate (Sec. 2+ 6e'uisites .

4he right to information of materialfacts may be waived, either by the termsof the insurance or by neglect to makein'uiries as to such facts where they aredistinctly implied in other facts of whichinformation is communicated. (Sec.$$

=here matters of opinion or *udgmentare called for, answers made in goodfaith and without intent to deceiver will

not avoid the policy even though they




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San Beda College of Law3"


are untrue. #eason$ 4he insurer cannotrely on those statements. ?e must makefurther in'uiry. (0hilamcare ?ealthSystems vs. CA, .6. ;o. !2)+:>, "arch

!>, 2992 .

2. Re "e/e ! o / 3actualstatements made by the insured at thetime of, or prior to, the issuance of thepolicy to give information to the insurerand induce him to enter into theinsurance contract. 4hey are consideredan active form of concealment. 6e'uisites of a false representation

(misrepresentation Hb ,2$9Hb #

&. 4hat theconditions of thepolicy relating tomilitary or navalservice have beenviolated (Secs.22:Hb , 22>Hb #). 4hat the fraud isof a particularlyvicious type#+. 4hat thebeneficiary failed tofurnish proof of death or to comply

with any conditionimposed by thepolicy after the losshas happened# or:. 4hat the actionwas not broughtwithin the timespecified.

=III.A. O'ER8INSURANCE results when theinsured insures the same property for anamount greater than the value of the

property with the same insurancecompany. E99ec c!/e o9 o//3

!. 4he insurer is bound only to pay to

the e-tent of the real value of theproperty lost#2. 4he insured is entitled to recover the

amount of premium corresponding tothe e-cess in value of the property#

B. DOUBLE INSURANCE e-ists wheresame person is insured by severalinsurers separately in respect to samesub*ect and interest. (Sec. @$ Re@ / e/3

!. 0erson insured is the same#2. 4wo or more insurers insuring

separately#$. Sub*ect matter is the same#&. Interest insured is also the same#). 6isk or peril insured against is

likewise the same.

E99ec /3 =here double insurance isallowed, but over insurance results& #2. 5oss theimmediate cause of which is the perilinsured againste-cept wherepro-imate cause isan e-cepted peril#$. 5oss throughnegligence of

!. 5oss byinsured8s willfulact#2. 5oss due toconnivance of theinsured (Sec. >: #and$. 5oss where thee-cepted peril isthe pro-imatecause.




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It shall commence from the denial of the claim, not from the resolution of themotion for reconsideration, otherwise itcan be used by the insured as a scheme

or device to waste time until theevidence which may be used against himis destroyed. (Sun Insurance ffice, 5td.v. CA, !@) SC6A &. In C" 5I, the written notice of claimmust be filed within + months from thedate of the accident otherwise the claimis deemed waived. 4he suit for damageseither with the proper court or with theInsurance Commissioner should be filedwithin ! year from the date of the denialof the claim by the insurer, otherwiseclaimant8s right of action shall prescribe.(Sec. $>&

PARTICULAR 7INDS OF INSURANCECONTRACTS

='I. &ARINE INSURANCE Insurance against risks connected with

navigation, to which a ship, cargo,freightage, profits or other insurableinterest in movable property, may bee-posed during a certain voyage or afi-ed period of time. (Sec. @@ Co-e"!+e3

A.!. essels, goods, freight, cargo,

merchandise, profits, money,valuable papers, bottomry andrespondentia, and interest in respectto all risks or perils of navigation#

2. 0ersons or property in connectionwith marine insurance#

$. 0recious stones, *ewels, *ewelry andprecious metals whether in thecourse of transportation orotherwise# and

&. Eridges, tunnels, piers, docks andother aids to navigation andtransportation. (Sec. @@

Cargo can be the sub*ect of marine insurance, and once it isentered into, the impliedwarranty of seaworthinessimmediately attaches towhoever is insuring the cargo,whether he be the shipowner ornot. (6o'ue v. IAC, !$@ SC6A)@+

E. "arine 0rotection and Indemnity

Insurance

C !//e/ o9 ! * !" e / "! ce3(Prof. e Leon, p. ;24)

!. Property in transit providesprotection to property

fre'uently e-posed to loss whileit is transportation form onelocation to another.

2. ?ailee lia"ility + insurance forthose who have temporarycustody of the goods.

$. @i=ed transportation property they are so insured because theyare held to be an essential partof the transportation systemsuch as bridges, tunnels, etc.

&. @loater provides insurance tofollow the insured propertywherever it may be located,sub*ect always to the territoriallimits of the contract.

I / "!: e e"e/ 3 A.

1$ 'hipo&ner a. ver the vessel to the

e-tent of its value, e-ceptthat if chartered, theinsurance is only up to theamount not recoverablefrom the charterer. (Sec.!99 .

b. ?e also has an insurableinterest on e-pectedfreightage. (Sec. !9$ .

c. ;o insurable interest if hewill be compensated bycharterer for the value of the vessel, in case of loss.

2. Car o o&ner ver the cargo and e-pected

profits (Sec. !9) .;. Charterer

ver the amount he is liable to

the shipowner, if the ship is lostor damaged during the voyage(Sec. !9+ .

E.In loans on bottomry and respondentia 6epayment of the loan is sub*ect to the

condition that the vessel or goods,respectively, given as a security, shallarrive safely at the port of destination.

/. 8&nerB e"tor




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%ifference between the valueof vessel or goods and theamount of loan. (Sec. !9!

2. CreditorBlender

Amount of the loan

No e3 If a vessel is hypothecated bybottomry, only the e-cess is insurable,since a loan on bottomry partakes of thenature of an insurance coverage to thee-tent of the loan accommodation. Thesa!e rule &ould apply to thehypothecation of the car o "y respondentia. (Pandect of Co!!ercialLa& and urisprudence, ustice oseVitu , / : ed.)

PERILS OF T#ESEA

PERILS OF T#ES#IP

Includes only thosecasualties due tothe

A loss which in theordinary course of events, resultsfrom the

C. I c ! !"ee C ! /e A clause which makes the insurer liable

for loss or damage to the hull ormachinery arising from the

engineers, etc.2. -plosions, breakage of shafts# and$. 5atent defect of machinery or hull.

(?ar #e%ie&


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material and must becommunicated

need not becommunicatedunless it proceedsform an agent of the insured whoseduty it is to giveinformation

4he concealment of any fact in relation toany of the mattersstated in Sec. !!9does not vitiate theentire contract butmerely e-onerates theinsurer from a riskresulting from the factconcealed

Concealment of anymaterial fact willvitiate the entirecontract, whetheror not the lossresults for the riskconcealed.

I&PLIED ;ARRANTIES!. Seaworthiness of the ship at the

inception of the insurance (Sec.!!$ #

2. Against improper deviation (Sec.!2$, !2&, !2) #

$. Against illegal venture#7. =arranty of neutrality< the ship will

carry the re'uisite documents of nationality or neutrality of the shipor cargo where such nationality orneutrality is e=pressly warranted#(Sec. !29

). 0resence of insurable interest.

=hile the payment by the insurer forthe insured value of the lost cargooperates as a waiver of the insurer8sright to enforce the term of the impliedwarranty against the assured under themarine insurance policy, the samecannot be validly interpreted as anautomatic admission of the vessel8sseaworthiness by the insurer as toforeclose recourse against the commoncarrier for any liability under thecontractual obligation as such commoncarrier. (%elsan 4ransportation 5ines vs.CA, $+& SC6A 2&

Se!?o" e// A relative term depending upon the

nature of the ship, voyage, service andgoods, denoting in general a ship8sfitness to perform the service and toencounter the ordinary perils of thevoyage, contemplated by the parties tothe policy (Sec. !!& . 5636#AL # L6$ 4he warranty of seaworthiness is complied with if the

ship be seaworthy at the time of thecommencement of the risk. 0rior orsubse'uent unseaworthiness is not abreach of the warranty nor is it material

that the vessel arrives in safety at theend of her voyage. 67C6PTI83'$!. In the case of a time policy, the ship

must be seaworthy at thecommencement of every voyage shemay undertake

2. In the case of cargo policy, eachvessel upon which the cargo isshipped or transshipped, must beseaworthy at the commencement of each particular voyage

$. In the case of a voyage policycontemplating a voyage in differentstages, the ship must be seaworthyat the commencement of eachportion

A c!: 5 o9 e* ?!""! 5 o9 /e!?o" e// o c!"+o o? e"/3 Itbecomes the obligation of a cargo ownerto look for a reliable common carrier,which keeps its vessels in seaworthyconditions. 4he shipper may have nocontrol over the vessel but he hascontrol in the choice of the commoncarrier that will transport his goods(6o'ue v. IAC, !$@ SC6A )@+ .

De- ! o A departure from the course of the

voyage insured, or an unreasonable delayin pursuing the voyage or thecommencement of an entirely differentvoyage. (Sec.!2$ Instancesa. =hen caused by circumstances outsidethe control of the ship captain or ship

owner#




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b. =hen necessary to comply with awarranty or to avoid a peril#

c. =hen made in good faith to avoid aperil#

d. =hen made in good faith to savehuman life or to relieve another vesselin distress (Sec. !2&

ffect< In case of loss, theinsurer is still liable.

2. Improper D very deviation notspecified in Sec. !2& (Sec. !2) . ffect< In case of loss or

damage, the insurer is not liable.(Sec. !2+

LOSS!. Total$

a. Actual Di. 4otal destruction#ii. Irretrievable loss by sinking#iii. %amage rendering the thing

valueless# oriv. 4otal deprivation of owner of

possession of thing insured.(Sec. !$9

b. Constructive Di. Actual loss of more than L

of the value of the ob*ect#ii. %amage reducing value by

more than L of the value of the vessel and of cargo# and

iii. -pense of transshipmente-ceed L of value of cargo.(Sec. !$!, in relation to Sec.!$@

In case of constructivetotal loss, insured may .

A'ERAGE Any e-traordinary or accidental

e-pense incurred during the voyage forthe preservation of the vessel, cargo, orboth, and all damages to the vessel andcargo from the time it is loaded and thevoyage commenced until it ends and the

cargo unloaded.

GENERAL PARTICULAR?as inured to thecommon benefit and

profit of all personsinterested in thevessel and cargo

?as not inured to thecommon benefit and

profit of all personsinterested in thevessel and her cargo.

4o be borne e'uallyby all of the interestsconcerned in theventure.

4o be borne alone bythe owner of thecargo or the vessel,as the case may be.

6e'uisites for theright to claimcontribution

danger to thevessel orcargo#

2. 0art of thevessel or cargowas sacrificeddeliberately#

$. Sacrifice mustbe for thecommon safetyor for thebenefit of all#

&. Sacrifice mustbe made bythe master or

upon hisauthority#). It must be not

be caused byany fault of the partyasking thecontribution#

+. It must besuccessful, i.e.resulted in thesaving of thevessel or

cargo# and;ecessary.

RIG#T OF INSURED IN CASE OFGENERAL A'ERAGE 5636#AL # L6$ 4he insured mayeither hold the insurer directly liable forthe whole of the insured value of theproperty sacrificed for the generalbenefit, subrogating him to his own rightof contribution or demand contributionfrom the other interested parties as soonas the vessel arrives at her destination




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in>uries to or da!a e to property of others . (third party liability insurance Insurable interest is based on the

interest of the insured in the safety of

persons, and their property, who maymaintain an action against him in case of their in*ury or destruction, respectively. -amples< workmen8s compensation,

motor vehicle liability In a third party liability (405

insurance contract, the insurer assumesthe obligation by paying the in*ured thirdparty to whom the insured is liable. 0riorpayment by the insured to the thirdperson is not necessary in order that theobligation may arise. 4he moment theinsured becomes liable to third persons,the insured ac'uires an interest in theinsurance contract which may begarnished like any other credit. (0erlaComapnia de Seguro, Inc vs. 6amolete,29) SC6A &>:

Aside from compulsory motor vehicleliability insurance, the Insurance Codecontains no other provisions applicableto casualty insurance. 4herefore, suchcasualty insurance are governed by thegeneral provisions applicable to all typesof insurance, and outside of suchstatutory provisions, the rights andobligations of the parties must bedetermined by their contract, taking intoconsideration its purpose and always inaccordance with the general principlesof insurance law.

In burglary, robbery and theftinsurance, the opportunity to defraudthe insurer the moral ha7ard is sogreat that insurer have found itnecessary to fill up the policies withmany restrictions designed to reduce the

ha7ard. 0ersons fre'uently e-cluded arethose in the insured8s service andemployment. 4he purpose of thee-ception is to guard against liabilityshould theft be committed by one havingunrestricted access to the property.(3ortune Insurance vs. CA, 2&& SC6A 29>

R + o9 ! "* !" 5 "e* o / e e/ "e"

!. Indemnity against liability A thirdparty in*ured can directly sue theinsurer.

2. Indemnity for actual loss orreimbursement after actual payment bythe insured A third party has no causeof action against the insurer (Sec. )$,

Eonifacio Eros. v. "ora, 29 SC6A 2+! .

4he insurer is not solidarily liable withthe insured. 4he insurer8s liability isbased on contract# that of the insured isbased on torts. 3urthermore, theinsurer8s liability is limited by theamount of the insurance coverage (0an"alayan Insurance Corporation v. CA,!>& SC6A )& .

INTENTIONAL -/. ACCIDENTAL ASUSED IN INSURANCE POLICIES/. Intentional Implies the e-ercise of the reasoning faculties, consciousnessand volition. =here a provision of thepolicy e-cludes intentional in*ury, it isthe intention of the person inflicting thein*ury that is controlling. If the in*uriessuffered by the insured clearly resultedfrom the intentional act of the thirdperson, the insurer is relieve fromliability as stipulated. (Eiagtan v. theInsular 5ife Assurance Co. 5td., && SC6A)>, !@:22. Accidental 4hat which happens bychance or fortuitously, without intentionor design, which is une-pected, unusualand unforeseen.

NO ACTION CLAUSE A re'uirement in a policy of liability

insurance which provides that suit andfinal *udgment be first obtained againstthe insured# that only thereafter can theperson in*ured recover on the policy.( uingon vs. %el "onte, 29 SC6A !9&$

=I=. CO&PULSOR &OTOR 'E#ICLELIABILIT INSURANCE (C&'LI) A species of compulsory insurance that

provides for protection coverage thatwill answer for legal liability for lossesand damages for bodily in*uries orproperty damage that may be sustainedby another arising from the use andoperation of motor vehicle by its owner. 0urpose< 4o give immediate financial

assistance to victims of motor vehicle




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accidents andMor their dependents,especially if they are poor regardless of the financial capability of motor vehicleowners or operators responsible for the

accident sustained (Shafer v. Nudge,64C, !+: SC6A $>+ . ClaimantsMvictims may be apassenger/ or a $ rd party/

It applies to all vehicles whetherpublic and private vehicles.;ote< It is the only compulsory insurancecoverage under the Insurance Code.

&e o* o9 co-e"!+e!. Insurance policy2. Surety bond$. Cash deposit

P!//e +e" Any fareDpaying personbeing transported and conveyed in andby a motor vehicle for transportation of passengers for compensation, includingpersons e-pressly authori7ed by law orby the vehicle8s operator or his agents toride without fare. (Sec. $:$Hb

T "* P!" 5 Any person other than thepassenger, e-cluding a member of thehousehold or a member of the familywithin the second degree of consanguinity or affinity, of a motorvehicle owner or land transportationoperator, or his employee in respect of death or bodily in*ury arising out of andin the course of employment. (Sec.$:$Hc

No8F! C ! /e A clause that allows the victim (in*ured

person or heirs of the deceased to anoption to file a claim for death or in*urywithout the necessity of proving fault ornegligence of any kind. 0urpose< 4o guarantee compensation or

indemnity to in*ured persons in motorvehicle accidents. 6ules:, IC0. (Pandect of Co!!ercial La& and urisprudence,/ : ed. P. / /)$. Killin !y the !eneficiary

5636#AL # L6$ 4he interest of abeneficiary in a life insurance policyshall be forfeited when the beneficiary isthe principal accomplice or accessory in

willfully bringing about the death of theinsured, in which event, the nearestrelative of the insured shall receive theproceeds of said insurance if nototherwise dis'ualified. (Sec. !2 67C6PTI83'$

!. Accidental killing2. SelfDdefense$. Insanity of the beneficiary at the

time he killed the insured

If the premiums paid came fromcon*ugal funds, the proceeds areconsidered con*ugal. If the beneficiary isother than the insured8s estate, thesource of premiums would not berelevant. (%el al v. %el al, 2@ 0hil )$&

4he measure of indemnity in life orhealth insurance policy is the sum fi-edin the policy e-cept when a creditorinsures the life of his debtor. (Sec. !>$IS T#E CONSENT OF T#E BENEFICIARNECESSAR TO T#E ASSIGN&ENT OF ALIFE INSURANCE POLIC

It depends. If the designation of thebeneficiary is irrevocable, thebeneficiary8s consent is essentialbecause of his vested right. If thedesignation is revocable, the policy maybe assigned without such consentbecause the beneficiary only has a meree-pectancy to the proceeds. (TheInsurance Code of the Philippines

Annotated, Hector de Leon, 2002 ed.)

C!/ S ""e *e" '! e As applied to a life insurance policy, it

is the amount the insured in case of default, after the payment of at least $full annual premiums, is entitled toreceive if he surrenders the policy andreleases his claims upon it.

LIFE INSURANCE FIRE INSURANCE

Contract of investment not of indemnity

Contract of indemnity

alued policy pen or valued policy"ay be transferredor assigned to any

4he insurableinterest of the




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person even if hehas no insurableinterest

transferee orassignee is essential

Consent of insurer isnot essential tovalidity ofassignment

Consent of insurermust be secured in theabsence of waiver

Contingency that iscontemplated is acertain event, theonly uncertaintybeing the time whenit will take place

Contingency insuredagainst may or maynot occur

A longDtermcontract and cannotbe cancelled by theinsurer

"ay be cancelled byeither party and isusually for a term ofone year

Eeneficiary is underno obligation toprove actualfinancial loss

Insured is re'uired tosubmit proof of hisactual pecuniary lossas a conditionprecedent tocollecting theinsurance.

==II. 'ARIABLE CONTRACT Any policy or contract on either a group

or individual basis issued by an insurancecompany providing for benefits or othercontractual payments or valuesthereunder to vary so as to reflectinvestment results of any segregatedportfolio of investment.

==III. INSURANCE CO&&ISSIONER "ain agency charged with the

enforcement of the Insurance Code andother related laws. F c o /3

!. A%N1%ICA4 6BMO1ASIDN1%ICIA5a. -clusive original *urisdiction

Any dispute in the enforce!ent of anypolicy issued pursuant to Chapter I(C" 5I . (Sec. $>), par. 2

b. Concurrent original *urisdiction(with the 64C =here the ma-imumamount involved in any single claim is0!99,999 (Sec. &!+ , e-cept in case of maritime insurance which is within thee-clusive *urisdiction of the 64C. (E0!2@# admiralty J maritime *urisdiction

=here the amount e-ceeds0!99,999, the 64C has*urisdiction.

4he Insurance Commissioner has no*urisdiction to decide the legality of acontract of a ency entered into betweenan insurance company and its agent. 4hesame is not covered by the term doingor transacting insurance business/ underSec 2, IC0, neither is it covered by Sec.&!+ of the same Code which grants theCommissioner ad*udicatory powers(0hilippine American 5ife Insurance Co.v. Ansaldo, 2$& SC6A )9@ .

2. A%"I;IS46A4I M6 15A4 6Ba. nforcement of insurance lawsb. Issuance, suspension or

revocation of certificate of authority

c. 0ower to e-amine books andrecords, etc.

d. 6uleDmaking authoritye. 0unitive

COMMERCIAL LAW C OMMITTEE

Documents

INSURANCE-beda reviewer.pdf