Professional Documents
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Insurance Law (Personal Reviewer)
Insurance Law (Personal Reviewer)
The one who will indemnify the insured or the beneficiary upon
the happening of the unknown or contingent event.
Insured
- The one who pays the premium to avail the insurance.
Beneficiary
- A person designated by the insured to receive proceeds of the
policy of insurance when risk attaches.
Insurable interest:
In life insurance:
Life/health/accident a person can insure himself based on life, health,
accident;
Pecuniary interest is enough, as long as the person has an insurable
interest over the insured;
You can insure yourself in any amount because it is in the nature of
investment;
Insurable interest must exist only at the time the policy takes effect &
need not exist at the time of loss.
In non-life insurance:
The insurable interest can be based on inchoate interest, expectancy
coupled w/ existing interest, contract or by law;
Mere pecuniary interest is not enough, the insured must have existing
interest over the property;
The insured can only insured his property up to the value of the property
only;
The insurable interest must exist at the time of the effectivity of policy and
at the time of the loss, although it need not exist in the meantime.
Other
Sec 12 (new)
Any crime who willful, intentionally, voluntarily as principal, accomplice or
accessories, the beneficiary will be forfeited and it will go to another beneficiary.
If no beneficiary
1. In the absence of beneficiary - the proceed will go to the co-beneficiary;
2. In the absence of co-beneficiary - will go according to the policy of the
insurance;
3. In the absence of policy the proceeds will go to the estate of the insured.
Exception for insurable interest (sec 22-24)
1. Insuring 2 different properties in one policy
If in the meantime, the insured sells one of the properties and the other
remaining unsold property is loss, insured can still recover damage on the
property loss.
2. Succession
Heirs of insured may recover on the policy although they do not have
insurable interest at the time of the perfection of the contract.
3. Co-owner of insured property
If one acquired the whole property from other co-owners and later the
property is lost, the buyer full owner may recover the whole amount lost.
This is applicable only where one co-owner sells to another co-owner, if
sell is to a third person, exception does not apply.
-------------------------------------------------------------------------------------------------------------------------------------II.
Concealment: (sec 26) is a neglect to communicate that which a party knows
and ought to communicate.
Elements:
A party knows a fact within his knowledge and neglect to communicate the
same to other party;
Such party concealing is duty bound to disclose a material fact to the
other party;
Such party concealing makes no warranty to the fact concealed;
The other party has no means of ascertaining the fact concealed.
Representation is a collateral statement in writing, not inserted in the policy,
which are necessary to be communicated to the underwriters to enable them to
form a just estimate of the risk.
Misrepresentation is a statement of something as a fact which is untrue and
material to the risk, and which the insured states, knowing it to be untrue in an
attempt to deceive, or which he states positively as true w/o knowing it to be
true, and which has a tendency to deceive.
Warranty: a risk described in the policy which makes part in the contract. There
can be no warranty by any collateral representation, only misstatement of fact
concerning a warranty can render a policy void.
1. Express warranty is one which is specifically set out in the policy. It
must be a statement relating to the person, thing or risk, which must be a
fact and not a mere opinion.
2. Implied warranty is one which is not specifically stated within the
policy.
3. Affirmative warranty is a statement regarding a fact at the time the
contract was made
4. Promissory warranty is a statement about future facts or about facts
that will continue to be true throughout the term of the policy.
Policy: (sec 49) the written instrument in which a contract of insurance is set
forth.
Open policy: (sec 60) is one in which the value of the thing insured is not
agreed upon, but is left to be ascertained in case of loss.
(ex. A insured his house for 5M, if A house destroy, he can recover up to the
amount the thing destroyed, but not to exceed 5M).
Valued policy: (sec 61) is one which expresses on its face an agreement that
the thing insured shall be valued at a specific sum.
(ex. Same example above, the only different is, A can recover 5M, even if the
value of the thing loss is only 3M).
Running policy: (sec 62) is one which contemplates successive insurances,
and which provides that the object of the policy may be from time to time
defined, especially as to the subjects of insurance, by additional statements or
endorsements.
(ex. A insured his warehouse, if A warehouse destroy, he can recover the amount
of the property
loss, but if there is no loss declared he cannot recover).
Others:
Cover notes: (sec 52) issued to bind insurance temporarily pending the
issuance of the policy. w/n 60days after the issue of the cover note, a policy shall
be issued in lieu thereof, subject to extension by the commissioner.
Prescriptive period: (sec 63) a condition, stipulation, or agreement in any
policy of insurance, limiting the time for commencing an action to a period of less
than 1 year from the time when the cause of action accrues, is void.
45days before the expiration of the contract: (sec 66)
GR: the insured may renew policy by merely paying premium, on the effective
date of renewal.
Except: unless 45days in advance before the expiration of the contract, the
insurer notify by letter the insured, that they had no intention to renew the policy,
due to broad risk, and the premium is very low, and they want to increase
warranties.
Binders a mere acknowledgement on behalf of the company that its branch
office had received premium.
Rider is an amendment to a contract or policy. It is a written form attached to
an insurance policys coverage, terms, or conditions.
(ex. After buying a diamond bracelet, a policyholder may want to add a rider to
her homeowners insurance policy to cover the jewelry.)
(ex. 1 mon grade period was granted by the insurer. If you died before 1
mon even if not yet pay premium, still can recover. But if you died after 1
mon cannot claim).
2. An acknowledgment in a policy or contract of insurance or the receipt of
premium is conclusive evidence of its payment, so far as the policy
binding, notwithstanding any stipulation therein that it shall be binding
until the premium is actually paid.
3. If the oblige accepted the bond
(ex. A purchased goods to B w/ C as a surety. If B received from the
insurance (surety) a bond, B can recover even if A not yet pays the
premium.
4. Extension agreement ?
-------------------------------------------------------------------------------------------------------------------------------------V.
Notice of loss: purpose to duly notify the insurer of the happening of the
proximate cause, if denied cause of action accrues.
When to notify within a reasonable period w/o delay if non-life, if life,
depending on the judgment of the commissioner.
- Unreasonable delay, 60 days based on SC decision.
Proximate cause:
Remote cause:
-------------------------------------------------------------------------------------------------------------------------------------VI.
Double insurance: (sec 93) a double insurance exists where the same person
is insured by several insurers separately in respect to the same subject and
interest.
Elements:
Same person;
Same subject matter;
Same insurable interest;
Same risk insured;
With several insurer.
GR: not contrary to law
Barratry is any willful act or conduct of the master or the crew of some
unlawful purpose without the consent of the owners and prejudice of the 3 rd party.
(mutiny)
Implied warranties: (sec 113, 119, 120)
1. Sea worthiness;
2. Improper deviation;
3. Improper or illegal venture;
4. Ship will carry necessary documents to show nationality or neutrality.
Loan of bottomry - is a contract in the nature of a mortgage, by which the
owner of a ship borrows money for the use, equipment, or repair of the vessel,
and for a definite term, pledges the ship as a security for its repayment, with
maritime or extraordinary interest on account of the marine risks to be borne by
the lender;
It being stipulated that if the ship be lost in the course of specified voyage,
or during the limited time, by any of the perils enumerated in the contract,
the lender shall also lose his money.
Respondentia when the loan is not made upon the ship, but on the goods
laden on board, and which are to be sold, or exchanged in the course of the
voyage, the borrowers personal responsibility is deemed the principal security for
the performance of the contract;
The lender must be paid his principal and interest though the ship perish,
provided the goods are saved.
Concealment in maritime vs in property or life insurance
Mere belief or opinion of a 3rd person is material in maritime insurance; while
personal knowledge is requires in property or life insurance.
Concealment 5 ground: (sec 110)
1. The national character of the insured;
2. The liability of the thing insured to capture and detention;
3. The liability to seizure from breach of foreign laws of trade;
4. Want of necessary documents;
5. The use of false and simulated papers.
Deviation: (sec 123)
Deviation is a departure from the course of the voyage insured, or an
unreasonable delay in pursuing the voyage or the commencement of an entirely
different voyage.
When deviation proper: (sec 124)
1. When caused by circumstances over which neither the master nor the
owner of the ship has any control;
Commissioner can only accept cases based only in insurance contract and not in
other basis.
Administrative
Adjudicatory
The commissioner is authorized, at his discretion, to impose upon the
insurance companies, their director for any willful failure or refusal to
comply with, violation of any provision of this code, the following:
Fines not in excess of 5oo a day;
Suspension, or after due hearing, removal of director and
officers or agent.