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    Ray Santos
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    Atty. Quimson - Insurance

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    Atty. Quimson - Insurance

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    Download as pdf
    6 views11 pages

    Significant Amendments - New Insurance Code

    Uploaded by

    Ray Santos
    Atty. Quimson - Insurance

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    Download as pdf
    of 11
    ee 3C jnurance ‘SIGNIFICANT AMENDMENTS UNDE NEW INSURANCE CODE (R.A. 10607) By: Jose B. Quimson, Professor of Lav, Ateneo de Manila Law School ‘The new Insurarice Code (R.A. 10607) was signed into law on August 15, 2013 and became effective 15 days after it was published in Philippine Star on S September 2013, It renacted as a ‘whole with proper amendments P.D. 612 (The Insurance Code) which became the Insurance Code of 1978 (P.D. 1460) with the consolidation of previous amendments. The latest amendments concentrated on “The Business of Insurance” particulatly the increased capitalization of insurance companies, and “The Insurance Commissioner” covering his administrative and quasi-judicial powers, The numbering of Sections 1 to 77 (referring principally to the “Contract of Insurance”) in the old Code remains the same in the new Code, with changes in the numbering after insertions of new provisions. Provisions were added, among others, to introduce new concepts like Micro-insurance, Bankassurance and insurance policies which are electronic in character, Among the more significant changes are the following! 4.1 Section 3 (under the New and Old Codes) Life Insurance Coniracts Entered Into By Marti 4.1.1 The consent of the spouse (“husband” under the old Code) is not necessary for tive validity of an insurance policy taken by a married person (“woman” under the ‘old Code) om his‘her life or that of histher children, 4.1.2 The paragraph (under the Old Cod) allowing minors 18 and above to enter into a life insurance contract provided the insurance covers the minor's life and provided his beneficiaries are his estate, parents, spouse, child, brother or sister has been deleted. This is pursuant to the lowering of the age of majority to 18 in accordance with the Family Code as amended, 4.2 Section 11 (New and Old Codes) Right To Change The Benefici 42.1 Under the new Insurance Code, even if the insured reserves the right to change his beneficiary (and therefore the beneficiary designation is revocable), if he does not do so during his lifetime, the designation shall be deemed irrevocable. 4.2.2 This has tax consequences and is favorable to the beneficiary, as life insurance proceeds received by irrevocable beneficiaries are not subject 10 estate taxes, 43 Section 13 (New and Old Codes) rfeiture OF Life Insurance Proceeds Bi OF The Insured 43.1 This provision was amended! to make the recipient of the proceeds more specific than what was provided in the old code as “the nearest relative” ofthe insured. 44 4s 46 47 43.2 Under the new code, the share forfeited passes on tothe following: 43.2.1 Tothe other qualified beneficiaries 43.2.2 In the absence of other beneficiaries, to those in accordance with the contract 43.23, Ifthe policy contract is silent, tothe estate of the deceased insured Section 45 (New and Old Codes) Waiver Of The Right To Rescind The Insurance Contract 44.1 The waiver of the insurer's right to rescind an insurance contract by the accepiance of premiums despite knowledge of the ground for rescission has been snitted in the new code, 44.2. This omission favors the insurers, However, apparently the legislators saw the vulnerability of the insurers under the deleted sentence due to the existence of their various offices and branches scattered throughout the country which are Fequired by the Insurance Commissioner to have spscial powers of attorney to represent their principals. Acceptance of premiums of rescindible policies by any of these offices would deprive insurers of the opportunity to rescind these policies. Section 50 (New and Old Codes) Formal Requirements Of A Policy, Rider, Clause, Warranty, Endorsement As Part Of ‘The Contract 45.1 Notwithstanding the requirement that the policy and its modifications be printed and signed or countersigned, the amendment under the new cose recognizes that the policy and its modifications may be electronic in nature subject t0 the Electronic Commerce Act (RA 4792) and rules and regulations of the Insurance Commissioner. Section 60 (New and Old Codes) Meaning OF An Open Policy 46.1 To make the meaning of an “open policy” clearer, the new code adds a new

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