A.

Representation
Title 5; Sec. 37-48, 51, IC

Questions:

1. Are representations required to be written?

2. Are representations required to be the absolute truth?
3. When can you withdraw or alter a representation?
4. Can there be false representation when such representation is not true at the time the contract
was made, but true at the time the contract takes effect?
5. Differentiate warranties from representations.
6. Concealment from misrepresentation.
7. Who determines materiality of representation?

1. Definition

REPRESENTATION IS A STATEMENT MADE BY THE INSURED AT THE TIME OF,

OR PRIOR TO, THE ISSUANCE OF THE POLICY, RELATIVE TO THE RISK TO BE
INSURED, AS TO AN EXISTING OR PAST FACT OR STATE OF FACTS,
CONCERNING A FUTURE HAPPENING, TO GIVE INFORMATION TO THE INSURER
AND OTHERWISE INDUCE HIM TO ENTER INTO THE INSURANCE CONTRACT.

2. How representation is made – Sec. 36

Oral or Written

3. When representation made – Sec. 37

At the time of, or before, issuance of the policy

4. Construction of representation – Sec. 38

-liberally in favor of the insured and are required to be only substantially true

5. Affirmative representation-allegation as to the existence or non existence of a fact

6. Promissory representation –any promise to be fulfilled after the contract has come into
existence or any statement concerning what is to happen during the existence of the
insurance.

7. Effect of representation on provisions of policy; on implied warranty – Sec. 40

-a collateral inducement, it is not qualified as express provision or an express warranty
8. When representation may be withdrawn – Sec. 41
-altered or withdrawn before the insurance is effected but not afterwards
9. Time to which representation refers – Sec. 42
A representation must be presumed to refer to the date on which the contract takes effect

10. Information from third person; from agent – Sec. 43

-matters insured has no personal knowledge, can be communicate to the insurer and if such
representation turns out to be false, he is not responsible therefor, PROVIDED he gives
explanation that he does son on the information of others.
11. When representation deemed false – Sec. 44
MISREPRESENTATION
Statement-fact which is untrue-insured has knowledge that it is untrue and with an intent to
deceive, or has tendency to mislead- such fact is material to the risk
 -A FALSE REPRESETATION;
-when the facts fails to correspond with its assertions or stipulations.
12. Effect where representation is false – Sec. 45
-injured party may rescind from the time the representation becomes false
13. Determination of materiality – Sec. 46
Same rules as in concealment
BY PROBABLE AND REASONABLE INFLUENCE OF THE FACTS UPON THE
PARTY TO WHOM THE REPRESENTATION IS MADE, IN FORMING HIS
ESTIMATES OF THE DISADVANTAGES OF THE PROPOSED CONTRACT OR IN
MAKING HIS INQUIRIES.

MISREPRESENTATION VS CONCEALMENT
C, withholds information or material facts from the insurer;
M, makes erroneous statement of facts with intent of inducing insured to enter into insurance
contract

Materiality, same rules

Effect, same-rescission

Intent-not necessary on both

Both likewise applies to insure (Uberrima Fidei)

14. Applicability to modifications of original contract – Sec. 47

-applicable to subsequent amendments

15. Rescission; incontestability – Sec. 48

GR. A contract of insurance may be rescinded on the ground of concealment, false rep or breach of
warranty
EXCEPTION: incontestability clause
EXCEPTION TO THE EXCEPTION:
- Defenses not barred by incontestability clause
1. NO INSURABLE INTEREST
2. CAUSE OF DEATH AN EXCEPTED RISK
3. PREMIUMS HAVE NOT BEEN PAID
4. CONDITIONS ON THE POLICY RELATING TO MILITARY OR NAVAL
SERVICE HAVE BEEN VIOLATED
5. FRAUD, OR VISCIOUS TYPE
6. NO PROOF OF DEATH
7. ACTION HAS PRESCRIBED

See: Art. 1370-1378, Civil Code

Sec. 10-19, Rule 130, Revised Rules of Court
Ng Gan Zee v. Asian Crusader Life, 122 SCRA 461 (1963)
Tan v. Court of Appeals and Phil-Am Life, 174 SCRA 403 (1989)