Insurance Code of the Phils.

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WMSU College of Law INSURANCE CODE REVIEWER (ROMEL

G TORRES)

Personal – each party having in view the character, credit and conduct of the other. 7.

INSURANCE CODE (P.D. No. 1460) CONCEPTS

REQUISITES OF A CONTRACT OF INSURANCE

CONTRACT OF INSURANCE  An agreement whereby one undertakes for a consideration to indemnify another against loss loss,, dama damage ge or liab liabil ilit ity y aris arisin ing g from from an unknown or contingent event. (Sec. 2, par. 2, IC)

1. A subject matter which the insured has an insurable interest.

“DOING AN INSURANCE BUSI USINESS OR TRANSA TRANSACTI CTING NG AN INSURA INSURANCE NCE BUSINE BUSINESS” SS” (Sec. 2, par. 4) 1. Making or proposing to make, as insurer, any insurance contract; 2. Making or proposing to make, as surety, any contract of suretyship as a vocation, not not as a mer mere inci incide den nt to any any othe otherr legitimate business of a surety; 3. Doing any insurance business, including a reinsurance business; 4. Doing or proposing to do any business in sub substance ance equ equiva ivalen lent to any any of the foregoing II. II. CHAR CHARAC ACTE TERI RIST STIC ICS S OF AN INSU INSURA RANC NCE E CONTRACT (The (The Insu Insura ranc nce e Code Code of the Philippines Annotated, Hector de Leon, 2002 ed.) 1. Consensual – it is perfected by the meeting of the minds of the parties. 2. Voluntary – the parties may incorporate such terms and conditions as they may deem convenient. 3. Aleatory Aleatory – it depends upon some contingent event. 4. Unilateral – imposes legal duties only on the insurer who promises to indemnify in case of loss. 5.

6.

Conditional – It is subject to conditions the principal one of which is the happening of the event insured against. Contract of indemnity – Except life and

2. Event or peril insured against which may be any future contingent or unknown event, past or future and a duration for the risk thereof. 3. A promise to pay or indemnify in a fixed or ascertainable amount. 4. A consideration known as “premium”. 5. Meeting of the minds of the parties.

5 CARDINAL PRINCIPLES IN INSURANCE 1. Insurable Interest 2. Principle of Utmost Good Faith insurance ce contract contract requir requires es utmost utmost  An insuran good faith faith (uberrimae between the uberrimae fidei) fidei) between parties. The applicant is enjoined to disclose any material fact, which he knows or ought to know. 

Reason: An insu insurrance ance cont contrract act is an aleatory contract. The insurer relies on the representation of the applicant, who is in the best position to know the state of his health. 3. Contract of Indemnity  It is the basis of all property insurance. The insured who has insurable interest over a prop proper erty ty is only only en enti titl tled ed to reco recove verr the the amou amount nt of actu actual al loss loss sust sustai aine ned d and and the the burden is upon him to establish the amount of such loss (Reviewer on Commercial Law, Professors Sundiang and Aquino) Rules:

a. Appl Applie iess only only to prop prope erty rty insu insura ranc nce e except when the creditor insures the life of his debtor.












4. Contract of Adhesion (Fine Print Rule)  Most of the terms of the contract do not result from mutual negotiations between the parties as they are prescribed by the insurer in final printed form to which the insured may “adhere” if he chooses but which he cannot change. (Rizal Surety and Insurance Co., vs. CA, 336 SCRA 12)

5. Principle of Subrogation: 

It is a process of legal substitution where the insurer steps into the shoes of the insured and he avails of the latter’s rights against the wrongdoer at the time of loss. 

The principle of subrogation is a normal inciden incidentt of indemni indemnity ty insuran insurance ce as a legal legal effect of payment; it inures to the insurer without any formal assignment or any express stipulation to that effect in the policy. Said right is not dependent upon nor does it grow out of any private contract. Payment to the insur insured ed make makess the insur insurer er a subro subroge gee e in equity. (Malayan Insurance Co., Inc. v. CA, 165 SCRA 536; see also Art. 2207, NCC)

Purposes: 1. To make make the pers person on who who caused caused the the loss legally responsible for it. 2. To preve prevent nt the insur insured ed from from receiv receiving ing a double recovery from the wrongdoer and the insurer. 3. To prev preven entt tort tortfe feas asor orss from from bein being g free free from from liabil liabiliti ities es and is thus thus found founded ed on considerations of public policy. 

Rules: 1. Applicable only to property insurance. 2. The insurer can only recover from the third person what the insured could have recovered. 3. There can be no subrogation in cases: a. Wher Where e the insur insured ed by his own own act rele release asess the wrongdoer or third party liable for the loss or damage; b. Wher Where e the the insu insurrer pays pays the the insu insurred the the valu value e of the the loss loss with withou outt noti notify fyin ing g the the carrier who has in good faith settled the

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e. For reco recove very ry of loss loss in excess excess of insur insuranc ance e coverage

CONSTRUCTION OF INSURANCE CONTRACT The ambiguous terms are to be construed strictly against the insurer, and liberally in favor of the insured. insured. However, However, if the terms are clear, there is no room for int interpr erpret etat atio ion. n. (Cal (Calan anoc oc vs. vs. Cour Courtt of Appeals, Appeals, 98 98 Phil. 79)

III. II. DISTI STINGUI NGUISH SHIING ELEME LEMENT NTS S INSURANCE CONTRACT

OF

AN

The insured possesses an insurable interest sus susceptible of pecu ecuniary ary estimation; 2. The insured is subject to a risk of loss through the destruction or impairment of that interest by the happening of designated perils; 3. The insurer assumes that risk of loss; 4. Such Such assu assump mpti tion on is par part of a general scheme to distribute actual losses among a large large grou group p or subst substan anti tial al nu numb mber er of person personss bearing bearing somewh somewhat at similar similar risks; risks; and 5. The insured makes a ratable contribution premium) to a general insurance fund. ( premium contra ract ct poss posses essi sing ng only only the the firs firstt 3  A cont elements above is a risk-shifting device. If all the elements, it is a risk-distributing device. device. (The (The Insu Insura ranc nce e Code Code of the the Phil Philip ippi pine ness Annotated, Annotated, Hector Hector de Leon, 2002 ed.) 1.

IV. PERFECTION OF AN INSURANCE CONTRACT  An insur insuran ance ce contr contract act is a conse consens nsua uall cont contrract act and and is ther theref efor ore e per perfect fected ed the the moment there is a meeting of minds with resp respec ectt to the the obj object ect and and the the cau cause or consideration. 

What What is bein being g foll follow owed ed in insu insura ranc nce e contracts is what is known as the “cognition theory”. theory”. Th Thus us,, “an “an acce accep ptan tance made made by letter shall not bind the person making the offer except from the time it came to his knowledge”. (Enriquez vs. Sun Life Assurance Co. of Canada, 41 Phil. 269)












from the applica applicant nt the insuran insurance ce premiu premium m and had accepted the application subject to processing by the head office.

Cover Note (Ad Interim)  A concise and temporary written contract issu issue ed to the the ins insurer thr through its its duly duly authoriz authorized ed agent agent embody embodying ing the principa principall terms of an expected policy of insurance. Purpose:

It is intended to give temporary insu insurrance prote otection cov coverage age to the app applicant ant pen end ding ing the acce cceptance nce or rejection of his application.  Duration: Not exceeding 60 days unless a long longer er per period iod is appr approv oved ed by Insu Insura ranc nce e Commissioner (Sec. 52).

Riders 

Printed Printed stipula stipulation tionss usually usually attache attached d to the policy because they constitute additional stipulations between the parties. (Ang Giok Chip vs. Springfield, 56 Phil. 275)  In case of conflict between a rider and the printed stipulations in the policy, the rider prevails, as being a more deliberate expression of the agreement of the contracting parties. (C. Alvendia, The Law of Insurance in the Philippines, 1968 ed.)

Clauses  An agreement between the insurer and the insur insured ed on certai certain n matte matterr rela relatin ting g to the liability of the insurer in case of loss. (Prof. De Leon, p.188) Endorsements Any y prov provis isio ion n adde added d to the the cont contra ract ct  An altering its scope or application. application. (Prof. De Leon,

7.

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Duration of the insurance.

Persons entitled to recover on the policy (sec. 53): 

The insu The insura ranc nce e proc procee eeds ds shal shalll be appl applie ied d excl ex clus usiv ivel ely y to the the prop proper er inte intere rest st of the the person in whose name or to whose benefit it is made, made, unless unless otherw otherwise ise specifie specified d in the policy. 

Kinds:

1. OPEN POLICY – value of thing insured is not agreed upon, but left to be ascertained in case of loss. (Sec. 60)  The actual loss, as determined, will repr repres esen entt the total total indem indemnit nity y due due the insured from the insurer except only that the total indemnity shall not exceed the face value value of the policy. policy. (Devel (Developm opment ent Insurance Corp. vs. IAC, 143 SCRA 62) 2. VALUED POLICY – definite valuation of the the prop proper erty ty insu insurred is agre agreed ed by both both parties, and written on the face of policy. (Sec. 61)  In the absence of fraud or mistake , the agreed valuation will be paid in case of total loss of the property, unless the insurance is for a lower amount. 3. RUNN RUNNIN ING G POLI POLICY CY – cont contem empl plat ates es successive insurances and which provides that the object of the policy may from time to time be defined (Sec. 62)

V. TYPES OF INSURANCE CONTRACTS

p.188)

POLICY OF INSURANCE  Th The e wr writ itte ten n inst instru rume ment nt in which hich a contract of insurance is set forth. (Sec. 49) 

Contents: (Sec. 51) CODE: RAPID-PR

1.

Parties Amount of insurance, except in open or running policies;

2.

1. Life insurance a. Individual Individual life (Secs. (Secs. 179–183, 227) 227) b. Group life life (Secs. 50, last par., par., 228) c. Industrial Industrial life (Secs. (Secs. 229–231) 229–231) 2. Non-life insurance a. Mari Marine ne (Sec (Secs. s. 99– 99–16 166) 6) b. Fire Fire (Se (Secs. cs. 167–1 167–173 73)) c. Casu Casualt alty y (Sec (Sec.. 174) 174) 3. Contracts of bonding or suretyship (Secs. 175–178)












2. Marine, fire, and the property aspect of casua casualt lty y insur insuran ance ce are are also also refer referre red d to as property insurance.

iv. The int interest of a ben beneficiary in a life life insur insuranc ance e polic policy y shall shall be forfe forfeit ited ed when wh en the the bene benefi fici ciar ary y is the the prin princi cipa pall accomplice or accessory in willfully bringing about the death of the insured in which event, the nearest relative of the insured shall receive the proceeds of said insurance if not otherwise disqualified. (Sec. 12)

VI. PARTIES TO INSURANCE CONTRACT Insurer - Person Person who undert undertake akess to indemnify another.  For a person to be called an insurance agent, it is necessary that he should perform the function for compensation. (Aisporna vs. CA, 113 SCRA 459)

1.

PROPERTY  The ben ene efici iciary of prope operty insu insura ranc nce e must must have have an insu insura rabl ble e interest in such property, which must exist not only at the time the policy takes effect but also when the loss occurs. (Sec. 13 and 18).

b.

2. Insured - The party party to be indem indemni nifi fied ed upon the occurrence of the loss. He must have capacity to contract, must possess an insu insura rabl ble e inte intere rest st in the the subj subjec ectt of the the insurance and must not be a public enemy. A public public enem enemy y- a nati nation on with with whom the Philippines is at war and it inclu include dess every every citiz citizen en or subj subjec ectt of such nation. 

3. Beneficiary - A pers person on design designate ated d to receiv ceive e procee ceeds of polic licy when risk isk attaches. Rules in the designation of the  beneficiary: a. LIFE i. A person who insures his own life can can desi design gnat ate e any any pers person on as his his benef benefici iciar ary, y, wh whet ethe herr or not the beneficiary has an insurable interest in the life of the insured subje subject ct to the limita limitatio tions ns un unde derr Art. 739 and Art. 2012 of the NCC. Reason: in essence, a life insu insura ranc nce e poli policy cy is no diff differ eren entt form a civil donation insofar as the beneficiary is concerned. Both are founded on the same consideration of libe libera rali lity ty.. (Insu Insula larr Life Life vs. vs. Ebrado, 80 SCRA 181) ii. A person who insures the life of another person and name himself as the bene benefi ficia ciary ry must must have have an insurable interest in such life. (Sec. 10) iii. As a genera generall rule, the designat designation ion 

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Effe Effect ctss of Beneficiary 

Irre rrevoca vocabl ble e

Desig esigna nati tio on

Of

Insured cannot: 1. Assign the policy 2. Take the cash surrender value of the policy 3. Allow his creditors to attach or execute on the policy; 4. Add new beneficiary; or 5. Change the irrevocable designation to revocable, even though the change is just and reasonable.

The insu The insure red d does does not not even even reta retain in the the power to destroy the contract by refusing to pay the prem premiu iums ms for the benef benefici iciar ary y can can protect his interest by paying such premiums for he has an interest in the fulfillment of the obligation. (Vance, p. 665, cited in de Leon, p. 101, 101, 2002 2002 ed.) ed.) 

VII. INSURABLE INTEREST A. In General 

A person person has an insurab insurable le intere interest st in the subj subjec ectt matt matter er if he is so conn connec ected ted,, so situated, so circumstanced, so related, that by the pres preser erva vati tion on of the same same he shall shall derive pecuniary benefit, and by its destruc destruction tion he shall shall suffer suffer pecunia pecuniary ry loss, loss,












a. of himse himself lf,, of his spous spouse e and and of his children; b. of any perso person n on whom whom he depe depend ndss whol wh olly ly or in part part for for educ educat atio ion n or support;

c. of any pers person on unde underr a legal legal oblig obligati ation on to him him to pay pay mone money y or resp respec ecti ting ng property or services, of which death or illness might delay or prevent performance; and d. of any any person upon whose ose lif life any any esta state or int interest vested ted in him depends. (Sec. 10)  When it should exist: When the insurance takes effect; not thereafter or when the loss occurs.  Amount: GENERA GENERAL L RULE: RULE: Th The ere is no lim limit in the amount the insured can insure his life. EXCEPTION: In a creditor-debtor relationship where the creditor insures the life of his

debtor, the limit of insurable interest is equal to the amount of the debt.

Note: If at the time of the death of the debtor the whole debt has already been paid, the creditor can no longer recover on the policy policy becau because se the princ princip iple le of indem indemnit nity y applies. C. Property  Every interest in property whether real or personal, or any relation thereto, or liability in respect thereof, of such nature that the contemp contemplat lated ed peril peril might might directly directly damnif damnify y the insured (Sec. 13), which may consist in: 1. an exi exist stin ing g inte intere rest st;; 2. any any inch inchoa oate te inte intere rest st foun founde ded d on an existing interest; or 3. an expectan tancy cou coupled with ith an exis ex isti ting ng inte intere rest st in that that out out of which the expectancy arises. (Sec. 14) When it should exist: When the insurance takes takes effect effect and whe when n the loss occurs, occurs, but 

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the insured might be damnified by loss or injury thereof. (Sec. 17)

INSURABLE INTE REST IN LIFE Must exist only at the time the policy takes effect and need not exist at the time of loss Unli Unlimi mite ted d ex exce cept pt in life life insu insura ranc nce e effected by creditor on life of debtor. The expectation of benefit to be deri derive ved d from from the continued exis ex iste tenc nce e of life life need not have any legal basis whatever. A reasonable probability is suffici sufficient ent without without more. The ben ene eficia ciary need not have an insurab insurable le interes interestt over the life of the insured if the ins insured him himself elf secured the policy. However, if the life insuran insurance ce was was obta obtain ined ed by the the bene benefi fici ciar ary, y, the latter must have insurable inter interes estt over over the

INSURABLE INTEREST IN PROPERTY

Must exist at the time the policy takes effect and when the loss occurs Limit Limited ed to actua actuall value of interest in property insured.

An expecta expectation tion of a benefit to be deri derive ved d from from the the continued exis ex iste tenc nce e of the the prop proper erty ty insu insure red d must have a legal basis.

The beneficiar iary must have insurab insurable le interes interestt over the thing insured.














such, to the extent of his liability but not to exceed the value thereof (Sec. 15) 2. In case case of of a mortg mortgage aged d prope property rty  The mortgagor and mortgagee each have an insu insurrable int interest est in the the property mortgaged and this interest is separate and distinct from the other. a. Mortgagor – As owner, has an insurable interest therein to the extent of its

valu value, e, even even thoug though h the mortg mortgage age debt debt equals such value. The reason is that the loss or destruction of the property insured will not extinguish the mortgage debt. b. Mortgagee – His interest is only up to the the ex exte tent nt of the the debt debt.. Such Such inte intere rest st cont contin inue uess un unti till the the mort mortga gage ge debt debt is extinguished. The lessor cannot be validly a beneficiary of a fire insurance policy taken by a lessee over his merchandise, and the provision in the the lea lease cont contrract providing for for such such auto autom matic atic assi assign gnm ment is void void for for bein being g contrary to law and public policy. (Cha vs. Court of Appeals, 227 SCRA 69)

e. Upon recovery by the mortgagee to the extent of his credit, the debt is extinguished. In case case a mort mortga gage gee e insu insure ress his his own own interest and a loss occurs, he is entitled to the proceeds of the insurance but he is not allowed to retain his claim against the



mortgagor as the claim is discharged but it passes by subrogation to the insurer to the extent of the money paid by such insurer. (Palileo vs. Cosio)

VIII. RISK 



STANDARD OR UNION MORTGAGE CLAUSE Subse Subsequ quen entt acts acts of the mortgag mortgagor or cannot affect the rights of the assignee

OPEN OR LOSS PAYABLE MORTGAGE CLAUSE Acts of the mort mortga gag gor affe affect ct the mortgagee. Reason: Mortgagor does does not not ceas cease e to be a party to the cont contra ract ct.. (Sec (Secs. s. 8 and 9)

Effects of Loss Payable Clause a. The contract is deemed to be upon the

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What may be insured against: 1. Futu Future re cont contin inge gent nt even eventt resu result ltin ing g in loss or damage – Ex. Possible future fire 2. Past unkn unknown own even eventt resulti resulting ng in loss loss or damage – Ex. Fact of past sinking of a vessel unknown to the parties 3. Conting Contingent ent liabi liability lity – Ex. Ex. Reinsur Reinsuranc ance e

IX. PREMIUM PAYMENTS 

Conside ideration ion pai paid an ins insurer for undertaking to indemnify the insured against a specified peril.  Basis of the right of the insurer to collect premiums: Assumption of risk.

GENERA GENERAL L RULE RULE : No poli policy cy issu issued ed by an insurance company is valid and binding until actual payment of premium. Any agreement to the contrary is void. (Sec. 77) EXCEPTIONS: 1. In case case of of life life or indu industr stria iall life life insu insura ranc nce, e, when the grace periods applies; (Sec. 77) 2. When the insurer makes a written acknowledgment of the receipt premium; (Sec. 78)












Section 77 merely precludes the parties from stipulating that the policy is valid even if the premiu emium ms are are not paid aid. (Makat kati Tuscany Condominium Corp. v. CA, 215 SCRA 462) 

2. In life insurance. 3. When When the contr contrac actt is resci rescind ndab able le or rendered void ab initio by the fraud of the insured. 4. When the contract is illegal and the parties are in pari delicto.

PREMIUM

Effe Effect ct of Ackn Acknow owle ledg dgme ment nt of Rece Receip iptt of Premium in Policy: Conclusive evidence of its payment, so far as to make the policy bindi binding ng,, notwi notwith thsta stand ndin ing g any stipu stipula latio tion n therein that it shall not be binding until the premium is actually paid. (Sec. 78)

ENTITLEMENT OF INSURED TO RETURN OF PREMIUMS PAID

If the thing insured was never exposed to the risks insured against; (Sec. 79) 2. If c on ontract is is vo v oidable du due to to the the frau fraud d or misr misrep epre rese sent ntat atio ion n of insurer or his agents; (Sec. 81) 3. If co contract is is vo voidable be because of the existence of facts of which the insured was ignorant without his fault; (Sec. 81) 4. When by any default of the insured other than actual fraud, the insurer never incurred liability; (Sec. 81) 5. When rre escission is is gr granted du due to the insur insurer’ er’ss brea breach ch of contr contract act.. (Sec. 74) 1.

B. Pro rata: 1. When When the insur insuran ance ce is for for a defi defini nite te period and the insured surrenders his

ASSESSMENT

Levied and paid Colle Collecte cted d to meet meet to meet actual losses. anticipated losses. Paym Paymen entt is not not Payment is enforceable enforceable once against levied unless the insured. othe otherw rwis ise e agre agreed ed upon. Not a debt.

A. Whole:

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It becomes a debt once properly levied unless otherwise agreed.

X. TRANSFER OF POLICY 1. Life Insurance transf sfer erre red d even even witho without ut the  It can be tran consent of the insurer except when there is a stip stipul ulat atio ion n requ requir irin ing g the the cons consen entt of the the insurer before transfer. (Sec. 181)  Reason: The policy does not represent a personal agreement between the insured and the insurer. 2. Property insurance cannot ot be tran transf sfer erre red d with withou outt the the  It cann consent of the insurer.  Reason: The insurer approved the policy based on the personal qualification and the insurable interest of the insured.











WMSU College of Law INSURANCE CODE REVIEWER (ROMEL 

Reason: Reason: Insurance contract is personal.

GENERAL GENERAL RULE: A change of interest in any part of a thing insured unaccompanied by a corr corres espo pond ndin ing g chan change ge of inte intere rest st in the the insu insura ranc nce e susp suspen ends ds the the insu insura ranc nce e to an equivalent extent, until the interests in the thing and the interest in the insurance are vested in the same person. (Sec. 20)

G TORRES)

1. Concealment – A neglect to communicate that that which hich a part party y kn know owss and and ough oughtt to communicate (Sec. 26)  Requisites: a. A party party knows knows a fact which which he neglec neglects ts to comm commu unica nicate te or disc disclo lose se to the the other. b. Such party party conceali concealing ng is duty duty boun bound d to disclose such fact to the other. c. Such party concealing makes no warranty as to the fact concealed. d. Th The e other other part party y has not not the means means of of ascertaining the fact concealed. e. Mater ateriial

EXCEPTIONS:  EXCEPTIONS: 1. In life, health and accident insurance.(Sec. 20); 2. Change in interest in the thing insured after occurrence of an injury which results in a loss. (Sec. 21); 3. Change in interest in one or more of several distinct things separately insured by one policy. (Sec. 22); 4. Change o off i nt nterest, by b y wi w ill or or suc successi essio on, on the the death ath of the the insured. (Sec. 23); 5. Transfer of of i nt nterest by b y on o ne of of seve severa rall part partne ners rs,, join jointt owne owners rs,, or owners in common, who are jointly insured, to others. (Sec. 24); 6. When a policy is so so fr framed that it will inure to the benefit of whomsoever, whomsoever, during the continuance continuance of the risk, may become the owner of the interest insured. (Sec. 57); 7. When there is an express prohib prohibitio ition n against against alienati alienation on in the poli policy cy,, in cas case of alie aliena nati tion on,, the the contr contract act of insur insuranc ance e is not mere merely ly suspe suspend nded ed but but avoid avoided ed.. (Art (Art.. 1306, 1306, NCC).



Effects: Entitles insurer to rescind, even if the death or loss is due to a cause not related to the concealed matter (Sec. 27).

Note: Good Faith is not a defense in concealment. Sec. 27 clearly provides that, “the concealme concealment nt whether whether intentional intentional or unintentional entitles the injured party to rescind the contract of insurance.” insur ance.” Test of Materiality: Determined not by the eve event, but sole olely by the the probab obablle and and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the advantages of the the prop propos osed ed cont contra ract ct,, or in maki making ng his his inquiries (Sec. 31). Exception to Sec. 31: a. Incontestability clause b. Matters under Sec.110 (marine insurance) The waiver of medical examination in a non-medical insurance contract renders even














without intent to deceive will not avoid the policy even though they are untrue. Reason: The insurer cannot rely on those statements. He must make further inquiry. (Philamcare Health Systems vs. CA, G.R. No. 125678, March 18, 2002).

2. Representati Representations ons – Factual Factual stateme statements nts made by the insured at the time of, or prior to, to, the the issu issua ance of the polic licy to giv give information to the insurer and induce him to enter into the insurance contract. They are considered an active form of concealment.

Requisites of a false representation (misrepresentation): a. The insu insurred stat tated a fact which ich is untrue. b. Such Such fact was was stated stated with with knowle knowledg dge e that it is untrue and with intent to deceive or which he states positively as true without knowing it to be true and which has a tendency to mislead. c. Such Such fact fact in either either case case is mater material ial to the risk.  Characteristics: a. It is not a part of the contract but merely a collateral inducement to it. b. It may be oral or written. c. It is made at the same time of issuing the policy or before but not after. d. It may be altered or withdrawn before the insurance is effected but not afterwards. e. It always refers to the date the contract goes into effect.  Kinds: a. AFFIRMATIVE – affirmation of a fact when the contract begins; and

G TORRES)

resp respon onsi sibl ble e for his acts acts for that that purp purpos ose. e. (Insular (Insular Life Assur. Co. vs. Feliciano, Feliciano, 74 Phil. 469)

3. Warranties – Statement or promise by the insured set forth in the policy or by reference incor incorpo pora rated ted there therein in,, the un untru truth th or nonnonfulf fulfil illm lmen entt of wh whic ich h in any any resp respec ect, t, and and without reference to whether insurer was in fact fact prej prejud udic iced ed by such such un untr trut uth h or nonnonfulfillm fulfillment ent,, ren render derss the policy policy voidable voidable by the insurer. Purpose: To elim elimin inat ate e pot poten enti tial ally ly  increasing hazards which may either be due to the acts of the insured or to the change to the condition of the property.

KINDS: a. EXPRESS EXPRESS – an agreement agreement expressed expressed in a policy policy whe whereb reby y the insured insured stipula stipulates tes that certain facts relating to the risk are or shall be true, or certain acts relating to the same subject have been or shall be done. b. IMPL IMPLIE IED D - it is deemed included in the contract although not expressly mentioned. Example: In marine insurance, seaworthiness of the vessel.

Effects of breach of warranty: a. Material GENE GENERA RAL L RULE RULE:: Viol Violat atio ion n of mater ateria iall warranty or of a material provision of a policy will will entitl entitle e the other other party party to resc rescind ind the contract. (Sec. 74) EXCEPTIONS: a. Loss oc occurs be before th the ti time of of performance of the warranty.












Written on the policy, actually or by reference Presumed mate aterial ial

May be written in the policy or may be oral. Must be prove oved to be material Must be strictly Requires only complied with substantial truth and compliance 4. Conditi Conditions ons – Even Events ts sign signif ifyi ying ng in its its broadest sense either an occurrence or a nonoccurrence that alters the previously existing legal relations relations of the parties to the contract. contract. The hey y may be cond onditio tions prece eceden entt or conditions subsequent.

Limitations on the right of the insurer to rescind: 1. Non-life – such such right right must must be ex exer erci cise sed d prior to the commencement of an action on the contract; 2. Life – such right must be availed of during the first two years from the date of issue of poli policy cy or its its last last rein reinst stat atem emen ent; t; prio priorr to “incontestability.” (Sec. 48) CANCEL CANCELLAT LATION ION OF NON-LIF NON-LIFE E INSURA INSURANCE NCE POLICY ight of the the insu insurrer to aban aband don the the  Right contract on the occurrence of certain grounds after the effectivity date of a non-life policy.

 1.



Effect of breach: a. Cond Condit itio ion n prec preced eden entt – prev preven ents ts the the accrual of cause of action b. Cond Condit itio ion n subs subseq equ uen entt – avoi avoids ds the the policy or entitles the insurer to rescind

The insu The insure rerr may may also also prot protec ectt hims himsel elf f against fraudulent claims of loss and this he attem attempt ptss to do by inser inserti ting ng in the polic policy y vario various us condit conditio ions ns wh which ich take take the form form of conditio conditions ns preced precedent ent.. For instan instance, ce, there there are conditions requiring immediate notice of loss loss or inju injury ry and and deta detail iled ed proo proofs fs of loss loss within a limited period.

2. 3. 4.



5. Exceptions – Provisions that may specify excepted perils. It makes more definite the coverage indicated by the general description of the risk by excluding certain specified risk that otherwise would be included under the gen ge neral eral lang anguage age descr escrib ibin ing g the the risks isks assumed.

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5. 6.

Grounds: NPC-D3 Non-payment of premium; Conviction of a crime out of acts increasing the hazard insured against; Discovery of fraud or material misrepresentation; Discov iscover ery y of willf willful ul or reck reckle less ss acts acts of omissi omissions ons increasi increasing ng the hazard hazard insured insured against; Physical changes in property making the property uninsurable; and Determination by the Insurance Commissioner that the continuation of the policy would violate the Insurance Code. (Sec. 64)

Requirements: Priorr noti notice ce of canc cancel ella lati tion on to the the 1. Prio insured; 2. Notice must be in writing, mailed or delivered to the named insured at the address shown in the policy; 3. Notice must state which of the grounds set forth in Sec. 64 is relied upon and














3. It has been been in force force during during the the lifetime lifetime of the insured for a period of at least two years from the date of its issue or of its last reinstatement Note: The period of 2 years may be shor shorte tene ned d but but it cann cannot ot be ex exte tend nded ed by stipulation.

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6. That the beneficiary failed to furnish proo prooff of deat death h or to comply with any condition imposed by the policy after the loss has happened; or 7. Th That at the the acti action on was not brought brought within the time specified.

Incontestability only deprives the insurer of those defenses which arise in connection with with the the form format atio ion n and and oper operat atio ion n of the the policy prior to loss. (Prof. De Leon, p. 173 citing Wyatt and Wyatt, p. 878) 

XIII.

BARRED DEFENSES DEFENSES NOT OF THE INSURER BARRED 1. Poli Policy cy is void void ab 1. That That the person person initio taking the insurance 2. Policy is lacked insurable resci rescind ndab able le by interest as reas eason of the the required by fraudulent law; concealment or misrepresentati 2.That 2.That the the cau cause

A. OVER-INSURANCE – resu result ltss wh when en the the insur insured ed insur insures es the same same prop proper erty ty for an amoun ount greater tha than the valu alue of the the property with the same insurance company.  Effect in case of loss: 1. Th The e insure insurerr is boun bound d only only to pay pay to the extent of the real value of the property lost; 2. Th The e insu insure red d is en enti titl tled ed to reco recove verr the the amount of premium corresponding to the excess in value of the property; B. DOUBLE INSURANCE – exists where same pers erson is insu insurred by sever everal al ins insurers separat separately ely in respec respectt to same same subject subject and interest. (Sec. 93)












regard to the actual value of the subject matter insured; 3. Where the policy unde un derr wh whic ich h the the insu insure red d clai claims ms is an unvalued policy he must give credit, as against the full insurable value, for any sum received by him under any policy; 4. Where the insured receives any sum in excess of the valuation in the case of valued policies, or of the the insu insura rabl ble e valu value e in the the case case of unvalued policies, he must hold such sum in trust for the insurers, according to their right of contribution among themselves; 5. Each insurer is bound, as between himself and the other insurers, to contribute ratably to the loss in proportion to the amount for which he is liable under his contract.

Additional or “Other Insurance” Clause  A cond conditi ition on in the polic policy y requ requir iring ing the insured to inform the insurer of any other insurance coverage of the property insured. It is lawful and specifically allowed under Sec. 75 wh whic ich h prov provid ide es that that “(a) “(a) poli policy cy may decl declar are e that that a viol violat atio ion n of a spec specif ifie ied d provision thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid it.”

Insured is the party in interest in the 2 contracts Subject insurance property

of is

Insured has to give his consent

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relation to reinsurer Origi Origina nall insur insured ed has no interest in the the rein reinsu sura ranc nce e contract. Subject of insu insura ranc nce e is the the original original insurer insurer’s ’s risk Insured’s Insured’s consent not necessary

TERMS: 1. Reinsurance treaty – Merely an agreement between two insurance companies whereby one agrees to cede and the other to accept reinsurance reinsurance business pursuant pursuant to provisions provisions specified in the treaty. (Prof. De Leon, p. 306) 2. Automatic reinsurance – The reinsured is bound to cede and the reinsurer is obligated to accept a fixed share of the risk which has to be reinsured under the contract. (Prof. De Leon, p. 305) 3. Facultative Facultative reinsurance reinsurance – Th Ther ere e is no obligation to cede or accept participation in the risk each party having a free choice. But once the share is accepted, the obligation is absolute and the liability thereunder can be discharged only by payment. (Equitable Ins. & Casualty Co. vs. Rural Ins. & Surety Co., Inc. 4 SCRA 343)












2.

3.

4.

5.

peril insured against (Sec. 84); Loss the immedi immediate ate cause cause 3. of which is the the peril insured agai agains nstt except where whe re proxim proximate ate cause is an excepted peril; Loss through negligence of ins insured except where whe re there there was gros grosss ne negli glige genc nce e amounting to willful acts; and Loss caused by effort effortss to rescue rescue the thing from peril insured against; If during the course of rescue, the thing is exposed to a peril not insured agai agains nst, t, whic hich permanently deprives the insured of its possession, in whole or in part (Sec. 85).

connivance of the insured (Sec. 87); and Loss where the excepte excepted d peril peril is the proximate cause.

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Required

Not required

Failure to give notice will defeat the right of the the insured to recover.

Failure to give notice will not exonerate the insurer, unless there is a stip stipul ulat atio ion n in the policy requiring the insured to do so.

B. CLAIMS SETTLEMENT  The indem indemni nific ficat atio ion n of the loss loss of the insured. TIME FOR PAYMENT OF CLAIMS NON-LIFE POLICIES LIFE POLICIES a. Maturing upon the expi expira rati tion on of the term – The proc procee eed ds are are immediately payable to the insured, unless they are made payable in installments or as annui annuity ty,, in which case, the

The proc The procee eeds ds shal shalll be paid with ithin 30 days after the receipt by the insu insure rerr of proo prooff of loss, and ascertainment of the loss loss or dam damage age by agr agreement of the the parties or by arbitr arbitrat ation ion but but not late laterr than than 90 days days from such receipt of proof of loss whether












In case of an unreasonable delay in the paym paymen entt of the the insu insure red’ d’ss clai claim m by the the insurer, the insured can recover: 1) attorney’s fees; 2) ex expe pens nses es incu incurr rred ed by reas reason on of the the unreasonable withholding; 3) interest at double the legal interest rate fixed by the Monetary Board; and 4) the amount of the claim. (Zenith Insurance Corp. vs. CA, 185 SCRA 398) 

XV. PRESCRIPTIVE PERIOD (Secs. 63 & 384)  Rules: 1. In the absence of an express stipulation in the the poli policy cy,, it bein being g bas based on a wr writ itte ten n contract, the action prescribes in 10 years. 2. However the parties may validly agree on a shorter period provided it is not less than one year year from from the the time time the the cau cause of acti action on accrues. 3. Th The e caus cause e of acti action on accr accrue uess from from the the rejection of the claim of the insured and not from the time of loss. It shall commence from the denial of the claim, not from the resolution of the motion for reconsideration, reconsideration, otherwise otherwise it can be used by the the insu insure red d as a sche scheme me or devi device ce to waste time until the evidence which may be used against him is destroyed. (Sun Insurance Office, Ltd. v. CA, 195 SCRA) 4. In CMVLI, the written notice of claim must be filed within 6 months from the date of the acci accide dent nt othe otherw rwis ise e the the clai claim m is deem deemed ed waived. The suit for damages either with the

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interest in respect to all risks or perils of navigation; 2. Pers Person onss or prop proper erty ty in conn connec ecti tion on with with marine insurance; 3. Pre Preciou ciouss ston stones es,, jewe jewels ls,, jewe jewelr lry y and and precious metals whether in the course of transportation or otherwise; and 4. Bridges, tunnels, piers, docks and other aids aids to navi navigat gatio ion n and and trans transpo port rtati ation on.. (Sec. 99)  Cargo can be the subject of marine insurance, insurance, and once it is entered into, the implied warranty of seaworthiness immedi immediate ately ly attache attachess to whoever whoever is insuring the cargo, whether he be the shipowner or not. (Roque v. IAC, 139 SCRA 596) B. Marine Protection and Indemnity Insurance Classes ses of inlan inland d marin marine e insur insuran ance ce::  Clas (Prof. De Leon, p. 325) 1. Proper Property ty in transit transit – provid provides es prot protec ecti tion on to prop proper erty ty freq freque uent ntly ly exposed to loss while it is transpo transportat rtation ion form form one location location to another. Bailee liability - insurance for 2. those who have temporary custody of the goods. Fixed transportation property – 3. they are so insured because they are held to be an essential part of the transportation transportation system such as bridges, bridges, tunnels, etc. 4. Floater – provides insurance to












Over the amount he is liable to the ship hipowner, er, if the ship ship is los lost or damaged during the voyage (Sec. 106). B. In loans on bottomry and respondentia  Repayment of the loan is subject to the condition that the vessel or goods, respectively, given as a security, shall arrive safely at the port of destination. 1. Owner/Debtor Difference nce between between the value value of  Differe vess vessel el or good goodss and and the the amou amount nt of loan. (Sec. 101) 2. Creditor/lender  Amount of the loan

Note: If a vessel is hypothecated by bottomry, only the excess is insurable, since a loan on bottomry partakes of the nature of an insurance coverage to the extent of the loan accommodation. The same rule would apply to the hypothecation of the cargo by respondentia. (Pandect of Commercial Law and Jurisprudence, Justice Jose Vitug, 1997 ed.)

Includ Includes es only those those casu casual alti ties es due due to the: 1. unusual violence; or 2. ex extr trao aord rdin inar ary y action of wind and wave; or 3. Other extraordinary causes connected with navigation.

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A loss which in the ordinary course of events, results from the: 1. natural and inevitab le action of the sea 2. ord ordinary ary wear and tea tear of the ship or 3. Neglige Negligent nt failu failure re of the ship ship’s ’s owne ownerr to provide the vessel with proper equi equipm pmen entt to convey the cargo under ordinary conditions.

Note: It is only perils of the sea which may be insured against unless perils of the ship is covered by an all-risk policy.














owners, and to the prejudice of the owner’s interest. (Roque vs. IAC, 139 SCRA 596) 5 96)

resul resultin ting g from from the the fact fact

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concealed.

concealed

C. Inchamaree Clause 

A clause which makes the insurer liable for loss loss or dama damage ge to the the hu hull ll or mach machin iner ery y arising from the: 1. Negligence Negligence of the captain, engineers, engineers, etc. 2. Explosi Explosions ons,, breaka breakage ge of shaf shafts; ts; and and 3. Latent defect of machinery or hull. (Bar Revi Review ew Mate Materi rial alss in Comm Commer ercia ciall Law, Law, Jorge Miravite, Miravite, 2002 ed.)

D. Sue and Labor Clause clause e un unde derr wh whic ich h the insur insurer er may may  A claus become liable to pay the insured, in addition to the loss actually suffered, such expenses as he may have incurred in his efforts to protect the property against a peril for which the insur insurer er woul would d have have been been liabl liable. e. (Sec. (Sec. 163) MATT MATTER ERS S ALTH ALTHOU OUGH GH CONCE CONCEAL ALED ED,, WI WILL LL NOT VITIATE THE CONTRACT EXCEPT WHEN

IMPLIED WARRANTIES 1. Seaworthiness of the ship at the inception of the insurance (Sec. 113); 2. Against Against impro improper per devia deviation tion (Sec. (Sec. 123, 123, 124, 125); 3. Against Against illegal illegal ventur venture; e; 4. Warranty of neutrality: the ship will carr carry y the the requ requis isit ite e docu docum men ents ts of nationality or neutrality of the ship or car cargo where ere suc such natio tionality ity or neutr neu tral ality ity is expressly warranted; (Sec. 120) 5. Presen Presence ce of insurab insurable le inter interest est.. While the payment by the insurer for the insured value of the lost cargo operates as a waiver of the insurer’s right to enforce the term term of the implie implied d warr warrant anty y again against st the assured under the marine insurance policy, the same cannot be validly interpreted as an i d i i f h l’ 












stages, the ship must be seaworthy at the commencement of each portion

Appli Applica cabil bility ity of impli implied ed warr warran anty ty of seaworthiness to cargo owners: It becomes the obligation of a cargo owner to look for a relia reliabl ble e commo common n carri carrier er,, wh which ich ke keep epss its vessels in seaworthy conditions. The shipper may have no control over the vessel but he has has cont contro roll in the the choi choice ce of the the comm common on carrier that will transport his goods (Roque v. IAC, 139 SCRA 596).

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iv. Tota otal deprivatio ation n of own owner of posses possession sion of thing thing insured insured.. (Sec. (Sec. 130)



Deviation  A departure from the course of the voyage insured, or an unreasonable delay in pursuing the the voya voyage ge or the the comm commen ence ceme ment nt of an entirely different voyage. (Sec.123)  Instances: 1. Departure of vessel from the course of the sailing fixed by mercantile usage 2. Depa Depart rtur ure e of vess vessel el from from the most most natural, direct and advantageous route if not fixed by mercantile usage

b. Cons Constr truc ucti tive ve i. Actual lo loss of of mo more th than ¾ of the value of the object; ii. Damage rre educing va v alue by by more than ¾ of the value of the vessel and of cargo; and iii. Expense of transshipment exceed ¾ of value of cargo. (Sec. 131, in relation to Sec. 139)  In case case of constr construc uctiv tive e total total loss, insured may: 1. Abandon goods or vessel to the insurer and claim for whole insured value (Sec. 139), or 2. Withou Withoutt abandon abandoning ing vessel, vessel, claim claim for part partial ial actua actuall loss. loss. (Sec. 155) 2. Partial: That which is not total (Sec. 128).











WMSU College of Law INSURANCE CODE REVIEWER (ROMEL be made by the master or upon his authority; 5. It mu must be be no not be caus caused ed by any fau fault of the party asking the contribution; 6. It must be successful, i.e. resulted in the the savi saving ng of the the vess vessel el or cargo; and Necessary.

4.

5. 6.

7.

GENERAL RULE: The insured may either hold the insurer directly liable for the whole of the insured value of the property sacrificed for the general benefit, subrogating him to his his own own righ rightt of cont contri ribu buti tion on or dema demand nd cont contri ribu buti tion on from from the the othe otherr inte intere rest sted ed parties as soon as the vessel arrives at her destination

It must be made within a reasonable reasonable time after after receip receiptt of reliabl reliable e informa informatio tion n of the loss (Sec. 141); It must be f actual actual (Sec. 142); It must be made by giving notice thereof to the insurer which may be done orally or in writing (Sec. 143); and The Th e noti notice ce of aban abando donm nme ent must must be explicit and must specify the particular cause of the abandonment (Sec. 144).

Effects: 1. It is equivalent to a transfer by the insured of his interest to the insurer with all the chances of recovery and indemnity (Transfer of Interest)(Sec.146) 2. Acts done done in good good faith faith by those those who who were were agents of the insured in respect to the thing insured, subsequent to the loss, are at the the risk risk of the the insu insure rerr and and for for his his benefit. (Transfer Of Agency)(Sec.148) 

RIGHT OF INSURED IN CASE OF GENERAL AVERAGE

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of the insured property which the insured himself assumes to act as insurer to the extent of the deficiency in the insurance of the insured property. In case of loss or damage, the insurer will be liable only for such proportion of the loss or damage as the amount of the insurance bears to the designated percentage of the full value of the property insured. (Bar Review Materials in Commercial Law, Jorge Miravite, 2002 ed.)

the insurer procures a 3rd party called the reinsurer to insure him against liability by reason of an original insurance. Basically, reinsurance is an insurance against liability which the original insurer may incur in favor of the original insured.

XVII. FIRE INSURANCE contrac actt by wh which ich the insur insurer er for a  A contr consideration agrees to indemnify the insured against loss of, or damage to, property by hostile fire fire,, incl includ udin ing g loss loss by ligh lightn tnin ing, g,

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insurance or fire insurance. The determination is important for 2 reasons: 1. Rules on constructive total loss and abandonme abandonment nt – appl applie iess only only to marine insurance; Rule on co-insurance – applies 2. primarily to marine insurance; Rule on co-insurance applies to 3. fire insurance only if expressly agreed upon. (Com (Comme merc rcial ial Law Law Revie Reviewe wer, r, Aguedo Aguedo Agbayani, Agbayani, 1988 ed.)

ALTE ALTERA RATI TION ON AS A SPEC SPECIA IAL L GROU GROUND ND FOR FOR RESCISSION BY INSURER  Requisites: 1. The use or condition of the thing is specifically limited or stipulated in the policy; 2. Such use or condition as limited by the policy is altered; 3. The al alteration is is ma made wi without the consent of the insurer; 4. The alteration is made by means with ithin the con control of the the insured;












1. Insurance Insurance against specified specified perils which may affect affect the person person and/or and/or property property of the insured . (accident or health insurance) Examples: personal accident,  robbery/theft insurance 2. Insurance Insurance against specified specified perils which may give rise to liability on the part of the insured for claims for injuries to or damage to prop proper erty ty of othe others rs.. (third party liability insurance)  Insurable interest is based on the interest of the insured in the safety of persons, and their property, who may maintain an action aga agains inst him him in case ase of thei theirr inju njury or destruction, respectively. Examp Example les: s: workm workmen en’s ’s compe compens nsati ation on,,  motor vehicle liability  In a third party liability (TPL) insurance contract, the insurer assumes the obligation by paying the injured third party to whom the insu insure red d is liab liable le.. Prio Priorr paym paymen entt by the the insured to the third person is not necessary in orde orderr that that the oblig obligati ation on may may arise arise.. The moment the insured becomes liable to third persons, the insured acquires an interest in

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1. Indemnity against liability – A third party injured can directly sue the insurer. 2. Indemnity for actual loss or reimbursement after actual payment by the insured – A third part party y has has no caus cause e of acti action on agai agains nstt the the insurer (Sec. 53, Bonifacio Bros. v. Mora, 20 SCRA 261). The insurer is not solidarily liable with the insured insured.. The insurer insurer’s ’s liabilit liability y is based based on contr contrac act; t; that that of the insure insured d is based based on torts. Furthermore, the insurer’s liability is limited by the amount of the insurance 

coverage (Pan Malayan Insurance Corporation v. CA, 184 SCRA 54).

“INTENTIONAL” vs. “ACCIDENTAL” AS USED IN INSURANCE POLICIES 1. Intentional – Implies the exercise of the reas reaso oning ning facu facult ltie ies, s, cons consci ciou ousn snes esss and and voliti volition on.. Wher Where e a provi provisi sion on of the polic policy y excludes intentional injury, it is the intention of the son infli the tha














if they are poor regardless of the financial cap capabil abilit ity y of motor otor vehi vehicl cle e owne ownerrs or oper operat ator orss resp respon onsi sibl ble e for for the the acci accide dent nt sustained (Shafer v. Judge, RTC, 167 SCRA 386).  Claimants/victims may be a “passenger” or a “3rd party”  It applies to all vehicles whether public and private vehicles. Note Note:: It is the only only compu compuls lsor ory y insur insuranc ance e coverage under the Insurance Code.

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3. Claim may be made against one motor vehicle only 4. Proper insurer from which to claim a. In case case of an occupa occupant nt:: Insur Insurer er of the vehi vehicl cle e in wh whic ich h the the occu occupa pant nt is ridi riding ng,, mounting or dismounting from; b. In any other case: Insurer of the directly offending vehicle. (Sec. 378) The claimant is not free to choose from which wh ich insure insurerr he will will claim claim the “no “no fault fault indemnity” as the law makes it mandatory that the claim shall lie against the insurer of the vehicle in which the occupant is riding, mounti mounting ng or dismo dismoun unti ting ng from from.. That That said said vehicle might not be the one that caused the 












A clause which includes theft as among the risks insured against.  Where the car is unlawfully and wrongfully tak taken witho ithou ut the the own owner’s con consent or knowledge, such taking constitutes theft, and thus, thus, it is the “theft “theft clau clause” se” and not the “authorized driver clause that should apply (Palermo v. Pyramids Ins., 161 SCRA 677).

C. Cooperation Clause  A clause which provides in essence that the insured shall give all such information and assistance as the insurer may require, usua usuall lly y requ requir irin ing g atte attend ndan ance ce at tria trials ls or hearings.

court Requires acceptance of obligee to be valid Risk-shifting device; premium paid being in the nature of a service fee

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provided by law No need of acceptance by any third party Risk-distributing device; premium paid as a ratable contribution to a common fund

XXI. LIFE INSURANCE  Insurance on human lives and insurance appertaining thereto or connected therewith which includes every contract or pledge for the paymen paymentt of endowm endowment entss or annuitie annuities. s. (Sec. 179)












the the loan loan,, to the the ex exte tent nt of the the mort mortga gage ge indebtedness such that if the mortgagor dies, the proceeds of his life insurance will be used to pay for his indeb indebte tedn dnes esss to the lende lenderr assured and the deceased’s heirs will thereby be relieved from paying the unpaid balance of the loan. loan. (Gre (Great at Pacif Pacific ic Life Life Assur Assuran ance ce Corp. vs. Court of Appeals, 316 SCRA 677)

LIABILITY OF INSURER IN CERTAIN CAUSES OF DEATH OF INSURED 1. Suicide  Insurer is liable in the following cases: 1. If committed after two years from the date of the policy’s issue or its last reinstatement; If mi ed in of insanit insanit

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The measure of indemnity in life or health insurance policy is the sum fixed in the policy except when a creditor insures insures the life of his debtor. (Sec. 183) 

IS THE CONS ONSENT OF THE BENE BENEFI FIC CIAR IARY NECESSARY TO THE ASSIGNMENT OF A LIFE INSURANCE POLICY? depend nds. s. If the the desi design gnat atio ion n of the the  It depe beneficiary is irrevocable, the beneficiary’s conse consent nt is essen essenti tial al becau because se of his veste vested d right right.. If the design designati ation on is revo revocab cable le,, the policy may be assigned without such consent becau because se the the benef benefici iciar ary y only only has a mere mere expectancy to the proceeds.












loss

condition precedent to collecting the insurance.

XXII. VARIABLE CONTRACT Any policy or contract on either a group or indi indiv vidu idual basi basiss issu issued ed by an insu insurrance ance comp compan any y prov provid idin ing g for for bene benefi fits ts or othe otherr contractual payments or values thereunder to vary so as to reflect investment results of any segregated portfolio of investment.

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_____________ ___________________ ___________ __________ __________ _________ ____

END

TO GOD BE THE GLORY. AD ASTRA PER ASPERA

(ALPHA RHO LAMBDA)

Insurance Code of the Phils.

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