Beruflich Dokumente
Kultur Dokumente
INSURANCE CODE
(PD 1460)
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2.
I. BENEFICIARY
The insurance proceeds shall be applied exclusively
to the proper interest of the person in whose name or for
whose benefit it is made unless otherwise specified in the
policy
Beneficiary
The beneficiary is the person designated to receive
the proceeds of the policy when the risk attaches.
He may be the (1) insured himself in the property
insurance or (2) the insured or (3)a third person in life
insurance
The father or mother of a minor who is an insured or
beneficiary of a life policy, may exercise, for said
minor, all rights under the policy up to P20k without
the need of a court authority or a bond (sec 180)
his
his
the
the
policy vested rights over the policy (Philam vs. Pineda 175
SCRA 201)
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Where a policy is taken by a third person on the
life of the insured, and said third person designates
himself as the beneficiary, the third person must have
an insurable interest on the life of the insured, at the
time the policy became effective.
C. Beneficiary of Property Insurance
The beneficiary of the property insurance must have
an insurable interest over the subject matter of the
insurance existing at the time the policy was taken
and at the time the loss took place
II. INSURABLE INTEREST
What is insurable Interest as referred in the Code?
Insurable interest is a right or relationship
In regard to the subject matter of the insurance
Such that the insured will derive
1. pecuniary benefit or advantage from its
preservation and
2. will suffer pecuniary loss or damage
from its destruction or injury
- by the happening of the event insured against
A . Insurable Interest in Life
Define Insurable Interest in Life?
Insurable interest in life is the interest which a person has
1. In his life or
2. In the lives of other persons
a. Of his spouse and of his children
b. On whom he depends wholly or in part for
education or support (Wife insuring Husbands
life)
c. Under legal obligation to him to pay money, to
deliver property or to render service (Creditor
insuring the life of its Debtor)
d. Upon whose file any estate or interest vested
upon him. (Legatee of a usufruct insuring the life
of the usufructuary)
A corporation has an insurable interest in
the lives of its officers when the death or
illness of said officers would materially and
injuriously affect the corporation.
The corporation and the heirs of the
manager can insure the life of the managerdecedent in agreed proportion, since both
have insurable interest over the life of the
latter
When Insurable Interest should exist?
It must exist at the time the insurance is taken.
B. Insurable Interest in property
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insurable interest in the property (Fil Merchants vs CA 179
SCRA 638)
d.
A carrier or depositary of any kind has an insurable interest in a
thing held by him as such, to the extent of his liability but not
exceed the value thereof.
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taking his interest in the thing insured. Otherwise
stated, the insurance on property passes
automatically, upon the death of the insured , to the
heir, legatee or devisee who acquires interest in the
thing insured.
III CONCEALMENT
What is Concealment?
Concealment is a neglect to communicate that which a party
knows and ought to communicate to the other party.
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a.
b.
c.
d.
e.
What is representation?
A representation is an oral or written statement of a fact or
condition made by the insured at the time of or prior to the
issuance of the policy, affecting the risk made by the insured to
the insurer, tending to induce the insurer to assume the risk
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material
It must be strictly complied with
6.
7.
V. WARRANTIES
What is a warranty?
A warranty is a statement or promise stated in the policy itself or
incorporated therein by reference, whereby the insured
expressly contracts as to the present or future existence or
certain facts, circumstances or conditions, the literal truth of
which is essential to the validity of the contract of insurance
What does warranty relate to?
It may relate to the past, the present, the future or to any or all of
these.
Note:
A statement in a policy, of a matter relating to the person or
thing insured, or to the risk as a fact is an express warranty. A
statement which is in the nature of an opinion or belief is not a
warranty
What is a promissory warranty?
It is a statement in a policy that a thing which is material to the
risk is intended to be done or not to be done after the policy
takes effect.
As a general rule: the non-performance of a promissory
warranty entitles the other party to rescind the contract:
Exceptions to the rule are:
1. Loss occurs before the time arrives for the
performance of the promissory warranty
2. Performance becomes unlawful before the time
arrives for the performance of the promissory warranty
3. Performance becomes impossible before the time
arrives for the performance of the promissory warranty
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policy clearly show that the insurance was meant to cover also
the shares of the other partners.
What is a rider in a contract of insurance?
A rider is a printed or typed stipulation contained on a slip of
paper attached to the policy and forming an integral part of the
policy.
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1.
2.
Define premium.
Premium is the consideration paid an insurer for undertaking to
indemnify the insured against a specified peril
Effect of nonpayment
1. Of First premium prevents the inception of the policy
2. Of subsequent premiums- it does not affect the validity
of the contract unless, by express stipulation, it is
provided that the policy shall in any event be
suspended or shall lapse.
When is the insured entitled to recover premiums?
The insured is entitled to a return of the whole premium:
1. If the thing insured was never exposed to the risk
insured against
2. When the contract is voidable due to the fraud or
misrepresentation of the insurer or his agent
3. When the contract is voidable because of the
existence of facts of which the insured is ignorant
without his fault
4. When the insurer never incurred any liability under the
policy because of the default of the insured other than
actual fraud
The insured is entitled to a ratable return of premium on the
following cases:
1. Where the insurance is made for a definite period of
time and the insured surrenders policy before
termination
2. Where there is over-insurance by several insurers
NOTES
Where the insurance is for a definite period of time and the
insured cancels his policy by surrendering the policy, the insured
is entitled to recover the premiums already paid equivalent to
the unexpired term at a pro rata rate
Exception to this rule:
a. Where the insurance is not for a definite period
b. Where the policy is a life policy
c. Where a short period rate has been agreed upon
Short period rate is that percentage, as agreed
upon by the parties and appearing on the face of
the policy, which the insurer shall retain from the
premium in the event that the policy is
surrendered by the insured for cancellation.
The premiums to be returned where there is over-insurance by
several insurers shall be proportioned to the amount by which
the aggregate sum insured in all the policies exceeds the value
of the thing
Example:
X insures his house which has an insurable value of
P1,500,000 as follows:
Insurer
Amt of Insurance
Premiums paid
A Co.
P 1,200,000
P 24,000
B. Co
600,000
12,000
Aggregate sum
P1,800,000.
In this case, there is an over insurance of P300,000, the
amount by which the aggregate sum insured in the two
policies exceeds the insurable value of the house. The
proportion is P300k to P1800k or 1/6. Hence, 1/6 of P24k
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or P4k is what A co must return; and 1/6 of P12k or P2k is
what B co must return
IX. REINSURANCE
VIII DOUBLE INSURANCE
When does double insurance exists?
A double insurance exists where the same person is insured by
several insurers separately in respect to the same subject and
interest
What are its requisites?
There is no double insurance unless the following requisites
exist:
1. The person insured is the same
2. Two or more insurers insuring separately
3. The subject matter is the same
4. The interest insured is also the same and
5. The risk or peril insured against is likewise the same
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insurer makes with another to
protect the first insurer from a
risk it has already assumed
It is a Contract of insurance
X. LOSS
Define loss in contract of insurance
Loss is the injury or damage sustained by the insured from the
perils insured against
What is Proximate cause?
Proximate cause is the active efficient cause which sets in
motion a train of events which in turn brings about a result
without the intervention of any force operating and working
actively from a new and independent force
What is a remote cause?
Remote cause is a cause that does not necessarily or
immediately produce an event or injury
When is the insurer liable for losses?
The insurer is liable for:
1. Loss the proximate cause of which is the peril insured
against although the peril not contemplated by the
contract may not have been a remote cause of the
loss
2. Loss the immediate cause of which is the peril insured
against except where the proximate cause is an
excepted peril
3. Loss through the negligence of the insured or of the
insureds agents or others, and
4. Loss in the course of efforts to rescue the thing from
the peril insured against although the cause of loss is
not a peril insured against..
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1.
Note:
Article 2207 of the Civil Code makes it clear that the insurance
company that has paid the indemnity for the injury or loss
sustained by the property insured shall be subrogated to the
rights of the insured against the wrongdoer or the person who
has violated the contract. The insurer who pays the insured is
an assignee in equity of the insured against the offender.
(Malayan vs CA 165 SCRA 536)
As a general rule: Payment by the insurer to the insured for
loss under the policy entitles the insurer to be subrogated to the
rights of the insured against the wrongdoer.
The exceptions are:
1. Where the insured releases the wrongdoer from
liability
2. Where the insurer pays without notifying the carrier,
which in good faith had already paid the insured, and
3. Where the insurer pays the insured for a loss which is
not included in the risk insured against, by the policy
(Pan Malayan vs. CA 184 SCRA 54)
Where the insured was paid by the insurer, the latter is
subrogated to all rights of the former against the wrongdoer. If
the insured after being paid by the insurer, releases the
wrongdoer without the insurers consent, the insurer loses his
right of subrogation against the wrongdoer. The insurer will
however be entitled to recover from the insured what the insured
originally received from the insurer as the proceeds of the policy
(Manila vs. CA 154 SCRA 650)
CLASSES OF INSURANCE
MARINE INSURANCE
-Insurance against risks connected with navigation, to
which a ship, cargo, freightage, profits or others insurable
interest in movable property, may be exposed during a certain
voyage or a fixed period of time.
Coverage of Marine Insurance:
1. Loss or damage to aircraft
2. Loss or damage to goods & merchandise for shipment
3. Persons in connection w/ marine insurance
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4.
5.
Perils of Navigation
-perils in making landings in river navigation and
damage from rain in consequence of improper stowage.
War risks
-perils due directly to some hostile action, military
maneuver, operational war danger
Builders risks
-damage to ways from launching as well as damage to
the ship.
Perils of the sea
-all kinds of marine casualties & damages done to the
ship or goods at sea by the violent action of the winds or waves;
not foreseen & not attributable to the fault of anybody.
Perils of the ship
-losses or damages resulting from:
a) natural and inevitable action of the sea
b) ordinary wear and tear of ship
c) negligent failure of the ship's owner to provide the vessel
w/ proper equipment to convey the cargo under ordinary
conditions.
Inchmaree clause
-provision in the policy that the insurance shall cover
loss of, damage to, the hull or machinery through negligence of
the master, charterers, engineers, or pilots, or through
explosions, bursting of boilers, breakage of shafts, or through
any latent defect in the machinery or hull not resulting from want
of due diligence.
1)
2)
Cargo owner
over the cargo & expected profits
3)
Charterer
over the amount he is liable to the shipowner, if the
ship is lost or damaged during the voyage.
Loan on Bottomry/Respondentia
-loan in which under any condition whatever, the
repayment of the sum loaned, and of the premium stipulated,
Freightage
benefits derived by the owner, either from:
a) chartering of the ship
b) its employment for the carriage of his own goods or
those of others.
a)
b)
1.
2.
3.
4.
5.
a)
b)
c)
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d)
Seaworthiness
relative term depending of the NATURE of the ship,
the VOYAGE, & the SERVICE in which she is at the
time engaged.
Reasonable fitness to perform the service & to
encounter the ordinary perils of the voyage
contemplated by the parties.
EFFECT OF VIOLATION OF IMPLIED WARRANTY OF
SEAWORTHINESS:
insurer will not be liable for a loss
WHEN
REQUIREMENT
OF
SEAWORTHINESS
SATISFIED:
General Rule:
Seaworthiness of the vessel is required only at the
commencement of the risk.
Exceptions:
1. insurance is made for a specified length of time
2. insurance is upon the cargo required to be
transshipped at an immediate port
a)
b)
c)
a)
b)
c)
DEVIATION IS PROPER:
a) when caused by circumstances over which neither the
master nor the owner of the ship has any control
b) when necessary to comply with warranty, or to avoid a
peril, whether or not the peril is insured against
c) when made in good faith, & upon reasonable grounds of
belief in its necessity to avoid a peril
d) when made in good faith, for the purpose of saving human
life, or relieving another vessel in distress.
EFFECT OF IMPROPER DEVIATION:
insurers become immediately absolved from further
liability
Loss
A. TOTAL
1.
2.
B.
PARTIAL LOSS
loss other than a total loss
1.
KINDS OF AVERAGE:
GROSS/GENERAL AVERAGES
include all the damages & expenses which are
deliberately caused in order to save the vessel, its
cargo, or both at the same time, from real & known
risk.
SIMPLE/PARTICULAR AVERAGE
includes all the expenses & damages caused to the
vessel or to her cargo which have not inured to the
common benefit & profit of all the persons interested
in the vessel & her cargo.
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5.
''FPA CLAUSE"
a situation wherein the insured & insurer stipulated in
the policy that the vessel/cargo insured shall be free
from particular average
effects:
a. if damage to the thing insured is a PARTICULAR
average, the insurer shall not be liable UNLESS
the loss suffered is total
b. if damage to the thing insured is a GENERAL
average, insurer shall be liable whether the loss
is partial or total or for the condition of the
insured for his proportion of all general average
losses assessed upon the thing insured which
was saved.
6.
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
Abandonment
act of the insured by which, after a constructive total
loss, he declares the relinquishment to the insurer of
his interest in the thing insured
effect: insured is surrendering to the insurer whatever
is left of the property insured, & resorting to the policy
for indemnity, insurer then becomes the owner of
whatever may remain of the insured thing & the
insured may recover a total loss.
REQUISITES FOR VALID ABANDONMENT:
actual relinquishment by the person insured of his interest
in the thing insured
constructive total loss
abandonment must be neither partial nor conditional
made within a reasonable time after receipt of reliable
information of the loss
factual
made by giving notice to the insurer which may be done
orally or in writing
notice of abandonment must be explicit & must specify the
particular cause of the abandonment
WHEN ABANDONMENT MAY BE MADE:
if more than 3/4 of the value of the thing insured is actually
lost
if more than 3/4 of the value of the thing insured would
have to be expended to recover it from the peril
if it is injured to such an extent as to reduce its value by
more than 3/4
if the thing is insured is a ship & the contemplated voyage
cannot be lawfully performed without incurring an expense
to be insured of more than 3/4 the value of the thing
abandoned.
1.
2.
no abandonment
recovery only of ACTUAL LOSS
1.
2.
3.
a)
b)
EFFECT OF VALUATION:
conclusive between the parties provided
a) the insured has some interest at the risk
b) there is no fraud on his part.
Co-insurance
form of insurance in which the person who insures his
property for less than the entire value is understood to
be his own insurer for the difference which exists
between value of property and amount of insurance
1.
2.
MARINE INSURANCE
There is always co-insurance
No
FIRE INSURANCE
co-insurance UNLESS
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expressly stipulated in the
policy
2.
Fire insurance
- a contract by which the insurer for a consideration
agrees to indemnify the insured against loss, or damage to,
property by fire, but may include loss by lightning, windstorm,
tornado & earthquake & other allied risks, when such risks are
covered by extension to fire insurance policies/ under separate
policies
Alteration
alteration in the use or condition of thing insured will
entitle the insurer to rescind the contract provided
following requisites are present:
a) use or condition of the thing is specifically
limited/stipulated in the policy.
b) such case/condition as limited by the policy is
altered
c) the alteration is made without the consent of the
insurer
d) alteration is made by means within the control of
the insured
e) the alteration increases the risk
f) violation of a policy provision
Co-insurance clause
clause requiring the insured to maintain insurance to
an amount equal to a specified percentage of the
value of the insured property under penalty of
becoming co-insurer to the extent of such deficiency
Casualty Insurance
includes all forms of instrument against loss or liability
arising from accident/mishap other than those within
the scope of other types of insurance
1.
ACCIDENT/HEALTH
INSURANCE
Protect against not a loss of life
but a loss of time, earning
capacity and expenses
Suretyship
contract whereby a person binds himself solidarily with
principal debtor for the fulfillment of an obligation
1.
2.
3.
SURETY
insurer of debt
Undertakes to pay if principal
does not pay
primary
No such rights
GUARANTOR
insurer of solvency of debtor
Binds himself to pay if principal
is unable to pay
Secondary
Can not be compelled to pay
the creditor unless the latter
has exhausted all the
properties of the debtor
SURETY
Accessory contract
3 parties: surety, obligor and
obligee
Credit accommodation
Surety can recover from
principal
Bond can be cancelled only
with consent of the oblige,
commissioner or the court
Risk-shifting device premium
paid being in the nature of a
service fee
Requires acceptance of the
oblige to be valid
PROPERTY INSURANCE
Principal contract
2 parties: insurer and insured
a)
b)
Contract of Indemnity
No such right, only right of
subrogation
May be cancelled unilaterally
either by insured or insurer on
grounds provided by law
Risk-distributing
device,
premium paid as a ratable
contribution to a common fund
No need for acceptance by any
third party
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1.
2.
3.
Life Insurance
insurance payable on the death of a person or on his
surviving a specified period or otherwise contingently
on the continuance or cessation of life.
Nature:
1. liability absolutely certain
2. amount of insurance generally no limit
3. direct pecuniary loss not required
1.
2.
3.
ENDOWMENT INSURANCE
contract to pay a certain sum to the insured if he lives
a certain length of time, or if he dies before that time,
to some other person indicated as beneficiary
4.
5.
ADVANCE INSURANCE
contract which provides for the payment to the insured
of a lump sum immediately, in consideration of his
agreement to make certain periodical payments to the
insurer for a specified period, or for that end of the
period, the performance of insured's obligation being
secured by mortgage or deed of trust
6.
TONTINE INSURANCE
form of life insurance by which the policyholder under
the same plan, that no dividends, return premium, or
surrender value shall be received for a term of years
called the "tontine period," the entire surplus from all
sources being allowed to accumulate to the end of
that period, and then divided among all who have
maintained their insurance in force and who have
survived.
"No-fault" Clause
any claim for death or injury shall be paid up to p5,000
without necessity of proving negligence or fault,
provided the following proofs of loss under oath are
submitted:
1. police report of accident
2. death certificate and evidence sufficient to establish
proper payee
3. medical report and evidence of medical or hospital
disbursement
Cooperation Clause
clause in an automobile insurance policy which
provides in essence that the insured shall give all such
information and assistance as the insurer may require,
usually requiring attendance at trials or hearings
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1.
2.
3.
COMPULSORY
MOTOR
VEHICLE
LIABILITY
INSURANCE (CMVLI)
is a protection coverage that will answer for legal
liability for losses and damages for bodily injuries or
property damage that may be sustained by another
arising from the use and operation of motor vehicle by
its owner
Purpose: to give immediate financial assistance to victims of
motor vehicle and/or their dependents, especially if they are
poor regardless of the financial capability of motor vehicle
owners or operators responsible for the accident sustained.
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