JJVL – INSURANCE LAW
 2001 CASES
G.R. No. 138737 July 12, 2001
FINMAN GENERAL ASSURANCE
CORPORATION, petitioner, vs. COURT OF APPEALS and
USIPHIL INCORPORATED, respondents.
Facts:
private respondent obtained a fire insurance policy from
petitioner covering certain properties, e.g., office, furniture,
fixtures, shop machinery and other trade equipment. Petitioner
undertook to indemnify private respondent for any damage to or
loss of said properties arising from fire.
Private respondent filed with petitioner an insurance claim
amounting to P987,126.11 for the loss of the insured properties
due to fire. Acting thereon, petitioner appointed Adjuster H.H.
Bayne to undertake the valuation and adjustment of the loss.
H.H. Bayne then required private respondent to file a formal
claim and submit proof of loss. In compliance therewith, private
respondent submitted its Sworn Statement of Loss and Formal
Claim signed by Reynaldo Cayetano, private respondent’s
Manager. Respondent likewise submitted Proof of Loss signed
by its Accounting Manager Pedro Palallos and countersigned by
H.H. Bayne’s Adjuster F.C. Medina.
Despite repeated demands by private respondent, petitioner
refused to pay the insurance claim. Thus, private respondent
was constrained to file a complaint against petitioner for the
unpaid insurance claim. In its Answer, petitioner maintained that
the claim of private respondent could not be allowed because it
failed to comply with Policy Condition No. 13 regarding the
submission of certain documents to prove the loss.
Held:
Both the trial court and the CA concur in holding that private
respondent had substantially complied with Policy Condition No.
13.
A perusal of the records shows that private respondent, after the
occurrence of the fire, immediately notified petitioner thereof.
Thereafter, private respondent submitted the following
documents: (1) Sworn Statement of Loss and Formal Claim
(Exhibit C) and; (2) Proof of Loss (Exhibit D). The submission of
these documents, to the Court’s mind, constitutes substantial
compliance with the above provision. Indeed, as regards the
submission of documents to prove loss, substantial, not strict as
urged by petitioner, compliance with the requirements will
always be deemed sufficient.8
In any case, petitioner itself acknowledged its liability when
through its Finance Manager, Rosauro Maghirang, it signed the
document indicating that the amount due private respondent is
P842,683.40.
G. R. No. 138941 - October 8, 2001
AMERICAN HOME ASSURANCE
COMPANY, Petitioner, v. TANTUCO ENTERPRISES,
INC., Respondent.
Facts:
Respondent Tantuco Enterprises, Inc. is engaged in the coconut
oil milling and refining industry. It owns two oil mills. (The 2nd oil
mill – new oil mill)The two oil mills were separately covered by
fire insurance policies issued by petitioner American Home
Assurance Co., Philippine Branch. The first oil mill was insured
for three million pesos (P3,000,000.00) for the period March 1,
1991 to 1992. The new oil mill was insured for six million pesos
(P6,000,000.00) for the same term.
A fire that broke out and gutted and consumed the new oil mill.
Respondent immediately notified the petitioner of the incident.
Petitioner rejected respondent's claim for the insurance
proceeds on the ground that no policy was issued by it covering
the burned oil mill. The oil mill gutted by fire was not the one
described by the specific boundaries in the contested policy.
Held:
Notwithstanding the misdescription in the policy, it is beyond
dispute, to our mind, that what the parties manifestly intended to
insure was the new oil mill. This is obvious from the categorical
statement embodied in the policy, extending its protection:
"On machineries and equipment with complete accessories
usual to a coconut oil mill including stocks of copra, copra cake
and copra mills whilst contained in the new oil mill building,
situate (sic) at UNNO. ALONG NATIONAL HIGH WAY, BO.
IYAM, LUCENA CITY UNBLOCKED.''13 (emphasis supplied.)
If the parties really intended to protect the first oil mill, then there
is no need to specify it as new.
Indeed, it would be absurd to assume that respondent would
protect its first oil mill for different amounts and leave uncovered
its second one. As mentioned earlier, the first oil mill is already
covered under Policy No. 306-7432324-4 issued by the
petitioner. It is unthinkable for respondent to obtain the other
policy from the very same company. The latter ought to know
that a second agreement over that same realty results in its over
insurance.
The imperfection in the description of the insured oil mill's
boundaries can be attributed to a misunderstanding between the
petitioner's general agent, Mr. Alfredo Borja, and its policy
issuing clerk, who made the error of copying the boundaries of
the first oil mill when typing the policy to be issued for the new
one.
G.R. No. 127897 November 15, 2001
DELSAN TRANSPORT LINES, INC., petitioner, vs. THE HON.
COURT OF APPEALS and AMERICAN HOME ASSURANCE
CORPORATION, respondents.
Facts:
Caltex Philippines (Caltex for brevity) entered into a contract of
affreightment with the petitioner, Delsan Transport Lines, Inc.,
for a period of one year whereby the said common carrier agreed
to transport Caltex’s industrial fuel oil from the Batangas-Bataan
Refinery to different parts of the country. Under the contract,
petitioner took on board its vessel, MT Maysun 2,277.314
kiloliters of industrial fuel oil of Caltex to be delivered to the
Caltex Oil Terminal in Zamboanga City. The shipment was
insured with the private respondent, American Home Assurance
Corporation.
MT Maysum set sail from Batangas for Zamboanga City.
Unfortunately, the vessel sank taking with it the entire cargo of
fuel oil. Subsequently, private respondent paid Caltex the sum
P5,096,635.67 representing the insured value of the lost cargo.
Exercising its right of subrogation under Article 2207 of the New
Civil Code, the private respondent demanded of the petitioner
the same amount it paid to Caltex.1âwphi1.nêt
Due to its failure to collect from the petitioner despite prior
demand, private respondent filed a complaint with the RTC for
collection of a sum of money. Petitioner Delsan Transport Lines,
Inc. invokes the provision of Section 113 of the Insurance Code
of the Philippines, which states that in every marine insurance
upon a ship or freight, or freightage, or upon any thin which is
the subject of marine insurance there is an implied warranty by
the shipper that the ship is seaworthy. Consequently, the insurer
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will not be liable to the assured for any loss under the policy in
case the vessel would later on be found as not seaworthy at the
inception of the insurance. It theorized that when private
respondent paid Caltex the value of its lost cargo, the act of the
private respondent is equivalent to a tacit recognition that the ill-
fated vessel was seaworthy; otherwise, private respondent was
not legally liable to Caltex due to the latter’s breach of implied
warranty under the marine insurance policy that the vessel was
seaworthy.
Held:
The payment made by the private respondent for the insured
value of the lost cargo operates as waiver of its (private
respondent) right to enforce the term of the implied warranty
against Caltex under the marine insurance policy. However, the
same cannot be validly interpreted as an automatic admission
of the vessel’s seaworthiness by the private respondent as to
foreclose recourse against the petitioner for any liability under
its contractual obligation as a common carrier. The fact of
payment grants the private respondent subrogatory right which
enables it to exercise legal remedies that would otherwise be
available to Caltex as owner of the lost cargo against the
petitioner common carrier.
The right of subrogation has its roots in equity. It is designed to
promote and to accomplish justice and is the mode which equity
adopts to compel the ultimate payment of a debt by one who in
justice and good conscience ought to pay. It is not dependent
upon, nor does it grow out of, any privity of contract or upon
written assignment of claim. It accrues simply upon payment by
the insurance company of the insurance claim. Consequently,
the payment made by the private respondent (insurer) to Caltex
(assured) operates as an equitable assignment to the former of
all the remedies which the latter may have against the petitioner.
In order to escape liability for the loss of its cargo of industrial
fuel oil belonging to Caltex, petitioner attributes the sinking of
MT Maysun to fortuitous even or force majeure. But as the
appellate court correctly ruled, petitioner’s vessel, MT Maysun,
sank with its entire cargo for the reason that it was not
seaworthy. There was no squall or bad weather or extremely
poor sea condition in the vicinity when the said vessel sank.
Neither may petitioner escape liability by presenting in evidence
certificates that tend to show that at the time of dry-docking and
inspection by the Philippine Coast Guard, the vessel MT
Maysun, was fit for voyage. These pieces of evidence do not
necessarily take into account the actual condition of the vessel
at the time of the commencement of the voyage.
 2002 cases
G.R. No. 125678 March 18, 2002
PHILAMCARE HEALTH SYSTEMS, INC., petitioner, vs.
COURT OF APPEALS and JULITA TRINOS, respondents.
Facts:
Ernani Trinos, deceased husband of respondent Julita Trinos,
applied for a health care coverage with petitioner Philamcare
Health Systems, Inc. In the standard application form, he
answered no to the following question:
Have you or any of your family members ever
consulted or been treated for high blood pressure,
heart trouble, diabetes, cancer, liver disease, asthma
or peptic ulcer? (If Yes, give details).1
The application was approved for a period of one year.
Accordingly, he was issued Health Care Agreement No.
P010194. Under the agreement, respondent’s husband was
entitled to avail of hospitalization benefits, whether ordinary or
emergency, listed therein. He was also entitled to avail of "out-
patient benefits" such as annual physical examinations,
preventive health care and other out-patient services.
Upon the termination of the agreement, the same was extended
for another year. The amount of coverage was increased to a
maximum sum of P75,000.00 per disability.2
During the period of his coverage, Ernani suffered a heart attack
and was confined at the Manila Medical Center (MMC) for one
month. Respondent tried to claim the benefits under the health
care agreement. However, petitioner denied her claim saying
that the Health Care Agreement was void. According to
petitioner, there was a concealment regarding Ernani’s medical
history. Doctors at the MMC allegedly discovered at the time of
Ernani’s confinement that he was hypertensive, diabetic and
asthmatic, contrary to his answer in the application form.
Held:
The insurable interest of respondent’s husband in obtaining the
health care agreement was his own health. The health care
agreement was in the nature of non-life insurance, which is
primarily a contract of indemnity. Once the member incurs
hospital, medical or any other expense arising from sickness,
injury or other stipulated contingent, the health care provider
must pay for the same to the extent agreed upon under the
contract.
Petitioner argues that respondent’s husband concealed a
material fact in his application. It appears that in the application
for health coverage, petitioners required respondent’s husband
to sign an express authorization for any person, organization or
entity that has any record or knowledge of his health to furnish
any and all information relative to any hospitalization,
consultation, treatment or any other medical advice or
examination. Petitioner additionally required the applicant for
authorization to inquire about the applicant’s medical history.
The answer assailed by petitioner was in response to the
question relating to the medical history of the applicant. This
largely depends on opinion rather than fact, especially coming
from respondent’s husband who was not a medical doctor.
Where matters of opinion or judgment are called for, answers
made in good faith and without intent to deceive will not avoid a
policy even though they are untrue.
The fraudulent intent on the part of the insured must be
established to warrant rescission of the insurance
contract. Concealment as a defense for the health care provider
or insurer to avoid liability is an affirmative defense and the duty
to establish such defense by satisfactory and convincing
evidence rests upon the provider or insurer. In any case, with or
without the authority to investigate, petitioner is liable for claims
made under the contract. Having assumed a responsibility under
the agreement, petitioner is bound to answer the same to the
extent agreed upon. In the end, the liability of the health care
provider attaches once the member is hospitalized for the
disease or injury covered by the agreement or whenever he
avails of the covered benefits which he has prepaid.
Under Section 27 of the Insurance Code, "a concealment
entitles the injured party to rescind a contract of insurance." The
right to rescind should be exercised previous to the
commencement of an action on the contract. In this case, no
rescission was made. Besides, the cancellation of health care
agreements as in insurance policies require the concurrence of
the following conditions:
1. Prior notice of cancellation to insured;
2. Notice must be based on the occurrence after effective date
of the policy of one or more of the grounds mentioned;
3. Must be in writing, mailed or delivered to the insured at the
address shown in the policy;
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4. Must state the grounds relied upon provided in Section 64 of
the Insurance Code and upon request of insured, to furnish facts
on which cancellation is based.18
None of the above pre-conditions was fulfilled in this case.
[G.R. No. 119176. March 19, 2002.]
COMMISSIONER OF INTERNAL REVENUE, Petitioner, v.
LINCOLN PHILIPPINE LIFE INSURANCE COMPANY, INC.
(now JARDINE-CMA LIFE INSURANCE COMPANY, INC.)
and THE COURT OF APPEALS, Respondents.
Facts:
Private respondent Lincoln Philippine Life Insurance Co., Inc.,
(now Jardine-CMA Life Insurance Company, Inc.) is a domestic
corporation registered with the Securities and Exchange
Commission and engaged in life insurance business. In the
years prior to 1984, private respondent issued a special kind of
life insurance policy known as the "Junior Estate Builder Policy,"
the distinguishing feature of which is a clause providing for an
automatic increase in the amount of life insurance coverage
upon attainment of a certain age by the insured without the need
of issuing a new policy. The clause was to take effect in the year
1984.
Subsequently, petitioner issued deficiency documentary stamps
tax assessment for the year 1984. Private respondent
questioned the deficiency assessments and sought their
cancellation. Petitioner claims that the "automatic increase
clause" in the subject insurance policy is separate and distinct
from the main agreement and involves another transaction; and
that, while no new policy was issued, the original policy was
essentially re-issued when the additional obligation was
assumed upon the effectivity of this "automatic increase clause"
in 1984; hence, a deficiency assessment based on the additional
insurance not covered in the main policy is in order.
Held:
Section 49, Title VI of the Insurance Code defines an insurance
policy as the written instrument in which a contract of insurance
is set forth. Section 50 of the same Code provides that the policy,
which is required to be in printed form, may contain any word,
phrase, clause, mark, sign, symbol, signature, number, or word
necessary to complete the contract of insurance. It is thus clear
that any rider, clause, warranty or endorsement pasted or
attached to the policy is considered part of such policy or
contract of insurance.
The subject insurance policy at the time it was issued contained
an "automatic increase clause." Although the clause was to take
effect only in 1984, it was written into the policy at the time of its
issuance. The distinctive feature of the "junior estate builder
policy" called the "automatic increase clause" already formed
part and parcel of the insurance contract, hence, there was no
need for an execution of a separate agreement for the increase
in the coverage that took effect in 1984 when the assured
reached a certain age.
Although the automatic increase in the amount of life insurance
coverage was to take effect later on, the date of its effectivity, as
well as the amount of the increase, was already definite at the
time of the issuance of the policy. Thus, the amount insured by
the policy at the time of its issuance necessarily included the
additional sum covered by the automatic increase clause
because it was already determinable at the time the transaction
was entered into and formed part of the policy.
The "automatic increase clause" in the policy is in the nature of
a conditional obligation under Article 1181, 8 by which the
increase of the insurance coverage shall depend upon the
happening of the event which constitutes the obligation. In the
instant case, the additional insurance that took effect in 1984
was an obligation subject to a suspensive obligation, 9 but still a
part of the insurance sold to which private respondent was liable
for the payment of the documentary stamp tax.
The deficiency of documentary stamp tax imposed on private
respondent is definitely not on the amount of the original
insurance coverage, but on the increase of the amount insured
upon the effectivity of the "Junior Estate Builder Policy."
G.R. No. 136914 - January 25, 2002
COUNTRY BANKERS INSURANCE
CORPORATION, Petitioner, vs. LIANGA BAY AND
COMMUNITY MULTI-PURPOSE COOPERATIVE,
INC., Respondent.
Facts:
Petitioner and the respondent entered into a contract of fire
insurance. Under the Fire Insurance Policy, the petitioner
insured the respondent's stocks-in-trade against fire loss,
damage or liability during the period starting from June 20, 1989
at 4:00 p.m. to June 20, 1990 at 4:00 p.m., for the sum of Two
Hundred Thousand Pesos (P200,000.00).
On July 1, 1989, at or about 12:40 a.m., the respondent's
building was gutted by fire and reduced to ashes, resulting in the
total loss of the respondent's stocks-in-trade, pieces of furnitures
and fixtures, equipments and records.
Due to the loss, the respondent filed an insurance claim with the
petitioner under its Fire Insurance Policy. The petitioner,
however, denied the insurance claim on the ground that, based
on the submitted documents, the building was set on fire by two
(2) NPA rebels who wanted to obtain canned goods, rice and
medicines as provisions for their comrades in the forest, and that
such loss was an excepted risk under paragraph No. 6 of the
policy conditions
Held:
Where a risk is excepted by the terms of a policy which insures
against other perils or hazards, loss from such a risk constitutes
a defense which the insurer may urge, since it has not assumed
that risk, and from this it follows that an insurer seeking to defeat
a claim because of an exception or limitation in the policy has
the burden of proving that the loss comes within the purview of
the exception or limitation set up.
If a proof is made of a loss apparently within a contract of
insurance, the burden is upon the insurer to prove that the loss
arose from a cause of loss which is excepted or for which it is
not liable, or from a cause which limits its liability. Stated else
wise, since the petitioner in this case is defending on the ground
of non-coverage and relying upon an exemption or exception
clause in the fire insurance policy, it has the burden of proving
the facts upon which such excepted risk is based, by a
preponderance of evidence. But petitioner failed to do so.
The petitioner relies on the Sworn Statements of Jose Lomocso
and Ernesto Urbiztondo as well as on the Spot Report of Pfc.
Arturo V. Juarbal. A witness can testify only to those facts which
he knows of his personal knowledge, which means those facts
which are derived from his perception. Consequently, a witness
may not testify as to what he merely learned from others either
because he was told or read or heard the same. Such testimony
is considered hearsay and may not be received as proof of the
truth of what he has learned. Such is the hearsay rule which
applies not only to oral testimony or statements but also to
written evidence as well.
Thus, the Sworn Statements of Jose Lomocso and Ernesto
Urbiztondo are inadmissible in evidence, for being hearsay,
inasmuch as they did not take the witness stand and could not
therefore be cross-examined.
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There are exceptions to the hearsay rule, among which are
entries in official records.11 To be admissible in evidence,
however, three (3) requisites must concur, to wit:
(a) that the entry was made by a public officer, or by another
person specially enjoined by law to do so;
(b) that it was made by the public officer in the performance of
his duties, or by such other person in the performance of a duty
specially enjoined by law; and
(c) that the public officer or other person had sufficient
knowledge of the facts by him stated, which must have been
acquired by him personally or through official information. 12
The third requisite was not met in this case since no
investigation, independent of the statements gathered from Jose
Lomocso, was conducted by Pfc. Arturo V. Juarbal. In fact, as
the petitioner itself pointed out, citing the testimony of Pfc. Arturo
Juarbal, the latter's Spot Report "was based on the personal
knowledge of the caretaker Jose Lomocso who witnessed
every single incident surrounding the facts and
circumstances of the case." This argument undeniably
weakens the petitioner's defense, for the Spot Report of Pfc.
Arturo Juarbal relative to the statement of Jose Lomocso to the
effect that NPA rebels allegedly set fire to the respondent's
building is inadmissible in evidence, for the purpose of proving
the truth of the statements contained in the said report, for being
hearsay.
The said Spot Report is admissible only insofar as it constitutes
part of the testimony of Pfc. Arturo V. Juarbal since he himself
took the witness stand and was available for cross-examination.
The portions of his Spot Report which were of his personal
knowledge or which consisted of his perceptions and
conclusions are not hearsay. The rest of the said report relative
to the statement of Jose Lomocso may be considered as
independently relevant statements gathered in the course of
Juarbal's investigation and may be admitted as such but not
necessarily to prove the truth thereof.
The petitioner's evidence to prove its defense is sadly wanting
and thus, gives rise to its liability to the respondent under Fire
Insurance Policy.
 2003 CASES
G.R. No. 131399 : October 17, 2003
ANGELITA AMPARO GO, Petitioner, v. OFFICE OF THE
OMBUDSMAN, INSURANCE COMMISSIONER EDUARDO T.
MALINIS and NORBERTO F. CASTRO, Respondents.
Facts:
Petitioner is the Treasurer and Vice-President of Wear Me
Garment Manufacturing Inc. Due to a fire that gutted down Wear
Me Garments factory as well as its machineries and stocks,
petitioner filed separate insurance claims against 14 insurance
companies.
Feeling that the resolutions of her claims have been unduly
delayed, petitioner sought the assistance of the Insurance
Commission (Commission for brevity) through her lette. Acting
on said letter, the Public Assistance & Information Division of the
Commission held a conference wherein petitioner and the
insurance companies’ respective representatives met. The
insurers manifested their official stance to deny the claims of
petitioner. As a result, the conference was terminated without
prejudice to petitioner’s option to pursue other legal remedies.
Petitioner then sought the intercession of several members and
committees of the Legislature accusing the Commission of
acting in conspiracy with the insurance companies in denying
and delaying her claims. Acting on the matter, the Commission
conducted several meetings with petitioner and the insurance
companies in order to settle the claims. The Commission
apprised the legislators and their committees of the actions
taken by the Commission and vehemently denied petitioners
accusations.
Petitioner filed with the Commission a complaint for Revocation
and/or Suspension of Licenses against the fourteen insurance
companies based on alleged violation by the insurance
companies and their respective adjusters of Section 241 (b), (c),
(d) and (e) of the Insurance Code, as amended.
Respondent Malinis denies petitioner’s allegations. He contends
that the Commission attended to petitioner’s claims as early as
January 1994 and that despite the fact that it was beyond the
jurisdiction of the Commission and the insurance companies
refused to grant the claims, he nevertheless exerted efforts to
mediate the dispute.
Held:
Records show that as early as January 1994, when petitioner
first brought the matter of the delay in her insurance claims to
the Commission, respondent Malinis, upon the request of
petitioner, exerted efforts to mediate between her and the
insurance companies in order to amicably settle the claims
notwithstanding the fact that it was beyond the jurisdictional
amount cognizable by the Commission under the Insurance
Code, as amended.
Paragraph 1, Section 416 of the Code provides that the
Insurance Commissioner shall have the power to adjudicate
claims and complaints involving any loss, damage or liability for
which an insurer may be answerable under any kind of policy or
contract of insurance where the amount of any such loss,
damage or liability does not exceed in any single claim one
hundred thousand pesos.
When the insurance companies made known their official
position to deny the claims, respondent Malinis persisted in
holding meetings between the parties. It was only after petitioner
formally filed a complaint for Revocation and/or Suspension of
Licenses with the Commission that settlement discussions were
discontinued as it may compromise the Commissions
impartiality.[49 These clearly are not indicative of evident bad
faith, manifest partiality or gross inexcusable negligence on
respondent’s part. Thus, respondent Malinis cannot be faulted
for attempting to mediate among the parties.
In Almendras Mining Corporation vs. Office of the Insurance
Commission,[54the Court expounded on the two-fold powers of
the Insurance Commission under the Insurance Code, as
amended, [55to wit:
. . . the Office of the Insurance Commission is an
administrative agency vested with regulatory power as well
as with adjudicatory authority. Among the several regulatory
or non-quasi-judicial duties of the Insurance Commissioner
under the Insurance Code is the authority to issue, or refuse
issuance of, a Certificate of Authority to a person or entity
desirous of engaging in insurance business in the Philippines,
and to revoke or suspend such Certificate of Authority upon a
finding of the existence of statutory grounds for such revocation
or suspension. The grounds for revocation or suspension of an
insurer's Certificate of Authority are set out in Section 241 and
in Section 247 of the Insurance Code as amended. The general
regulatory authority of the Insurance Commissioner is described
in Section 414 of the Insurance Code, as amended, in the
following terms:
Sec. 414. The Insurance Commissioner shall have the duty to
see that all laws relating to insurance, insurance companies and
other insurance matters, mutual benefit associations, and trusts
for charitable uses are faithfully executed and to perform the
duties imposed upon him by this Code, and shall,
notwithstanding any existing laws to the contrary, have sole and
exclusive authority to regulate the issuance and sale of variable
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contracts as defined in section two hundred thirty-two and to
provide for the licensing of persons selling such contracts, and
to issue such reasonable rules and regulations governing the
same.

...

The adjudicatory authority of the Insurance Commissioner is

generally described in Section 416 of the Insurance Code, as
amended, which reads as follows:

Sec. 416. The Commissioner shall have the power to adjudicate

claims and complaints involving any loss, damage or liability for
which an insurer may be answerable under any kind of policy or
contract of insurance, or for which such insurer may be liable
under a contract of suretyship, or for which a reinsurer may be
sued under any contract or reinsurance it may have entered into,
or for which a mutual benefit association may be held liable
under the membership certificates it has issued to its members,
where the amount of any such loss, damage or liability,
excluding interests, cost and attorney's fees, being claimed or
sued upon any kind of insurance, bond, reinsurance contract, or
membership certificate does not exceed in any single claim one
hundred thousand pesos. (Emphasis supplied)

Under its adjudicatory authority, the Insurance Commission

has the original jurisdiction to adjudicate and settle insurance
claims and complaints where the amount being claimed does
not exceed in any single claim one hundred thousand pesos, as
provided in Section 416 of the Code. Such original jurisdiction is
concurrent with that of the Metropolitan Trial Courts, the
Municipal Trial Courts and the Municipal Circuit Trial
Courts.[56cräläwvirtualibräry

In addition to such adjudicatory power, the Commissioner has

the regulatory authority to revoke or suspend the certificate or
authority of an insurance company upon finding the legal
grounds for such revocation or suspension under Sections 241
and 247 of the Insurance Code. Section 241 is quoted in the
early part of herein Decision. Section 247 provides:

SEC. 247. If the Commissioner is of the opinion upon

examination or other evidence that any domestic or foreign
insurance company is in an unsound condition, or that it has
failed to comply with the provisions of law or regulations
obligatory upon it, or that its condition or methods of business is
such as to render its proceedings hazardous to the public or to
its policyholders, or that its paid-up capital stock, in the case of
a domestic stock company, or its available cash assets, in the
case of domestic mutual company, or its security deposits, in the
case of a foreign company, is impaired or deficient, or that the
margin of solvency required of such company is deficient, the
Commissioner is authorized to suspend or revoke all certificates
of authority granted to such insurance company, its officers and
agents, and no new business shall thereafter be done by such
company or for such company by its agent in the Philippines
while such suspension, revocation or disability continues or until
its authority to do business is restored by the Commission.
Before restoring such authority, the Commissioner shall require
the company concerned to subject to him a business plan
showing the company’s estimated receipts and disbursements,
as well as the basis therefore, for the next succeeding three
years. (As amended by P.D. No. 1455)

Petitioner pursued her fire insurance claims through the regular

courts when she filed Civil Case No. Q-95-23135 for Specific
Performance with Damages with the RTC-Quezon City (Branch
222), her claims being beyond the jurisdiction of the
Commission. In resolving petitioner’s claims, the trial court must
therefore determine whether there was unreasonable denial or
withholding of the claims by the insurance companies.