Insurance Transcription (Part IV and V)

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Insurance March 3, 2008 Paano ba mag-collect from a policy? How does one collect from an insurance policy? Let's go to life insurance first. When are proceeds from life insurance payable? Sec. 242 provides that The proceeds of a life insurance policy shall be paid immediately upon maturity of the policy, unless such proceeds are made payable in installments or as an annuity, in which case the installments, or annuities shall be paid as they become due, Provided, however, That in the case of a policy maturing by the death of the insured, the proceeds thereof shall be paid within sixty days after presentation of the claim and filing of the proof of the death of the insured. Remember that death is the contingency. This is the event insured against in life insurance. What are the contingencies again in life insurance? Sec. 180. An insurance upon life may be made payable on the death of the person, or on his surviving a specified period, or otherwise contingently on the continuance or cessation of life. So continuance or cessation of life pertains to endowment policies. If he survives a certain period or if he dies during that period, he will be entitled to payment on the policy. In the case of Fernandez, what happened and what was the ruling of the court? Issue: When would the policy mature, is it at the time of death or at the time of giving of notice? The SC said that it is the time of the happening of the suspensive condition, which is death, that the policy becomes mature. Kasi diba, filing of proof of death.. there can always be filing of documents to establish death, but it is really the fact of death which will make the policy mature; which will now give rise to the claim, and to the entitlement of the proceeds. Kasi pwede naman magfile ka pero kung di naman talaga nangyari yung death, there can be no claim on the policy. In life insurance, the policy matures either upon the expiration of the term set forth therein in which case its proceeds are immediately payable to the insured himself, or upon his death occurring at any time prior to the expiration of such stipulated term, in which case, the proceeds are payable to his beneficiaries within sixty days after their filing of proof of death (Sec. 91-A Insurance Law). n the case at bar, the policy matured upon the death of the insured on November 2, 1944, and the obligation of the insurer to pay arose as of that date. The sixty-day period fixed by law within which to pay the proceeds after presentation of proof of death is merely procedural in nature, evidently to determine the exact amount to be paid and the interest thereon to which the beneficiaries may be entitled to collect on case of unwarranted refusal of the company to pay, and also to enable the insurer to verify or check on the fact of death which it may even validly waive. It is the happening of the suspensive condition of death that renders a life policy mature and not the filing of proof of death which, as above stated, is merely procedural, for even if such proof were presented but it turns out later that the insured is alive, such filing does not give maturity to the policy. What was the holding in the case Londres, with respect to evidence? The SC said in this case that the proof of death was clearly established by the certificate of death. And it is not enough that one gives notice of death of the cestui que vie, but what matters is the presentation of proof of death. And what better proof of death than death certificate.

So kahit na nagnotify ka pero wala kang ebidensya sa pagkamatay, there can be no entitlement of the proceeds of the life insurance policy. With regard to the sufficiency of the proof presented by appellee as to the death of the insured, we find that the same has been sufficiently established in view of the death certificate issued by the Civil Register of Manila on April 15, 1952, which was attached to the motion for summary judgment. This certificate strengthens the proof submitted by appellee on May 16, 1949 and as such it can serve as basis for the determination of the interest that the company should pay under the policy as required by law. Is the designated beneficiary always the one getting the proceeds of a life insurance policy? No, because of the facility of payment clause. This is a bar question. What is the facility of payment clause? Or what are the instances when a non-beneficiary can collect from a life insurance policy? Ito ang sagot nyo, facility of payment clause. So if any of the situations is present, or is satisfied in industrial life, then even persons who are not designated can collect. Facility of payment clause: Industrial life policy: Sec. 230 (K and M) k) A provision that when a policy shall become a claim by death of the insured, settlement shall be made upon receipt of due proof of death, or not later than two months after receipt of such proof (m) "X x x Such policy may also contain a provision that (1) if the beneficiary designated in the policy does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than thirty days after the death of the insured, or (2) if the beneficiary is the estate of the insured, (3)or is a minor, or (4) dies before the insured, or (5) is not legally competent to give valid release, then the insurer may make any payment thereunder to: (a) the executor or administrator of the insured, or (b) to any of the insured's relatives by blood or legal adoption or connections by marriage or (c) to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred expense for the maintenance, medical attention or burial of the insured Is the facility of payment clause present in group life? Yes, but the difference is there is a P500.00 limit. Sec. 228 (f) A provision that any sum becoming due by reason of death of the person insured shall be payable to the beneficiary designated by the insured, subject to the provisions of the policy in the event that there is no designated beneficiary, as to all or any part of such sum, living at the death of the insured, and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of such sum not exceeding five hundred pesos to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured Is it also present in individual life insurance? No, there is no such provision in individual life insurance. Bakit? Babalik na naman tayo sa nature ng life insurance. When we talk about industrial life, this refers to the members of the low income group. Nakarinig na kayo ng drama na ang gusmastos sa libing ni A ay ang kamag-anak nya na hindi kasama sa insurance. So industrial life is supposed to address that concern. What if someone who is not designated in the policy, actually spent for the last hospitalization or funeral expenses, he is able to recover through the facility of payment clause. As long as ANY of the conditions are present. Any ha, not ALL. Kahit isa lang. Sa group life ganun din, pero the limit is 500 pesos.

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We have tackled payment of proceeds in life, sabi dyan payable within 60 days from presentation of claim plus proof of death. So dalawang requirements yan. Kung notice ka lang wala kang proof, di pwede. What if there is delay in payment? Sec. 242: Refusal or failure to pay the claim within the time prescribed herein will entitle the beneficiary to collect interest on the proceeds of the policy for the duration of the delay at the rate of twice the ceiling prescribed by the Monetary Board, unless such failure or refusal to pay is based on the ground that the claim is fraudulent. How about in non life, when are proceeds payable? Sec. 243. The amount of any loss or damage for which an insurer may be liable, under any policy other than life insurance policy, shall be paid within thirty days after proof loss is received by the insurer and ascertainment of the loss or damage is made either by agreement between the insured and the insurer or by arbitration; but if such ascertainment is not had or made within sixty days after such receipt by the insurer of the proof of loss, then the loss or damage shall be paid within ninety days after such receipt. Ingat kayo ha.. 30 days from when? Proof of loss and ascertainment of loss. Ascertainment of loss is actually the amount of loss. Magkano ba ang nawala sa kanya? If they do not agree, they can submit themselves to arbitration. So dapat 30 days pasok na pareho: Proof of loss plus ascertainment. What if there is no ascertainment within 30 days from proof of loss? So if there is no ascertainment within 60 days from proof of loss, then the insurance company must give the proceeds within 90 days. This is the 30-60-90 rule. Example of 30: A insured his house for fire. On March 4, 2008 a fire gutted the entire house. Proof of loss was given on March 5, 2008 and there was ascertainment as to the amount of loss. So proceeds must be paid within 30 days from March 5, 2008 or on April 4, 2008. Example of 60-90 rule: So A filed on March 5, 2008. On April 4, 2008, there was still no ascertainment of the damage caused by the fire, the proceeds must be paid within 90 days after the receipf of such notice. So there must be no ascertainment when? There must be no ascertainment on May 4, 2008 -- so 60 days. So when must payment be made? So 90 days from proof of loss -- March 5, 2008, so payment dapat on June 5, 2008. (Note: Dapat June 3, 2008 -- include the last day, exclude the first day) Kung pasok na pareho, within 30 days. Kung after 60 days wala pa ring ascertainment of loss, magdagdag na lang kayo ng additional 30 days kailangan na bayaran. Ibig sabihin nagtagal sila sa ascertainment, the insured should not suffer the consequence. In case of litigation of claim, what is the responsibility of the court or the insurance commission? Sec. 244. In case of any litigation for the enforcement of any policy or contract of insurance, it shall be the duty of the Commissioner or the Court, as the case may be, to make a finding as to whether the payment of the claim of the insured has been unreasonably denied or withheld; and in the affirmative case, the insurance company shall be adjudged to pay damages which shall consist of attorney's fees and other expenses incurred by the insured person by reason of such unreasonable denial or withholding of payment plus interest x x x, from the date following the time prescribed in section two hundred forty-two or in section two hundred forty-three, as the case may be, until the claim is fully satisfied; When shall there be prima facie delay in the payment of proceeds?

The failure to pay any such claim within the time prescribed in said sections shall be considered prima facie evidence of unreasonable delay in payment. So may mga periods naman tayo, kung after that, there is now a ground to say that the insurance company incurred unreasonable delay. Although there are instances wherein delay is justified, one of which was in a decided case wherein the SC said that if the insurance company is still ascertaining whether the insured has insurable interest or not, then the delay is justified. Or if there are two or more parties fighting over the same right to the insurance proceeds, and the company incurs delay because they are still investigating, then the delay is justified. A lost his car and he files a claim with the insurance policy (for theft), can A assign his claim to B collect; can B get an insurance on the car of A? Yes and No. What am I pointing out? The right to assign, the right to collect, from a policy is again a circumvention of the requirement as to insurable interest. You have a situation wherein a person who has no insurable interest being able to enjoy the benefits of a property insurance, although ito naman you do not wait for the event if you assign it after the loss occurs. Halimbawa, nawala ang kotse nya, kinokolektahan na nya ngayon si insurance company, inassign nya ngayon sa creditor nya, walang problema. Wala tayong makikitang problema na si creditor ang nagcarnap. Pero what if before the loss happened, inassign na ni insured ang kanyang right to collect kay creditor? Again, nacircumvent na naman ang requirement that only those who have insurable interest can benefit from a property insurance. Again, what are the requirement in property insurance before there can be recovery? Sec. 84. Unless otherwise provided by the policy, an insurer is liable for a loss of which a peril insured against was the proximate cause, although a peril not contemplated by the contract may have been a remote cause of the loss; but he is not liable for a loss which the peril insured against was only a remote cause. Sec. 85. An insurer is liable where the thing insured is rescued from a peril insured against that would otherwise have caused a loss, if, in the course of such rescue, the thing is exposed to a peril not insured against, which permanently deprives the insured of its possession, in whole or in part; or where a loss is caused by efforts to rescue the thing insured from a peril insured against. Sec. 86. Where a peril is especially excepted in a contract of insurance, a loss, which would not have occurred but for such peril, is thereby excepted although the immediate cause of the loss was a peril which was not excepted. Sec. 87. An insurer is not liable for a loss caused by the willful act or through the connivance of the insured; but he is not exonerated by the negligence of the insured, or of the insurance agents or others. What is the special rule with regard to fire insurance with regard to the filing of claims? In fire insurance, there must be a notification or a notice of loss given by the insured, otherwise there can be no recovery. Sec. 88: In case of loss upon an insurance against fire, an insurer is exonerated, if notice thereof be not given to him by an insured, or some person entitled to the benefit of the insurance, without unnecessary delay. Why is this rule here? Take note and be able to differentiate ha, that the only minimum requirement is that notice of loss be given to the fire insurance company. Hindi proof. Sasabihin mo lang na nasunog yung bahay mo. Bakit? Because when we talk of fire insurance, the possibility of removing evidence of arson is great. Kasi if nasunog today, tapos sasabihan mo yung insurance company two days after, wala na yung mga kandila nailigpit na.

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So the minimum requirement is that notice of fire or destruction by fire be given without unreasonable delay otherwise there can be no recovery. What kind of proof of loss are we discussing here? Preliminary proof of loss.. what kind of preliminary proof are we talking about? Preponderance? Substantial? Evidence required by courts? Only evidence within his power, or in his possession at the time that he is asked or ordered to give proof. Hindi naman tayo korte.. So when we talk about proof of loss, what happened? Around what time? What is destroyed? What portion of the property was destroyed? Hindi yung proof na si B nagsunog or something. Best evidence that the person has at that time. Sec. 89. When a preliminary proof of loss is required by a policy, the insured is not bound to give such proof as would be necessary in a court of justice; but it is sufficient for him to give the best evidence which he has in his power at the time. What is the rule when there is a defect in the notice of loss? Sec. 90. All defects in a notice of loss, or in preliminary proof thereof, which the insured might remedy, and which the insurer omits to specify to him, without unnecessary delay, as grounds of objection, are waived. So there has to be action on the part of the insurance company to ask the insured to remedy the defect. What if the delay in presentation of proof of loss is due to the insurance company? Sec. 91. Delay in the presentation to an insurer of notice or proof of loss is waived if caused by any act of him, or if he omits to take objection promptly and specifically upon that ground. The insurance company causing the delay cannot use that against the insured. It cannot assert the fact of delay. What if fire happened and the insured has to get the statement of the neighbor, what is the rule? Sec. 92. If the policy requires, by way of preliminary proof of loss, the certificate or testimony of a person other than the insured, it is sufficient for the insured to use reasonable diligence to procure it, and in case of the refusal of such person to give it, then to furnish reasonable evidence to the insurer that such refusal was not induced by any just grounds of disbelief in the facts necessary to be certified or testified. So kung ang kukunin na testimony ay ang testimony ng 3rd person and such 3rd person refuses to give the statement -the only requirement is the exertion of diligence to get that statement, and to show that the refusal to give the statement is not be induced by any just grounds of disbelief in the facts necessary to be certified or testified. Halimbawa, nasunog ang building, kukuha ka ng testimony ng neighbor tapos ayaw nya. Aalamin mo kung bakit ayaw nya. Dahil alam nyang arson? Or dahil nahihiya lang sya? So ang minimum requirement is diligence to get the statement and to show that the refusal to give the statement was not based on disbelief. In the case of Manila Mahogany vs. CA , what was the holding? So here, you have a situation where the insured was able to claim both from SMC and the insurance company. So ang sinasabi ng insurance company, bat ka pa nag-claim jan eh nakatanggap ka na sakin? Ako na dapat ang nagcclaim jan sa party na yan. Right of subrogation. So since nakakolekta ka na sa 3rd person, ibalik mo sakin yung binayad ko. So isa-isa lang yan. Hindi pwedeng dinemanda mo na yung person at fault, kokolekta ka pa from the insurance company. 2. Since petitioner by its own acts released San Miguel Corporation, thereby defeating private respondent's right of subrogation, the right of action of petitioner against the insurer was also nullified.

3. The right of subrogation can only exist after the insurer has paid the insured, otherwise the insured will be deprived of his right to full indemnity. If the insurance proceeds are not sufficient to cover the damages suffered by the insured, then he may sue the party responsible for the damage for the remainder. To the extent of the amount he has already received from the insurer, the insurer enjoys the right of subrogation. 4. Since the insurer can be subrogated to only such rights as the insured may have, should the insured, after receiving payment from the insurer, release the wrongdoer who caused the loss, the insurer loses his rights against the latter. But in such a case, the insurer will be entitled to recover from the insured whatever it has paid to the latter, unless the release was made with the consent of the insurer. Holding in YU vs. Fieldsmen Yu cannot recover from the insurance policy because he committed fraud under a fire insurance policy. What was the purpose of the invoices? To prove the properties razed by fire, eh peke pala. So because of the fraud, there was denial of the claim. Shielding himself under Section 82 of the Insurance Act, the plaintiff asserts that in submitting his proof of loss he was "not bound to give such proof as would be necessary in a court of justice". The assertion is correct, but that does not give him any justification for submitting false proofs. Their falsity is the best evidence of the fraudulent character and the unmeritoriousness of plaintiff's claim. In the case of LEE BOG vs. Hanover There was payment of the claim because the discrepancy was not that gross. Naturally, numerical precision may not be expected, because those estimates were based merely on a physical observation of the big pile existing before the fire. It is sufficient that they show little discrepancy with the figures recorded in the books of the appellee. The mathematical computations of witnesses Filomeno and Magpili are "rough estimates" and therefore some allowance for such technical factors as "staggering," "shrinkage" and "angle of repose" should be duly taken into account; and where said estimates do not show too wide a difference, there would be no justification in discrediting appellee's claims. Holding in CHUY vs. PHILAM The delay in investigating whether the insured has insurable interest was justified and does not give rise to payment of interest. Holding in RCBC vs. CA for an insurance company to be held liable for unreasonably delaying and withholding payment of insurance proceeds, the delay must be wanton, oppressive, or malevolent. It is generally agreed, however, that an insurer may in good faith and honesty entertain a difference of opinion as to its liability. Accordingly, the statutory penalty for vexatious refusal of an insurer to pay a claim should not be inflicted unless the evidence and circumstances show that such refusal was willful and without reasonable cause as the facts appear to a reasonable and prudent man The case at bar does not show that MICO wantonly and in bad faith delayed the release of the proceeds. The problem in the determination of who is the actual beneficiary of the insurance policies, aggravated by the claim of various creditors who wanted to partake of the insurance proceeds, not to mention the importance of the endorsement to RCBC, to our mind, and as now home out by the outcome herein, justified MICO in withholding payment to GOYU.

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Holding in Zenith vs. CA So the court kahit papano, nirereduce din naman yung award of damages. However, the act of petitioner of delaying payment for two months cannot be considered as so wanton or malevolent to justify an award of P20,000.00 as moral damages, taking into consideration also the fact that the actual damage on the car was only P3,460. In the pre-trial of the case, it was shown that there was no total disclaimer by respondent. The reason for petitioner's failure to indemnify private respondent within the two-month period was that the parties could not come to an agreement as regards the amount of the actual damage on the car. The amount of P10,000.00 prayed for by private respondent as moral damages is equitable. Therefore, the award of moral damages is reduced to P10,000.00 and the award of exemplary damages is hereby deleted. The awards due to private respondent Fernandez are modified What is the right of subrogation? In the right of subrogation, the insurer steps into the shoes of the insured. But of course, subrogation is limited to the amount given to the insured by the insurer. Yun lang because the essence of engaging in an insurance business is the assumption of risk. So if one assumes the risk, he is ready to pay his way to collect from the erring party. Ang nawawala lang dun sa nagsuffer ng loss is the hassle. Instead na hahabulin mo pa si erring party, because you paid the premiums, bahala na si insurance company kumolekta. Art. 2207 of the Civil Code: If the plaintiff's property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. If the amount paid by the insurance company does not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury. Just read Malayan and St. Paul Malayan vs. CA While it is true that where the insurance contract provides for indemnity against liability to third persons, such third persons can directly sue the insurer, however, the direct liability of the insurer under indemnity contracts against third party liability does not mean that the insurer can be held solidarily liable with the insured and/or the other parties found at fault. The liability of the insurer is based on contract; that of the insured is based on tort. In the case at bar, petitioner as insurer of Sio Choy, is liable to respondent Vallejos, but it cannot, be made "solidarily" liable with the two principal tortfeasors, namely respondents Sio Choy and San Leon Rice Mill, Inc. For if petitioner-insurer were solidarily liable with said two (2) respondents by reason of the indemnity contract against third party liability ---- under which an insurer can be directly sued by a third party ---this will result in a violation of the principles underlying solidary obligation and insurance contracts. Subrogation is a normal incident of indemnity insurance. Upon payment of the loss, the insurer is entitled to be subrogated pro tanto to any right of action which the insured may have against the third person whose negligence or wrongful act caused the loss. The right of subrogation is of the highest equity. The loss in the first instance is that of the insured but after reimbursement or compensation, it becomes the loss of the insurer . When the insurance company pays for the loss, such payment operates as an equitable assignment to the insurer of the property and all remedies which the insured may have for the recovery thereof. That right is not dependent upon, nor does it grow out of, any privity of contract or upon written assignment of

claim, and payment to the insured makes the insurer an assignee in equity It follows, therefore, that petitioner, upon paying respondent Vallejos the amount of not exceeding P20,000.00, shall become the subrogee of the insured, the respondent Sio Choy; as such, it is subrogated to whatever rights the latter has against respondent San Leon Rice Mill, Inc. Article 1217 of the Civil Code gives to a solidary debtor who has paid the entire obligation the right to be reimbursed by his co-debtors for the share which corresponds to each. "Art. 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept. "He who made the payment may claim from his codebtors only the share which corresponds to each, with the interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded. In accordance with Article 1217, petitioner, upon payment to respondent Vallejos and thereby becoming the subrogee of solidary debtor Sio Choy, is entitled to reimbursement from respondent San Leon Rice Mill, Inc. ST. PAUL vs. MACONDRAY The plaintiff-appellant, as insurer, after paying the claim of the insured for damages under the insurance, is subrogated merely to the rights of the assured. As subrogee, it can recover only the amount that is recoverable by the latter. ""Upon payment for a total loss of goods insured, the insurance is only subrogated to such rights of action as the assured has against 3rd persons who caused or are responsible for the loss. The right of action against another person, the equitable interest in which passes to the insurer, being only that which the assured has, it follows that if the assured has no such right of action, none passes to the insurer, and if the assured's right of action is limited or restricted by lawful contract between him and the person sought to be made responsible for the loss, a suit by the insurer, in the right of the assured, is subject to like limitations or restrictions."

Insurance March 4 So you should be guided on the periods to make claims. So in life you have 60 days and in non-life you have the 30-60-90 rule. So the period will determine if the insurance company delayed in giving the claim. The crucial issue here is when do you determine? What is the reckoning point to count the days? Is it notice of death? Proof of death? Notice of claim? Proof of claim. So you should be able to differentiate notice of claim from proof of claim; notice of death and proof of death. Ano dapat yung pasok na requirements before we count the period. Okay, marine insurance. What are the two kinds of loss in marine insurance? Sec. 127. A loss may be either total or partial. What is partial loss? Sec. 128. Every loss which is not total is partial. What is total loss? What may constitute total loss? Sec. 129. A total loss may be either actual or constructive. So total, in its entirety, nawala. So dalawang klase: Actual and constructive. What are the causes of actual total loss? Sec. 130. An actual total loss is cause by:

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(a) A total destruction of the thing insured; (b) The irretrievable loss of the thing by sinking, or by being broken up; (c) Any damage to the thing which renders it valueless to the owner for the purpose for which he held it; or (d) Any other event which effectively deprives the owner of the possession, at the port of destination, of the thing insured. So when we talk about actual total loss, it is possible that the whole thing is actually not really lost, or destroyed, but still it is rendered useless for the purpose for which it was created. In that case, we still consider that actual total loss. Phil. Manufacturing case: Okay, you would think that if we're talking of actual total loss, dapat hindi mo na talaga makikita yung ship. But then in this case, and in our definition of actual total loss will tell us that it is possible that it is still there but it cannot be used. Pan Malayan case The subject matter here is rice. Nandun pa yung bigas, pero dahil nagmix na with water.. kulang na lang apos, sinaing na. While physically its still there but it is rendered valueless. Hindi yan constructive ha. Do not confuse that with constructive loss. When can one presume actual loss? Sec. 132. An actual loss may be presumed from the continued absence of a ship without being heard of. The length of time which is sufficient to raise this presumption depends on the circumstances of the case. So if a ship is supposed to have travelled this time, and supposed to have arrived at this time and then there's no news about it, then there can be a presumption that it is actual loss. What is constructive total loss? Sec. 131. A constructive total loss is one which gives to a person insured a right to abandon, under Section one hundred thirty-nine. When we talk about constructive total loss, the goods are still there, the ship is still there, but the extent of damage will give rise to the right to abandon. What is the right to abandon? What happens if the goods/ship is abandoned? Sec. 138. Abandonment, in marine insurance, is the 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. Relinquishment... hmm.. So meaning kapag nag-appear ang any of the instances in 139, hindi na kailangan antayin ni insured na totally na masira. Pwede na nyang sabihin na I hereby abandon all my rights to the ship, bahala ka na insurer. Why do we have to differentiate if total loss is actual or constructive? Take note, pag-actual total loss na ang na-suffer mo, entitled ka na to claim. Pero kung pasok lang sya sa instances ng 139, kailangan the insurance policy holder must have abandonment before he can claim the full amount. Hindi pwedeng basahin ni insurance company ang utak ni insured.. ay more than 3/4 na ang damage, inaabandon na nya. Hindi! Dapat the policy holder must declare abandonment before he can claim the entire proceeds of the policy. So what is Sec. 139. This is a bar question: Sec. 139. A person insured by a contract of marine insurance may abandon the thing insured, or any particular portion thereof separately valued by the policy, or otherwise separately insured, and recover for a total loss thereof, when the cause of the loss is a peril insured against: (a) If more than three-fourths thereof in value is actually lost, or would have to be expended to recover it from the peril;

(b) If it is injured to such an extent as to reduce its value more than three-fourths; (c) If the thing insured is a ship, and the contemplated voyage cannot be lawfully performed without incurring either an expense to the insured of more than three-fourths the value of the thing abandoned or a risk which a prudent man would not take under the circumstances; or (d) If the thing insured, being cargo or freightage, and the voyage cannot be performed, nor another ship procured by the master, within a reasonable time and with reasonable diligence, to forward the cargo, without incurring the like expense or risk mentioned in the preceding sub-paragraph. But freightage cannot in any case be abandoned unless the ship is also abandoned. Okay, the ship is valued at 2 Million pesos, when can there be constructive total loss? Sec. 139 is what I call more than 3/4 rule. Bakit? Dahil madami nang studyante ang nagkakamali dito. Ang loss lang ay 75% inaabandon na nila. Nakalagay jan, MORE THAN. So dapat 76% and up ang damage. So pag ganitong situtation, pwede ka nang mag-abandon and you can claim the entire proceeds. It is as if there was actual total loss. Nakikita nyo yung difference? What is average? Average is any extraordinary or accidental expense incurred during the voyage for the preservation of the vessel, cargo, or both and all damages to the vessel and cargo from teh time it is loaded and the voyage commenced until it ends and the cargo unloaded. What are the two kinds of average? General Average and particular average. What is the difference between the two kinds? General average - include damages and expenses which are deliberatedly caused by the master of the vessel or upon his authority, in order to save the vessel, her cargo, or both at the same time from a real and known risk Example: If A has to jettison his cargo so that all the cargo owners will be saved and will not have to jettison their cargo. Ibig sabihin, may nagsacrifice, hindi lang sya yung nakinabang but lahat nakinabang. So it is only fair that the loss will be borne not only by the one sacrificing but all those who benefitted from the act. Simple or particular average- include all damages and expenses caused to the vessel or to her cargo which have not inured to the common benefit and profit of all the persons interested in the vesse and her cargo. So dito, baliktad. Whoever sacrificed, he bears the loss. What is the rule with regard to general average when we are talking about marine insurance? Is the marine insurance company liable for loss in general average? YES. If the company says it is not liable for general average, is that possible? So in the example above, can insurance company of the cargo who was saved, refuse to pay the owner of the cargo that was jettisoned? Pwede ba nya sabihin na yung cargo naman ng insured nya eh hindi tinapon so he will not pay for the loss? Can they stipulate that the marine insurance company will not be liable for general average? No, there can be no stipulation to that effect. That is an invalid stipulation. Bakit? Eh nakinabang nga yung client mo eh tapos sasabihin mo hindi ka liable just because hindi sya nagtapon ng cargo? So in general average, what is the rule? The insured is liable for his proportionate share. In particular average, loss is suffered by and borne alone by the owner of the cargo or vessel, as the case may be. Balik muna tayo sa abandonment. Can the owner of the cargo say I abandon the vessel, but not the cargo?

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No, because abandonment must be total, not partial. So total relinquishment. Sec. 140. An abandonment must be neither partial nor conditional. Can the owner of the cargo say, I will abandon the goods provided that the goods in the upper deck can be saved? No. Again, sec. 140 So when must abandonment be done? At what point in time? Sec. 141. An abandonment must be made within a reasonable time after receipt of reliable information of the loss, but where the information is of a doubtful character, the insured is entitled to a reasonable time to make inquiry. What happens if there was already abandonment, but later on it was found out that the information was incorrect? Sec. 142. Where the information upon which an abandonment has been made proves incorrect, or the thing insured was so far restored when the abandonment was made that there was then in fact no total loss, the abandonment becomes ineffectual. So it is as if there was no abandonment which happened. What is the form of abandonment? It may be oral or written, provided that if the notice be done orally, a written notice of such abandonment shall be submitted within 7 days from such oral notice. Who is supposed to give notice of abandonment and to whom? So the insured or his agent must give notice of abandonment to the insurer or to the insurer's agent. What is the requirement with respect to the notice? Sec. 144. A notice of abandonment must be explicit, and must specify the particular cause of the abandonment, but need state only enough to show that there is probable cause therefor, and need not be accompanied with proof of interest or of loss. So dapat ilagay nyo dun: I am hereby abandoning my vessel, Edin Ann, due to destruction of more than 3/4. So ilalagay nyo ang 139. What if the cause of the loss is a storm, can the insured present evidence as to other causes? Sec. 145. An abandonment can be sustained only upon the cause specified in the notice thereof. What is the effect again of abandonment? Sec. 146. An abandonment is equivalent to a transfer by the insured of his interest to the insurer, with all the chances of recovery and indemnity. What if the insured does not abandon, and yet there was payment by the insurer as if there was actual loss? Example more than 3/4 of the value of the property was damage, pero hindi sya nag-abandon, and yet, binigay ni insurance company ang full proceeds, ano ang effect nun? Sec. 147. If a marine insurer pays for a loss as if it were an actual total loss, he is entitled to whatever may remain of the thing insured, or its proceeds or salvage, as if there had been a formal abandonment. So halimbawa may vessel, and more than 3/4 na ang damage, or any of the grounds in Sec. 139 is present. So any ha. Ang unang choice jan is to abandon. In effect, it is like saying to the insurance company to pay me the proceeds, take over my rights to the vessel. So kung may makukuha pa sa vessel si insurance company, out ka na. So may ground na to abandon pero hindi pa rin nag-abandon. So no abandonment, pero si insurance company gave the whole proceeds. Ano ang effect? It is as if there was abandonment also. So sasabihin ni insurance company, ah okay di ka mag-aabandon? Ibibigay ko

sa'yo lahat ng proceeds pero ako na ang bahala sa vessel or property mo. Parang constructive constructive abandonment. What if the shipowner abandons the ship and the captain of the ship does something in good faith with respect to the subject matter? Sec. 148. Upon an abandonment, acts done in good faith by those who were agents of the insured in respect to the thing insured, subsequent to the loss, are at the risk of the insurer and for his benefit. So the captain now is acting in good faith, no longer as an agent of the insured but of the insurer already. Nagabandonment na eh. So kung ano ang gagawin ni captain, act of the insurer na. What if the insured followed all the requirements of abandonment and yet the insurance company refuses to accept the abandonment? Sec. 149. Where notice of abandonment is properly given, the rights of the insured are not prejudiced by the fact that the insurer refuses to accept the abandonment. So in such case, the insured has the right to collect the total amount. So halimbawa, let's say that the vessel is valued at 1 Million. Why would you want to abandon? Because if you don't abandon, for example 80% damaged na sya, tapos ayaw mo parin mag-abandon, ang makukuha mo lang is 80% of 1 Million or 800,000. So you can only recover upto the extent of the damage. So yung more than 3/4 rule gives the insured the chance to get the full proceeds even if the property itself is not totally damaged. Ang condition lang ay ang more than 3/4 rule. So again, the main difference between abandoning and not abandoning is the extent of recovery of the policy holder. We said that if there's a situation creating the right to abandon and he does not abandon, then the policy holder can only recover to the extent of the loss. Compare to someone who abandons and relinquishes all his rights to the cargo and the vessel who is able to recover to the full extent of the value of the policy. Of course, we also discussed that if all the requisites for a valid abandonment are present but the insurance company did not accept the abandonment, it (insurance company) is still liable to the full extent of the policy. Basically, just to recap: Requisites for a valid abandonment: 1. actual relinquishment of rights to the cargo and/or vessel; 2. there must be constructive total loss -- so pag 3/4 lang, hindi yan pwede; 3. abandonment is neither partial nor conditional; 4. abandonment must be made within the reasonable period of time from the time the person receives the information; 5. abandonment may be done orally or in writing, but there is a 7 day requirement if there is an oral abandonment; 6. the notice of the abandonment must be explicity and it must state the cause for the abandonment, and 7. all evidence (presented) should center on the cause of abandonment. The policy holder is not supposed to present evidence of other causes. Oriental case: The terms of the contract constitute the measure of the insurer liability and compliance therewith is a condition precedent to the insured's right to recovery from the insurer. The fact that the logs were loaded on two different barges did not make the contract several and divisible as to the items insured. The logs on the two barges were not separately valued or separately insured. Only one premium was paid for the entire shipment, making for only one cause or consideration. The insurance contract must, therefore, be considered indivisible. Also, the insurers liability was for total loss only. A constructive total loss is one which gives to a person insured a right to abandon (Sec. 139 Insurance Code), and during these instances:

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(a) If more than three-fourths thereof in value is actually lost, or would have to be expended to recover it from the peril; (b) If it is injured to such an extent as to reduce its value more than three-fourths. Since only 498 of the 1,208 logs were lost, or only 41%, then there was no constructive total loss. So sabi ng SC dito, indivisible. Because we are talking only of 1 policy covering the goods, kahit hinati pa yan, hindi mo pwedeng sabihin na partially covered ng policy. Hindi pwede sabihin na magkahiwalay. So indivisible yan, kahit na nilagay sa magkahiwalay na vessel. What is the rule with regard to freightage? What is freightage? It is the amount paid by the shipper for the transport of the goods. (But see: Sec. 102. Freightage, in the sense of a policy of marine insurance, signifies all the benefits derived by the owner, either from the chartering of the ship or its employment for the carriage of his own goods or those of others. ) The rule is upon acceptance of the abandonment of the ship, the freightage which was earned previous to the loss will belong to the insurer of the freightage. If the freightage was subsequently earned (after the loss, i pressume), the freightage would belong to the insurer of the ship. Sabi natin, can the one who is supposed to get the freightage insure the same? Yes, meron syang insurable interest-- an expectancy coupled with an existing interest. So expected nya na pagkatapos ng biyahe babayaran sya ng may-ari ng goods dahil trinansport nya ang goods. Sinabi rin natin na yung charter diba, kapag chinarter mo yung ship, 2 persons can insure the ship: the owner of the vessel and the charter. The owner of the vessel can insure it upto the portion that is not covered by the insurer of the charterer. So kapag nirentahan yung vessel mo, sasabihin ng charterer, okay, so 1 million ang vessel mo, kapag nawala, i will cover upto 500,000. So ikaw, the owner, you can insure the vessel also upto 500,000. So for freightage naman, dalawang tao rin ang pwede maginsure: (1) yung may-ari ng goods -- to the full extent of the value of the goods because yun ang mawawala sa kanya, and (2) yung entitled sa bayad for shipping, pwede rin nyang iinsure upto what extent? Upto the extent that he expects to suffer some loss. Ano yung loss? Pwedeng liable sya sa loss or pwedeng yung ineexpect nyang kita, hindi na mapupunta sa kanya. So 2 classes: (1) actual loss of profits -- kung magkano usapan nila na cost of shipment; and (2) kung may liability sya arising from the loss. Pwede nyang sabihin kay owner, na kapag nawala yung goods mo, liable ako upto this amount. Pero ang pinag-uusapan natin ngayon, FREIGHTAGE. Yung amount that he is supposed to get for transporting the goods. So two points in time: 1. BEFORE ABANDONMENT OR BEFORE THE LOSS So kung may kinita syang freightage, dapat before the loss, at hindi nya kinita, ang sasagot dun ang insurer ng freightage. 2. AFTER ABANDONMENT kapag may ineexpect pang earnings, hindi na si insurer ng freightage ang meh right, ang may right na (dahil inabandon mo na) ang insurer ng ship or cargo. So kung before abandonment, kung kanino mo ininsure ang freightage, sya ang makakakuha or sya ang liable. After abandoning, wala na sya sa picture, ang papasok na sa eksena yung insurer ng cargo or ng vessel. Bakit? Kasi nagabandon ka na sa lahat ng rights mo dun eh. So kung may

kikitain kang freightage, it (freightage) will pertain to the insurer of the cargo or the vessel which was abandoned. So tapos na tayo sa marine. Yung general average naintindihan nyo ba? (Mahirap kapag may tumitiling mga undergrad!!!) So even the owners of the goods which were not sacrificed will have to share in the loss. In particular average, liable parin except if there is a stipulation. Nakita nyo na yung provision? Hanapin nyo yun anjan yun. (I think Ma'am is referring to Sec. 136) Sec. 136. Where it has been agreed that an insurance upon a particular thing, or class of things, shall be free from particular average, a marine insurer is not liable for any particular average loss not depriving the insured of the possession, at the port of destination, of the whole of such thing, or class of things, even though it becomes entirely worthless; but such insurer is liable for his proportion of all general average loss assessed upon the thing insured. So COMPULSORY INSURANCE MOTOR VEHICLE LIABILITY

Again, I want to emphasize: Ito, third party lang. Hindi ito yung comprehensive na pati ang may-ari ng kotse ay nakakarecover. Iba yun. Yung TPL mura lang yan mga 800. Yung comprehensive depende sa kotse ninyo.. it can cost upto 300,000 kung brand new. So TPL to. Before you can ply the national roads, you have to have TPL. So what situations will give rise to a claim under TPL? A motor vehicle liability insurance is a protection coverage that will answer for legal liability for losses and damages for bolidy injuries that my be sustained by another arising from the use and operation of a motor vehicle by its owner. Kasama ba dito ang damage to property? No. When we talk about loss we talk about loss of life. Kasi diba idudugtong nyo yung "resulting from injury". So ito ay purely loss of life or injury arising from a motor vehicle accident. If the accident happened on April 1, 2000, within what time must the claim be file and in what manner must the claim be filed? A written claim must be filed within 6 months from the date of the accident, otherwise, the claim shall be deemed wived. (Sec. 384) So it must be in writing. Hindi pwedeng tawag lang. Be able to diffentiate this from the prescriptive period of one year. Action or suit for recovery of damage due to loss or injury must be brought, in proper cases, with the Commissioner or the Courts within one year from denial of the claim, otherwise, the claimant's right of action shall prescribe. So ganito yan, accident on April 1, 2000, dapat ma-file mo na sa insurance company ang written notice within 6 months. Kapag na-deny yan, you have one year from the denial to question the decision of the insurance company. So magkaiba yan ha. What's the no-fault indemnity clause? This is a bar question. This connotes that teh victim of a tort can recover for his loss from his insurer without regard to his own contributory fault or the fault of the tortfeasor. Ganito na lang, pagkafile ng claim, anong action dapat ang gawin ng insurance company? Ordinary claim muna, wag muna no fault. So upon written notice, ano ang responsibility ng insurance company. Sec. 385. The insurance company concerned shall forthwith ascertain the truth and extent of the claim and make payment within five working days after reaching an agreement.

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If no agreement is reached, the insurance company shall pay only the "no-fault" indemnity may be availed of. So ganito ang nangyari.. nagfile ng claim si A, nagkasundo. Walang problem, babayaran sya. Pero pag hindi sila nagkasundo, sasabihin ni A ang nagastos nya is P50,000.00 pero sasabihin ng insurance company na pagkacheck nya, P10,000 lang. So hindi sila nagkaron ng ascertainment of loss. The next step would be to pay the no fault indemnity of P5,000.00. So kapag walang ascertainment, automatically dapat, upon presentation of certain documents, bibigyan si 3rd party ng P5,000.00 under the no-fault indemnity clause. What are the documents that must be presented by the 3rd party? Sec. 378: x x x ii) The following proofs of loss, when submitted under oath, shall be sufficient evidence to substantiate the claim: (a) Police report of accident; and (b) Death certificate and evidence sufficient to establish the proper payee; or (c) Medical report and evidence of medical or hospital disbursement in respect of which refund is claimed; Si A nag-aabang ng masasakyan. Nasandwich sya sa dalawang sasakyan. Kanino sya pwedeng magfile ng claim? Against the directly offending vehicle. Hindi pwedeng magfile si A ng no fault indemnity clause sa dalawa. So only against the one directly causing the death or injury. Ang sistema dito, in theory, kapag dineny ang claim nya, pero napresent nya tong mga documents na to, the insurance company is supposed to give him P5,000.00 pesos. Pero in practice hindi yan nangyayari. Kapag nabayaran ka ba ng P5,000.00 tapos na? No, because Sec. 385 provides that without prejudice to the claimant from pursuing his claim further, in which case, he shall not be required or compelled by the insurance company to execute any quit claim or document releasing it from liability under the policy of insurance or surety bond issued. So the payment of the P5,000.00 upon presentation of documents should work as a "pantawid gutom". So bibigyan ko sya ng P5,000.00 peso pero that does not mean that the owner of the policy is really the one at fault. That's not an admission. Hindi na kailangan maglitigate para sa P5,000, pero kung mas malaki pa sa P5K ang kini-claim nya, that's the time that he can proceed to the proper court or commission to collect the balance within of course the one year period reckoned from the denial of the claim. What if the person is a passenger of a certain vehicle? (iii) Claim may be made against one motor vehicle only. In the case of an occupant of a vehicle, claim shall lie against the insurer of the vehicle in which the occupant is riding, mounting or dismounting from. In any other case, claim shall lie against the insurer of the directly offending vehicle. In all cases, the right of the party paying the claim to recover against the owner of the vehicle responsible for the accident shall be maintained. So kung pasahero sya ng jeep, dun ka sa jeep maghahabol. Pero kung ang situation ay hindi ka nakasakay pero nagkaron ka ng accident, ang pipiliin mo ay yung directly offending vehicle under the no fault indemnity clause. GSIS case: Issue: Can GSIS be held solidarily liable with NFA? Held: NO. Under the Compulsory Motor Vehicle Liability Insurance, a third party may sue directly the insurer for indemnity. But such indemnity would be limited only to the extent of the insurance policy and those required by law. Yet, the direct liability of the insurer under indemnity contracts against third party liability does not mean that the insurer can be held liable solidarily with the insured and/or the other parties

found at fault. The liability of GSIS based on the insurance contract is direct, but not solidary with that of the NFA. Ganito yan, ang nag-iissue ng TPL ay ang GSIS. So ang sabi ng lower court dito, o ang NHA liable under TPL so solidary liable ang GSIS. Sabi ng SC, hindi. What if the TPL is only to a certain amount, then hanggang dun lang din ang pwede kolektahin from GSIS. Yung remaining amount, mag-sue ka na sa court. So the purpose of insurance is not supposed to prevent a person from suing. ITs supposed to give what is due the person on the policy with a right to collect or sue for the balance within the prescriptive period. Ilao vs. CA Again, the principle of subrogation. Kapag nagbayad na ang insurance company, at merong offending vehicle, pwede na nyang habulin since bayad na nya yung policy holder or in the case of TPL, yung 3rd person. Perla (first case) There was recovery in this case. So in this case, sabi ng insurance company, hindi kami magbabayad kasi viniolate niyo yung "authorized driver" clause. Pero sabi ng SC, iba yun. Ang tanong lang dito, ninakaw ba yung kotse, nawala o hindi? Hindi mo na itatanong sino ba ang nagddrive nung nawala, diba? Yung authorized driver clause important lang naman yun when we talk about TPL kasi gusto nating malaman sino nagddrive nung accident. Dun lang naging material yun. Perla (2nd case) Sec. 378 of the Insurance Code, or the no fault clause, is very clear - the claim shall lie against the insurer of the vehicle in which the occupant is riding, and no other. Irrespective of whether or not fault lies with the driver of the Superlines Bus, as private respondents were not occupants of the bus, they cannot claim. The claim shall be made against the insurer of the vehicle they were riding. So kung passenger si A, dapat dun sya sa insurance company ng bus or jeep or vehicle where he is riding. Kung hindi sya passenger, dun sya sa directly offending vehicle. Kaya nga sya no fault indemnity clause kasi hindi mo na kailangang i-establish sino ang may kasalanan. LITIGATION OF CLAIMS Halimbawa, nadeny ang claim sa insurance company, where does the person go? So the party can go the insurance commission. Always to the insurance commission? No. Sec. 244. In case of any litigation for the enforcement of any policy or contract of insurance, it shall be the duty of the Commissioner or the Court, as the case may be, to make a finding as to whether the payment of the claim of the insured has been unreasonably denied or withheld; and in the affirmative case, the insurance company shall be adjudged to pay damages which shall consist of attorney's fees and other expenses incurred by the insured person by reason of such unreasonable denial or withholding of payment plus interest of twice the ceiling prescribed by the Monetary Board of the amount of the claim due the insured, from the date following the time prescribed in section two hundred forty-two or in section two hundred forty-three, as the case may be, until the claim is fully satisfied; Provided, That the failure to pay any such claim within the time prescribed in said sections shall be considered prima facie evidence of unreasonable delay in payment. So how do we know if the person should go to the Insurance Commissioner (IC) or to the appropriate court? Or should it be that the person MAY go to the IC? May yan eh.. concurrent. Bakit may? Because the amount is the determining factor. Sec. 416. The Commissioner shall have the power to adjudicate claims and complaints involving any loss, damage or liability for which in insurer may be answerable under any kind of policy or contract of insurance, or for which such

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insurer may be liable under a contract of suretyship, or for which a reinsurer may be sued under any contract of 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 interest, 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. The insurer or surety may, in the same action file a counterclaim against the insured or the obligee. The insurer or surety may also file a cross-claim against a party for any claim arising out of the transaction or occurrence that is the subject matter of the original action or of a counterclaim therein. With leave of the Commissioner, an insurer or surety may file a third-party complaint against its reinsurers for indemnification, contribution, subrogation or any other relief, in respect of the transaction that is the subject matter of the original action filed with the Commissioner. The party filing an action pursuant to the provisions of this section thereby submits his person to the jurisdiction of the Commissioner. The Commissioner shall acquire jurisdiction over the person of the impleaded party or parties in accordance with and pursuant to the provisions of the Rules of Court The authority to adjudicate granted to the Commissioner under this section shall be concurrent with that of the civil courts, but the filing of a complaint with the Commissioner shall preclude the civil courts from taking cognizance of a suit involving the same subject matter. Any decision, order or ruling rendered by the Commissioner after a hearing shall have the force and effect of a judgment. Any party may appeal from a final order, ruling or decision of the Commissioner by filing with the Commissioner within thirty days from receipt of copy of such order, ruling or decision a notice of appeal to the Intermediate Appellate Court in the manner provided for in the Rules of Court for appeals from the Regional Trial Court to the Intermediate Appellate Court. (As amended by Batas Pambansa Blg. 874). As soon as a decision, order or ruling has become final and executory, the Commissioner shall motu proprio or on motion of the interested party, issue a writ of execution requiring the sheriff or the proper officer to whom it is directed to execute said decision, order or award, pursuant to Rule thirty-nine of the Rules of Court For the purpose of any proceeding under this section, the Commissioner, or any officer thereof designated by him, empowered to administer oaths and affirmation, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, documents, or contracts or other records which are relevant or material to the inquiry. In case of contumacy by, or refusal to obey a subpoena issued to any person, the Commissioner may invoke the aid of any court of first instance within the jurisdiction of which such proceeding is carried on, where such person resides or carries on his own business, in requiring the attendance and testimony of witnesses and the production of books, papers, documents, contracts or other records. And such court may issue an order requiring such person to appear before the Commissioner, or officer designated by the Commissioner, there to produce records, if so ordered or to give testimony touching the matter in question. Any failure to obey such order of the court may be published by such court as a contempt thereof. A full and complete record shall be kept of all proceedings had before the commissioner, or the officers thereof designated by him, and all testimony shall be taken down and transcribed by a stenographer appointed by the Commissioner. A transcribed copy of the evidence and proceeding, or any specific part thereof, of any hearing taken by a stenographer appointed by the Commissioner, being certified by such stenographer to be a true and correct transcript of the testimony on this hearing of a particular witness, or of a specific proof thereof, carefully compared by him from his original notes, and to be a correct statement of evidence and proceeding had in such hearing so purporting to be taken and subscribed, may be received as evidence by the Commissioner and by any court with the same effect as if such stenographer were present and testified to the facts so certified. (As amended by Presidential Decree No. 1455).

So P100,000 and below, san sya pwede pumunta? Basahin nyo yang provision na yan ha. Concurrent yan. That is concurrent: the insurance commission and the appropriate court, which is, the Municipal Trial Court. Tapos kapag more than P100,000? Sa appropriate court parin. So depende, pwedeng sa MTC or the RTC. (Again, again, again) P100,000 and below - the IC or the MTC, whichever the claimant prefers; kapag more than P100,000 - appropriate court. The amount to determine jurisdiction, the P100,000.. what does it include? So hindi kasama ang attorney's fees and interests just the single claim. Sec. 63. A condition, stipulation, or agreement in any policy of insurance, limiting the time for commencing an action thereunder to a period of less than one year from the time when the cause of action accrues, is void. Okay, what's the general rule in prescriptive period? 10 years if there is no stipulation; Exceptions: Can be shortened to one year from the time of action accrues.. always? No, exception to the exception: industrial life -- cannot be shorter than 6 years. What are the two powers of the commission? Administrative and adjudicatory powers. What are the adjudicatory powers? To decide claims by the insured against the insurer. So mga claims. Ito yung sinasabi natin na kapag dineny ni insurance company pwede nyong i-file sa commission. Yung administrative, ano yun? The power to issue licenses and revoke it. Of course, the privilege to exercise or engage in the insurance business carries with it the possibility of being revoked by the same insurance commission who issued it. In the exercise of adjudicatory powers if the person is not satisfied with the decision of the IC, where does he go? Appeal to the Court of Appeals. Kapag administrative powers naman, where do you go? So executory powers, you go to the Secretary of Finance. But before that, may motion for reconsideration ba yan? Alamin niyo yan ha. So when does the cause of action accrue in insurance? The right of the insured to the payment accrues from the time the loss occurs, however, the cause of action under the insurance contract does not accrue until the claim is finally rejected by the insurance company/insurer. So the elements of cause of action: Right; concomitant obligation on the part of the defendant; failure or denial of the right or violation of plaintiff's right, and damage. So you don't count the 10 year period, or the 1 year period in TPL, or the 6 year period in industrial life, UNTIL THE DENIAL OF THE CLAIM BY THE INSURANCE COMPANY. Pag na-deny ba pwede bang imotion for reconsideration tapos pwede mo sabihin na hindi pa tumatakbo ang prescriptive period? No. Holding in Traveler's ISSUE: W/N Mendozas cause of action has presccribed by failing to file a written notice of claim as required by sec. 384, PD 612 HELD: Yes, it has prescribed.

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Mendoza failed to file a written notice of claim. He did not attach a copy of the insurance contract to the amended complaint. Since MENDOZA failed to attach a copy of the insurance contract to his complaint, the trial court could not have been able to apprise itself of the real nature and pecuniary limits of petitioner's liability. Morever, assuming arguendo that it had issued the insurance contract over the Lady Love taxicab, Mendozas cause of action against petitioner did not successfully accrue because he failed to file with petitioner a written notice of claim within six (6) months from the date of the accident as required by Section 384 of the Insurance Code. Any person having any claim upon the policy issued pursuant to this chapter shall, without any unnecessary delay, present to the insurance company concerned a written notice of claim setting forth the amount of his loss, and/or the nature, extent and duration of the injuries sustained as certified by a duly licensed physician. Notice of claim must be filed within six months from date of the accident, otherwise, the claim shall be deemed waived . Action or suit for recovery of damage due to loss or injury must be brought in proper cases, with the Commission or the Courts within one year from date of accident, otherwise the claimant's right of action shall prescribe. Petitioners liability under an insurance contract the existence of which had not at all been proven in court. Even if there were such a contract, private respondent's cause of action can not prevail because he failed to file the written claim mandated by Section 384 of the Insurance Code. He is deemed, under this legal provision, to have waived his rights as against petitioner-insurer. So in TPL, there is a 6 month period requirement. So kung hindi ka nag-file ng claim within that time and na-deny, of course, you can still go to court, but you cannot expect to be given the benefits. If a person fails to meet the 6 month period to file a written notice, it is deemed waived. FILIPINO MERCHANTS Dito, parang inattempt to circumvent the prescriptive period. Sabi ng SC hidi pwede. ISSUE: Whether or not the one-year period within which to file a suit against the carrier and the ship, in case of damage or loss as provided for in the Carriage of Goods by Sea Act applies to the insurer of the goods. HELD: Yes it also applies to the insurer of the goods. Therefore, the action has already prescribed. Section 3(b) of the Carriage of Goods by Sea Act provides: In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, that if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring the suit within one year after the delivery of the goods or the date when the goods should have been delivered. Clearly, the coverage of the Act includes the insurer of the goods. Otherwise, what the Act intends to prohibit after the lapse of the one-year prescriptive period can be done indirectly by the shipper or owner of the goods by simply filing a claim against the insurer even after the lapse of one year. This would be the result if we follow the petitioner's argument that the insurer can, at any time, proceed against the carrier and the ship since it is not bound by the timebar provision. In this situation, the one-year limitation will be practically useless. This could not have been the intention of the law which has also for its purpose the protection of the carrier and the ship from fraudulent claims by having "matters affecting transportation of goods by sea be decided in as short

a time as possible" and by avoiding incidents which would "unnecessarily extend the period and permit delays in the settlement of questions affecting the transportation." The notice of loss or damage is required to be filed not necessarily by the shipper but also by the consignee or any legal holder of the bill of lading. ACCFA vs. Alpha Insurance Provision in the policy reads: No action, suit or proceeding shall be had or maintained upon this Bond unless the same be commenced within one year from the time of making claim for the loss upon which such action, suit or proceeding, is based, in accordance with the fourth section hereof. " The provision is void. A fidelity bond is, in effect, in the nature of a contract of insurance against loss from misconduct, and is governed by the same principles of interpretation: Consequently, the condition of the bond in question, limiting the period for bringing action thereon, is subject to the provisions of Section 61-A of the Insurance Act (No. 2427), SEC. 61-A - A condition, stipulation or agreement in any policy of insurance, limiting the time for commencing an action thereunder to a period of less than one year from the time when the cause of action accrues is void. The year for instituting action in court must be reckoned, therefore, from the time of appellee's refusal to comply with its bond; it can not be counted from the creditor's filing of the claim of loss, for that does not import that the surety company will refuse to pay. In so far, therefore, as condition eight of the bond requires action to be filed within one year from the filing of the claim for loss, such stipulation contradicts the public policy expressed in Section 61A of the Philippine Insurance Act. Condition eight of the bond, therefore, is null and void, and the appellant is not bound to comply with its provisions. Vda de Gabriel vs. Fortune Insurance The notice of death was given to private respondent, concededly, more than a year after the death of petitioner's husband. Private respondent, in invoking prescription, was not referring to the one-year period from the denial of the claim within which to file an action against an insurer but obviously to the written notice of claim that had to be submitted within six months from the time of the accident. Barred. COUNTRY BANKERS INSURANCE VS. TRAVELLERS The one year prescriptive period runs from the date of rejection of the claim by the insurer.The one-year period under Section 384 should be counted not from the date of the accident but from the date of the rejection of the claim by the insurer. The Court further held that it is only from the rejection of the claim by the insurer that the insured's cause of action accrued since a cause of action does not accrue until the party obligated refuse, expressly or impliedly, to comply with its duty. Basically, Country bankers tells us that diba, 6 month period file written claim. And after that, kung na-deny dun lang tatakbo ang 1 year period. UNFAIR SETTLEMENT PRACTICES Basically, these are acts which will give rise to interest. The policyholder will be given interest because of the commission of the acts. These acts may also give rise to cancel or suspend the license or certificate of authority to engage in insurance business. Should you memorize these acts? YES. Sec. 241. (1) No insurance company doing business in the Philippines shall refuse, without just cause, to pay or settle claims arising under coverages provided by its policies, nor shall any such company engage in unfair claim settlement practices. Any of the following acts by an insurance company, if committed without just cause and performed with such

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frequency as to indicate a general business practice, shall constitute unfair claim settlement practices: (a) knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverage at issue; (b) failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies; (c) failing to adopt and implement reasonable standards for the prompt investigation of claims arising under its policies; (d) not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear; or (e) compelling policyholders to institute suits to recover amounts due under its policies by offering without justifiable reason substantially less than the amounts ultimately recovered in suits brought by them. (2) Evidence as to numbers and types of valid and justifiable complaints to the Commissioner against an insurance company, and the Commissioner's complaint experience with other insurance companies writing similar lines of insurance shall be admissible in evidence in an administrative or judicial proceeding brought under this section. (3) If it is found, after notice and an opportunity to be heard, that an insurance company has violated.