The POLICYThe written instrument where the contract of insurance is set forthNo policy of insurance shall be issued or delivered within the Philippines unless previously approved by the Insurance Commissioner.Failure to obtain approval of the policy does not affect the validity of the terms of the contract and the policy may still be enforced.LANGUAGE OF THE POLICYA party that seeks to enforce the contract must prove that the terms of the policy were fully explained to the insured.SEC. 50Any rider, clause, warranty or endorsement purporting to be part of the contract is NOT binding on the insured.XPN: If the descriptive title or name of the rider is also mentioned or written in the blank space provided in the policyAny rider issued after the original policy shall be countersigned by the insured.XPN: If the rider was pasted or attached to the original policy at the time it was issued.Countersignature shall be construed as an agreement to the contents of the rider.

SEC. 51 -PAP-PIRPA policy of insurance must specify:a. The parties between whom the contract is madeb. The amount to be insured except in cases of open or running policyc. The premium or a statement of the basis and rates upon which a final premium is to be determinedd. The property or life insurede. The interest of the insured in the property insuredf. The risk insured against; andg. The period during which the insurance is to continue

Forms of policya. Riderb. Clausec. Warrantyd. EndorsementIn the absence of fraud, an incorrect designation of the name of the insured shall not invalidate the policy.

SEC. 52

Cover notes may be issued to bind insurance temporarily pending the issuance of the policy.Within 60 days after the issue of a cover note, a policy shall be issued.Cover notes may be extended or renewed beyond 60 days with the written approval of the Commissioner.A cover note or a binding slip is merely a written memorandum of the most important terms of a preliminary contract of insurance, intended to give temporary protection pending the investigation of the risk by the insurer or until the issuance of the formal policy.Preliminary contract of insurance

It is one intended to afford protection pending the investigation of the risk and formal issuance of the policy

To give adequate protection to the insured, it must be a preliminary contract of present insurance and not a mere agreement to insure at some future time.

provisional policy it is only an acknowledgment of receipt of the premium.

Rules on binding receipt issued by agent

a. If the act of acceptance of the risk by the agent and the giving by him of the receipt, are within the scope of the agents authority and nothing remains but to issue the policy, then the receipt will bind the company.b. Where an agreement is made between the applicant and the agent that no liability shall attach until the principal approves the risk and a receipt is given by the agent, such acceptance is merely conditional and in subordinated to the act of the company in approving or rejecting.c. Where the acceptance of the agent is within the scope of his authority a receipt containing a contract of insurance for a specified time which is not absolute but conditional, upon acceptance or rejection by the principal, covers the specified period unless the risk is declined within that period.No separate premium is required to be paid on a cover note.

WHEN ACCEPTANCE IS PRESUMEDWhen an insurer accepts and retains for an unreasonable length of time the first premium paid, it is presumed that the insurer has assumed the risk and is liable for the loss that occurs before the application is rejected.Unreasonable delay in returning the premium raises a presumption of acceptance of the application.SEC. 53The insurance proceeds shall be applied exclusively to the proper interest of the person in whose name or for those whose benefit it is made.Where several persons have distinct interests in the same property, the insurance taken by one in his own right does not in any way insure the interest of the other.WHEN THIRD PERSON MAY SUE INSURERThe insurer shall be liable only to the insured or the beneficiary named in the policy.Exception:a. If the insurance contract should contains some stipulation in favor of a third person.b. Where the insurance contract provides for indemnity against liability to third person.INSURER IS NOT SOLIDARILY LIABLE WITH INSURED CARRIERThe liability of the insurer is based on contract while that of the insured carrier or vehicle owner is based on tort.Insurer cannot be held liable in solidum with the insured or other person found at fault.INSURANCE PROCURED BY AGENTWhen the property is insured by the agent, the principal may insure the same as owner while the agent who is responsible for such property may likewise insure the same.If the principal secures the policy in his name alone, it is deemed to cover only the interest of the agent and the principal has no right of action against the insurer.INSURANCE PROCURED BY PARTNERWhen a partner takes a policy on the partnership property in his own name, it is deemed to include his separate interest aloneInsurance taken by an agent or partner in their respective names alone will not include the interest of their principal or co-partners.SEC. 56GENERAL DESCRIPTION OF THE INSURED.When the description of the persons insured is so general that it comprehends any person or any class of persons, the person claiming the proceeds of the policy must prove that such description was intended to include him.SEC. 58The mere transfer of the thing insured does not transfer the policy but suspends it until the same person becomes the owner of both the policy and the thing insured.SEC. 59, 60Open policy is one which the value of the thing insured is not agreed upon, and the amount of the insurance merely represents the insurers maximum liability.In such case the value of the thing insured shall be ascertained at the time of the loss.SEC. 61.A valued policy is one which expresses on its face an agreement that the thing insured shall be valued at a specific sum.LIFE INSURANCE IS VALUED POLICYThe measure of indemnity under a policy of insurance upon life or health is the sum fixed in the policy.Open vs. Valued policyIn open policy, the value of the thing insured is not agreed upon in the policy, while in valued policy, the parties have stipulated in the policy that the thing insured is valued at a specified sum.In open policy, upon occurrence of the loss, the insured must prove the value of the thing insured, while in valued policy, proof of the value of the thing insured after the loss is no longer necessary.SEC. 62A running policy is one which contemplates successive insurances and which provides that the object of the policy may be defined from time to time by additional statements or endorsements.Running policy = floating policySEC. 63A condition, stipulation, or agreement in any policy of insurance, limiting the time for commencing an action thereunder to a period of less than one (1) year from the time when the cause of action accrues, is void.If the period agreed upon should be less than one year form the time the cause of action accrues, such agreement is void.An action should be brought within a period of one year from the denial of the claim.WHEN NO PERIOD IS AGREED UPON.The insured may bring the action within 10 years from the time the cause of action accrues.If the insured file a petition for reconsideration, the prescriptive period should be counted from the date the claim was denied at the first instance and not from the denial of the petition for reconsideration.EFFECT OF CARRIER OF GOODS BY SEA ACTThe carrier and the ship shall be discharged from all liability for loss or damage to the goods if no suit is filed within one (1) year a. after delivery of the goods or b. date when they should be delivered.Only the carriers liability is extinguished and not of the insurer because the insurers liability is not based on contract of carriage but on contract of insurance.PRESCRIPTION OF THE INSURERS ACTION AGAINST THE CARRIERThe suit against the carrier must be filed within one year after delivery of the goods or the date when goods should have been delivered, otherwise the action shall prescribe.

SEC. 64.NCFW-PDNo policy of insurance other than life shall be cancelled by the insurer without prior notice to the insured.The grounds for the cancellation of the policy:a. non payment of the premiumb. conviction of a crime arising out of acts increasing the hazard insured against;c. discovery of fraud or material representationd. discovery of willful or reckless acts or omissions increasing the hazard insured againste. physical changes in the property insured resulting in the property becoming uninsurablef. discovery of other insurance coverage that makes the total insurance in excess of the value of the property insuredg. a determination of the Commissioner that the continuation of the policy would violate or would place the insurer in violation of this Code.SEC. 65There must be a prior notice of cancellationFORM All notice of cancellation must be in writing, mailed or delivered to the named insured at the address shown in the policyNotice of cancellation must be in writing and must state the grounds relied upon.NOTICE MAILED BUT NOT RECEIVED.A notice of cancellation mailed, but not received by the insured, is ineffective as cancellation.Actual receipt of the notice of cancellation is absolutely essential and the insurer could not merely rely on the presumption of regularity in the performance of duty.Notice of cancellation must be sent to the insured himself.

SEC. 66.If the insurer gives notice to the insured of its intention not to renew the policy at least 45 days prior to the end of the policy Effect: it gives no option to the insured to renew the policy.Any policy written for a term of less than one (1) year shall be considered as if written for a term of one (1) year.Any policy written for a term longer than one (1) year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one (1) year.

WARRANTIES

SEC. 67, 68, 69KINDS OF WARRANTYa. affirmative warranty one which relates to matters which exist at or before the issuance of the policy

b. promissory warranty one which the insured undertakes that something shall be done or omitted after the policy takes effect and during its continuance.

c. Express warranty is a statement in a policy, of a matter relating to the person or thing insured or to the risk, as a fact

d. Implied warranty is an agreement or stipulation not expressed in the policy but the existence of which is admitted or presumed from the fact that the contract of insurance has been executed.SEC. 70Every express warranty, made at or before the execution of a policy, must be contained in the policy itself or in another instrument signed by the insured and referred to in the policy as making a part of it.SEC. 71 Express warrantySEC. 72 Promissory warrantyNON-PERFORMANCE OF PROMISSORY WARRANTYGR: Non performance of a promissory warranty entitles the insurer to rescind the contract except:a. When before the time arrives for the performance of promissory warranty, the loss insured against happensb. When before the time arrives for the performance of promissory warranty, the performance becomes unlawful at the place of the contract.c. When before the time arrives for the performance of promissory warranty, the performance becomes impossible.SEC. 74.The violation of a material warranty, or other material provision of a policy, on the part of either party thereto, entitles the other to rescind.SEC.76.BREACH OF WARRANTY WITHOUT FRAUDIf the breach exists or is committed at the effectivity of the policy, it prevents the policy from attaching to the risk, that is the insurer is not liable from the beginning.If the breach exist after the effectivity of the policy, the insurer is exempted from liability for losses incurred after such breach. Insured is entitled to the return of premium paid pro-rata rate from the time of breach.BREACH OF WARRANTY WITH FRAUDThe policy is void ab initioWARRANTY VS. REPRESENTATIONa. Representations are not part of the contract while warranties are or must be a part of the contract itself.b. Materiality of warranty is presumed, while representation must be shown to be materialc. Misrepresentation sets aside the policy on the ground of fraud while non-fulfillment of a warranty operates as a breach of contract.d. Representation may be made by both the insured and insurer, while warranty is made only by the insured.

PREMIUMSEC. 77An insurer is entitled to payment of the premium as soon as the thing insured is exposed to the peril insured against.No policy or contract of insurance is valid and binding unless and until the premium thereof has been paid notwithstanding any agreement to the contrary.Exception:a. In the case of life or industrial life policy when the grace period appliesb. When a 90 day credit extention is givenc. When the insurer makes a written acknowledgment of the receipt of premiumd. Where the oblige accepted the bonde. In case of industrial life insurance, if the non-payment was due to the failure of the insurer to send its agent to collect the premium.

Except: When the premium on the policy remains unpaid for a period of three months after the grace period has expired.EFFECT OF NON-PAYMENT OF PREMIUMNon-payment of premiums puts an end to an insurance contract.No contract of insurance is valid and binding unless and until the premium thereof has been paid, notwithstanding any agreement to the contraryEFFECT OF PAYMENT BY INSTALLMENTSIf the parties have not agreed to have the premiums paid by installments or payment by installments is not an established practice by the parties, the obligation to pay premium when due is considered as an indivisible obligation. A forfeiture of the policy is not prevented by part payment thereof. A part payment will not keep the policy in force.But, if the parties agreed to have the premiums paid by installments or payment by installments is an established practice by the parties, acceptance of the payment of premium by installments would suffice to make the policy binding.PREMIUM PAYMENT IN BONDSGR: No contract of suretyship or bond shall be valid and binding unless and until the premium thereof has been paid.XPN: when a bond or suretyship contract is issued and accepted by the obligee or creditor, said bond or suretyship contract is valid and enforceable notwithstanding the non-payment of premium.PROMISSORY NOTES AND POST DATED CHECKSPremiums may be paid by promissory notes or post dated checks. The policy was not forfeited even if the promissory note of the premium was not paid on time, or the post-dated check was subsequently dishonored.The insurer is deemed to have accepted the promissory note as payment of the premium.

Non-payment of premiums cannot be excused by sickness or incapacity of the insured, or by war, since the time of payment of premium is peculiarly of the essence of the contract.NON-PAYMENT OF PREMIUM DUE TO WARIn case of non-payment, the contract is not merely suspended, but it is abrogated by reason of non-payment of premiums, since time of the payment is peculiarly of the essence of the contract.PAYMENT AFTER THE LOSSIf the insurer was aware of the loss at the time of the acceptance of payment, the insurer is bound under the policy.If the insurer was not aware of the loss at the time of the acceptance of payment and subsequently returned the premium to the insured, the insurer may still raise the defense of non payment.EFFECT OF REFUSAL TO ACCEPT PAYMENTThe act of the insurer or his agent in refusing to accept payment of premium will estop the insurer from claiming a forfeiture of the policy for non-payment of premium.DEVICES TO AVOID FORFEITURE OF LIFE INSURANCEa. Period of graceb. Payment of the cash surrender valuec. Giving options to the insured after payment of three full annual premiums such as extended insurance and paid-up insuranced. Automatic loan clausee. Reinstatement of lapsed policiesPERIOD OF GRACEIn life insurance, after payment of the first premium the insured is entitled to a grace period of thirty days within which to pay the succeeding premiumCASH SURRENDER VALUEIt is the sum of money the company agrees to pay to the holder of the policy if he surrenders it and releases his claim upon it.REINSTATEMENTEvery life insurance policy must contain a provision that the holder of the policy is entitled to reinstatement of the contract at any time within three years from the date of default in the payment of premium.Exception:a. If cash value has been duly paidb. Extention period has expiredIn order to be entitled for reinstatement the insured must pay the past due premiums and must furnish the insurer of evidence of insurability.SEC. 78Employees of the government may pay their insurance premiums through salary deduction.FAILURE TO REMIT PREMIUMSIf the premiums is not remitted by the treasurer, cashier, paymaster or official of the entity employing the government employee to the insurer, the insurer is still liable. Such entity employing the government employee is acting as an agent of the insurer.SEC. 79An acknowledgment in a policy or contract of insurance or the receipt of premium is conclusive evidence of its payment notwithstanding any stipulation therein that it shall not be binding until the premium is actually paid.SEC. 80, 81The insured is entitled to a return of premium as follows RETURN OF THE PREMIUM EDF-FIA-Oa. To the whole premium if no part of his interest in the thing insured be exposed to any of the perils insured against;b. Where the insurance is made for a definite period of time and the insured surrenders his policy before the expiration of that periodc. When the contract is voidable and subsequently annulled under the provisions of the Civil Code on account of fraud or misrepresentation of the insurer, or his agent.d. When the contract is voidable and subsequently annulled under the provisions of the Civil Code on account of facts, the existence of which the insured was ignorant without his fault.e. When by any default of the insured than actual fraud, the insurer never incurred any liability under the policyf. If the policy is annulled, rescinded, or if a claim is denied by reason of fraud.g. In case of over-insuranceWhen the insured is guilty of fraud, he has no right to a return of the premium.OVER-INSURANCEInsurance in excess of the amount of the insurable interest of the insured, the insured is entitled to a ratable return of the premium.WHEN PREMIUM IS NOT RECOVERABLEThe insured cannot recover the premium paid ELFAa. If the peril insured against has existed and the insurer has been liable for any period, the peril being entire and indivisible.b. In life insurancec. When the insured is guilty of fraud or misrepresentationd. When the policy is annulled or rescinded upon grounds other than those attributable to the insurer.

LOSSSEC.85An agreement not to transfer the claim of the insured against the insurer after the loss has happened, is void if made before the lossSEC. 86, 87, 88LOSSES FOR WHICH INSURER IS LIABLEa. Loss of which a peril insured against was the proximate causeb. Loss caused by the efforts to rescue the thing insured from the peril insured againstc. Loss caused by a peril not insured against to which the thing insured was exposed in the course of the rescuing the same from the peril insured againstd. Loss, the immediate cause of which was the peril insured against.e. Loss caused by the negligence of the insuredPROXIMATE CAUSEThat event which in a natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury and without which the injury would not have been occurred.Where the proximate cause of the loss is the peril insured against, the insurer is liable although a peril not insured against may have been the remote cause.EXPOSED TO ANOTHER PERILIf the thing insured is exposed to another peril not insured against during the course of a rescue, the insurer is liable.PERIL INSURED IS IMMEDIATE CAUSEImmediate cause is the cause or condition nearest to the time and place of injury.When the immediate cause of the loss is a peril insured against, the insurer is liable unless the proximate cause is an excepted risk.BURDEN OF PROOF IN ACCIDENT INSURANCEThe insureds beneficiary has the burden of proof in demonstrating that the cause of death is due to the covered peril. Then the burden of proof shifts to the insurer.SEC. 89.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 the insurance agents or othersWhen the insureds negligence is so gross that it is tantamount to misconduct, or willful or wrongful act, the insurer is not liable.EFFECT OF FRAUDULENT CLAIMFraud in the statement of loss operates to defeat recovery upon any part of the policy, for the policy is avoided by any false and material misrepresentation in the statement of loss and all benefit under the policy is forfeited.EFFECT OF HONEST OVER-VALUATIONIn case the insured fraudulently over-values the property insured in the claim for the loss, the insurance is avoided.In overvaluing his property, the insured did so knowingly and with fraudulent intent.

NOTICE OF LOSSSEC. 90, 91In case of fire insurance, if no written notice is not given by the insurer the insurer is liable.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.CONDITION SUBSEQUENTAfter the occurrence of the loss, the insured, in order to recover from the insured, must;a. Give a notice of loss without unnecessary delay in fire insurance and within the period specified by the Insurance Commissioner in other kinds of insurance; andb. When required by the policy, submit a preliminary proof of lossSEC.92.WAIVER OF DEFECTSa. When the insurer fails to specify to the insured any defect in the notice or proof loss which the insured might remedy without unnecessary delayb. When the insurer denied liability on a ground other than the defect in the notice or proof of loss.SEC.93.WAIVER OF DELAYWhen notice or proof of loss was given but not within the time provided for by law or by the policy, there is waiver of delay when:a. Where delay was caused by an act of the insurer.b. Where the insurer failed to object to the delay promptly and specifically upon such ground.PERSONS ENTITLED TO CLAIM PROCEEDS OF POLICYInsurable interest alone is not sufficient to enable a person to obtain payment from the insurer. His interest must be covered by insurance or he must be designated as beneficiary.PERIOD TO PAY PROCEEDS OF LIFE INSURANCELife insurance:a. If the policy matures by the expiration of the terms (maturity other than by the death of the insured), payment shall be made immediately upon maturity

Exception:1. When the proceeds are payable in installments or as an annuity

b. If the policy matures by the death of the insured, payments should be made within 60 days font the presentation of the claim and filing of proof of death.PERIOD TO PAY PROCEEDS OF PROPERTY INSURANCEThe proceeds of a policy shall be paid within thirty days after the proof of loss is received by the insurer.If such ascertainment is not had or made within sixty days after the receipt by the insurer of the proof of loss, then the loss or damage shall be paid within 90 days after such receipt.SUBROGATION, AN EFFECT OF PAYMENT BY INSURERAfter the insured has received payment from the insurer of the loss covered by the policy, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who violated the contract.The subrogated insurer cannot recover more than what the insured may recover from the wrongdoer.INCAPACITY OF INSURED TO SUE DOES NOT AFFECT SUBROGEELack of capacity to sue on the part of the creditor (the insured) does not affect the insurers capacity to sue. Capacity to sue is a right personal to its holder. It is conferred by law and not by the parties.WHEN INSURER NOT SUBROGATEDThe insurer will not be subrogated to the rights of the insured in the following cases;a. In life insurance subrogation exists only when insurance is a contract of indemnity. It only exist in property insuranceb. When the proximate cause of the damage was the negligence of the insured himself.c. When the insurer pays to the insured a loss not covered by the policyd. When the insured failed to comply with the legal or stipulated condition precedent prior to the filing of an action against the wrongdoer.INSUREDS RIGHT AFTER RECEIVING THE PAYMENTa. If the proceeds of the insurance were not sufficient to cover the loss suffered, the insured may recover the deficiency from the wrongdoerb. When the insured is fully compensated, he could no longer claim against the wrongdoer. And if the insured obtained payment from the wrongdoer, he must return such payment to the insurer.EFFECT OF RELEASE OF THIRD PERSON LIABLE FOR THE LOSSa. If the insured releases the wrongdoer from liability before payment by the insurer, the insurer destroys hi right to collect front the insurer.b. If the insured releases the wrongdoer after receiving payment form the insurer, the latter may recover from the insured the insurance proceeds paid.

DOUBLE INSURANCESEC. 95. Requisites of a double insuranceSISR-Sa. The same person insured.b. There must be several insurersc. The subject matter insured must be the samed. The interest insured must be the samee. The risk insured must be the same.In case of double insurance, the insurer may still be made liable up to the extent of the value of the thing insured but not to exceed the amount of the policies issued.The policy should be avoided if the insured procures any other insurance without insurers consentWhen the insurance policy expressly requires that notice should be given by the insured of the existence of other insurance policies upon the same property, the absence of such notice nullifies the policyWAIVER OF VIOLATIONWhen the insurer, with the knowledge of the existence of other insurance, preferred to continue the policy, its action amounts to waiver of annulment of the contract.SEC.96OVER-INSURANCEWhenever the insured obtains a policy in an amount exceeding the value of his insurable interest.OVER-INSURANCE VS. DOUBLE INSURANCEa. In double insurance, there must be two or more insurers while in over-insurance, one insurer is sufficientb. In double insurance, the total amount of the policies taken need not exceed the value of the insurable interest while in over-insurance, the insurance taken must always be more than the amount of the insurable interest.OVER INSURANCE BY DOUBLE INSURANCEThe effects of double insurance by double insurance are as follows:a. The insured may claim payment from the insurers in any order he may select, up to the amount for which each individual insurers are liable under their respective contracts.b. In case of valued policy, any sum received by him under any other policy shall be deducted from the value of the policy.c. In case of unvalued policy (open policy), any sum received by him under any policy shall be deducted against the full insurable value.d. In case the insured received any sum in excess of the valuation or insurable value of his policy, he must hold the excess in trust for the insurers.e. The insurers are bound to contribute ratably to the loss in proportion to the amount for which they are liable under their policies.Insurers policy / total amount of policies issued x amount of loss = share of the insurer

REINSURANCESEC. 97A contract of reinsurance is one by which an insurer procures a third person to insure him against loss or liability by reason of such original insurancePURPOSE OF REINSURANCEWhen an insurer finds that a single risk is so great that the happening of the peril insured against would render him insolvent, or seriously cripple his efficiency, it is allowed for him to reinsure such risk.RETROCESSIONRetrocession is reinsurance made on a second and subsequent level, concerning the same original risk written by the first ceding company.REINSURANCE POLICY VS. REINSURANCE TREATYReinsurance policy is a contract of indemnity one insurer makes with another person to protect the first insurer from risk it has already assumed.Reinsurance treaty is merely an agreement between two insurance companies whereby one agrees to cede and the other to accept reinsurance business pursuant to provisions specified in the treaty.WHEN IS REINSURANCE NECESSARYWhen a non-life insurer insures in any one risk or hazard an amount exceeding twenty (20) per centum of its net worth, the insurer needs reinsurance of the excess over said limit.REINSURANCE VS. DOUBLE INSURANCEa. In double insurance, the insurer remains as insurer while in reinsurance, the insurer becomes an insured.b. In double insurance, the subject matter is property while in reinsurance it is the insurers risk or liabilityc. In double insurance, the same interest and risk are insured with another insurer, while in reinsurance, different risk and interest is insured.SEC. 98Where an insurer obtaines reinsurance, he must communicate all the representations of the original insured and all the knowledge and information he possesses which is material to the riskMATTERS TO BE COMMUNICATED BY REINSUREDa. All representations made by the original insured; andb. All the knowledge and information he possess which are material to the riskFailure to reveal information or facts or circumstances which are material to the risk will be a ground for declaring the policy or reinsurance as avoided.SEC. 99.A reinsurance is presumed to be a contract of indemnity against liability and merely against damage.The reinsurer is not liable to the reinsured for a loss under an original policy if the reinsured is not liable to the original policy holderWhen the reinsured becomes liable under the original policy, he may obtain payment from the reinsurer even before paying the loss of the original insured.Reinsurance is a contract of indemnity against liability, not damageReinsurer is not liable where reinsured incurred no liabilityReinsured is entitled to payment before payment to original insured.REINSURERS EXTENT OF LIABILITYThe insurers measure of liability was the reinsureds liability to the original owner.EFFECT OF SETTLEMENT WITH ORIGINAL INSUREDWhere the reinsured has actually discharged its liability by payment of the sum less than that fixed in the original policy, the amount so paid is the measure of the reinsurers liabilitySEC. 100The original insured has no interest in a contract of reinsuranceA contract of insurance operates solely between the reinsured and the reinsurer, and creates no privity between the reinsurer and the person originally insured.The reinsured alone has claim against the reinsurer.WHEN IS REINSURER LIABLE TO ORIGINAL INSURED.GR: The original insured has no right to sue the reinsurer on the contract of reinsuranceXPN: a. If the policy is made directly for the benefit of the reinsureds policy holders; orb. If the reinsurer assumes and agrees to perform reinsureds contractIMPLIED WARRANTIES IN MARINE INSURANCE

a. The ship is seaworthyb. No improper deviation from the agreed voyage will be madec. The vessel will not engage in illegal ventured. Where the nationality or neutrality of a ship or cargo is expressly warranted, the ship will carry the requisite documents to show such nationality or neutrality