insurance reviewer part 3

7/25/2019 Insurance Reviewer Part 3

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LIFE INSURANCE

SEC. 181

Life insurance is insurance on human lives and insurance appertainin thereto or

connected there!ith.

Ever" contract or underta#in for the pa"ment of annuities includin contract forthe pa"ment of lump sums under a retirement proram !here a life insurancecompan" manaes or acts as a trustee for such retirement proram shall $econsidered a life insurance contract.

SEC. 18%

An insurance upon life ma" $e made pa"a$le on the death of the person or on hissurvivin a speci&ed period' or other!ise continent on the continuance orcessation of life.

Ever" contract or plede for the pa"ment of endo!ments or annuities shall $econsidered a life insurance contract.

In the a$sence of a (udicial uardian' the father' or in the latter)s a$sence orincapacit"' the mother' of an" minor' !ho is an insured or $ene&ciar" under thecontract of life' health or accident insurance' ma" e*ercise' in $ehalf of the saidminor' an" riht under the polic"' !ithout necessit" or court authorit" or the ivinof a $ond' !here the interest of the minor in the particular act involved does note*ceed Five hundred thousand pesos +,-'./ or in such reasona$le amountas ma" $e determined $" the Commissioner.

Such riht ma" include' $ut shall not $e limited to' o$tainin a polic" loan'surrenderin the polic"' receivin the proceeds of the polic"' and ivin the minor)sconsent to an" transaction on the polic".

In the a$sence or incapacit" of the father or mother' the randparent' the eldest$rother or sister at least eihteen +18/ "ears of ae' or an" relative !ho has actualcustod" of the minor insured or $ene&ciar"' shall act as a uardian !ithout the needof a court order or (udicial appointment as such uardian' as lon as such person isnot other!ise dis0uali&ed or incapacitated.

,a"ment made $" the insurer pursuant to this section shall relieve such insurer ofan" lia$ilit" under the contract.

If the amount of the interest of the minor in the insurance polic" does not e*ceed,-'.or in such reasona$le amount as ma" $e determined $" theCommissioner' court authorit" or a $ond is no loner necessar" in order that theminor)s father or in his a$sence or incapacit"' the mother ma" e*ercise an" riht in$ehalf of the minor.

ASENCE 2R INCA,ACI34 2F FA35ER 2R 6235ER.

3he randparent' the eldest $rother or sister at least 18 "ears of ae' or an" relative!ho has actual custod" of the minor insured or $ene&ciar"' shall act as a uardian

!ithout the need of a court order or (udicial appointment as such uardian' as lonas such person is not other!ise dis0uali&ed or incapacitated.

ANNUI34

Annuit" is a contract to pa" the insured' or a named person or persons' a sum orsums periodicall" durin a life or a certain period.

ANNUI34 7S' LIFE INSURANCE


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Annuit" is pa"a$le durin the lifetime of the annuitant' !hile in life insurance isusuall" pa"a$le upon the death of the insured.

3he annuitant pa"s a sinle premium !hile the insured in the life insurance pa"spremiums $" installments.

In annuit"' the insurer underta#es to pa" annuities until the death of the annuitant'!hile in life insurance' the insurer pa"s lump sum upon the death of the insured.

LIFE INSURANCE 5ILE IN 6ILI3AR4 SER7ICE.

If there a$sence of a provision in the polic" e*ceptin death of the insured in $attle!hile servin in the militar" forces' the insurer is lia$le therefore.

A life insurance polic" ma" validl" e*empt the insurer from lia$ilit" in case theinsured dies !hile enaed in naval or militar" service in time of !ar.

5ERE ASSAUL3 2R 6UR9ER E:CLU9E9.

3he insurer)s Lia$ilit" in such case !ill depend on !hether the insured)s death !asintended or not.

If the insured !as #illed $" another person intentionall" the insurer is not lia$le.

If the insured !as not an intended victim of felonious assault' the insurer is lia$le.

SEC. 18;.

3he insurer in a life insurance contract shall $e lia$le in case of suicide onl" !hen itis committed after the polic" has $een in force for a period of t!o +%/ "ears from thedate of its issue or of its last reinstatement' unless the polic" provides a shorterperiod. ,rovided' ho!ever' that suicide committed in the state of insanit" shall $e

compensa$le reardless of the date of commission.hen the polic" does not e*pressl" state !hether suicide is e*cepted in the polic"or covered therein' a distinction should $e made as to !hether suicide !ascommitted !hile the insured !as insane or sane.

hen the insured !as insane !hen he too# his o!n life' the insurer is lia$le on hiscontract as insanit" is one of the disease to !hich the insurer must have #no!n thatthe insured !as suscepti$le' and the un!ittin act of self


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3hat form of insurance under !hich the premiums are pa"a$le monthl" or oftener' ifthe face amount of insurance provided in an" polic" is not more than - times thatof the current statutor" dail" !ae of the Cit" of 6anila.

SEC. 18>.

A polic" of insurance upon life or health ma" pass $" transfer' !ill or succession toan" person' !hether he has an insura$le interest or not' and such person ma"recover upon it !hatever the insured miht have recovered.

SEC. 18-.

Notice to an insurer of a transfer or $e0uest thereof is not necessar" to preserve thevalidit" of a polic"

of insurance upon life or health.

ASSI?N6EN3 2F LIFE INSURANCE.

3he transferee of the life polic" need not have insura$le interest and notice to theinsurer of such assinment need not $e iven unless e*pressl" re0uired $" thepolic".

C2NSEN3 2F ENEFICIAR4

here the polic" is pa"a$le to a $ene&ciar" other than the insured or his estate orpersonal representative' and the riht to chane the $ene&ciar" is e*pressl"!aived' the consent of such $ene&ciar" to the assinment of the polic" must $eo$tained since the $ene&ciar" has a vested riht on the polic" that cannot $edefeated $" an assinment or transfer !ithout his consent.

3he consent of the $ene&ciar" to an assinment $" the insured is not necessar"!here the insured has not e*pressl" !aived the riht to chane the $ene&ciar".

SEC. 18@ < 6EASURE 2F IN9E6NI34 UN9ER 35E ,2LIC4

Unless the interest of a person insured is suscepti$le of e*act pecuniar"measurement' the measure of indemnit" under the polic" of insurance upon life orhealth is the sum &*ed in the polic".

FIRE INSURANCE

SEC.1@

3he term &re insurance shall include insurance aainst loss $" &re' lihtnin'!indstorm' tornado' or earth0ua#e and other allied ris#s' !hen such ris#s arecovered $" e*tension to &re insurance policies or under separate policies.

In &re insurance' the insured is entitled to recover the loss su=ered !here the causeof the damae is a hostile &re. 5ostile &re is one !hich $urns at a place !here it isnot intended to $e' or $rea#s out from !here it is intended to $e and $ecomesuncontrolla$le

And !here the &re that caused the loss is a friendl" &re' recover" cannot $e had forloss or damae caused there$". Friendl" &re is one !hich is con&ned !ithin theplace !here it !as intended to $e and emplo"ed for the ordinar" purpose oflihtnin' heatin or manufacturin.

SEC.1B' 1B1' 1B%


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An alteration in the use or condition of the thin insured from that to !hich it islimited $" the polic" made !ithout the consent of the insurer' $" means !ithin thecontrol of the insured' and increasin the ris#s' entitles an insurer to rescind acontract of &re insurance.

An alteration in the use or condition of a thin insured from that to !hich it is

limited $" the polic"' !hich does not increase the ris#' does not a=ect the contractof insurance.

A contract of &re insurance is not a=ected $" an" act of the insured su$se0uent tothe e*ecution of the polic"' !hich does not violate its provisions' even thouh itincreases the ris# and is the cause of the loss.

AL3ERA3I2N IN 35E USE 2R C2N9I3I2N 2F 35IN? INSURE9.

An alteration in the use or condition of thin insured !ill entitle the insurer torescind the contract of insurance provided the = re0uisites are present

a. 3here must $e a violation of the provisions of the polic"

$. 3he alteration !as made !ithout the consent of the insurerc. 3he alteration !as made $" means !ithin the control of the insured andd. 3he alteration increased the ris# of the loss.

5EN 3RANSFER 32 AN235ER UIL9IN? IS AL3ERA3I2N.

An" transfer e=ected $" the insured of the propert" insured from one place toanother re0uires the consent of the insurer' an" transfer made $" the insured!ithout the consent of the insurer constitutes alteration !hich !ould free the latterfrom an" lia$ilit".

7I2LA3I2N 2F 35E ,2LIC4 NECESSAR4.

Increase of the ris# of loss alone !ill not entitle the insurer to rescind a contract ofinsurance. 3here must $e a correspondin violation of the provision of the polic" inorder to rescind the polic".

A contract of insurance is not a=ected $" an" act of the insured su$se0uent to thee*ecution of the polic"' !hich does not violate its provision' even thouh itincreases the ris# and is the cause of the loss.

INCREASE IN 35E RISD 2F L2SS NECESSAR4.

hen the insured does not pa" premium upon the increased ri#s' the insurer isentitled to rescind the contract.

SEC.1B;.

3he measure of indemnit" in an insurance aainst &re is the e*pense it !ould $e tothe insured at the time of the commencement of the &re to replace the thin lost orin(ured in the condition in !hich it !as at the time of the in(ur"

SEC.1B>.

henever the insured desires to have a valuation named in his polic"' he ma"re0uire such $uildin or structure to $e e*amined $" an independent appraiser andthe value of the insured)s interest therein ma" then $e &*ed as $et!een the insurerand the insured.

3he cost of e*amination shall $e paid for $" the insured.

6EASURE 2F IN9E6NI34

In case of an open or unvalued polic"' the measure of indemnit" in &re insurance isthe e*pense it !ould $e to the insured to replace the thin lost or insured in thecondition in !hich it !as at the time of the in(ur".


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In case of valued polic"' the valuation areed upon shall $e conclusive $et!een theparties in the ad(ustment of the loss.

INSURER)S LIAILI34 IN 7ALUE9 ,2LIC4.

In case of a valued polic"' upon a total loss' the insurer shall pa" the !hole amount

so insured and in case of partial loss' the full amount of the partial loss shall $epaid.

henever co


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$. 2rdinar" !ear and tear of the ship' orc. Nelient failure of the ship)s o!ner to provide the vessel !ith proper

e0uipment to conve" the caro under ordinar" condition.

,eril of the ship K attri$uta$le to the fault of the man.

,ERILS 2F 35E S5I, 2R9INARIL4 N23 C27ERE9.

Unless other!ise stated in the polic"' loss due to perils of the ship is not !ithin thecoverae of marine insurance.

A marine insurance polic" in the usual form includes perils of the sea and not perilsof the ship' and accordinl"' a marine insurer upon a polic" in the usual form is notlia$le for a loss caused $" a peril of the ship.

INSURE9 6US3 C5ECD SEA2R35INESS.

Since the la! provides for an implied !arrant" of sea!orthiness in ever" contract ofordinar" marine insurance' it $ecomes the o$liation of a caro o!ner or insured toloo# for a relia$le common carrier !hich #eeps its vessels in sea!orth" condition.

ARRA3R4.

arratr" is an" !illful misconduct on the part of the master or cre! in pursuance ofsome unla!ful or fraudulent purpose !ithout the consent of the o!ners' and topre(udice the o!ners interest.

arratr" necessaril" re0uires a !illful and intentional act in its commission. Nohonest error of (udment or mere nelience' unless criminall" ross can $e

$arratr".

INC56AREE CLAUSE.

It is a provision in the polic" that the insurance shall cover loss of' or damae to' thehull or machiner" throuh the nelience of the master' charterers' mariners'enineers' or pilots' or throuh an" latent defect in the machiner" or hull notresultin from !ant of due dilience.

ALL RISD ,2LIC4.

All ris# !hatsoever and coverin all losses $" an accidental cause of an" #ind andcoverin an" loss other than !illful and fraudulent act of the insured.

It covers all losses durin the vo"ae !hether arisin from a marine peril or not'includin pilferae losses durin !ar.

An insurance aainst Hall ris# covers all losses durin the vo"ae !hether arisinout of a marine peril or not' includin pilferae losses durin the !ar.

An Hall ris# provision of a marine polic" creates a special t"pe of insurance' !hiche*tends coverae to ris# not usuall" contemplated and avoids puttin upon theinsured the $urden of esta$lishin that the loss !as due to peril fallin !ithin the

polic")s coverae.

SEC.1% INSURALE IN3ERES3

3he o!ner of a ship has in all cases an insura$le interest in it' even !hen it has$een chartered $" one !ho covenants to pa" him its value in case of loss.


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In case of loss' the insurer shall $e lia$le for onl" that part of the loss !hich theinsured cannot recover from the charterer.

C5AR3ER ,AR34.

It is a contract $" virtue of !hich the o!ner or the aent of a vessel $inds himself to

transport merchandise or person for a &*ed price.

INSURALE IN3ERES3 2F 35E 2NER 2F C5AR3ERE9 7ESSEL.

Even if the vessel has $een chartered $" one !ho underta#es to pa" the o!ner thevalue of the vessel in case of loss' the o!ner still has insura$le interest on thevessel.

In case of loss the o!ner ma" recover from the insurer onl" that part of the loss!hich he cannot o$tain from the charterer.

SEC.1;.

3he insura$le interest of the o!ner of the ship h"pothecated $" $ottomr" is onl" thee*cess of its value over the amount secured $" $ottomr".

L2AN 2F 23326R4 2R RES,2N9EN3IAL.

A loan in !hich under an" condition !hatever' the repa"ment of the sum loaned'and of the premium stipulated' depends upon the safe arrival in port of the oodson !hich it is made or of the price the" ma" receive in case of accident' shall $e

considered a loan on $ottomr" or respondentia.

It is a loan !ith thins e*posed to maritime ris# as collaterals to $e paid if thecollaterals are safel" transported and the lender shall lose his mone" if the latterare lost.

It is a loan $ottomr" !hen the securit" is a vessel' respondentia !here the securit"is a caro.

INSURALE IN3ERES3 2N 7ESSEL 54,235ECA3E9 4 23326R4.

here a vessel has $een h"pothecated $" !a" of $ottomr"' the insura$le interest

thereon $" the o!ner is onl" the e*cess of its value over the amount secured $"$ottomr".

hen the vessel h"pothecated $" $ottomr" is lost' the o!ner need not pa" the loanon $ottomr" and' therefore' he is $ene&tted to the e*tent of the amount of the loano$tained and actuall" the loss he su=ers is onl" the di=erence $et!een the actualvalue of the vessel and the loan on $ottomr".

RI?53S 2F INSURER AN9 LEN9ER 2N SAL7A?E.

If the same vessel should $e the o$(ect of a loan on $ottomr" and marine insurance'

after a loss' the value of !hat ma" $e saved or salvaed shall $e divided $et!eenthe lender and the insurer' in proportion to the leitimate interest of each one.

SEC.1>' 1-' 1@

Freihtae' sini&es all the $ene&ts derived $" the o!ner' either from thecharterin of the ship or its emplo"ment for carriae of his o!n oods or those ofothers.


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3he o!ner of a ship has an insura$le interest in e*pected freihtae

3he interest mentioned in the last section e*ist' in case of a charter part"' !hen theship has $ro#en round on the chartered vo"ae.

FREI?53A?E.

Freihtae' in the sense of a polic" of marine insurance' sini&es all the $ene&tsderived $" the o!ner either from

a. 3he charterin of the ship or$. Its emplo"ment for the carriae of his o!n oods or of those others.

INSURALE IN3ERESE3 IN FREI?53A?E.

3he o!ner of the vessel ma" insure e*pected freihtae if there is a ris# of not$ein a$le to collect the same $" the happenin of the peril insured aainst.

ut !here the freihtae is pa"a$le in an" event !hether the vessel is lost or not'the ship o!ner has no insura$le interest in such freihtae since insurance is acontract of indemnit" and !here the insured !ill not su=er an" loss or damae'insurance is not leall" possi$le.

If the ship o!ner receives in advance the pa"ment of freihtae and !ithout an"o$liation to return it even if the vessel fails to arrive safel" at the port ofdestination' he has no insura$le interest on freihtae as he has no ris# of losinthe same.

3I6E 5EN INSURALE IN3ERES3 IN FREI?53A?E E:IS3S.

Insura$le interest on e*pected freihtae e*ists

a. In case of a charter part"' from the time the vessel has $ro#en round on thechartered vo"ae' and

$. hen there is no charter part" and the price is to $e paid for the carriae ofoods' from the time said oods are actuall" on $oard the vessel' or if theresome contract for puttin them on $oard' from the time $oth ship and oodsare read" for the speci&ed vo"ae.

SEC.1B. INSURALE IN3ERES3 IN ,R2FI3S

2ne !ho has an interest in the thin from !hich pro&ts are e*pected to proceed hasan insura$le interest in the pro&ts.

SEC.18

3he charterer of a ship has an insura$le interest in it' to the e*tent that he is lia$leto $e damni&ed $" its loss.

SEC. 1' 11 C2NCEAL6EN3

Each part" is $ound to communicate all the information !hich he possesses'material to the ris# and to state the e*act and !hole truth in relation to all mattersthat he represents' or upon in0uir" discloses or assumes to disclose

In marine insurance' information of the $elief or e*pectation of a third person' inreference to a material fact' is material.


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9U34 32 RE7EAL 6A3ERIAL INF2R6A3I2N.

3he insured must reveal all information !hich he possesses !hich is material to theris#.

In marine insurance' the insured must reveal to the insurer information of the $elief

or e*pectation of a third person' in reference to a material fact.

SEC. 111.

A person insured $" a contract of marine insurance is presumed to have #no!lede'at the time of insurin' of a prior loss' if the information miht have possi$l"reached him in the usual mode of transmission and at the usual rate ofcommunication.

SEC. 11%.

A concealment in a marine insurance' in respect to an" of the follo!in matters'does not vitiate the entire contract' $ut merel" e*onerates the insurer from a lossresultin from the ris# concealed

a. 3he national character of the insured$. 3he lia$ilit" of the thin insured to capture and detentionc. 3he lia$ilit" to seiure from $reach of forein la!s of traded. 3he !ant of necessar" documents ande. 3he use of false and simulated papers

EFFEC3S 2F C2NCEAL6EN3 2F 6A33ERS 6EN3I2NE9 IN SEC.11

In marine insurance concealment of the matters speci&ed in Sec.11 does notentitle the insurer to cancel the polic" $ut merel" e*onerates the insurer from a lossresultin from the ris# concealed.

SEC. 11;. RE,RESEN3A3I2N

If a representation $" a person insured is intentionall" false in an" material respect'or in respect of an" fact on !hich the character and nature of the ris# depends' theinsurer ma" rescind the entire contract.

6ISRE,RESEN3A3I2N IN 6ARINE INSURANCE.

A misrepresentation to entitle the insurer to rescind the contract must $eintentionall" false in an" material respect' or in respect of an" fact on !hich thecharacter and nature of the ris# depends.

SEC.11>

3he eventual falsit" of a representation as to e*pectation does not' in the a$senceof fraud' avoid the contract of marine insurance.

SEC. 11- I6,LIE9 ARRAN3IES

In ever" marine insurance upon a ship or freiht' or freihtae' or upon an"thin!hich is the su$(ect of marine insurance' a !arrant" is impleind that the ship issea!orth".


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I6,LIE9 ARRAN3IES IN 6ARINE INSURANCE

A. 3he ship is sea!orth". No improper deviation from the areed vo"ae !ill $e madeC. 3he vessel !ill not enae in illeal venture9. here nationalit" or neutralit" of a ship or caro is e*pressl" !arranted' it is

implied that the ship !ill carr" the re0uisite document to sho! suchnationalit" or neutralit" and !ill N23 carr" an" document !hich castsreasona$le suspicion thereon.

SEC. 11@ 5EN IS A S5I, SEA2R354M

A ship is sea!orth" !hen reasona$l" &t to perform the service and to encounter theordinar" perils of the vo"ae contemplated $" the parties to the polic".

EFFEC3 2F 7I2LA3I2N 2F I6,LIE9 ARRAN34 2F SEA2R35INESS.

henever the vessel is unsea!orth"' the insurer !ill not $e lia$le for a lossoccasioned there$" !hether such fact !as #no!n to the insured or not.

AI7ER 2F I6,LIE9 ARRAN3IES.

Implied !arranties ma" $e !aived $" the insurer $ut it could $e done onl" inRI3IN?' in the polic" and in the clearest lanuae.

SEC.11B 5EN REUIRE6EN3 2F SEA2R35INESS IS SA3ISFIE9.

?R Sea!orthiness of a vessel is re0uired onl" at the commencement of the ris#

:,N

a. hen the insurance is for a speci&c period' in !hich case' the vessel must $esea!orth" at the commencement of ever" vo"ae she underta#es durinsuch period.

$. hen the insurance is upon caro re0uired to $e transshipped at anintermediate port' in !hich case each vessel upon !hich caro is shipped' ortransshipped' must $e sea!orth" at the commencement of each particularvo"ae and

c. here the di=erent portions of the vo"ae contemplated $" the polic" di=er

in respect to the thins re0uisite to ma#e the ship sea!orth"' in !hich casethe ship must $e sea!orth" at the commencement of each portion !ithreference to that portion.

SEC. 118.

A !arrant" of sea!orthiness re0uires that the ship $e properl" laden and provided!ith competent master' a suOcient num$er of competent oOcers and seamen' andthe re0uisite appurtenances and e0uipment' and other necessar" or proper storesand implements for the vo"ae.

SEC. 11.

here the di=erent portions of the vo"ae di=er in respect to the thins re0uisite toma#e the ship sea!orth"' a !arrant" of sea!orth" is complied !ith if' at thecommencement of each portion' the ship is sea!orth" !ith reference to thatportion.

SEC. 1%.


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hen the ship $ecomes unsea!orth" durin the vo"ae' an unreasona$le dela" inrepairin the defect e*onerates the insurer on ship or shipo!ner)s interest fromlia$ilit" from an" loss arisin therefrom.

UNSEA2R35INESS 9URIN? 35E 724A?E.

Sea!orthiness of the vessel is necessar" onl" at the commencement of the ris#. 3heinsure does not !arrant that the ship !ill $e sea!orth" durin the entire vo"ae orthrouhout the life of the polic".

If a vessel is sea!orth" at the inception of the vo"ae' su$se0uent unsea!orthinessdoes not avoid the polic".

5EN IS INSURER S3ILL LIALE.

Unreasona$le dela" in repairin the defect causin unsea!orthiness arisin afterthe commencement of the ris# !ill 9ISC5AR?E the insurer from lia$ilit" onl" !hen

the damae or loss !as caused $" the unsea!orthiness of the vessel.

SEC. 1%1. SEA2R35INESS F2R ,UR,2SE 2F RECEI7IN? CAR?2.

A ship !hich is sea!orth" for the purpose of an insurance upon the ship ma"' $"reason of $ein un&tted to receive the caro' $e unsea!orth" for the purpose ofinsurance upon caro.

SEC. 1%%.

here nationalit" or neutralit" of a ship or caro is e*pressl" !arranted' it is impliedthat the ship !ill carr" the re0uisite document to sho! such nationalit" or neutralit"

and !ill N23 carr" an" document !hich casts reasona$le suspicion thereon.

SEC.1%; 35E 724A?E AN9 9E7IA3I2N

C2URSE 2F 35E 724A?E INSURE9.

hen the vo"ae contemplated $" a polic" is descri$ed $" the places of $einninand endin' the course of the vo"ae insured is

a. 3he one areed upon $" the parties

$. In the a$sence of areement' the course of sailin $" mercantile usae andc. If the course of the sailin is not &*ed $" mercantile usae' one !hich to a

master of ordinar" s#ill and direction !ould seem the most natural' direct andadvantaeous.

SEC.1%-

9eviation is

a. A departure from the course of the vo"ae insured$. An unreasona$le dela" in pursuin the vo"ae orc. 3he commencement of an entirel" di=erent vo"ae.

SEC. 1%@.

A deviation is proper

a. hen caused $" circumstances over !hich neither the master nor the o!nerof the ship has an" control


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$. hen necessar" to compl" !ith a !arrant"' or to avoid peril' !hether or notthe peril is insured aainst

c. hen made in ood faith' and upon reasona$le round of $elief in itsnecessit" to avoid a peril

d. hen made in ood faith' for the purpose of savin human life or relievinanother vessel in distress

SEC.1%B.

Ever" deviation not speci&ed in the last section is improper

DIN9S 2F ,R2,ER 9E7IA3I2N

a. Caused $" circumstances $e"ond control of master or o!ner.$. 6ade to compl" !ith !arrant"c. 6ade to avoid a perild. Savin human life or relievin vessel in distress.

SEC.1%8.

An insurer is not lia$le for an" loss happenin to the thin insured su$se0uent to animproper deviation.

EFFEC3 2F I6,R2,ER 9E7IA3I2N

here there has $een an" deviation !ithout (ust cause' the insurers $ecomeimmediatel" a$solved form further lia$ilit" under the polic" for losses occurrinsu$se0uent to the deviation' even if the ris# has not $een increased.

L2SS

SEC. 1%.

A loss ma" either $e total or partial.

SEC.1;.

Ever" loss !hich is not total is partial

SEC.1;1.

A total loss ma" either $e actual or constructive.

SEC.1;%.

An actual loss is caused $"

a. A total destruction of the thin insured$. 3he irretrieva$le loss of the thin $" sin#in' or $" $ein $ro#en upc. An" damae to the thin !hich renders it valueless to the o!ner for the

purpose for !hich he held it or

d. An" other event !hich e=ectivel" deprives the o!ner of the possession' atthe port of destination' of the thin insured.

SEC.1;%.

A constructive total loss is one !hich ives to a person insured a riht to a$andon'under Sec. 1>1.


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DIN9S 2F L2SSES

A. 323AL L2SS K a total loss ma" either $e

a. Actual loss !hich is caused $"

i. A total destruction of the thin insured

ii. 3he irretrieva$le loss of the thin $" sin#in or $" $ein $ro#enup

iii. An" damae to the thin !hich renders it valueless to the o!nerfor the purpose for !hich he held it or

iv. An" other event !hich e=ectivel" deprives the o!ner of thepossession' at the point of destination' of the thin insured.

$. Constructive total loss !hich is one that ives the insured a riht toa$andon

. ,AR3IAL L2SS K !hich is a loss other than a total loss

AC3UAL 323AL L2SS

hen the damae renders the thin valueless to the o!ner for the purpose for!hich he held it' there is actual total loss

C2N3RUC3I7E 323AL L2SS G 3echnical total loss .

An actual loss ma" $e presumed from the continued a$sence of a ship !ithout$ein heard of. 3he lenth of time !hich is suOcient to raise this presumptiondepends on the circumstances of the case.

,RESU6,3I2N 2F AC3UAL L2SS.

A continued a$sence of a ship !ithout $ein heard of esta$lishes a presumption ofactual loss of the ship. 3he lenth of time suOcient to raise such presumptiondepends on the circumstances of the case.

SEC.1;-.


14/23

hen a ship is prevented' at an intermediate port' from completin the vo"ae' $"the perils insured aainst' the lia$ilit" of a marine insurer on the caro continuesafter the" are thus reshipped.

Nothin shall prevent an insurer from re0uirin an additional premium if the haard$e increased $" this e*tension of lia$ilit".

SEC.1;@.

A marine insurer is $ound for damaes' e*penses of discharin' storae'reshipment' e*tra freihtae' and all other e*penses incurred in savin caroreshipped pursuant to the last section up to the amount insured.

C2N3INUA3I2N 2F LIAILI34.

henever the ship upon !hich the caro !as insured cannot continue the vo"aedue to the peril insured aainst and such caro is loaded on another vessel' the

insurance upon the caro shall continue and the insurer of the caro shall $e lia$lefor damaes' e*penses of discharin' storae' reshipment' e*tra freihtae and allother e*penses incurred in savin the caro reshipped.

SEC.1;B.

Upon an actual total loss' a person insured is entitled to pa"ment !ithout notice ofa$andonment.

AAN92N6EN3 NECESSAR4 2NL4 IN C2NS3RUC3I7E 323AL L2SS.

hen the loss is actual total loss' a$andonment is not necessar"' $ut !hen the loss

is constructive total loss' a$andonment is necessar" so that the insured ma"recover a total loss.

SEC.1;8.

here it has $een areed that an insurance shall $e free from particular averae' amarine insurer is not lia$le for an" particular averae loss not deprivin the insureof the possession.

DIN9S 2F A7ERA?ES

a. Simple or particular averae< Includes all the e*penses and damaes caused to the vessel or to her

caro !hich have not inured to the common $ene&t and pro&t of all thepersons interested in the vessel or her caro.

< It is a partial loss caused $" a peril insured aainst' !hich is not a eneralaverae cost.

$. ?eneral or ross averae< Includes all the damaes and e*penses !hich are deli$eratel" caused in

order to save the vessel' its caro' or $oth at the same time' from real or

#no!n ris#.< All persons havin interest in the vessel and caro at the time of theoccurrence of the averae shall contri$ute to the averae.

,R2CE9URAL AN9 F2R6AL REUIRE6EN3S


15/23

3he su$stantive re0uirement of eneral or ross averae is that the damae ande*penses are deli$eratel" caused in order to save the vessel' its caro' or $oth atthe same time' from real or un#no!n ris#.

EFFEC3S 2F F,A +Free ,articular Averae/ CLAUSE

a. If the damae to the thin insured is a particular averae' the insurer shallnot $e lia$le unless the loss su=ered is total i.e. the insured is deprived of the!hole of such thin.

$. If the damae to the thin is a eneral averae' the insurer shall $e lia$le tothe insured !hether the loss is partial or total' or for the contri$ution of theinsured for his proportion of all eneral averae losses assessed upon thethin insured !hich !as saved. PAR

SEC.1;.

3here is an actual loss if the insured is e=ectivel" deprived of the use andpossession of the propert"' !hether $" seiure or capture follo!ed $"condemnation or theft.

SEC.1> AAN92N6EN3

A$andonment is the act of the insured $" !hich' after a constructive total loss' hedeclares the relin0uishment to the insurer of his interest in the thin insured.

SEC.1>1.

5EN AAN92N6EN3 6A4 E 6A9E.

A$andonment ma" $e made in an" of the follo!in cases

a. If more than three%;

REUISI3ES 2F 7ALI9 AAN92N6EN3

a. It must $e total and unconditional$. It must $e made !ithin a reasona$le time after receivin information of the

loss !hich entitles the insured to a$andon.c. An e*plicit notice of a$andonment specif"in the particular cause of

a$andonment must $e iven to the insurer.d. 3here must $e proper and leal cause for a$andonment.


16/23

e. It must $e coupled !ith an actual a$andonment or relin0uishment of claim ofo!nership $" the insured in favor of the insurer.

SEC.1>>.

hen the information !hich formed the $asis of a$andonment proved to $e

incorrect and there !as in fact no total loss' a$andonment $ecomes ine=ectual.

SEC.1>-.

A$andonment is made $" ivin notice to the insurer' !hich ma" $e done orall"' orin !ritin.

If the notice $e done orall"' a !ritten notice of such a$andonment shall $esu$mitted !ithin seven +B/ da"s form such oral notice.

SEC. 1>@.

A notice of a$andonment must $e e*plicit' and must specif" the particular cause ofthe a$andonment. It needs onl" to state that there is pro$a$le cause for the lossand need not $e accompanied !ith proof of interest or of loss.

SEC.1>8.

An a$andonment is e0uivalent to a transfer $" the insured of his interest to theinsurer' !ith all the chances of recover" and indemnit".

SEC.1>.

If a marine insurer pa"s for a loss as if it !ere an actual total loss' he is entitled to!hatever ma" remain of the thin insured' or its proceeds or salvae' as if therehad $een a formal a$andonment.

SEC.1-.

Upon a$andonment' acts done in ood faith $" those !ho !ere aents of theinsured in respect to the thin insured' su$se0uent to the loss' are at the ris# of theinsurer' and for his $ene&t.

SEC. 1-1' 1-B

here notice of a$andonment is properl" iven' the rihts of the insured are notpre(udiced $" the fact that the insurer refuses to accept the a$andonment.

3he acceptance of a$andonment ma" $e either e*press or implied from the conductof the insurer. 3he mere silence of the insurer for an unreasona$le lenth of timeafter notice shall $e construed as an acceptance.

3he acceptance of an a$andonment' !hether e*press or implied' is conclusive uponthe parties' and admits the loss and the suOcienc" of the a$andonment.

An a$andonment once made and accepted is irrevoca$le' unless the round upon

!hich it !as made proves to $e unfounded.

2n an accepted a$andonment of a ship' freihtae earned previous to the loss$elons to the insurer of said freihtae

ut freihtae su$se0uentl" earned $elons to the insurer of the ship.


17/23

If an insurer refuses to accept a valid a$andonment' he is lia$le as upon an actualtotal loss' deductin from the amount of the proceeds of the thin insured !hichma" have come to the hands of the insured.

If a person insured omits to a$andon' he ma" nevertheless recover his actual loss.

ACCE,3ANCE 2F AAN92N6EN3 N23 IN9IS,ENSALE.

Acceptance of a$andonment is in no case necessar" to recover a total loss if thea$andonment is properl" made.

Acceptance of a$andonment is an admission of the loss and the suOcienc" of thea$andonment.

52 ACCE,3ANCE 2F AAN92N6EN3 IS 6A9E

It is made $" either

a. E*press or$. Implied from the acts of the insurer.

3he mere silence of the insurer for an unreasona$le lenth of time after noticeshall $e construed as acceptance.

SEC.1-8.

EFFEC3 2F 7ALUA3I2N

A valuation in a polic" of marine insurance is conclusive $et!een the parties thereto

in the ad(ustment of either a partial or total loss provided

a. 3he insured has some interest at the ris# and$. 3here is no fraud on his part.

EFFEC3 2F 27ER7ALUA3I2N

here the thin insured has not $een valued in the polic"' its value must $e provenat the time of the loss.

An honest valuation !ill not $e suOcient to avoid the polic".

SEC.1-. C2


18/23

henever a marine polic" includes a sue and la$or clause' the insurer is lia$le forthe e*pense incurred $" the insured in recoverin the propert"' !hich e*pense is inaddition to a total loss' if that after!ards occurs.

E:3EN3 2F 35E LIAILI34 2F 35E INSURER

A marine insurer)s lia$ilit" is not limited to the actual loss su=ered' $ut e*tends toall e*penses incurred' caused $" a loss !hich forces the ship into port to $erepaired. PPPPP

SEC.1@@' 1@B

LIAILI34 F2R C2N3RIU3I2N 32 ?ENERAL A7ERA?E.

A eneral averae is caused deli$eratel" to save the vessel or caro or $oth fromthe real and #no!n ris# and all persons havin an interest in the vessel and carothat are saved shall contri$ute to the averae.

hen the person lia$le to contri$ute to a eneral averae is insured' he ma" holdthe insurer lia$le for his contri$ution up to the value of the polic".

5EN INSURE9 SUFFERE9 ?ENERAL A7ERA?E L2SS.

A person !hose insured propert" su=ered a eneral averae loss ma" either

a. Claim from other persons interested in the vessel or other caroes tocontri$ute to the eneral averae loss he su=ered or

$. 9emand the !hole amount of the eneral averae loss from his insurer' in!hich case' the insurer shall $e su$roated to the riht of the insured to

contri$ution from the others.

INSURER IS N23 LIALE F2R ?ENERAL A7ERA?E L2SS

3he insurer of the propert" that sustained a eneral averae loss shall not $e lia$le

a. !hen the insured nelected or !aived the riht to demand contri$ution fromothers or

$. !here the insurer is $ein made lia$le after the separation of the interestslia$le to contri$ution.

hen the insurer could not $e su$roated to the rihts of the insured $ecause of

the nelect or !aiver of the latter' the insured is no loner lia$le on the polic".

COMPULSORY MOTOR VEHICLE LIABILITY INSURANCE

C2NCE,3 2F C26,ULS2R4 6232R 7E5ICLE LIAILI34 INSURANCE

It is to provide protection or coverae to ans!er for $odil" in(ur" or propert"damae that ma" $e sustained $" another arisin from the use of a motor vehicle.,LEASE N23E 352U?5 that !hat is no! compulsor" is death or $odil" in(ur" arisin

from motor vehicle accidents AS ,ER AN A6EN96EN3 32 35E INSURANCE C29E 4,9 181> and ,91>-- $rouht a$out $" insurance losses due to padded claims forpropert" damae. 5ENCE' propert" damae is no! optional.

52 I3S C26,ULS2R4 NA3URE IS ENF2RCE9


19/23


20/23

3hird ,art" Lia$ilit" ans!ers for lia$ilities arisin from death or $odil" in(ur" to ;rd

persons or passeners.

2!n 9amae Insurance ans!ers for reim$ursement of the cost of repairin thedamae to vehicle of the insured.

Comprehensive Insurance ans!ers for all lia$ilitiesQdamaes arisin from theuseQoperation of a motor vehicle' it includes 3hird ,art"' 2!n 9amae' 3heft and,ropert" 9amae.

5EN 92ES 35E LIAILI34 2F 35E INSURER ACCRUE

In an insurance polic" that directl" insures aainst lia$ilit"' the insurer)s lia$ilit"accrues immediatel" upon the occurrence of the in(ur" upon !hich lia$ilit" depends'and does not depend on the recover" of (udment $" the in(ured part" aainst theinsured. 5ence' there is no need for the insured to !ait for a decision of the court&ndin him uilt" of rec#less imprudence. 3he occurrence of an in(ur" for !hich theinsured ma" $e lia$le immediatel" ives rise to insurer lia$ilit" + Shafer vs.

ude' 1@B SCRA ;8@/. In fact a third part" can $rin a claim or an action directl"aainst the insurer as the eneral purpose of the statute is to protect the in(ured

aainst the insolvenc" of the insured.

NA3URE 2F 35E LIAILI34 2F 35E INSURER

It is not solidar" !ith the insured. 3he lia$ilit" of the insurer is $ased on contract'!hile that of the insured is $ased on tort. +6ala"an Insurance v. CA 1@- SCRA -;@/

52 CAN ISSUE ,2LIC4 2R SURE34 2N9

3hose authoried $" the commissioner in the list furnished to Land 3ransportation2Oce +Section ;B-/. If the 6otor 7ehicle 2!ner or the Land 3ransportation 2peratoris una$le to o$tain or is unreasona$l" denied the polic" of insurance' the" !ill $ere0uired to sho! proof of a cash deposit !ith the commissioner' $ut the authorit" ofthe insurance compan" to enae in casualt" or suret" lines of $usiness shall $e!ithdra!n immediatel" +Section ;B/

CANCELLA3I2N 2F 35E ,2LIC4

4 35E INSURER ' re0uires !ritten notice to 6otor 7ehicle 2!nerQLand3ransportation 2perator at least 1- da"s prior to intended e=ective date. IF S2


21/23

CANCELLE9' the Land 3ransportation 2Oce ma" order the immediate con&scationof license plates UNLESS it receives ne! valid insurance Q suret" Q proof of cashdeposit or revival $" endorsement of the cancelled polic" +Section ;8/.

4 35E INSURE9 ' the 6otor 7ehicle 2!nerQLand 3ransportation 2perator shallsecure a similar polic" or suret" $efore the cancelled polic" Q suret" ceases to $ee=ective or ma#e a cash deposit AN9 &le the same or proof thereof !ith the Land

3ransportation 2Oce +Section ;81/.

EFFEC3 2F A C5AN?E IN 2NERS5I, 2R C5AN?E IN EN?INE

3here is no need to issue a ne! polic" until the ne*t date of reistration ,R27I9E9'the insurer shall aree to continue the polic" and such chane shall $e indicated in

a second duplicate !hich is &led !ith the Land 3ransporation 2Oce +Section ;8%/.

235ER ,R25II3E9 AC3S

+1/ 3he 6otor 7ehicle 2!ner or the Land 3ransportation 2perator cannot re0uiredriverQsQemplo"ees to contri$ute to the pa"ment of the premium +Section ;8@/

+%/ An" overnment oOce or aenc" havin the dut" to implement the

provisions' oOcial or emplo"ee thereof shall not act as an aent in procurin thepolic" or suret" $ond and in no case shall the commission of the procurin aente*ceed 1 of the premiums paid +Section ;8B/.

,ENAL3IES F2R 7I2LA3I2N

3he penalties for a violation $" the 6otor 7ehicle 2!ner or the Land 3ransportation2perator is a &ne of not less than ,5, -. nor more than ,5, 1'. and Q orimprisonment for not more than @ months. If a Land 3ransportation 2peratorviolates Section ;BB +minimum limits of coverae/ it is suOcient cause forrevocation of a certi&cate of pu$lic convenience +Section ;88/.

If the violation is committed $" a corporation Q association or overnment oOce Qentit"' the e*ecutive oOcerQs !ho shall have #no!inl" permitted or failed toprevent the violation shall $e held lia$le as principals +Section ;8/.

,A46EN3 2F CLAI6S

A claim for pa"ment is to $e &led !ithout an" unnecessar" dela"' !ithin @ monthsfrom the date of accident $" ivin !ritten notice settin forth the nature' e*tentand duration of the in(uries as certi&ed $" a dul" licensed ph"sician +Section ;8>/.

EFFEC3 2F FAILURE 32 FILE CLAI6 I35IN ,ERI29


22/23

3he failure to &le a claim !ill $e deemed a !aiver. If a claim is &led $ut denied' anaction must $e $rouht !ithin 1 "ear from date of denial !ith the InsuranceCommissioner or the Court' other!ise the riht of action !ill $e deemed as havinprescri$ed.

5A3 S5ALL INSURANCE C26,AN4 92 U,2N FILIN? 2F 35E CLAI6

It shall forth!ith ascertain the truth and e*tent of the claim and ma#e pa"ment!ithin - !or#in da"s after reachin an A?REE6EN3. If N2 A?REE6EN3 ISREAC5E9' I3 6US3 NE7ER35ELESS ,A4 35E N2 FAUL3 IN9E6NI34 +Section ;B8/!ithout ,REU9ICE 32 A FUR35ER ,URSUI3 2F 35E CLAI6 K IN 5IC5 CASE 5ES5ALL N23 E REUIRE9 2R C26,ELLE9 32 E:ECU3E A UI3 CLAI6 2R RELEASEFR26 LIAILI34. Note thouh that in case of dispute as to enforcement of polic"

provisions' the ad(udication shall $e !ithin the oriinal and e*clusive (urisdiction ofthe commissioner su$(ect to Section >1@' !hich provides for concurrent (urisdiction$ut the &lin !ith the Insurance Commissioner shall preclude &lin !ith the court+Section ;8-/.

5A3 IS N2 FAUL3 IN9E6NI34

A no fault indemnit" claim is a claim for pa"ment for death or in(ur" to a passeneror third part" !ithout NECESSI34 2F ,R27IN? FAUL3 2R NE?LI?ENCE. 3his ispa"a$le $" the insurer ,R27I9E9 +a/ indemnit" in respect of one person shall note*ceed ,5, -'. +$/ the necessar" proof of loss under oath to su$stantiate theclaim is su$mitted' these are police report of accident and either the deathcerti&cate and suOcient evidence to esta$lish the pa"ee 2R the medical report andevidence of medical or hospital dis$ursement in respect of !hich refund is made.

A?AINS3 526 IS 35E ,A46EN3 CLAI6E9

A claim under the no fault indemnit" clause ma" $e made aainst one motor vehicleinsurer onl" as follo!s +a/ in case of an occupant of a vehicle< aainst the insurer ofthe vehicle in !hich the occupant is ridin' mountin or dismountin from +$/ in an"other case' from the insurer of the directl" o=endin vehicle +c/ in all cases' theriht of the part" pa"in the claim to recover aainst the o!ner of the vehicleresponsi$le for the accident shall $e maintained.

IN3ER,RE3A3I2N 2F 35E AU352RITE9 9RI7ER CLAUSE

3he authoried driver clause is interpreted to refer to the insured or an" persondrivin on the order of the insured or !ith his permission ,R27I9E9' such person ispermitted to operate a motor vehicle in accordance !ith our licensin la!s orreulations and !ho is not other!ise dis0uali&ed.


23/23

N23E the follo!in (urisprudence +1/If license is e*pired' person is not authoried tooperate a motor vehicle +3arco r. v. ,hil ?uarant" K 1- SCRA ;1;/' +%/ Issued a

3emporar" 2perator)s ,ermit or a 3emporar" 7ehicle Receipt' a person is authoriedto operate a motor vehicle' $ut if it has e*pired' it is as if he had no license

+?utierre v. Capital Insurance 1; SCRA @18' ,ETA v. Ali#pala' 1@ SCRA ;1/' +;/ Atourist !ith license $ut in the countr" for more than da"s' is not authoried tooperate a motor vehicle $ecause it is as if he has no license +Sto#es vs. 6ala"an1%B SCRA B@@/' +>/ A driver)s license that $ears all the earmar#s of a dul" issuedlicense is presumed enuine +-/ a license is not necessar"' !here the insuredhimself is the driver +,aterno v. ,"ramid Insurance 1@1 SCRA @BB' 18@ AR/

235ER ,R27ISI2NS

1. Chapter 7II< 6utual ene&t Associations +SEC. ;. An" societ"' associationor corporation' !ithout capital stoc#' formed or oranied not for pro&t $ut mainl"for the purpose of pa"in sic# $ene&ts to mem$er' or furnishin &nancial support tomem$ers !hile out of emplo"ment' or of pa"in to relatives of deceased mem$ersof &*ed or an" sum of mone"' irrespective of !hether such aim or purpose is carriedout $" means of &*ed dues' assessments' or voluntar" contri$utions' or ofprovidin' $" the issuance of certi&cates of insurance' pa"ment to its mem$ers ofaccident or life insurance $ene&ts' out of due or assessments collected from the

mem$ers' shall $e #no!n as a mutual $ene&t association !ithin the intent of thisCode. An" societ"' association' or corporation principall" oranied as a la$or unionshall $e overned $" the La$or Code not!ithstandin an" mutual $ene&t featureprovisions in its charter as incident to its oraniation./ and 3rusts for Charita$le Use+SEC. >1. 3he term Htrust for charita$le uses !ithin the intent of this Code' shallinclude' all real or personal properties or funds' as !ell as those ac0uired !ith thefruits or income therefrom or in e*chane or su$stitution thereof' iven to orreceived $" an" person' corporation' association' foundation or entit"' e*cept theNational ?overnment' its instrumentalities or political su$divisions' for charita$le'$enevolent' educational pious' reliious' or other uses for the $ene&t of the pu$licat lare or a particular portion hereof or for the $ene&t of an inde&nite num$er of

persons./ +Sections ;@ to >1;/

%. Chapter 7III< Insurance Commissioner +Section >1>< Administrative Functions'Section >1-< ,o!er to Impose FinesQSuspensions< Section >1-' Ad(udicator" ,o!ers1@/.

insurance reviewer part 3

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