the insurance code of 1976, rhys-murillo

8/13/2019 The Insurance Code of 1976, Rhys-murillo

1/79

INSURANCE REVIEWER Atty. Quimson page 1

Most of the content of this reviewer was taken from theReviewer of Johnbee Sioson (3-B,1994) edited to inc!denew "!ris#r!dence and s!b"ect matter disc!ssed in cass$

THE INSURANCE CODE OF 1976(Presidentia !e"ree No. 1#$%&

GENERAL PROVISIONS

Section 1. 'is de"ree sa )e*no+n as te ,Insuran"e Code o- 1/0

What i the !"inci!#e $ehin% in&"ance'Insuran"e is )ased upon te prin"ipe o- aiding

anoter -rom a oss "aused )y an un-ortunate e2ent.

Ho( o#% i the conce!t o) in&"ance'Very od. 3ene2oent so"ieties organi4ed -or te

purpose o- e5tending aid to teir un-ortunate mem)ers-rom a -und "ontri)uted )y a6 a2e )een in e5isten"e-rom te eariest times. 'ey e5isted among teEgyptians6 te Cinese6 te 7indus6 te Romans6 and are

*no+n to a2e )een esta)ised among te 8ree*s aseary as6 )eie2e it or not6 9 3.C.

Ho( %i% in&"ance %e*e#o! in the Phi#i!!ine'P"e+S!anih E"a : tere +as no insuran"e; e2ery

oss +as )orne )y te person or te -amiy +o su--eredte mis-ortune.

S!anih e"a Insuran"e6 in its present "on"ept6 +asintrodu"ed in te Piippines +en atters not e5pressy pro2ided -or in su"spe"ia a+s sa )e reguated )y tis Code.

A"t5 -15 Any person +o is -or)idden -romre"ei2ing any donation under Art. /9 "annot )e named)ene-i"iary o- a i-e insuran"e poi"y )y a person +o"annot ma*e any donation to im6 a""ording to saidarti"e.

A"t5 -1. 'e aeatory "ontra"t o- i-e annuity )indste de)tor to pay an annua pension or in"ome during tei-e o- one or more determinate persons in "onsiderationo- a "apita "onsisting o- money or oter property6 +oseo+nersip is trans-erred to im at on"e +it te )urden o-in"ome.

A"t5 -. 'e annuity may )e "onstituted upon tei-e o- te person +o gi2es te "apita6 upon tat o- atird person6 or upon te i2es o- 2arious persons6 a o-+om must )e i2ing at te time te annuity isesta)ised.

9! S %%#:%%F rys ae5ei


2/79


3/79


impossi)e "ir"umstan"es )y te +ar6 tere-ore6 teysoud )e e5"used and te poi"ies soud not )e-or-eited.


4/79

INSURANCE REVIEWER Atty. Quimson page #

(1) ./ the #oicies sho!d be avoided for the reasonthat there was a breach of warrant$

Under te >emorandum o- Warranty6 tere soud)e no ess tan 1 ydrant -or ea" 1F% -eet o- e5terna+a measurements o- te "ompound6 and sin"e )odegasinsured ad an e5terna +a per meter o- 1$#% -eet6 te

insured soud a2e 11 ydrants in te "ompound. 3ut eony ad .

E2en so6 te insurer is )arred )y estoppe to "aim2ioation o- te -ire ydrants +arranty6 )e"ause *no+ingtat te num)er o- ydrants it demanded ne2er e5isted-rom te 2ery )eginning6 appeant ne2erteess issuedte poi"ies su)e"t to su" +arranty and re"ei2ed te"orresponding premiums. 'e insuran"e "ompany +asa+are6 e2en )e-ore te poi"ies +ere issued6 tat in tepremises tere +ere ony ydrants and oters +ereo+ned )y te >uni"ipaity6 "ontrary to te reGuirementso- te +arranties in Guestion.

It soud )e "ose to "onni2ing at -raud upon te

insured to ao+ te insurer to "aim no+ as 2oid tepoi"ies it issued to te insured6 +itout +arning im o-te -ata de-e"t6 o- +i" te insurer +as in-ormed6 anda-ter it ad mised te insured into )eie2ing tat tepoi"ies +ere e--e"ti2e.

A""dg to Ameri"an urispruden"eJ It is a +e:settedrue tat te insurer at te time o- te issuan"e o- apoi"y as te *no+edge o- e5isting -a"ts6 +i" i-insisted on6 +oud in2aidate te "ontra"t -rom its 2eryin"eption6 su" *no+edge "onstitutes a +ai2er o-"onditions in te "ontra"t in"onsistent +it *no+n -a"ts6and te insurer is stopped terea-ter -rom asserting te)rea" o- su" "onditions. 'e reason -or te rue isJ 'oao+ a "ompany to a""ept one=s money -or a poi"y o-

insuran"e +i" it *no+s to )e 2oid and o- no e--e"t6toug it *no+s as it must tat te insured )eie2es it to)e 2aid and )inding is so "ontrary to te di"tates o-onesty and -air deaing6 as so "osey reated to positi2e-raud6 as to )e a)orrent to -air:minded men. It +oud )eto ao+ te "ompany to treat te poi"y as 2aid ongenoug to get te premium on it6 and ea2e it at i)erty torepudiate it te ne5t moment.

>oreo2er6 ta*ing into a""ount te +e:*no+n ruetat am)iguities or o)s"urities must stri"ty )e interpretedagainst te party tat "ause tem6 te memorandum o-+arranty in2o*ed )y te insurer )ars te atter -romGuestioning te e5isten"e o- te appian"es "aed -or6sin"e its initia e5pression ,te undernoted appian"es -orte e5tin"tion o- -ire )eing *ept on te premises insuredere)y.. admits o- te interpretation as an admission o-te e5isten"e o- su" appian"es +i" insurer "annotno+ "ontradi"t6 soud te paroe e2iden"e appy.

(0) ./ the ins!red vioated the hem# warrant#rovision aainst the storae of asoine sinceins!red admitted there were 3 cans of asoine inBodea 0 which was a se#arate str!ct!re and notaffected b the fire$

It is +e to note tat gasoine is not spe"i-i"aymentioned among te proi)ited arti"es isted in te so:"aed emp +arranty. 'e "ause reied upon )y teinsurer spea*s o- ,ois. Brdinariy6 ois mean u)ri"antsand not gasoine or *erosene. 7ere again6 )y reason o-te e5"usi2e "ontro o- te insuran"e "ompany o2er te

terms o- te "ontra"t6 te am)iguity must )e ed stri"tyagainst te insurer and i)eray in -a2or o- te insured6spe"iay to a2oid a -or-eiture.

@urtermore6 te gasoine *ept +as ony in"identa tote insured=s )usiness. It is a +e setted rue tat*eeping o- in-amma)e ois in te premises tougproi)ited )y te poi"y does NB' 2oid it i- su" *eepingis in"identa to te )usiness. Aso6 te emp +arranty-or)ade te storage ony in te )uiding to +i" teinsuran"e appies6 andKor in any )uiding "ommuni"atingtere+it; and it is undisputed tat no gasoine +asstored in te )urnt )odegas and tat 3odega No. +i"+as +ere te gasoine +as -ound stood isoated -romte oter )odegas.

08 T4 *5 Fi#i!ina Co2!a


5/79

INSURANCE REVIEWER Atty. Quimson page F

te )ody o- te insured. In te +ords o- Atty. QuimsonJA)a gago paa siya6 Sina)i ng oss )y amputation6pinagpipiitan pa nyang -ra"ture ang ang *aiangan.

8 De# Roa"io *5 E=&ita$#e In&"ance11, PHIL /09

Fact EGuita)e Insuran"e issued a i-e Insuran"e poi"y to

de Rosario )inding itse- to pay P16%%% to P96%%% asindemnity.

!e Rosario died in a )oating a""ident. 'e eirs-ied a "aim and EGuita)e paid tem P16%%%.

'e eir -ied a "ompaint -or re"o2ery o- te )aan"eo- P6%%%6 "aiming tat te insurere soud pay imP96%%% as stated in te poi"y.

I&e WBN te eir is entited to re"o2er P96%%%.

He#% >ES58eneray a""epted prin"ipes or ruing on insuran"e6

enun"iate tat +ere tere is an am)iguity +it respe"t to

te terms and "onditions o- te poi"y6 te same sa )ereso2ed against te one responsi)e tereo-. 'einsured as itte6 i- any6 parti"ipation in te preparation o-te poi"y. 'e interpretation o- o)s"ure stipuations in a"ontra"t soud not -a2or te party +o "ause teo)s"urity.

68 ?ia2i L&2$e" *5 Ca!ita# In&"ance1/ Phi# 1-77

Fact

>isamis um)er insured it=s motor "ar -or P1#' +itCapita Insuran"e. 'e poi"y stipuated tat teinsured may autori4e te repair o- te 2ei"ene"essitated )y damage and te ia)iity o- teinsured is imited to 1F%.

Car met an a""ident and +as repaired )y >orosi>otors at a tota "ost o- P9%./. >isamis made areport o- te a""ident to Capita +o re-used to payte "ost o- te repairs.

I&e WBN te insurer is ia)e -or te tota amount o-te repair.

He#% NO5'e insuran"e poi"y stipuated tat i- it is te insured

+o autori4ed te repair6 te ia)iity o- te insurer isimited to 1F%. 'e itera meaning o- te stipuation must"ontro6 it )eing te a"tua "ontra"t6 e5pressy and painy

pro2ided -or in te poi"y.

78 Ve"en%ia *5 CA17 SCRA 199/

Fact

@ideity and Surety Insuran"e Company (@ideity&issued @ire Insuran"e Poi"y No. @:100/$ e--e"ti2e)et+een une 96 10% and une 96 101 "o2eringRa-ae (Re5& VerendiaLs residentia in te amount o-P90F6%%%.%%. !esignated as )ene-i"iary +as te>onte de Piedad ? Sa2ings 3an*.

Verendia aso insured te same )uiding +it t+ooter "ompanies6 namey6 'e Country 3an*ersInsuran"e -or PF$6%%%.%% and 'e !e2eopmentInsuran"e -or P#%%6%%%.%%.

Wie te tree -ire insuran"e poi"ies +ere in -or"e6te insured property +as "ompetey destroyed )y-ire.

@ideity appraised te damage amounting to 90F6%%%+en it +as a""ordingy in-ormed o- te oss. !espitedemands6 @ideity re-used payment under its poi"y6tus prompting Verendia to -ie a "ompaint -or tere"o2ery o- 90F6%%%

@ideity6 a2erred tat te poi"y +as a2oided )yreason o- o2er:insuran"e6 tat Verendia mai"iousyrepresented tat te )uiding at te time o- te -ire+as eased under a "ontra"t e5e"uted on une F610% to a "ertain Ro)erto 8ar"ia6 +en a"tuay it+as a >ar"eo 8ar"ia +o +as te essee.

I&e WBN Verendia "an "aim on te insuran"edespite te misrepresentation as to te essee and teo2erinsuran"e.

He#% NOPE5'e "ontra"t o- ease upon +i" Verendia reies to

support is "aim -or insuran"e )ene-its6 +as entered into)et+een im and one Ro)ert 8ar"ia6 a "oupe o- daysa-ter te e--e"ti2ity o- te insuran"e poi"y. Wen terented residentia )uiding +as ra4ed to te ground6 it

appears tat Ro)ert 8ar"ia +as sti +itin te premises.7o+e2er6 a""ording to te in2estigation )y te poi"e6 te)uiding appeared to a2e Mno o""upantsM and tat >r.Ro)erto 8ar"ia +as Mrenting on te oterside o- said"ompoundM 'ese pie"es o- e2iden"e )eie VerendiaLsun"orro)orated testimony tat >ar"eo 8ar"ia +om e"onsidered as te rea essee6 +as o""upying te )uiding+en it +as )urned.

Ironi"ay6 during te tria6 Verendia admitted tat it+as not Ro)ert 8ar"ia +o signed te ease "ontra"t )utit +as >ar"eo 8ar"ia "ousin o- Ro)ert6 +o ad aso)een paying te rentas a te +ie. Verendia6 o+e2er6-aied to e5pain +y >ar"eo ad to sign is "ousinLsname +en e in -a"t e +as paying -or te rent and +y

e (Verendia& imse-6 te essor6 ao+ed su" a ruse.@ideityLs "on"usions on tese pro2en -a"ts appear6tere-ore6 to a2e su--i"ient )asesJ Verendia "on"o"tedte ease "ontra"t to de-e"t responsi)iity -or te -ireto+ards an aeged MesseeM6 in-ated te 2aue o- teproperty )y te aeged monty renta o- P$6F%%& +en in-a"t6 te Pro2in"ia Assessor o- Ri4a ad assessed tepropertyLs -air mar*et 2aue to )e ony P#%69%%.%%6insured te same property +it t+o oter insuran"e"ompanies -or a tota "o2erage o- around P%%6%%%6 and



6/79

INSURANCE REVIEWER Atty. Quimson page $

"reated a dead:end -or te aduster )y te disappearan"eo- Ro)ert 8ar"ia.

3asi"ay a "ontra"t o- indemnity6 an insuran"e"ontra"t is te a+ )et+een te parties. Its terms and"onditions "onstitute te measure o- te insurerLs ia)iityand "ompian"e tere+it is a "ondition pre"edent to te

insuredLs rigt to re"o2ery -rom te. As it is aso a"ontra"t o- adesion6 an insuran"e "ontra"t soud )ei)eray "onstrued in -a2or o- te insured and stri"tyagainst te insurer "ompany +i" usuay prepares it.

Considering6 o+e2er6 te -oregoing dis"ussionpointing to te -a"t tat Verendia used a -ase ease"ontra"t to support is "aim under @ire Insuran"e Poi"y6te terms o- te poi"y soud )e stri"ty "onstruedagainst te insured. Verendia -aied to i2e )y te terms o-te poi"y6 spe"i-i"ay Se"tion 19 tereo- +i" ise5pressed in terms tat are "ear and unam)iguous6 tata )ene-its under te poi"y sa )e -or-eited M if the caimbe in an res#ect fra!d!ent, or if an fase decaration bemade or !sed in s!##ort thereof, or if an fra!d!ent

means or devises are !sed b the 2ns!red or anoneactin in his behaf to obtain an benefit !nder the #oicM.Verendia6 a2ing presented a -ase de"aration to supportis "aim -or )ene-its in te -orm o- a -rauduent ease"ontra"t6 e -or-eited a )ene-its terein )y 2irtue o-Se"tion 19 o- te poi"y in te a)sen"e o- proo- tat@ideity +ai2ed su" pro2ision

'ere is aso no reason to "on"ude tat )ysu)mitting te su)rogation re"eipt as e2iden"e in "ourt6@ideity )ound itse- to a Mmutua agreementM to setteVerendiaLs "aims in "onsideration o- te amount o-P1#6$0F.//. Wie te said re"eipt appears to a2e)een a -ied:up -orm o- @ideity6 no representati2e o-@ideity ad signed it. It is e2en in"ompete as te )an*

spa"es -or a +itness and is address are not -ied up.>ore signi-i"anty6 te same re"eipt states tat Verendiaad re"ei2ed te a-oresaid amount. 7o+e2er6 tatVerendia ad not re"ei2ed te amount stated terein6 ispro2en )y te -a"t tat Verendia imse- -ied te"ompaint -or te -u amount o- P90F6%%%.%% stated in tepoi"y. It migt )e tat tere ad )een e--orts to setteVerendiaLs "aims6 )ut surey6 te su)rogation re"eipt )yitse- does not pro2e tat a settement ad )een arri2ed atand en-or"ed. 'us6 to interpret @ideityLs presentation o-te su)rogation re"eipt in e2iden"e as indi"ati2e o- itsa""ession to its MtermsM is not ony +anting in rationa)asis )ut +oud )e su)stituting te +i o- te Court -ortat o- te parties

Section 5 Wene2er used in tis Code6te -oo+ing terms sa a2e te respe"ti2emeanings ereina-ter set -ort or indi"ated6uness te "onte5t oter+ise reGuiresJ

(1& A ,Contra"t o- Insuran"e is anagreement +ere)y one underta*es -or a"onsideration to indemni-y anoter against oss6

damage or ia)iity arising -rom an un*no+n or"ontingent e2ent.

A "ontra"t o- suretysip sa )e deemed to)e an insuran"e "ontra"t6 +itin te meaning o-tis Code6 ony i- made )y a surety +o or+i"6 as su"6 is doing an insuran"e )usiness

as ereina-ter pro2ided.

(& 'e term ,doing an insuran"e )usinessor ,transa"ting an insuran"e )usiness +itingte meaning o- tis Code6 sa in"udeJ

(a& >a*ing or proposing to ma*e6 asinsurer6 any insuran"e "ontra"t;

()& >a*ing6 or proposing to ma*e6 assurety6 any "ontra"t o- suretysip as a 2o"ationand not as merey in"identa to any oteregitimate )usiness or a"ti2ity o- te surety;

("& !oing any *ind o- )usinessin"uding a reinsuran"e )usiness6 spe"i-i"ayre"ogni4ed as "onstituting te doing o- aninsuran"e )usiness +itin te meaning o- tis

Code;(d& !oing or proposing to do any

)usiness in su)stan"e eGui2aent to any o- te-oregoing in a manner designed to e2ade tepro2isions o- tis "ode.

In te appi"ation o- te pro2isions o- tisCode6 te -a"t tat no pro-it is deri2ed -rom tema*ing o- insuran"e "ontra"ts6 agreements ortransa"tions or tat no separate or distin"t"onsideration is re"ei2ed tere-or6 sa not )edeemed "on"usi2e to so+ tat te ma*ingtereo- does not "onstitute te doing ortransa"ting o- an insuran"e )usiness.

(9& As used in tis Code6 te term,Commissioner means te ,Insuran"eCommissioner.

I the %e)inition o) a cont"act o) in&"ance &n%e" Sec5 &))icient'

!e


7/79

INSURANCE REVIEWER Atty. Quimson page /

1. Conen&a# per-e"ted )y te meeting o- teminds o- te parties

. Vo#&nta"4 it is not "ompusory and te partiesmay in"orporate su" terms and "onditions astey may deem "on2enient +i" +i )e )indingpro2ided tey are not against te a+ or pu)i"poi"y

9. A#eato"4 depends upon some "ontingente2ent#. E@ec&te% as to te insured a-ter te payment

o- te premiumF. E@ec&to"4 as to te insurer as it is not

e5e"uted unti payment -or a oss$. Con%itiona# su)e"t to "onditions te prin"ipa

one o- +i" is te appening o- te e2entinsured against

/. Pe"ona# ea" party in te "ontra"t a2e in2ie+ te "ara"ter6 "redit and "ondu"t o- teoter

What a"e the e#e2ent o) an in&"ance cont"act'

a*ing or proposing to ma*e6 as insurer6 anyinsuran"e "ontra"t;

)& >a*ing6 or proposing to ma*e6 as surety6 any"ontra"t o- suretysip as a 2o"ation and not asmerey in"identa to any oter egitimate)usiness or a"ti2ity o- te surety;

"& !oing any *ind o- )usiness in"uding a

reinsuran"e )usiness6 spe"i-i"ay re"ogni4ed as"onstituting te doing o- an insuran"e )usiness+itin te meaning o- tis Code;

d& !oing or proposing to do any )usiness insu)stan"e eGui2aent to any o- te -oregoing in amanner designed to e2ade te pro2isions o- tis"ode.

Doe the )act that no !"o)it (a %e"i*e% )"o2 thet"anaction no" a e!a"ate coni%e"ation "ecei*e%the"e)o"e 2ean that no in&"ance $&ine (at"anacte%'

No. @a"t tat no pro-it is deri2ed -rom te "ontra"t ortransa"tion or tat no separate or dire"t "onsideration isre"ei2ed -or su" "ontra"t or transa"tion is NB' deemed

"on"usi2e to so+ tat no insuran"e )usiness +astransa"ted.

Wi## an4 &"et4hi! a3"ee2ent a2o&nt to anin&"ance cont"act'

No. In order -or a suretysip agreement to "omeunder te pur2ie+ o- te Insuran"e Code6 te Suretyunderta*ing to ensure te per-orman"e o- te o)igationsmust )e registered +it te Insuran"e Commissioner andmust a2e )een issued )y te atter +it a "erti-i"ate o-autority. @urtermore6 te person a"ting as a surety isa)ituay engaged as su" -or a i2eiood.

Cae

,8 Phi#a2#i)e *5 Ana#%o/0 SCRA -9

Fact

Ramon >. Paterno sent a etter:"ompaint to teInsuran"e Commissioner aeging "ertain pro)emsen"ountered )y agents6 super2isors6 managers andpu)i" "onsumers o- te Piami-e as a resut o-"ertain pra"ti"es )y said "ompany.

Commissioner reGuested petitioner Rodrigo de osReyes6 in is "apa"ity as Piami-eLs president6 to"omment on respondent PaternoLs etter.

'e "ompaint prays tat pro2isions on "arges and-ees stated in te Contra"t o- Agen"y e5e"uted

)et+een Piami-e and its agents6 as +e as teimpementing pro2isions as pu)ised in te agentsLand)oo*6 agen"y )uetins and "ir"uars6 )ede"ared as nu and 2oid. 7e aso as*ed tat teamounts o- su" "arges and -ees aready dedu"tedand "oe"ted )y Piami-e in "onne"tion tere+it)e reim)ursed to te agents6 +it interest at tepre2aiing rate re"*oned -rom te date +en tey+ere dedu"ted

>anue Brtega6 Piami-eLs Senior Assistant Vi"e:President and E5e"uti2e Assistant to te President6



8/79


as*ed tat te Commissioner -irst rue on teGuestions o- te urisdi"tion o- te Insuran"eCommissioner o2er te su)e"t matter o- te etters:"ompaint and te ega standing o- Paterno.

Insuran"e Commissioner set te "ase -or earingand sent su)poena to te o--i"ers o- Piami-e.Brtega -ied a motion to Guas te su)poena aeging

tat te Insuran"e "ompany as no urisdi"tion o2erte su)e"t matter o- te "ase and tat tere is no"ompaint su--i"ient in -orm and "ontents as )een-ied.

'e motion to Guas +as denied.

I&e WBN te insuran"e "ommissioner ad urisdi"tiono2er te egaity o- te Contra"t o- Agen"y )et+eenPiami-e and its agents.

He#% No it %oe not ha*e &"i%iction5'e genera reguatory autority o- te Insuran"e

Commissioner is des"ri)ed in Se"tion #1# o- teInsuran"e Code6 to +itJ

5*he 2ns!rance +ommissioner sha have

the d!t to see that a aws reatin toins!rance, ins!rance com#anies and otherins!rance matters, m!t!a benefit associationsand tr!sts for charitabe !ses are faithf!e&ec!ted and to #erform the d!ties im#osed!#on him b this +ode, $ $ $ $5

Bn te oter and6 Se"tion #1F pro2idesJ52n addition to the administrative

sanctions #rovided esewhere in this +ode,the 2ns!rance +ommissioner is hereba!thori6ed, at his discretion, to im#ose !#onins!rance com#anies, their directors and7orofficers and7or aents, for an wif! fai!re orref!sa to com# with, or vioation of an

#rovision of this +ode, or an order,instr!ction, re!ation or r!in of the2ns!rance +ommissioner, or an commissionof irre!arities, and7or cond!ctin b!sinessin an !nsafe or !nso!nd manner as ma bedetermined b the 2ns!rance +ommissioner,the foowin8

a) fines not in e&cess of fiveh!ndred #esos a da and

b) s!s#ension, or after d!ehearin, remova of directorsand7or officers and7or aents$5

A pain reading o- te a)o2e:Guoted pro2isions so+

tat te Insuran"e Commissioner as te autority toreguate te )usiness o- insuran"e6 +i" is de-ined as-oo+sJ

5(0) *he term :doin an ins!ranceb!siness: or :transactin an ins!ranceb!siness,: within the meanin of this +ode, shainc!de (a) makin or #ro#osin to make, asins!rer, an ins!rance contract (b) makin, or

#ro#osin to make, as s!ret, an contract ofs!retshi# as a vocation and not as mereincidenta of the s!ret (c) doin an kind of

b!siness, inc!din a reins!rance b!siness,s#ecifica reconi6ed as constit!tin the doinof an ins!rance b!siness within the meanin ofthis +ode (d) doin or #ro#osin to do anb!siness in s!bstance e!ivaent to an of theforeoin in a manner desined to evade the

#rovisions of this +ode$ (2ns!rance +ode, Sec$

0 ;0ar" 16 100 to >ar" 16 10. 7e +as aissued 7eat Care Agreement6 and under su"6 e+as entited to a2ai o- ospitai4ation )ene-its6+eter ordinary or emergen"y6 isted terein. 7e+as aso entited to a2ai o- Mout:patient )ene-itsMsu" as annua pysi"a e5aminations6 pre2enti2eeat "are and oter out:patient ser2i"es.

Upon te termination o- te agreement6 te same+as e5tended -or anoter year -rom >ar" 16 10 to>ar" 16 1%6 ten -rom >ar" 16 1% to une 161%. 'e amount o- "o2erage +as in"reased to ama5imum sum o- P/F6%%%.%% per disa)iity.

!uring te period o- is "o2erage6 Ernani su--ered aeart atta"* and +as "on-ined at te >ania >edi"aCenter (>>C& -or one mont )eginning >ar" 61%.

Wie er us)and +as in te ospita6 uita tried to"aim te )ene-its under te eat "are agreement.7o+e2er6 Piam"are denied er "aim saying tatte 7eat Care Agreement +as 2oid.

A""ording to Piam"are6 tere +as "on"eamentregarding ErnaniLs medi"a istory.

o !o"tors at te >>C aegedy dis"o2ered at

te time o- ErnaniLs "on-inement tat e+as ypertensi2e6 dia)eti" and astmati"6"ontrary to is ans+er in te appi"ation-orm.

uita ad no "oi"e )ut to pay te ospitai4atione5penses erse-6 amounting to a)out P/$6%%%.%%

A-ter er us)and +as dis"arged -rom te >>C6 e+as attended )y a pysi"a terapist at ome.


9/79

INSURANCE REVIEWER Atty. Quimson page

us)and ome again. In te morning o- Apri 1961%6 Ernani ad -e2er and +as -eeing 2ery +ea*.uita +as "onstrained to )ring im )a"* to te C87+ere e died on te same day.

uita instituted6 an a"tion -or damages againstPiam"are. Se as*ed -or reim)ursement o- ere5penses pus mora damages and attorneyLs -ees.

R'C de"ided in -a2or o- uita. CA a--irmed.

I&e an% Reo#&tion@hiamcare bro!ht the instant #etition for review, raisinthe #rimar ar!ment that a heath care areement is notan ins!rance contract hence the 5incontestabiit ca!se5!nder the 2ns!rance +ode *ite , Sec$ 4A does nota##$

SC ed tat in te "ase at )ar6 te insura)e interesto- respondentLs us)and in o)taining te eat "areagreement +as is o+n eat. 'e eat "areagreement +as in te nature o- non:i-e insuran"e6 +i"is primariy a "ontra"t o- indemnity. Bn"e te mem)erin"urs ospita6 medi"a or any oter e5pense arising -rom

si"*ness6 inury or oter stipuated "ontingent6 te eat"are pro2ider must pay -or te same to te e5tent agreedupon under te "ontra"t.

Under te tite Caim pro"edures o- e5penses6Piam"are. ad 1 mos -rom te date o- issuan"e o- teAgreement +itin +i" to "ontest te mem)ersip o- tepatient i- e ad pre2ious aiment o- astma6 and si5monts -rom te issuan"e o- te agreement i- te patient+as si"* o- dia)etes or ypertension. 'e periods a2inge5pired6 te de-ense o- "on"eament or misrepresentationno onger ie.

@etitioner ar!es that res#ondent:s h!sband conceaed amateria fact in his a##ication$ 2t a##ears that in the

a##ication for heath coverae, #etitioners re!iredres#ondent:s h!sband to sin an eress a!thori6ationfor an #erson, orani6ation or entit that has an recordor knowede of his heath to f!rnish an and ainformation reative to an hos#itai6ation, cons!tation,treatment or an other medica advice or e&amination$

Piam"are "annot rey on te stipuation regardingMIn2aidation o- agreementM +i" readsJ

ai!re to discose or misre#resentation ofan materia information b the member in thea##ication or medica e&amination, whetherintentiona or !nintentiona, sha a!tomaticainvaidate the 'reement from the verbeinnin and iabiit of @hiamcare sha beimited to ret!rn of a Membershi# ees #aid$

'n !ndiscosed or misre#resented informationis deemed materia if its reveation wo!d haveres!ted in the decination of the a##icant b@hiamcare or the assessment of a hiherMembershi# ee for the benefit or benefitsa##ied for$

'e ans+er assaied )y petitioner +as in response tote Guestion reating to te medi"a istory o- te

appi"ant. 'is argey depends on opinion rater tan-a"t6 espe"iay "oming -rom respondentLs us)and +o+as not a medi"a do"tor. Were matters o- opinion orudgment are "aed -or6 ans+ers made in good -ait and+itout intent to de"ei2e +i not a2oid a poi"y e2entoug tey are untrue. 'us6

(')tho!h fase, a re#resentation of the

eectation, intention, beief, o#inion, or"!dment of the ins!red wi not avoid the #oicif there is no act!a fra!d in ind!cin theacce#tance of the risk, or its acce#tance at aower rate of #remi!m, and this is ikewise ther!e atho!h the statement is materia to therisk, if the statement is obvio!s of theforeoin character, since in s!ch case theins!rer is not "!stified in rein !#on s!chstatement, b!t is obiated to make f!rtherin!ir$ *here is a cear distinction betweens!ch a case and one in which the ins!red isfra!d!ent and intentiona states to be tr!e,as a matter of eectation or beief, that whichhe then knows, to be act!a !ntr!e, or the

im#ossibiit of which is shown b the factswithin his knowede, since in s!ch case theintent to deceive the ins!rer is obvio!s andamo!nts to act!a fra!d$

'e -rauduent intent on te part o- te insured must)e esta)ised to +arrant res"ission o- te insuran"e"ontra"t. Con"eament as a de-ense -or te eat "arepro2ider or insurer to a2oid ia)iity is an a--irmati2ede-ense and te duty to esta)is su" de-ense )ysatis-a"tory and "on2in"ing e2iden"e rests upon tepro2ider or insurer. In any "ase6 +it or +itout teautority to in2estigate6 petitioner is ia)e -or "aimsmade under te "ontra"t. 7a2ing assumed aresponsi)iity under te agreement6 petitioner is )ound to

ans+er te same to te e5tent agreed upon. In te end6te ia)iity o- te eat "are pro2ider atta"es on"e temem)er is ospitai4ed -or te disease or inury "o2ered)y te agreement or +ene2er e a2ais o- te "o2ered)ene-its +i" e as prepaid.

Under Se"tion / o- te Insuran"e Code6 Ma"on"eament entites te inured party to res"ind a"ontra"t o- insuran"e.M 'e rigt to res"ind soud )ee5er"ised pre2ious to te "ommen"ement o- an a"tion onte "ontra"t. In tis "ase6 no res"ission +as made.3esides6 te "an"eation o- eat "are agreements as ininsuran"e poi"ies reGuire te "on"urren"e o- te-oo+ing "onditionsJ

1. Prior noti"e o- "an"eation to insured;. Noti"e must )e )ased on te o""urren"e

a-ter e--e"ti2e date o- te poi"y o- one ormore o- te grounds mentioned;

9. >ust )e in +riting6 maied or dei2ered to teinsured at te address so+n in te poi"y;

#. >ust state te grounds reied upon pro2idedin Se"tion $# o- te Insuran"e Code andupon reGuest o- insured6 to -urnis -a"ts on+i" "an"eation is )ased.



10/79

INSURANCE REVIEWER Atty. Quimson page 1%

None o- te a)o2e pre:"onditions +as -u-ied in tis"ase. Wen te terms o- insuran"e "ontra"t "ontainimitations on ia)iity6 "ourts soud "onstrue tem insu" a +ay as to pre"ude te insurer -rom non:"ompian"e +it is o)igation. 3eing a "ontra"t o-adesion6 te terms o- an insuran"e "ontra"t are to )e"onstrued stri"ty against te party +i" prepared te

"ontra"t te insurer. 3y reason o- te e5"usi2e "ontroo- te insuran"e "ompany o2er te terms andpraseoogy o- te insuran"e "ontra"t6 am)iguity must )estri"ty interpreted against te insurer and i)eray in -a2oro- te insured6 espe"iay to a2oid -or-eiture. 'is iseGuay appi"a)e to 7eat Care Agreements. 'epraseoogy used in medi"a or ospita ser2i"e"ontra"ts6 su" as te one at )ar6 must )e i)eray"onstrued in -a2or o- te su)s"ri)er6 and i- dou)t-u orreasona)y sus"epti)e o- t+o interpretations te"onstru"tion "on-erring "o2erage is to )e adopted6 ande5"usionary "auses o- dou)t-u import soud )e stri"ty"onstrued against te pro2ider.

CHAPTER 1CONTRACT OF INSURANCE

TITLE I . WHAT ?A> E INSURED

Section /5 Any "ontingent or un*no+ne2ent6 +eter past or -uture6 +i" maydamni-y a person a2ing an insura)e interest6or "reate a ia)iity against im6 may )e insuredagainst6 su)e"t to te pro2isions o- tis "apter.

'e "onsent o- te us)and is notne"essary -or te 2aidity o- an insuran"e poi"yta*en out )y te married +oman on er i-e ortat o- er "idren.

Any minor o- te age o- eigteen years ormore6 may not+itstanding su" minority6"ontra"t -or i-e6 eat and a""ident insuran"e6+it any insuran"e "ompany duy autori4ed todo )usiness in te Piippines6 pro2ided teinsuran"e is ta*en on is o+n i-e and te)ene-i"iary appointed is te minor=s estate or teminor=s -ater6 moter6 us)and6 +i-e6 "id6)roter or sister.

'e married +oman or te minor ereinao+ed to ta*e out an insuran"e poi"y maye5er"ise a te rigts and pri2ieges o- an o+ner

under a poi"y.

A r igts6 t ite and interest in te poi"yo- insuran"e ta*en out )y an origina o+ner onte i-e or eat o- a minor sa automati"ay2est in te minor upon te deat o- te originao+ner6 uness oter+ise pro2ided in te poi"y.

What !e"i# o" "i; 2a4 $e in&"e%''e -oo+ing ris*s may )e insuredJ

1. Any "ontingent or un*no+n e2ent +eter pastor -uture +i" may "ause damage to a persona2ing an insura)e interest; or

. Any "ontingent or un*no+n e2ent6 +eter pastor -uture6 +i" may "reate ia)iity against teperson insured.

?a4 a 2a""ie% (o2an ta;e o&t an in&"ance' I) oon (hat'es. A married +oman may ta*e out an insuran"e

on er i-e or tat o- er "idren e2en +itout te "onsento- er us)and. Se may i*e+ise ta*e out an insuran"eon te i-e o- er us)and6 er paraperna property6 oron property gi2en to er )y er us)and.

?a4 a 2ino" ta;e o&t an in&"ance''ird par o- Se". 9 is no onger appi"a)e6 sin"e te

age o- maority is no+ 10 years od (RA 00%6 !e". 19610&.

Att4 :&i2on a;e% & to #oo; at a )e( !"o*iion o)#a( (ith "e!ect to thi ection5 What a"e the4'

Art. 11/# (NCC&. E5"ept in "ases e5pressyspe"i-ied )y te a+6 or +en it is oter+ise de"ared )ystipuation6 or +en te nature o- te o)igation reGuireste assumption o- ris*6 no person sa )e responsi)e -ortose e2ents +i"6 "oud not )e -oreseen6 or +i"6toug -oreseen6 +ere ine2ita)e.

Art. 11% (@C&. 'e spouses retain te o+nersip6possession6 administration and enoyment o- teire5"usi2e properties.

Eiter spouse may during te marriage6 trans-er teadministration o- is or er e5"usi2e property to te oter)y means o- a pu)i" instrument6 +i" sa )e re"ordedin te registry o- property o- te pa"e +ere te propertyis o"ated.

A"t5 1/7 NCC&. 'e -oo+ing "annot gi2e "onsentto a "ontra"tJ

(1& Uneman"ipated minors;(& Insane or demented persons6 and dea-:mutes

+o do not *no+ o+ to +rite.

A"t5 1/9- NCC85 'e -oo+ing "ontra"ts are2oida)e or annua)e6 e2en toug tere may a2e )eenno damage to te "ontra"ting partiesJ

(1& 'ose +ere one o- te parties is in"apa)e o-gi2ing "onsent to a "ontra"t;

(& 'ose +ere te "onsent is 2itiated )y mista*e62ioen"e6 intimidation6 undue in-uen"e or -raud.

'ese "ontra"ts are )inding6 uness tey areannued )y a proper a"tion in "ourt. 'ey aresus"epti)e o- rati-i"ation.

P"o$#e2', wanted to o#en a medicina herb sho#$ =e #aced aon distance #hone ca to *aiwan and taked to aneorter who wiin areed to consin severa tons ofinsens with him on the condition that he wi come and

#ick the oods !#$ ' then sent C of his caro vesses to



11/79


*aiwan$ *he shi#s eft on '!!st 9$ .n '!!st 14, 'ins!red the C vesses aainst #eris of the So!th +hinaSea DEost or /ot Eost with B 2ns!rance +o$ itho!t theknowede of both #arties, the shi#s had aread s!nk on

'!$ 14$ 2s B 2ns!rance +o$ iabe for the shi#s>

es. 'is is an e5ampe o- a past un*no+n e2ent

)e"ause te sin*ing o- te sip is a past e2ent at te timetat te poi"y too* e--e"t. 'e "ontra"t is 2aid and 3Insuran"e Co. is ia)e )e"ause e agreed to pay e2entoug te sip )e aready ost. An insuran"e against anun*no+n past e2ent is pe"uiar ony to 2a"ine insuran"e.7o+e2er6 Atty. Quimson said in "ass tat no+adays6most i- not a insuran"e "ompanies no onger insure apast e2ent sin"e te"noogy as progressed in su" amanner tat a sip=s "urrent status "an easiy )e *no+n+ie te appi"ation is )eing pro"essed.

Cae5

1-8 Phi#a2ca"e *5 CA (repeat Case O%&/79 SCRA /6

Fact

Ernani 'rinos6 appied -or a eat "are "o2erage+it Piam"are. In te standard appi"ation -orm6 eans+ered NB to te -oo+ing GuestionJ ,=ave o!or an of o!r fami members ever cons!ted orbeen treated for hih bood #ress!re, heart tro!be,diabetes, cancer, iver disease, asthma or #e#tic!cer> (2f ?es, ive detais)

'e appi"ation +as appro2ed -or a period o- oneyear -rom >ar" 16 100 to >ar" 16 10. 7e +as aissued 7eat Care Agreement6 and under su"6 e+as entited to a2ai o- ospitai4ation )ene-its6+eter ordinary or emergen"y6 isted terein. 7e+as aso entited to a2ai o- Mout:patient )ene-itsMsu" as annua pysi"a e5aminations6 pre2enti2eeat "are and oter out:patient ser2i"es.

Upon te termination o- te agreement6 te same+as e5tended -or anoter year -rom >ar" 16 10 to>ar" 16 1%6 ten -rom >ar" 16 1% to une 161%. 'e amount o- "o2erage +as in"reased to ama5imum sum o- P/F6%%%.%% per disa)iity.

!uring te period o- is "o2erage6 Ernani su--ered aeart atta"* and +as "on-ined at te >ania >edi"aCenter (>>C& -or one mont )eginning >ar" 61%.

Wie er us)and +as in te ospita6 uita tried to"aim te )ene-its under te eat "are agreement.7o+e2er6 Piam"are denied er "aim saying tat

te 7eat Care Agreement +as 2oid. A""ording to Piam"are6 tere +as "on"eament

regarding ErnaniLs medi"a istory.o !o"tors at te >>C aegedy dis"o2ered at

te time o- ErnaniLs "on-inement tat e+as ypertensi2e6 dia)eti" and astmati"6"ontrary to is ans+er in te appi"ation-orm.




12/79


Membershi# ee for the benefit or benefitsa##ied for$

'e ans+er assaied )y petitioner +as in response tote Guestion reating to te medi"a istory o- teappi"ant. 'is argey depends on opinion rater tan-a"t6 espe"iay "oming -rom respondentLs us)and +o

+as not a medi"a do"tor. Were matters o- opinion orudgment are "aed -or6 ans+ers made in good -ait and+itout intent to de"ei2e +i not a2oid a poi"y e2entoug tey are untrue. 'us6

(')tho!h fase, a re#resentation of theeectation, intention, beief, o#inion, or

"!dment of the ins!red wi not avoid the #oicif there is no act!a fra!d in ind!cin theacce#tance of the risk, or its acce#tance at aower rate of #remi!m, and this is ikewise ther!e atho!h the statement is materia to therisk, if the statement is obvio!s of theforeoin character, since in s!ch case theins!rer is not "!stified in rein !#on s!chstatement, b!t is obiated to make f!rther

in!ir$ *here is a cear distinction betweens!ch a case and one in which the ins!red isfra!d!ent and intentiona states to be tr!e,as a matter of eectation or beief, that whichhe then knows, to be act!a !ntr!e, or theim#ossibiit of which is shown b the factswithin his knowede, since in s!ch case theintent to deceive the ins!rer is obvio!s andamo!nts to act!a fra!d$

'e -rauduent intent on te part o- te insured must)e esta)ised to +arrant res"ission o- te insuran"e"ontra"t. Con"eament as a de-ense -or te eat "arepro2ider or insurer to a2oid ia)iity is an a--irmati2ede-ense and te duty to esta)is su" de-ense )y

satis-a"tory and "on2in"ing e2iden"e rests upon tepro2ider or insurer. In any "ase6 +it or +itout teautority to in2estigate6 petitioner is ia)e -or "aimsmade under te "ontra"t. 7a2ing assumed aresponsi)iity under te agreement6 petitioner is )ound toans+er te same to te e5tent agreed upon. In te end6te ia)iity o- te eat "are pro2ider atta"es on"e temem)er is ospitai4ed -or te disease or inury "o2ered)y te agreement or +ene2er e a2ais o- te "o2ered)ene-its +i" e as prepaid.

Under Se"tion / o- te Insuran"e Code6 Ma"on"eament entites te inured party to res"ind a"ontra"t o- insuran"e.M 'e rigt to res"ind soud )ee5er"ised pre2ious to te "ommen"ement o- an a"tion onte "ontra"t. In tis "ase6 no res"ission +as made.3esides6 te "an"eation o- eat "are agreements as ininsuran"e poi"ies reGuire te "on"urren"e o- te-oo+ing "onditionsJ


a-ter e--e"ti2e date o- te poi"y o- one ormore o- te grounds mentioned;

9. >ust )e in +riting6 maied or dei2ered to teinsured at te address so+n in te poi"y;

#. >ust state te grounds reied upon pro2idedin Se"tion $# o- te Insuran"e Code andupon reGuest o- insured6 to -urnis -a"ts on+i" "an"eation is )ased.

None o- te a)o2e pre:"onditions +as -u-ied in tis"ase. Wen te terms o- insuran"e "ontra"t "ontain

imitations on ia)iity6 "ourts soud "onstrue tem insu" a +ay as to pre"ude te insurer -rom non:"ompian"e +it is o)igation. 3eing a "ontra"t o-adesion6 te terms o- an insuran"e "ontra"t are to )e"onstrued stri"ty against te party +i" prepared te"ontra"t te insurer. 3y reason o- te e5"usi2e "ontroo- te insuran"e "ompany o2er te terms andpraseoogy o- te insuran"e "ontra"t6 am)iguity must )estri"ty interpreted against te insurer and i)eray in -a2oro- te insured6 espe"iay to a2oid -or-eiture. 'is iseGuay appi"a)e to 7eat Care Agreements. 'epraseoogy used in medi"a or ospita ser2i"e"ontra"ts6 su" as te one at )ar6 must )e i)eray"onstrued in -a2or o- te su)s"ri)er6 and i- dou)t-u orreasona)y sus"epti)e o- t+o interpretations te

"onstru"tion "on-erring "o2erage is to )e adopted6 ande5"usionary "auses o- dou)t-u import soud )e stri"ty"onstrued against te pro2ider.

Section 05 'e pre"eding se"tion does notautori4e an insuran"e -or or against tedra+ing o- any ottery6 or -or against any "an"eor ti"*et in a ottery dra+ing a pri4e.

I a cont"act o) in&"ance a (a3e"in3 o" 3a2$#in3cont"act'

NB. A "ontra"t o- insuran"e is a "ontra"t o-indemnity and not a +agering or gam)ing "ontra"t.Atoug it is true tat an insuran"e "ontra"t is aso)ased on a "ontingen"y6 it is not a "ontra"t o- "an"e.

What i the conce!t o) a #otte"4''e term ,ottery e5tends to a s"emes -or te

distri)ution o- pri4es )y "an"e6 su" as poi"y paying6gi-t e5i)ition6 pri4e "on"erts6 ra--es at -airs6 et". and2arious -orms o- gam)ing.

What a"e the th"ee eentia# e#e2ent o) #otte"4'Consideration6 pri4es and "an"e.'ere is "onsideration o- pri"e aid i- it appears tat

te pri4es o--ered )y +ate2er name tey may )e "aed

"ame out o- te -und raised )y te sae o- "an"esamong te parti"ipants in order to +in te pri4es.

A"e a## !"ie e=&i*a#ent to a #otte"4'I- te pri4es do not "ome out o- te -und or

"ontri)utions )y te parti"ipants6 no "onsideration as)een paid and "onseGuent6 tere is no ottery. E5J A"ompany6 to promote te sae o- "ertain produ"ts6 resortsto a s"eme +i" en2isions te gi2ing a+ay -or -ree o-"ertain pri4es -or te pur"ase o- said produ"ts6 -or te



13/79


parti"ipants are not reGuired to pay more tan te usuapri"e o te produ"ts.

Can a (ee!ta;e ho#%e" in&"e hi2e#) a3aint the)ai#&"e o) hi tic;et to (in'

NB. It "annot )e said tat e su--ered a ,oss o-pri4e +en e did not +in. 'e -aiure to +in a pri4e

+oud not damni-y or "reate a ia)iity against im.

What a"e the %itinction $et(een an in&"ancecont"act an% a (a3e"in3 cont"act'

A "ontra"t o- insuran"e is a "ontra"t o- indemnity andnot a +agering6 or gam)ing "ontra"t.(Se". F& Wite it is)ased on a "ontingen"y6 it is not a "ontra"t o- "an"e andis not used -or pro-it. 'e distin"tions are te -oo+ingJ

In&"ance Cont"act Ga2$#in3 cont"act

Parties see* to distri)uteoss )y reason o-mis"an"e

Parties "ontempate gaintroug mere "an"e or teo""urren"e o- a "ontingente2ent.

Insured a2oids

mis-ortune.

8am)er "ourts -ortune

'ends to eGuai4e-ortune.

'ends to in"rease teineGuaity o- -ortune.

Wat one insured gains isnot at te e5pense o-anoter insured. 'eentire group o- insuredspro2ides troug tepremiums paid6 te -unds+i" ma*e possi)e tepayment o- a "aims;

Essen"e is +ate2er oneperson +ins -rom a +ageris ost )y te oter+agering party.

Pur"ase o- insuran"edoes not "reate a ne+and non:e5isting ris* o-oss to te pur"aser. Inpur"asing insuran"e6 teinsurer -a"es an areadye5isting ris* o- e"onomi"oss.

As soon as a party ma*esa +ager6 e "reates a ris*o- oss to imse- +ere nosu" ris* e5istedpre2iousy.

What a"e the i2i#a"itie $et(een an in&"ancecont"act an% a 3a2$#in3 cont"act'

'ey are simiar in ony one respe"t. In )ot6 oneparty promises to pay a gi2en sum to te oter upon teo""urren"e o- a gi2en -uture e2ent6 te promise )eing"ondition upon te payment o-6 or agreement to pay6 astipuated amount )y te oter party to te "ontra"t.

In eiter "ase6 one party may re"ei2e more6 mu"

more6 tan e paid or agreed to pay.

P"o$#e25

', B, + and F decided to "oin a b!nee "!m#incom#etition$ *he contrib!ted @1,GGG each to a f!ndavaiabe for the !se of an member who is in"!red in thecontest$ 2s this ins!rance or ambin>

'is is an insuran"e "ontra"t. Ea" mem)er"ontri)utes to a "ommon -und6 out o- +i" one isreim)ursed -or te osses tat e may su--er.

S!##ose ', B, +, and F aree that the whoe amo!nt of4* wo!d be iven to the one who swins nearest to thero!nd$ 2s this ins!rance or ambin>

'is is no+ a gam)ing "ontra"t. 'e parties areno+ "ontempating a gain )ased upon un"ertain e2ents.

Section 5 A *inds o- insuran"e aresu)e"t to te pro2isions o- tis "apter so -ar aste pro2isions "an appy.

What i the a!!#ica$i#it4 o) the !"o*iion o) Cha!te"1'

Pro2isions o- Cap 1 on ,'e Contra"t o- Insuran"e(Se"s 1:0& are aso appi"a)e to marine Insuran"e(Se"s. :1$$&6 @ire insuran"e (Se"s. 1$/:1/9&6 CasuatyInsuran"e (Se". 1/#&6 Suretysip (Se"s. 1/F:1/0&6


14/79

INSURANCE REVIEWER Atty. Quimson page 1#

situation is a i-e insuran"e poi"y +ere te pro"eeds arenot gi2en to te insured )ut to a tird party designated )yte insured.

What i the nat&"e o) the "e#ationhi! $et(een thein&"e" an% the in&"e%'

It is tat o- a "ontingent de)tor and "reditor6 su)e"t

to te "onditions o- te poi"y and NB' tat o- trustee and"estui Gue trust.

Ho( a"e the te"2 a&"e" in&"e% an% a&"e% &e%in in&"ance'

A""dg to 3a"*=s


15/79

INSURANCE REVIEWER Atty. Quimson page 1F

'e Commissioner may re-use to issue a "erti-i"ateo- autority to any insuran"e "ompany i-6 in is udgment6su" re-usa +i )est promote te interests o- te peopeo- tis "ountry. No su" "erti-i"ate o- autority sa )egranted to any su" "ompany unti te Commissionersa a2e satis-ied imse- )y su" e5amination as e

may ma*e and su" e2iden"e as e may reGuire tatsu" "ompany is Guai-ied )y te a+s o- te Piippinesto transa"t )usiness terein6 tat te grant o- su"autority appears to )e usti-ied in te igt o- o"ae"onomi" reGuirements6 and tat te dire"tion andadministration6 as +e as te integrity and responsi)iityo- te organi4ers and administrators6 te -inan"iaorgani4ation and te amount o- "apita6 not+itstandingte pro2isions o- se"tion 1006 reasona)y assure tesa-ety o- te interests o- te poi"yoders and te pu)i".

In order to maintain te Guaity o- te management o-insuran"e "ompanies and a--ord )etter prote"tion o-poi"yoders and te pu)i" in genera6 any person o-good mora "ara"ter6 unGuestioned integrity and

re"ogni4ed "ompeten"e may )e ee"ted or appointeddire"tor or o--i"er o- insuran"e "ompanies. 'eCommissioner sa pres"ri)e te Guai-i"ations o- tee5e"uti2e o--i"ers and oter *ey o--i"ias o- insuran"e"ompanies -or te purposes o- tis se"tion.

No person sa "on"urrenty )e a dire"tor andKoro--i"er o- an insuran"e "ompany and an adustment"ompany.

In"um)ent dire"tors andKor o--i"ers a--e"ted )y tea)o2e pro2isions are ere)y ao+ed to od on to teirpositions unti te end o- teir terms or t+o years -rom tee--e"ti2ity o- te !e"ree6 +i"e2er is sorter.

3e-ore issuing su" "erti-i"ate o- autority6 teCommissioner must )e satis-ied tat te name o- te"ompany is not tat o- any oter *no+n "ompanytransa"ting a simiar )usiness in te Piippines6 or aname so simiar as to )e "a"uated to misead te pu)i".

Su" "erti-i"ate o- autority sa e5pire on te astday o- une o- ea" year and sa )e rene+ed annuay i-te "ompany is "ontinuing to "ompy +it te pro2isionso- tis Code or te "ir"uars6 instru"tions6 ruings orde"isions o- te Commissioner. E2ery "ompanyre"ei2ing any su" "erti-i"ate o- autority sa )e su)e"tto te pro2isions o- tis Code and oter reated a+s andto te urisdi"tion and super2ision o- te Commissioner.

No insuran"e "ompany may )e autori4ed totransa"t in te Piippines te )usiness o- i-e and non:i-einsuran"e "on"urrenty6 uness spe"i-i"ay autori4ed todo so6 pro2ided o+e2er6 tat te terms ,i-e and ,non:i-e insuran"e sa e deemed to in"ude eat6 a""identand disa)iity insuran"e.

No insurer "ompany sa a2e any eGuity in anadustment "ompany and neiter sa an adustment"ompany a2e an eGuity in an insuran"e "ompany.

Insuran"e "ompanies and adustment "ompaniespresenty a--e"ted )y te a)o2e pro2isions sa a2e t+oyears -rom te e--e"ti2ity o- te !e"ree +itin +i" todi2est o- teir sto"*odings.

Section 75 Anyone e5"ept a pu)i" enemymay )e insured.

What a"e the "e=&iite in o"%e" that a !e"on 2a4 $ein&"e% in a contact o) in&"ance'

'ere are 9 reGuisites nameyJ"& 7e must )e "ompetent to enter into a

"ontra"t.d& 7e must possess an insura)e interest

in te su)e"t o- insuran"e.e& 7e must NB' )e a pu)i" enemy.

What i a !&$#ic ene24'It is a nation +it +om te Piippines is at +ar6 and

it in"udes e2ery "iti4en or su)e"t o- su" nation.

What i the e))ect o) (a" on the e@itin3 in&"ancecont"act $et(een the Phi#i!!ine an% a citien o"&$ect o) a !&$#ic ene24 (ith "e!ect to !"o!e"t4in&"ance'

Wit respe"t to property insuran"e6 te rue adoptedin te Pi is tat an insuran"e poi"y "eases to )e 2aidand en-or"ea)e as soon as te insured )e"omes a pu)i"enemy.

What i the e))ect o) (a" on the e@itin3 in&"ancecont"act $et(een the Phi#i!!ine an% a citien o"&$ect o) a !&$#ic ene24 (ith "e!ect to #i)ein&"ance''ree do"trines a2e arisen.

(1& Connectic&t Re tere are t+o eementsin te "onsideration -or +i" te annua premiumis paidJ

a. 'e mere prote"tion -or te year; and). 'e pri2iege o- rene+ing te "ontra"t -or

ea" su""eeding year )y paying tepremium -or tat year at te time agreedupon.

A""dg. to tis 2ie+6 te payments o- tepremiums are a "ondition pre"edent6 te non:per-orman"e o- +i" (as +en te per-orman"e+oud )e iega& ne"essary de-eats te rigt torene+ te "ontra"t.

(& Ne( >o"; Re apparenty -oo+ed )yte num)er o- de"isions. War )et+een te statesin +i" te parties reside merey suspends te"ontra"ts o- i-e insuran"e and tat upon te tendero- premiums due )y te insured or isrepresentati2es a-ter te +ar as terminatedre2i2es te "ontra"t +i" )e"omes -uy operati2e.

(9& US Re de"ared te "ontra"t not mereysuspended )ut is a)rogated )y reason o- non:



16/79


17/79

INSURANCE REVIEWER Atty. Quimson page 1/

'e mortgagor "annot re"o2er upon te insuran"e)eyond te -u amount o- te oss6 and te mortgagee"annot re"o2er in e5"ess o- te "redit at te time o- teoss.

Un%e" Sec5 , (hat a"e the e))ect o) in&"ance (henthe 2o"t3a3o" e))ect in&"ance in hi o(n na2e an%

!"o*i%e that the #o $e !a4a$#e to the 2o"t3a3ee''e ega e--e"ts o- tis areJ(1& 'e "ontra"t is deemed to )e upon te

interest o- te mortgagor6 en"e e doesNB' "ease to )e a party to te "ontra"t;

(& Any a"tion o- te mortgage prior to te oss+i" +oud oter+ise a2oid te insuran"ea--e"ts te mortgagee e2en i- te property isin te ands o- te mortgagee;

(9& Any a"t +i" under te "ontra"t o-insuran"e is to )e per-ormed )y temortgagor6 may )e per-ormed )y temortgagee;

(#& In "ase o- oss6 te mortgagee is entited tote pro"eeds to te e5tent o- is "redit; and

(F& Upon re"o2ery )y te mortgagee to tee5tent o- is "redit6 te de)t is e5tinguised.

What i the e))ect i) the 2o"t3a3ee e))ect in&"anceon $eha#) o) the 2o"t3a3o"'

Pra"ti"ay te same rues appy. Upon tedestru"tion o- te property6 ten te mortgagee is entitedto re"ei2e te pro"eeds eGua to te amount o- temortgage "redit. Su" payment operates to dis"argete de)t.

Att45 :&i2on (ant & to #oo; at A"t5 17 CC5What %oe it a4'

Art. 1/. 'e mortgage e5tends to te naturaa""ession6 to te impro2ements6 gro+ing -ruits6 and te

rents or in"ome not yet re"ei2ed +en te o)igation)e"omes due6 and to te amount o- te indemnitygranted or o+ing to te proprietor -rom te insurers o- teproperty mortgaged6 or in 2irtue o- e5propriation -or pu)i"use6 +it te de"arations6 ampi-i"ations and imitationsesta)ised )y a+6 +eter te estate remains in tepossession o- te mortgagor6 or it passes into te andso- a tird person.

P"o$#e25

' is the owner of a ho!se worth 1G* which he mortaedto B to sec!re a oan of C*$ hat is the ins!rabeinterests of each>

Insura)e interest o- A6 mortgagor is P1%'6 +ie teinsura)e interest o- 36 mortgagee is PF'.

' ins!red for 1M her ho!se with the #oic #rovidin thatthe oss sha be #aabe to B$ *he ho!se wasmortaed to B as sec!rit for a oan of @CG*$ 2t wastota destroed b accidenta fire$ ho ma recover onthe #oic>

36 te mortgagee may re"ei2e te 1> )ut is entitedony to te e5tent o- is "redit o- P/F%'6 and e sa odas trustee -or A6 mortgagor6 te e5"ess o- PF%'.

S!##osin before the fire occ!rred B had aread been#aid, who, if at a, wi receive the #roceeds>

A +i re"ei2e te pro"eeds. 'e reason is tat A

e--e"ted te insuran"e in is o+n name and e did NB'"ease to )e a party to te "ontra"t atoug it +aspro2ided tat te indemnity )e paid to 3.

S!##ose it was B, mortaee who ins!red the ho!se for1M$ 2f the oss occ!rred before B was #aid who isentited to receive the #roceeds>

3. 3ut 3 "an ony re"o2er P/F%'6 te amount o-er "redit.

hat if the oss occ!rred after B was #aid, can he stireceive the #roceeds>

No. Upon payment o- te de)t6 3 ost is insura)einterest in te property.

i ' et the #roceeds>No. 3e"ause A +as ne2er a party to te "ontra"t. It

is important to note tat it +as 36 mortgagee +o e--e"tedte insuran"e.

Cae

18San ?i3&e# "e(e"4 *5 La( Union Roc;In&"ance Co2!an4

0- PHIL 670

Fact

Bn an. 16 1106 !unn mortgaged a par"e o- andto S>3 to se"ure a de)t o- 1%'.

>ortgage "ontra"t stated tat !unn +as to a2e teproperty insured at is o+n e5pense6 autori4ingS>3 to "oose te insurers and to re"ei2e tepro"eeds tereo- and retain so mu" o- te pro"eedsas +oud "o2er te mortgage de)t.

!unn i*e+ise autori4ed S>3 to ta*e out teinsuran"e poi"y -or im.

3rias6 S>3=s genera manager6 approa"ed 3=sinterest in te property +as merey tat o- amortgagee.

3 ony and "ontained no re-eren"e to any oterinterests in te propty. 3ot poi"ies reGuiredassignments to )e appro2ed and noted on te poi"y.

Premiums +ere paid )y S>3 and "arged to !unn.A year ater6 te poi"ies +ere rene+ed.

In 11/6 !unn sod te property to 7arding6 )ut noassignment o- te poi"ies +as made to te atter.

Property +as destroyed )y -ire. S>3 -ied an a"tionin "ourt to re"o2er on te poi"ies. 7arding +as



18/79


19/79


Fact

Bn !e". 106 1F16 Paieo o)tained -rom Cosio aoan o- P1'.

'o se"ure payment6 Cosio reGuired Paieo to sign ado"ument *no+n as ,"onditiona sae o- residentia)uiding6 purporting to "on2ey to Cosio6 +it a rigt

to repur"ase (on te part o- Paieo&6 a t+o:story)uiding o- strong materias )eonging to Paieo.

A-ter e5e"ution o- te do"ument6 Cosio insured te)uiding against -ire +it Asso"iated Insuran"e ?Surety Co. (Asso"iated& -or 1F'.

'e insuran"e poi"y +as issued in te name o-Cosio.

'e )uiding +as party destroyed )y -ire and a-terproper demand6 Cosio +as a)e to "oe"t -rom teinsuran"e "ompany an indemnity o- P1961%/.

Paieo demanded -rom Cosio tat se )e "redited+it te ne"essary amount to pay er o)igation outo- te insuran"e pro"eeds6 )ut Cosio re-used to doso.

'ria Court -ound tat te de)t ad an unpaid)aan"e o- P1'. It de"ared te o)igation o- Paieoto Cosio -uy "ompensated )y 2irtue o- te pro"eeds"oe"ted )y Cosio and -urter ed tat te e5"ess o-P161%/ (1961%/ 16%%%& )e re-unded to Paieo

I&e WBN te tria "ourt +as usti-ied in "onsidering teo)igation o- Paieo -uy "ompensated )y te insuran"eamount tat Cosio +as a)e to "oe"t -rom Asso"iated6and WBN te tria "ourt +as "orre"t in reGuiring Cosio tore-und te e5"ess o- P161%/ to Paieo.

He#%5 NO an% NO5'e rue is tat ,+ere a mortgagee6 independenty

o- te mortgagor6 insures te mortgaged property in is

o+n name and -or is o+n interest6 e is entited to teinsuran"e pro"eeds in "ase o- oss6 )ut in su" "ase6 eis not ao+ed to retain is "aim against te mortgagor6)ut is passed )y su)rogation to te insurer to te e5tento- te money paid.

'e o+er "ourt erred in de"aring tat te pro"eedso- te insuran"e ta*en out )y Cosio on te propertyinsured to te )ene-it o- Paieo and in ordering te -ormerto dei2er to te atter6 te di--eren"e )et+een teinde)tedness and te amount o- insuran"e re"ei2ed )yCosio. In te igt o- tis ruing6 te "orre"t soution +oud)e tat te pro"eeds o- te Insuran"e )e dei2ered toCosio6 )ut er "aim against Paieo soud )e "onsideredassigned to te insuran"e "ompany +o is deemed

su)rogated to te rigts o- Cosio to te e5tent o- temoney paid as indemnity.

18 G"e!a#i)e *5 CA/16 SCRA 677

Fact

A "ontra"t o- group i-e insuran"e +as e5e"uted)et+een 8repai-e and !3P. 8repai-e agreed to

insure te i2es o- eigi)e ousing oan mortgagors o-!3P.

!r. Wi-redo eia=s -indings6 )ased party -rom te in-ormationgi2en )y te +ido+6 stated tat !r.


20/79

INSURANCE REVIEWER Atty. Quimson page %

appied to te payment o- te mortgage de)t6 tere)yreie2ing te eirs o- te mortgagor -rom paying teo)igation.

In a simiar 2ein6 ampe prote"tion is gi2en to temortgagor under su" a "on"ept so tat in te e2ent o-deat; te mortgage o)igation +i )e e5tinguised )y te

appi"ation o- te insuran"e pro"eeds to te mortgageinde)tedness. ConseGuenty6 +ere te mortgagor payste insuran"e premium under te group insuran"e poi"y6ma*ing te oss paya)e to te mortgagee6 te insuran"eis on te mortgagor=s interest6 and te mortgagor"ontinues to )e a party to te "ontra"t. In tis type o-poi"y insuran"e6 te mortgagee is simpy an appointee o-te insuran"e -und6 su" oss:paya)e "ause does notma*e te mortgagee a party to te "ontra"t.

'e insured pri2ate respondent did not "ede to temortgagee a is rigts or interests in te insuran"e6 tepoi"y stating tatJ 52n the event of the debtorHs deathbefore his indebtedness with the +reditor ;FB@< shahave been f! #aid, an amo!nt to #a the o!tstandin

indebtedness sha first be #aid to the creditor and thebaance of s!m ass!red, if there is an, sha then be

#aid to the beneficiar7ies desinated b the debtor$5Wen !3P su)mitted te insuran"e "aim againstpetitioner6 te atter denied payment tereo-6 interposingte de-ense o- "on"eament "ommitted )y te insured.'erea-ter6 !3P "oe"ted te de)t -rom te mortgagorand too* te ne"essary a"tion o- -ore"osure on teresidentia ot o- pri2ate respondent

And sin"e a poi"y o- insuran"e upon i-e or eatmay pass )y trans-er6 +i or su""ession to any person6+eter e as an insura)e interest or not6 and su"person may re"o2er it +ate2er te insured migt a2ere"o2ered6 1# te +ido+ o- te de"edent !r. ortgagor (>or& to a>ortgage (>ee&6 and at te time o- is assent te insurerimposes -urter o)igation on te >ee6 a ne+ and distin"t"onsideration passed -rom te >ee to te insurer6 and ane+ "ontra"t is "reated )et+een tem. 'e a"ts o- te>or "annot anymore a--e"t te rigts o- te >ee.

What i the i3ni)icance o) thi !"o*iion'Remem)er +e said in Se". 0 tat a a"ts o- te

mortgagor a--e"ts te mortgageeH We6 tis pro2isionpro2ides te e5"eption to te rue.

TITLE III . INSURALE INTEREST

Section 1-5 E2ery person as an insura)einterest in te i-e and eatJ

(a& B- imse-6 o- is spouse and o- is"idren;

()& B- any person on +om e depends+oy in part -or edu"ation or support6 or in+om e as a pe"uniary interest;

("& B- any person under a ega o)igation toim -or te payment o- money6 or respe"tingproperty or ser2i"es6 B- +i" deat or inessmigt deay or pre2ent te per-orman"e; and

(d& B- any person upon +ose i-e anyestate or interest 2ested in im depends.

Wh4 i thi ection i2!o"tant'Bter tan it dis"usses te "on"ept o- keyman

insurance6 Atty. Quimsons as*ed tis in a past mid:terme5am6 as*ing te students to Quote te pro2ision.

What i in&"a$#e inte"et'Insura)e interest is one te most )asi" o- a

reGuirements in insuran"e. In genera6 a person isdeemed to a2e insura)e interest in te su)e"t matterinsured +ere e a a reation or "onne"tion +it or"on"ern in it tat e +i deri2e pe"uniary )ene-it orad2antage -rom its preser2ation and +i su--er pe"uniaryoss or damage -rom its destru"tion6 termination or inury)y te appening o- te e2ent insured against.

Wh4 2&t the"e $e an in&"a$#e inte"et'It is essentia -or 2aidity and en-or"ea)iity o- te

"ontra"t or poi"y. A poi"y issued to a person +itoutinterest in te su)e"t matter is a mere +ager poi"y or"ontra"t.

When i the"e in&"a$#e inte"et in #i)e in&"ance'In i-e insuran"e6 Insura)e interest e5ists +ere

tere is reasona)e ground -ounded on te reations o-te parties +eter pe"uniary6 "ontra"tua or )y )ood or



21/79


22/79


23/79


7o+e2er6 Piam"are denied er "aim saying tatte 7eat Care Agreement +as 2oid.

A""ording to Piam"are6 tere +as "on"eamentregarding ErnaniLs medi"a istory.

o !o"tors at te >>C aegedy dis"o2ered atte time o- ErnaniLs "on-inement tat e+as ypertensi2e6 dia)eti" and astmati"6

"ontrary to is ans+er in te appi"ation-orm.




24/79

INSURANCE REVIEWER Atty. Quimson page #

e5er"ised pre2ious to te "ommen"ement o- an a"tion onte "ontra"t. In tis "ase6 no res"ission +as made.3esides6 te "an"eation o- eat "are agreements as ininsuran"e poi"ies reGuire te "on"urren"e o- te-oo+ing "onditionsJ


a-ter e--e"ti2e date o- te poi"y o- one ormore o- te grounds mentioned;9. >ust )e in +riting6 maied or dei2ered to te

insured at te address so+n in te poi"y;#. >ust state te grounds reied upon pro2ided

in Se"tion $# o- te Insuran"e Code andupon reGuest o- insured6 to -urnis -a"ts on+i" "an"eation is )ased.

None o- te a)o2e pre:"onditions +as -u-ied in tis"ase. Wen te terms o- insuran"e "ontra"t "ontainimitations on ia)iity6 "ourts soud "onstrue tem insu" a +ay as to pre"ude te insurer -rom non:"ompian"e +it is o)igation. 3eing a "ontra"t o-adesion6 te terms o- an insuran"e "ontra"t are to )e

"onstrued stri"ty against te party +i" prepared te"ontra"t te insurer. 3y reason o- te e5"usi2e "ontroo- te insuran"e "ompany o2er te terms andpraseoogy o- te insuran"e "ontra"t6 am)iguity must )estri"ty interpreted against te insurer and i)eray in -a2oro- te insured6 espe"iay to a2oid -or-eiture. 'is iseGuay appi"a)e to 7eat Care Agreements. 'epraseoogy used in medi"a or ospita ser2i"e"ontra"ts6 su" as te one at )ar6 must )e i)eray"onstrued in -a2or o- te su)s"ri)er6 and i- dou)t-u orreasona)y sus"epti)e o- t+o interpretations te"onstru"tion "on-erring "o2erage is to )e adopted6 ande5"usionary "auses o- dou)t-u import soud )e stri"ty"onstrued against te pro2ider.

Section 115 'e insured sa a2e terigt to "ange te )ene-i"iary e designated inte poi"y6 uness e as e5pressy +ai2ed isrigt in te said poi"y.

What i a $ene)icia"4'A )ene-i"iary is a person +eter natura or uridi"a

-or +ose )ene-it te poi"y is issued and is te re"ipiento- te pro"eeds in te insuran"e.

Who can $e a $ene)icia"4'Any person in genera "an )e a )ene-i"iary.

A"e the"e an4 e@ce!tion'es. 'e ony persons disGuai-ied -rom )eing a

)ene-i"iary are tose not Guai-ied to re"ei2e donationsunder Art. /9. 'ey "annot )e named )ene-i"iaries o- ai-e insuran"e poi"y )y te person +o "annot ma*e anydonation to im.

In cae o) a%te"4 conc&$ina3e %oe the%i=&a#i)ication e@ten% to the i##e3iti2ate chi#%"en'

NB. 'e disGuai-i"ation does not e5tend to te"idren6 and as su"6 tey may )e made )ene-i"iaries.

What i the o#% "e "e3a"%in3 "e*oca$i#it4 o)%ei3nation o) $ene)icia"4 a en&nciate% in the caeo) Ge"cio *5 S&n#i)e'

'e B

te designation o- te )ene-i"iary e2en +itout te"onsent o- te atter6 +eter or not su" po+er isreser2ed in te poi"y. Su" rigt must )e e5er"isedspe"i-i"ay in te manner set -ort in te poi"y or"ontra"t. It is o- "ourse6 e5tinguised at is deat andCANNB' )e e5er"ised )y is persona representati2es orassignees.

Un%e" the c&""ent "e (hen %oe the in&"e% #oethe "i3ht to chan3e the $ene)icia"4'

Wen te rigt to "ange te )ene-i"iary is e5pressy+ai2ed in te poi"y6 te insured as no po+er to ma*esu" "ange +itout te "onsent o- te )ene-i"iary.

What i) the $ene)icia"4 %ie $e)o"e the in&"e% an%the in&"e% %i% not chan3e the %ei3nation (ho 3etthe !"ocee%'

'ere is a di2ergen"e o- opinion6 )ut te generatrend is to gi2e it to te estate of thebeneficiary.

What a"e the othe" !"o*iion o) #a( that Att45:&i2on "e=&i"e% & to "ea%'

A"t5 -1 CC. Any person +o is -or)idden -rom

re"ei2ing any donation under Art. /9 "annot )e named a)ene-i"iary o- a i-e insuran"e poi"y )y te person +o"annot ma*e any donation to im6 a""ording to saidarti"e.

A"t5 7/9. 'e -oo+ing donations sa )e 2oidJ(1& 'ose made )et+een persons +o +ere guity o-

adutery or "on"u)inage at te time o- te donation;(& 'ose made )et+een persons -ound guity o- te

same "rimina o--ense6 in "onsideration tereo-;(9& 'ose made to a pu)i" o--i"er6 or is +i-e6

des"endants and as"endants )y reason o- is o--i"e.

L'tt$ !imson said that the desination of the #!bicofficer MNS* be b reason of his office and /.* a

#!bic officers are dis!aified from bein beneficiaries ofa ife ins!rance #oic, as on as the desination was notmade in consideration of an act done b the #!bic officerb reason of his office in favor of the ins!red$

A"t5 0/ FC. 'e termination o- su)seGuent marriageprodu"es te -oo+ing e--e"tsJ

555.(#& 'e inno"ent spouse may re2o*e te designation

o- te oter spouse +o a"ted in )ad -ait as a



25/79

INSURANCE REVIEWER Atty. Quimson page F

)ene-i"iary in any insuran"e poi"y e2en i- su"designation )e stipuated as irre2o"a)e.

A"t5 60 FC. A-ter te -inaity o- te de"ree o- egaseparation6 te inno"ent spouse may re2o*e tedesignation o- te o--ending spouse as )ene-i"iary in anyinsuran"e poi"y. 'e re2o"ation o- or "ange in te

designation o- te insuran"e )ene-i"iary sa ta*e e--e"tupon +ritten noti-i"ation to te insured.

A"t5 - FC. 'e e--e"ts pro2ided -or )y paragrap(#& o- Art. #9 555 sa aso appy in te proper "ases tomarriages +i" are de"ared 2oid a) initio or annued )y-ina udgment under Art. #% ? #F.

P"o$#e25

@ao and Jane are h!sband and wife$ Jef and Jo"o areaso h!sband and wife (iheeO)$ Jef and Jane enaedin ad!tero!s reations$ Jef sec!red a ife ins!rance

#oic and named Jane as beneficiar$ hen Jef dies,

who wi et the ins!rance #roceeds>

oo. ane "annot )e named as a )ene-i"iary in a i-einsuran"e poi"y )e"ause se is -or)idden )y a+ tore"ei2e a donation -rom e- sin"e tey +ere )ot guity o-adutery.

@ao and Jane are h!sband and wife$ Jef and Jo"o areaso h!sband and wife$ Jane enaed in ad!tero!sreaions with Pan$ Jef sec!red a ife ins!rance andnamed Jane as beneficiar$ hen Jef dies, who wi etthe ins!rance #roceeds>

ane. 'e a+ proi)its te situation +erein aperson +o is -or)idden -rom re"ei2ing a donation under

Art. /9 is named a )ene-i"iary o- a i-e insuran"e poi"y)y te person +o "annot ma*e any donation to im6a""ording to said arti"e. In oter +ords6 not+itstandingte -a"t tat ane is guity o- adutery6 ane "an sti )e a)ene-i"iary o- e- sin"e te a+ pro2ides tat ane "annot)e a )ene-i"iary o- a i-e insuran"e poi"y i- te person+o names er as )ene-i"iary is -or)idden to gi2e er adonation under Art. /9. Art. /9 is tere-ore notappi"a)e in te situation at )ar.

@ao and Jane are h!sband and wife$ Jef and Jo"o areaso h!sband and wife$ Jef has a conc!bine named Ma!i*aor$ Jef thereafter sec!red a ife ins!rance #oic andnamed Jane as beneficiar$ hen Jef dies, who wi etthe ins!rance #roceeds>

ane. 'e a+ ony proi)its te situation +erein aperson +o is -or)idden -rom re"ei2ing a donation underArt. /9 is named a )ene-i"iary o- a i-e insuran"e poi"y)y te person +o "annot ma*e any donation to im6a""ording to said arti"e. Not+itstanding tat e- isguity o- "on"u)inage6 ane "an sti )e a )ene-i"iary.Sin"e ane is not te "on"u)ine6 Art. /9 +i not appyand e- is not -or)idden -rom gi2ing a donation to ane.

@ao and Jane are h!sband and wife$ Jef and Jo"o areaso h!sband and wife$ Jane enaes in ad!tero!sreations with Pan$ Jef has a conc!bine named Ma!i*aor$ Jef thereafter sec!res a ife ins!rance #oic andnames Jane as a beneficiar$ henJef dies, who wi etthe ins!rance #roceeds>

ane. 'e a+ ony proi)its te situation +erein aperson +o is -or)idden -rom re"ei2ing a donation underArt. /9 is named a )ene-i"iary o- a i-e insuran"e poi"y)y te person +o "annot ma*e any donation to im6a""ording to said arti"e. Not+itstanding tat )otparties are guity o- adutery and "on"u)inagerespe"ti2ey6 tey are not -or)idden )e"ause e- is not teone engaged in an aduterous reationsip +it ane6 andse is not te "on"u)ine o- e-. Art. /9 does not appy.

@ao and Jane are h!sband and wife$ Jef and Jo"o areaso h!sband and wife$ Jef and @ao become overs$ Jefthereafter sec!res a ife ins!rance #oic and names @aoas his beneficiar$ hen Jef dies who wi et theins!rance #roceeds>

Pao. Sin"e tere is no a+ proi)iting e- -romdonating to Pao6 )e"ause )ot o- tem are neiter guityo- adutery nor "on"u)inage6 ten te ony soution to tispro)em is to "onsider te designation o- te )ene-i"iaryas a "ontra"t +i" is 2aid and )inding )et+een teinsurer and te insured.

Fiscaimer8 'n resembance to rea and ivin #ersonsare #!re coincidenta$ =ahahaha$$ riht$

Cae5

18 Ina" Li)e *5 E$"a%o(re#eated case Q case 0),- SCRA 1,1

Fact

3uena2entura E)rado +as issued )y Insuar


26/79

INSURANCE REVIEWER Atty. Quimson page $

It is Guite un-ortunate tat te Insuran"e A"t or ouro+n Insuran"e Code does not "ontain a spe"i-i" pro2isiongrossy resoutory o- te prime Guestion at and. Rater6te genera rues o- "i2i a+ soud )e appied to reso2etis 2oid in te insuran"e a+. Art. %11 o- te NCCstatesJ *he contract of ins!rance is overned b s#eciaaws$ Matters not eress #rovided for in s!ch s#ecia

aws sha be re!ated b this +ode$ Wen nototer+ise spe"i-i"ay pro2ided -or in te insuran"e a+6te "ontra"t o- i-e insuran"e is go2erned )y te generarues o- "i2i a+ reguating "ontra"ts.

Under Art. %16 NCCJ'n #erson who is forbiddenfrom receivin an donation !nder 'rt$ 39 cannot benamed beneficiar of a ife ins!rance #oic b a #ersonwho cannot make an donation to him, accordin to saidartice. Under Art. /96 donations )et+een persons +o+ere guity o- adutery or "on"u)inage at te time o- tedonation sa )e 2oid.

In essen"e6 a i-e insuran"e poi"y is no di--erent -rom"i2i donations inso-ar as te )ene-i"iary is "on"erned.

3ot are -ounded on te same "onsideration o- i)eraity.A )ene-i"iary is i*e a donee )e"ause -rom te premiumso- te poi"y +i" te insured pays6 te )ene-i"iary +ire"ei2e te pro"eeds or pro-its o- said insuran"e. As a"onseGuen"e6 te pros"ription in Art. /9 soud eGuayoperate in i-e insuran"e "ontra"ts.

'ere-ore6 sin"e "ommon:a+ spouses are )arred-rom re"ei2ing donations6 tey are i*e+ise )arred -romre"ei2ing pro"eeds o- a i-e insuran"e "ontra"t.

8 So&the" L&on E2!#o4eeK Aociation *5Go#!eo

96 PHIL ,/

Fact Saoes6 te "ommon a+ +i-e6 and

er "idreno Esie 7i")an6 anoter "ommon a+ +i-e o-

Roman6 and er "id.

Saoes6 8opeo=s argument +oud "ertainyNB' appy to te "idren o- >aoes i*e+ise named)ene-i"iaries )y te de"eased. As a matter o- -a"t6 teNCC re"ogni4es "ertain su""essiona rigts o- iegitimate

"idren.

/8 Na"io *5 Phi#a2#i)e In&"ance Co2!an4- SCRA 0/0

Fact

>rs. Nario appied -or and +as issued a i-eInsuran"e poi"y (no. F%9$1/& )y P7Irs. Nario ten appied -or a oan on te a)o2epoi"y +it P7I


27/79

INSURANCE REVIEWER Atty. Quimson page /

)e gi2en )y is -ater as ega guardian )ut it mustaso )e autori4ed )y te "ourt in a "ompetentguardiansip pro"eeding.

>rs. Nario ten signi-ied er de"ision to surrenderer poi"y and demand its "as 2aue +i" tenamounted to P F%.

P7Irs. Nario sued P7Iar. 916 1#9.

In )ot poi"ies6 West agreed to pay ' eiter toEsperan4a i- sti i2ing on Apr 16 1#9; or to)ene-i"iary 3artoome Vianue2a6 or te -ater o- teinsured immediatey upon re"eipt o- te proo- o-deat o- Esperan4a.

'e poi"y aso ga2e er te rigt to "ange te)ene-i"iary.

In 1#%6 3artoome died6 and e +as su)stituted as)ene-i"iary under te poi"ies )y >ariano6Esparan4a=s )roter.

Esperan4a died in 1## +itout a2ing "oe"ted teinsuran"e pro"eeds. Ad2erse "aims -or tepro"eeds +ere presented )y te estate o- Esperan4aon one and and )y >ariano on te oter.

C@I ed tat te estate o- Esperan4a +as entited tote pro"eeds to te e5"usion o- te )ene-i"iary.

I&e WBN te )ene-i"iary is entited to te pro"eeds.

He#% NO5Under te poi"ies6 te insurer o)igated itse- to pay

te insuran"e pro"eeds toJ (1& te insured i- te atteri2ed on te dates o- maturity; or (& te )ene-i"iary i- teinsured died during te "ontinuan"e o- te poi"ies. 'e-irst "ontingen"y e5"udes te se"ond6 and 2i"e 2ersa. In

oter +ords6 as te insured Esperan4a +as i2ing on Apri1 and >ar" 916 1#96 te pro"eeds are paya)ee5"usi2ey to er or to er estate uness se ad )e-oreer deat oter+ise assigned te matured poi"ies.

'e )ene-i"iary "oud )e entited to said pro"eedsony in de-aut o- te -irst "ontingen"y. 'o sustain te)ene-i"iary=s "aim +oud )e to atogeter eiminate -romte poi"ies te "ondition tat te insurer ,agrees to payto te insured i- i2ing.

'is "on"usion taies +it Ameri"an Autorities +osay tatJ 'e interest o- te insured in te pro"eeds o-te insuran"e depends upon is sur2i2a o- te e5pirationo- te endo+ment period. Upon te insured=s deat6

+itin te period6 te )ene-i"iary +i ta*e6 as against tepersona representati2es te endo+ment period6 te)ene-its are paya)e to im or to is assignee6not+itstanding a )ene-i"iary is designated in te poi"y.(Amur and Cou" Cy"opedia o- Insuran"e


28/79


Bn an. 1F 1$96 !imayuga pro"essed an ordinaryi-e insuran"e poi"y -rom Piami-e and designatedis +i-e and "idren as irre2o"a)e )ene-i"iaries.

Bn @e). 6 10%6 !imayuga -ied a petition in "ourtto amend te designation o- te )ene-i"iaries in ispoi"y -rom irre2o"a)e to re2o"a)e.


29/79

INSURANCE REVIEWER Atty. Quimson page

Se". 11()& "eary indi"ates tat tere is need -or teempoyee to -ie an appi"ation -or retirement insuran"e)ene-its +en e )e"omes a 8SIS mem)er and to stateis )ene-i"iary. 'e i-e insuran"e and te retirementinsuran"e are t+o separate and distin"t systems o-)ene-its paid out -rom separate and distin"t -unds.

In "ase o- -aiure to name a )ene-i"iary in aninsuran"e poi"y6 te pro"eeds +i a""rue to te estate o-te insured. And +en tere e5ists t+o marriages6 ea"-amiy +i )e entited to one:a- o- te estate.

98 Ge"cio *5 S&n Li)e (re#eat, case 1A)0, PHIL /

Fact

Suni-e issued a i-e insuran"e poi"y to 8er"io6 te-ormer agreeing to insure te i-e o- 8er"io -or ' to)e paid to im on @e). 16 19% or i- e soud die)e-ore said date6 ten to is +i-e Andrea6 soud sesur2i2e im; oter+ise to te e5e"utor6 administratoro- 8er"io.

'e poi"y did not in"ude any pro2ision reser2ing to8er"io te rigt to "ange te )ene-i"iary.

'e +i-e +as "on2i"ted o- adutery and a de"ree o-di2or"e +as issued.

8er"io noti-ied Suni-e tat e ad re2o*ed isdonation in -a2or o- Andrea and tat e addesignated is present +i-e Adea as is )ene-i"iary.

Suni-e re-used to "ange te )ene-i"iary.

I&e WBN 8er"io may "ange te )ene-i"iary in tepoi"y.

He#%5 NO5I- te poi"y "ontains no pro2ision autori4ing a

"ange o- )ene-i"iary +itout te )ene-i"iary=s "onsent6te insured "annot ma*e su" "ange. It is ed tat ai-e insuran"e poi"y o- a us)and made paya)e to is+i-e as a )ene-i"iary is te separate property o- te)ene-i"iary and )eyond te "ontro o- te us)and.(NB'EJ tis "ase is )ased on te od rue under teInsuran"e A"t&

Court aso ed tat te designation o- a)ene-i"iary tat is originay 2aid does NB' render itin2aid dut to a su)seGuent "essation o- te interests)et+een te )ene-i"iary and insured.

Section 15 'e interest o- a )ene-i"iary in

a i-e insuran"e poi"y sa )e -or-eited +en te)ene-i"iary is te prin"ipa6 a""ompi"e ora""essory in +i-uy )ringing a)out te deat o-te insured; in +i" e2ent6 te nearest reati2eo- te insured sa re"ei2e te pro"eeds o- saidinsuran"e i- not oter+ise Guai-ied.

Who a"e the nea"et "e#ati*eB 2entione% he"e'

'ose reated to te de"edent in te order mentionedunder te rues o- intestate su""ession su" asJ (teorder o- te -oo+ing reati2es are as -oo+s&

1. 'e egitimate "idren;. 'e -ater and moter6 i- i2ing;9. 'e grand-ater and grandmoter; or

as"endants nearest in degree6 i- i2ing;

#. 'e iegitimate "idren;F. 'e sur2i2ing spouse; and$. 'e "oatera reati2es6 to +itJ

a. 3roters and sisters o- te -u )ood;). 3roters and sisters o- te a-:)ood;

and". Nepe+s and nie"es

/. In de-aut o- te a)o2e6 te S'A'E sa )eentited to re"ei2e te insuran"e pro"eeds.

P"o$#e2

+ark is ins!red$ =is nearest reatives are8

1) 'nakin, the eitimate chid0) Jor-e and a, the eitimate father and mother3) Eoo and Eoa, randfather and randmother (or

ascendants in the nearest deree)4) Bastardo, the ieitimate chidC) Eois Eane, the s!rvivin s#o!se) +oatera reatives to wit8

a) !a, brother of f! boodb) 'f, brother of haf boodc) /e#, ne#hew

hat if a of the above are nowhere to be fo!nd>'en te State o- rypton is entited to te pro"eeds.

S!##ose that Eois Eane masterminded a #an to ki +ark

and 'nakin carried it o!t$ 'nakin and Eois wereconvicted of m!rder$ =owever, the are aso instit!ted asbeneficiaries in the ins!rance #oic of +ark, and the

#roceeds are the on #ro#erties avaiabe for distrib!tionto the heirs$ 2n case a three are convicted who ets the

#roceeds>

Sin"e Ana*in6 te egitimate "id and


30/79

INSURANCE REVIEWER Atty. Quimson page 9%

>eaning6 in order to -ind out i- Ana*in is Guai-ied6re-eren"e must )e made to a+s o- su""ession.

A""ording to Art. 1%# o- te CC6 te pro2isionsreating to in"apa"ity )y +i are eGuay appi"a)e tointestate su""ession; and a""ording to Art. 1%9 (&6 anyperson +o as )een "on2i"ted o- an attempt against te

i-e o- te testator is in"apa)e o- su""eeding )y reason o-unworthiness. 7en"e6 te "orre"t ans+er to tispro)em is NB. Ana*in is not entited to te pro"eeds andsu)seGuenty te insuran"e pro"eeds +i )e di2ided aspro2ided -or in te -irst ans+er.

2n case 'nakin and Eois are not convicted, b!t both areinstit!ted as beneficiaries of +ark, can the sti coectthe #roceeds>

'ere is no a+ or urispruden"e tat treats o- tissituation. 7o+e2er6 Atty. Quimson said in "ass tat teremust )e a conviction )e-ore Se". 1 "an operate todisGuai-y or -or-eit te interests o- Ana*in and


31/79


32/79


!espite repeated assuran"es )y enit=s soi"itingagent6 it re-used and -aied to sette and pay"ompainant=s insuran"e "aim.

Compainant see*s not ony te payment o- saidinsuran"e "aim o- /%' pus ega interest6 atty=s -ees6and itigation e5penses6 )ut aso te re2o"ation or"an"eation o- te i"ense o- enit to do insuran"e

)usiness. enit on te oter and "ontends tatJ

o Compainant is not te rea party in interestsin"e te poi"y "arries +it it a designatedoss payee6 te 3A @inan"e Corp

o 'e poi"y insures against oss or damage"aused )y -ire and igtning6 et"6 +ie te-tor ro))ery is NB' insured against in tepoi"y6 it not a2ing )een e5pressymentioned

o ania on or a)out!e"em)er 116 1/$ and see*s to re"o2er -rom@iipino te amount o- PF16F$0.$ representingdamages to said sipment +i" as )een insured)y @iipino.

@iipino )rougt a tird party "ompaint againstCompagnie >aritime !es Cargeurs Reunis andKorE. Ra4on6 In". see*ing udgment against te tirdparty de-endants in "ase udgment is renderedagainst it.

It appears -rom te e2iden"e presented tat Caoinsured said sipment +it @iipino -or te sum o-P$/6$F9.F -or te goods des"ri)ed as $%% metri"tons o- -ismea in gunny )ags o- % *ios ea" -rom3ang*o*6 'aiand to >ania against a ris*s under+areouse to +areouse terms.

A"tuay6 +at +as imported +as F.#% metri" tonsnot $%% tons at 9F.# a ton.

'e -ismea in $$$ gunny )ags +ere unoaded -romte sip on !e"em)er 116 1/$ at >ania unto tearrastre "ontra"tor E. Ra4on6 In". and @iipino=ssur2eyor as"ertained and "erti-ied tat in su"dis"arge 1%F )ags +ere in )ad order "ondition asointy sur2eyed )y te sipLs agent and te arrastre"ontra"tor.

3ased on said "omputation te Cao made a -orma

"aim against te @iipino -or PF16F$0.$. A -orma"aim statement +as aso presented )y te painti--against te 2esse6 )ut te @iipino re-used to pay te"aim.

I&e Reo#&tionii#ino contends that an 5a risks5 marine #oic has atechnica meanin in ins!rance in that before a caim canbe com#ensabe it is essentia that there m!st be 5somefort!it,5 5cas!at5 or 5accidenta ca!se5 to which theaeed oss is attrib!tabe and the fai!re of herein



33/79


#rivate res#ondent, !#on whom a the b!rden, toadd!ce evidence showin that the aeed oss to thecaro in !estion was d!e to a fort!ito!s event #rec!deshis riht to recover from the ins!rance #oic$

SC did not upod tis "ontention.An Ma ris*s poi"yMsoud )e read iteray as meaning a ris*s +atsoe2er

and "o2ering a osses )y an a""identa "ause o- any*ind. 'e terms Ma""identM and Ma""identaM6 as used ininsuran"e "ontra"ts6 a2e not a"Guired any te"ni"ameaning. 'ey are "onstrued )y te "ourts in teirordinary and "ommon a""eptan"e. 'us6 te terms a2e)een ta*en to mean tat +i" appens )y "an"e or-ortuitousy6 +itout intention and design6 and +i" isune5pe"ted6 unusua and un-oreseen. An a""ident is ane2ent tat ta*es pa"e +itout oneLs -oresigt ore5pe"tation; an e2ent tat pro"eeds -rom an un*no+n"ause6 or is an unusua e--e"t o- a *no+n "ause and6tere-ore6 not e5pe"ted.

Co2erage under an Ma ris*sM pro2ision o- a marineinsuran"e poi"y "reates a spe"ia type o- insuran"e

+i" e5tends "o2erage to ris*s not usuay "ontempatedand a2oids putting upon te insured te )urden o-esta)ising tat te oss +as due to te peri -aing+itin te poi"yLs "o2erage; te insurer "an a2oid"o2erage upon demonstrating tat a spe"i-i" pro2isione5pressy e5"udes te oss -rom "o2erage. A marineinsuran"e poi"y pro2iding tat te insuran"e +as to )eMagainst a ris*sM must )e "onstrued as "reating a spe"iainsuran"e and e5tending to oter ris*s tan are usuay"ontempated6 and "o2ers a osses e5"ept su" as arise-rom te -raud o- te insured. 'e )urden o- te insured6tere-ore6 is to pro2e merey tat te goods etransported a2e )een ost6 destroyed or deteriorated.'erea-ter6 te )urden is si-ted to te insurer to pro2etat te oss +as due to e5"epted peris. 'o impose on

te insured te )urden o- pro2ing te pre"ise "ause o- teoss or damage +oud )e in"onsistent +it te )roadprote"ti2e purpose o- Ma ris*sM insuran"e.

In te present "ase6 tere )eing no so+ing tat teoss +as "aused )y any o- te e5"epted peris6 teinsurer is ia)e under te poi"y

ii#ino contends that +hao does not have ins!rabeinterest, bein on a consinee of the oods$

Anent te issue o- insura)e interest6 SC uped teruing o- te CA tat Cao6 as "onsignee o- te goods intransit under an in2oi"e "ontaining te terms under MC ?@ >ania6M as insura)e interest in said goods.

Se"tion 19 o- te Insuran"e Code de-ines insura)einterest in property as e2ery interest in property6 +eterrea or persona6 or any reation tereto6 or ia)iity inrespe"t tereo-6 o- su" nature tat a "ontempated perimigt dire"ty damni-y te insured. In prin"ipe6 anyoneas an insura)e interest in property +o deri2es a)ene-it -rom its e5isten"e or +oud su--er oss -rom itsdestru"tion +eter e as or as not any tite in6 or ienupon or possession o- te property. Insura)e interest in

property may "onsist in (a& an e5isting interest; ()& anin"oate interest -ounded on an e5isting interest; or ("& ane5pe"tan"y6 "ouped +it an e5isting interest in tat out o-+i" te e5pe"tan"y arises.

Cao6 as 2endeeK"onsignee o- te goods in transitas su" e5isting interest terein as may )e te su)e"t

o- a 2aid "ontra"t o- insuran"e. 7is interest o2er tegoods is )ased on te per-e"ted "ontra"t o- sae. 'eper-e"ted "ontra"t o- sae )et+een im and te sipper o-te goods operates to 2est in im an eGuita)e tite e2en)e-ore dei2ery or )e-ore e per-ormed te "onditions o-te sae. 'e "ontra"t o- sipment6 +eter [email protected] [email protected] or C. ? @. as in tis "ase6 is immateria inte determination o- +eter te 2endee as an insura)einterest or not in te goods in transit. 'e per-e"ted"ontra"t o- sae e2en +itout dei2ery 2ests in te 2endeean eGuita)e tite6 an e5isting interest o2er te goodssu--i"ient to )e te su)e"t o- insuran"e

Section 15 A "arrier or depository o- any

*ind as an insura)e interest in a ting ed )yim as su"6 to te e5tent o- is ia)iity )ut notto e5"eed te 2aue tereo-.

What i the "eaon )o" thi !"o*iion''e oss o- te ting may ma*e te "arrier or

depositary ia)e to te o+ner o- te goods6 to te e5tento- te 2aue o- te goods6 and te a+ tere-ore ao+ssu" a "arrier or depositary to insure is possi)e ia)iitytere-or.

P"o$#e25

M7P Mar Jane, a common carrier, ins!red @eter@arkerHs oods, va!ed at 1M with '$M'? 2ns!rance+om#an for 0M$ *he vesse was hit b ihtnin, ca!htfire, and sank$ Mar Jane is now caimin 0M from

'$M'? beca!se the #oic stated that the oss d!e toihtnin is com#ensabe$ '$M'? denies iabiit on thero!nd that8 (1) Mar Jane is not the owner of the oodsand therefore has no ins!rabe interest and (0) MarJane cannot caim more than the va!e of the oods ost$Fecide$

A""ording to Se". 1F6 a "arrier as insura)e interestin a ting ed )y im as su". 7en"e6 >ary ane asinsura)e interest o2er te goods o- Peter Par*er.7o+e2er6 te same pro2ision aso states tat su"

insura)e interest is ony up to te e5tent o- is ia)iityand not to e5"eed te 2aue o- te ting. Sin"e te 2aueo- te goods is ony 1>6 ten >ary ane "an ony "oe"t1>.

Cae

/8 Lo!e *5 De# Roa"io00 PHIL 9,

Fact



34/79

INSURANCE REVIEWER Atty. Quimson page 9#

3enita !e Rosario is te o+ner o- a )onded+areouse in >ania +ere "opra and otermer"andise are deposited.

Among tose +o ad "opra deposited in te+areouse +as @roian ere ope or e5pe"tation o- )ene-it +i" may )e-rustrated )y te appening o- some e2ent un"ouped+it any present ega rigt +i not support a "ontra"t o-insuran"e.

E@a2!#eA son "annot insure te property o- is -ater +i"

e e5pe"ts to inerit -rom te atter6 or a us)and insuringte paraperna property o- is +i-e; te reason )eing6teir interest is merey an e5pe"tan"y o- ineriting6 andte rigts to su""ession are transmitted ony -rom temoment o- te deat o- te de"edent.

Section 175 'e measure o- an insura)einterest in te property is te e5tent to +i" teinsured migt )e damni-ied )y oss or inurytereo-.

P"o$#e25

' ins!red his #ro#ert va!ed at @1GG,GGG for @10G,GGG$' s!ffered a tota oss$ =ow m!ch is he entited to

recover>

A is entited to re"o2er ony te 2aue o- is oss+i" is 1%%' and not 1%' )e"ause it is against pu)i"poi"y to pro-it -rom a oss.

hat if the one who ca!sed the damae, B #aid '@AG,GGG> hat is the iabiit of the 2ns!rance +om#an>

'e insuran"e "aim is redu"ed in te same amounto- 0%'. Anyting tat redu"es or diminises te oss6redu"es and diminised te amount +i" te insurer is)ound to pay. 7en"e te insurer is ia)ie -or %'.

Nnder a b!idin contract, ' constr!cted a ho!se in 'aa'aban for 4M for U who made an advance #ament of1M, the baance to be #aid !#on deiver of the ho!se on

'!$ 13, 1993$ ' finished the ho!se on J! 13, 1993 sohe ins!red the ho!se aainst fire for 4M$ Before deiverof the ho!se in '!!st, the ho!se b!rned down$ hat isthe e&tent of the ins!rabe interest of '>

It is sti #>6 not+itstanding te -a"t tat e asre"ei2ed -rom 1> as ad2an"e payment. 'e reason+y e is entited to te +oe #> is6 e as to repa"ete ouse destroyed +it anoter ouse +ort #> as perte "ontra"t6 not one 2aued at ony 9>. In oter +ords6#> +as te e5tent to +i" A +as damni-ied )y te osso- te ouse.

Cae

/68 San ?i3&e# "e(e"4 *5 La( Union Roc;In&"ance Co2!an4(repeat "ase O1&

0- PHIL 670

Fact



35/79

INSURANCE REVIEWER Atty. Quimson page 9F

Bn an. 16 1106 !unn mortgaged a par"e o- andto S>3 to se"ure a de)t

the insurance code of 1976, rhys-murillo

Documents