insurance atty filoteo.docx

8/19/2019 insurance atty filoteo.docx

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M O N D A Y , J A N U A R Y 1 6 , 2 0 0 6

INSURANCE LAW

Course Outline

A. BASIC PRINCIPLES

1. Insurance Defined

1-a. Definition – Agreement whereby one undertakes for a consideration to

indemnify another against loss, damage or liability

1-b. Limitation – Ecludes life insurance which is a contract u!on condition, not oneof indemnification

1 Laws A!!licable

"-a. #ain Law – Insurance $ode %&.D. '1"(

"-b. )u!!letory Laws

1. $i*il $ode of the &hili!!ines %Arts. +, "11-"1"(

". /)I) Law

0. ))) Law

. Act "2+0 %#utual Insurance on 3ork Animals(

1 4A '2' %&ro!erty Insurance Law(

" 4A 01" %Industrial Life Insurance(

0 &D 01+ %Insurance $oo!erati*es(

&D 1'1 %$ro! Insurance(

1 Im!lementing 5ffice – Insurance $ommissioner


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1 6urisdiction

-a. Insurance $ommissioner

1. Ad7udicate claims8com!laints for amounts not eceeding &1,8claim

1 Liability of 4einsurer

" Liability under )uretyshi!

0 Liability of a #utual 9enefit Association

$ounterclaims against Insured

2 $ross-claims against co-!arty

' :hird-!arty claims by insurer against another

-b. 4egular $ourts

1. $laims abo*e 1: but less than 0: – #unici!al :rial $ourt

". $laims abo*e 0: – 4egional :rial $ourt

0. see Republic Act 7691

2. $lasses of Insurance

2-a. Life Insurance

1. $lassifications

a. Indi*idual ;)ecs. 1+-10< ""+, I.C.=

b. /rou! Life ;)ecs. 2< "", I.C.=

c. Industrial Life ;)ecs. ""-"01, I.C.=

1 >inds –


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a. 5rdinary – !ayment e*ery year until death

b. Limited &ayment &olicy – !ayment for a limited !eriod. If the insured

dies, his beneficiary claims. If he sur*i*es, no claim

c. Endowment &olicy – !ayment for a limited !eriod. If the insured dies,

his beneficiary claims. If he outli*es !olicy, he claims.

d. :erm Insurance – !ayment once that co*ers a s!ecified !eriod. If

insured dies, beneficiary claims. If he sur*i*es, no claim.

2-b. ?on-Life Insurance

1. #arine ;)ecs. -1'', I.C.=

". @ire ;)ecs. 1'+-1+0, I.C.=

0. $asualty ;)ec. 1+, I.C.=

2-c. )uretyshi! and 9onding ;)ecs. 1+2-1+, I.C.=

'. $haracteristics of Insurance $ontract

'-a. Aleatory

'-b. oluntary

'-c. Eecutory

'-d. $om!ensatory

'-e. &ersonal

'-f. &erfect good faith

'-g. )ynallagmatic

+. $onstruction of Insurance $ontracts

+-a. Laws86uris!rudence


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1. $alifornia Insurance $ode

". )tatute is ado!ted along with its $onstruction

+-b. &ro*isions8)ti!ulations

1. $ontract of Adhesion

". Article 10++, $i*il $ode

+-c. $asesB

1. Constantino vs. Asia Life ;+ &hil. "=

". Insular Life vs. Ebrado ; )$4A 11=

0. Del Rosario vs. Equitable Insurance ;11 &hil. 0=

B. ELEMENTS OF INSURANCE CONTRACT

1. $onsent

1-a. #eeting of minds

1-b. $oncurrence of offer and acce!tance both as to the ob7ect and consideration

1-c. $ogniti*e theory

". 5b7ect

"-a. Assum!tion of loss, damage or liability by the insurer ;Art. 11+, Civil Code=

"-b. 3hat #ay be Insured Against ;)ection 0, I.C.=

1. $ontingent E*ent

a. @uture

b. 4esulting to loss, damage or liability

". Cnknown E*ent


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a. &ast, unknown to the !arties

b. 4esulting to loss, damage or liability

"-c. >inds of Insurable 4isks

1. &ersonal risks – life, health, accident

". &ro!erty risks – loss, damage

0. Liability risks – liability for in7ury to third !ersons

0. $ause or $onsideration – &ayment of &remium

. Insurable Interest – necessary to !re*ent contract from being waggering

C. PARTIES TO INSURANCE CONTRACT

1. Insurer

1-a. Definition ;)ec. 1, I.C.=

1-b. Authoried to :ransact Insurance 9usiness ;)ec. ', I.C.=

1-c. &enal &ro*isions ;)ecs. "< 1, I.C .=

1 Insured

"-a. $a!acity to enter into contract

"-b. Insurable Interest

"-c. ?ot a !ublic enemy ;)ection +, I.C.=

1. &ublic enemy refers to a nation where the &hili!!ines is at war

". It includes e*ery citien or sub7ect of such nation ;Filipinas Cia de e!uros vs.

C"ristian #uenefeld $ Co., &hil. 2=

0. 9eneficiary


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0-a. 4ule

1. Designation of beneficiary is discretionary

". Absence, !ayable to estate of insured

0-b. >inds of 9eneficiary –

1. As to )uccession

a. &rimary beneficiary who is first entitled to the !roceeds of insurance

b. )econdary beneficiary who is entitled to the !roceeds of insurance in

case the !rimary beneficiary dies

". As to 4e*ocability

a. 4e*ocable – the insured reser*es the right to make future changes in the

designation

b. Irre*ocable – such beneficiary cannot be changed by the insured or other !erson

without the consent of the beneficiary

0-c. In Life Insurance

1. Designation of beneficiary is akin to donations and sub7ect to !roscri!tions on

donations ;Art. +0, Civil Code=

". /rounds for @orfeiture – if he !artici!ated in willfully bringing about the death of

insured as

a. &rinci!al

b. Accom!lice

c. Accessory ;)ec. 1", I.C.=

0. Designation of disualified beneficiary is *oid but does not a*oid insurance


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0-d. In &ro!erty Insurance, beneficiary is reuired to ha*e an Insurable Interest in

the !ro!erty insured ;)ec. 1, I.C.=

D. INSURABLE INTEREST

1. Definition8Elements

1-a. 4elation, connection or concern of one !erson to another, a thing or !ro!erty

1-b. Fe deri*es !ecuniary ad*antage8benefit from its !reser*ation

1-c. Fe suffers !ecuniary loss or damage from its destruction, termination or in7ury

1 Distinctions

"-a. &ecuniary *s. non-!ecuniary

"-b. &artial Loss

"-c. Amount of insurance co*erage

1. Life – no limit

". &ro!erty – etent to which the insured might be damnified by the loss or

in7ury ;)ection 1+, I.C.=

"-d. Incontestability clause

"-e. Eistence

1. Life – at the time insurance takes effect

". &ro!erty – at the time insurance takes effect and at the time of loss ;)ection

1, I.C.=

"-f. )ubrogation

1 Insurable Interest in Life


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0-a. $o*erage – In the life and health of

1. Fimself, his s!ouse or his children<

". Any !erson on whom he de!ends wholly or in !art for education or su!!ort, or in

whom he has a !ecuniary interest<

0. Any !erson under legal obligation to him for the !ayment of money, or

res!ecting !ro!erty or ser*ices, of which death or illness might delay or !re*ent the

!erformance< and

. Any !erson u!on whose life any estate or interest *ested in him de!ends

;)ection 1, I.C.=

0-b. 3hen considered !ro!erty – 5utside himself, s!ouse or children, insurableinterest must be !ecuniary

1 Insurable Interest in &ro!erty

-a. Definition – any interest in !ro!erty, whether real or !ersonal, or any relation

thereto, or liability in res!ect thereof, of such nature that a contem!lated !eril

might damnify the insured ;)ec. 10, I.C.=

-b. $o*erage

1. Eisting interest

". Inchoate interest founded on eisting interest

0. E!ectancy, cou!led with an eisting interest out of which e!ectancy arises

;)ec. 1, I.C.=

-c. Inchoate 4ights *s. E!ectancy

1. 4ight is inchoate when the transmission of the !ro!erty de!ends on a !eriod or

an e*ent that is certain to occur

". 4ight is e!ectancy when the realiation of income or acuisition of right is

conditional


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2. $hange of Interest

2-a. /eneral 4uleB )us!ends !olicy ;)ections " and 22, I.C.=

2-b. Ece!tions –

1. After occurrence of in7ury

". 5ne or more distinct things se!arately insured under one !olicy

0. 9y will or succession

. :ransfer of interest from one !artner, 7oint owner, co-owner to others

;)ections "1-"", I.C.=

2. Insurance is for the benefit of whomsoe*er during the continuance of the

!olicy ;)ection 2+, I.C.=

E. POLICY

1. :y!es of Insurance $ontract

1-a. &olicy – written instrument in which a $ontract of Insurance is set forth

;)ection , I.C.=

1-b. 9inding 4ecei!t – acknowledgment that branch recei*ed !remium and

acce!ted a!!lication sub7ect to !rocessing by Fead 5ffice ;%reat &acific Life vs.

Court of Appeals, )$4A 20=

1-c. $o*er ?ote – recei!t whereby insurer agrees to contract good for ' days

!ending issuance of a regular !olicy ;)ection 2", I.C.=

1 >inds of &olicy

"-a. 5!en &olicy – *alue of thing insured is determined at the time of loss ;)ection

', I.C.=

"-b. alued &olicy – *alue of !ro!erty or life insured is determined at the time

insurance is taken ;)ection '1, I.C.=


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"-c. 4unning &olicy – contem!lates successi*e insurance, ob7ect defined from time

to time ;)ection '", I.C.=

1 $ontents of &olicy

0-a. &arties

0-b. Amount of insurance

0-c. Amount of &remium

0-d. &ro!erty or life insured

0-e. Insurable interest

0-f. 4isks insured against

0-g. Insurance !eriod ;)ection 21, I.C.=

1 4iders in &olicy

-a. Defined – !rinted or ty!ed sti!ulation contained on a sli! of !a!er attached to

!olicy forming an integral !art thereof

-b. 4euirements for alidity

1. :itle or name of rider mentioned in the !olicy

". $ounter-signed by the insured

0. If insured !re!ared the rider or made u!on his reuest, no signature

necessary

-c. $onstruction

1. In case of conflict between !olicy and rider, rider !re*ails

". 4easonB It is a more deliberate Ge!ression of !artiesH agreement

2. 4enewal of &olicy


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2-a. ?on-life Insurance – the insured has the right to renew insurance contract

under same terms and conditions unless the insurer sent notice not to renew within

2 days !rior to its e!iration

2-b. Life Insurance –

'. Double Insurance and 5*er-Insurance

'-a. Double Insurance

1. Defined – Eists where the same !erson is insured by se*eral insurers se!arately

in res!ect to the same sub7ect and interest ;)ection 0, I.C.=

". 4euisitesB

a. 5ne and the same insured

b. 5ne and the same insurable interest

c. 5ne and the same risk or !eril insured against

d. :wo or more insurers se!arately

0. &rohibitions

a. Double insurance may be !rohibited under a !olicy

b. &ur!ose is to !re*ent o*er-insurance and thus a*ert the !er!etuation of fraud

;&ioneer Insurance and uret' Corp. vs. (ap, '1 )$4A "'=

. Effects of Double Insurance

a. Insured can reco*er, before or after the loss, from the insurers the ecess

!remium !aid

b. In case of loss, insurers are liable se*erally to the etent of their co*erage.

Insured can reco*er from any of the insurers to the etent of his loss

'-b. 5*er-Insurance


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1. Defined – :here is o*er-insurance when the amount of the insurance is beyond

the *alue of the insuredHs insurable interest

". Distinctions with Double Insurance

a. Double insurance does not always result to o*er-insurance

b. Double insurance in*ol*es two or more insurers while there may be o*er-

insurance with one insurer only

'-c. 5*er-Insurance by Double Insurance ;)ection , I.C.=

+. 4einsurance

+-a. Defined – one by which an insurer !rocures a third !erson to insure him

against loss or liability by reason of such original insurance ;)ection 2, I.C.=

+-b. Distinction with Double Insurance

1. In double insurance, original insurer remains as insurer< in reinsurance, the

original insurer becomes an insured<

". In double insurance, sub7ect is !ro!erty %same interest(< in reinsurance, sub7ect

is the original insurerHs risk %different interest(<

0. In double insurance, insured is the !arty to all the contracts< in reinsurance,

insured has no interest therein

+-c. &rinci!les

1. 5riginal insured has no interest in reinsurance ;)ection , I.C.=

". Insurer is duty-bound to –

a. $ommunicate to reinsurer all the re!resentations of the original insured and all

the knowledge and information the insurer !ossesses material to the risk

b. Ece!tionB Automatic reinsurance treaty being a self-eecuting agreement

between two or more insurance com!anies whereby one will reinsure !art of any

line of insurance taken by the other ;)ection ', I.C.=


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". 4einsurer is entitled to a*ail of e*ery defense which the insurer can inter!ose

against the !erson originally insured

0. If reinsurance is one of indemnity for losses suffered by the insurer, original

insured has no interest in the reinsurance contract ; Arte) Develop*ent Co. vs.

+ellin!ton Insurance Co*pan' , 21 )$4A 02"=

1 If reinsurance contains a !ro*ision whereby the reinsurer binds himself to

!ay the insured for any loss which the insurer may become obliged to !ay

under the original !olicy, then the reinsurer becomes liable to the insured

who may go against both the insurer and the reinsurer.

F. PREMIUM

1. &remium defined – agreed !rice for assuming and carrying the risk

". Effects of ?on-!ayment of &remium

"-a. @irst &remium

1. &re*ents contract from becoming binding notwithstanding acce!tance of the

a!!lication ;Constantino vs. Asia Life Insurance Co., + &hil. "<

". 9ut the non-!ayment of the balance of the !remium does not a*oid the !olicy

;&"ilippine &"oeni) uret' $ Insurance, Inc. vs. +ood-ors, Inc ., " )$4A 1"+=

0. Acknowledgment in the !olicy of recei!t of !remium is conclusi*e e*idence of

!ayment ;)ection +, I.C.=

"-b. )ubseuent &remium

1. Does not ipso facto a*oids the !olicy

". It only entitles the insurer to cancel the contract of insurance ;)ection ', I.C.=

0. 4eturn of &remiums

0-a. :otal 4efund


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1. In !ro!erty insurance where no !art of interest in thing insured was e!osed to

!eril ;)ection +%a(, I.C.=

". $ontract is *oidable due to fraud or misre!resentation by insurer ;)ection

1, I.C.=

0. $ontract is *oidable because of the eistence of facts of which the insured was

ignorant without his fault ;Ibid =

1 Insurer ne*er incurred liability ;Ibid =

" 4escission is granted due to the insurerHs breach of contract

0-b. &artial 4efund

1. Insurance is for a definite !eriod and insured surrenders !olicy !rior to e!iration

of such !eriod ;)ection +%b(, I.C.=

". &ursuant to a short-!eriod clause !ro*ision in the !olicy

0. In case of 5*er-Insurance

0-c. $asesB

1. %reat &acific Life Insurance Corporation vs. Court of Appeals ;1 )$4A 21=

". ison vs. un Life Assurance Co*pan' of Canada ;+ 5./. 12 %1(=

G. DEFENSES

1. Defenses :hat A*oids &olicy – Insurer need not cancel the !olicy. Any of

these grounds ipso facto negates a *alid insurance contract. :hus –

1-a. Lack of any of the essential reuisites of contract

1. $onsent, through the *ices of consent

". Insurable interest

0. ?on-!ayment of first !remium ece!t when there is a written acknowledgment

thereof ;)ections ++ and +, I.C.=


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1-b. &rescri!tion – failure to commence an action from accrual of the right of

action, that is, from denial of claim by the insurer

1. If no sti!ulation, 1 years ;Art. 11, Civil Code=

". If there is sti!ulation, same *alid but in no case that it shall be less than 1 year

;)ection '0, I.C.=

1-c. iolation of double insurance clause !ro*ision in a !olicy ;&ioneer Insurance

and uret' Corporation vs. (ap, '1 )$4A "'=

1 Defenses that /i*e /round to $ancel &olicy – Insurer must first cancel the

!olicy !rior to the commencement of an action thereon ;)ection , I.C.=. If

the !olicy is cancelled, no reco*ery can be made by the insured or his

beneficiary

"-a. /rounds for $ancellation

1. $oncealment ;)ection "+, I.C.=

a. Defined – ?eglect to communicate that which a !arty knows and ought to

communicate ;)ection "', I.$.=

b. $haracteristics –

1. :his is an omission

". #ust be shown to be material, that is, affects insurerHs decision to enter into

contract, in estimating degree of risk or fiing the !remium

0. 3ithin the knowledge of insured but he makes no warranty

. #ay be intentional or unintentional

1 #isre!resentation ;)ection 2, I.C.=

a. Defined – oral or written statement of a fact or condition affecting risk made by

insured to insurer tending to induce the insurer to assume the risk



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1. :his is commission

". Inducing factor to a contract

0. #ust be shown to be material by the insurer

. Insured makes no warranty

2. Always intentional

'. 4euires substantial com!liance

+. #ay be wai*ed by acce!tance of !remium des!ite knowledge thereof ;)ection

2, I.C.=

1 iolation of 3arranty

a. 3arranty Defined – )tatement in a !olicy of a matter relating to the !erson or

thing insured or to the risk as a fact


1. :his is commission

". It is !art of the contract

0. &resumed material and reuires strict com!liance

. iolation of a material warranty entitles either !arty to rescind while *iolation of

an immaterial warrants does not a*oid !olicy unless e!ressly declared ;)ections

+ and +2, I.C.=

c. >inds of 3arranty –

1. E!ress – stated in the !olicy itself as a fact ;)ection +1, I.C.=

". Im!lied – deri*ed from the *ery nature of the contract

0. Affirmati*e – asserts the eistence of fact or condition at the time it is made


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. &romissory – referring to future acts !artaking the nature of a condition

subseuent ;)ection +", I.C.=

d. $asesB

1. (oun! vs. /idland 0e)tile Ins. Co. ;0 &hil. '1+=

". ua C"ee %an vs. La- 2nion $ Roc Insurance Co. ; &hil. 2=

0. %eneral Insurance $ uret' Corp. vs. 3! #ua ;1' &hil. 111+=

1 ?on-!ayment of subseuent !remium

" $on*iction of a crime arising out of acts increasing the haard insured against

0 Disco*ery of fraud or material misre!re-sentation

Disco*ery of willful or reckless acts or omissions increasing the haard

insured against

2 &hysical changes in the !ro!erty insured which resulted in !ro!erty becoming

uninsurable

' Determination of Insurance $ommis-sioner that the continuation of !olicy

*iolates or !laces the insurer in *iolation of Insurance $ode ;)ection ', I.C.=

"-b. &rocedures

1. 5ccurrence of a *alid ground after effecti*ity of the !olicy

". 3ritten notice deli*ered to insured

a. At the address stated in !olicy

b. )tating the *alid ground

0. @urnish facts to insured u!on reuest ;)ection '2, I.C.=

"-c. $asesB


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1. aura I*port4E)port Co*pan' vs. &"ilippine International uret' ; )$4A 10=

". /ala'an Insurance Co*pan' vs. Arnaldo ;12 )$4A '+"=

0. &aulino vs. Capital Insurance ;12 &hil. 1012=

0. /rounds to Defeat 4eco*ery by Insured

0-a. Loss, damage or in7ury caused by an ece!ted risk ;)ection ', I.C.=

1. Losses Insurer Liable ;)ections -', I.C.=

a. Loss where the proi!"te #"use is the insured !eril ;)ection , I.C.=

b. Loss caused by e$$orts to res#ue the thing insured from insured !eril ;)ection

2, I.C.=

c. Loss caused by a peril not insure% "&"inst to which the thing insured was

e!osed in the course of its rescue from the insured !eril ;)ection 2,I.C.=

a. Loss, the i!!e%i"te #"use of which was the insured !eril if the

!roimate cause is not an ece!ted !eril ;)ection ',I.C.=

b. Loss caused by the negligence of the insured ;)ection +,I.C.=

". Losses Insurer ?ot Liable

a. Loss where the re!ote #"use is an insured !eril ;)ection , I.C.=. 4emote

cause is one where the effect is uncertain, *ague or does not necessarily follow

;9lackHs Law Dictionary, !. 11'=.

b. Loss where the proi!"te #"use is an ece!ted !eril e*en if thei!!e%i"te

#"use is not an ece!ted !eril ;)ection ', I.C.=

a. Loss where the proi!"te #"use is not an ece!ted !eril but

the i!!e%i"te #"use is an ece!ted !eril

b. Loss caused by the willful act or through the conni*ance of the insured

;)ection +, I.C.=


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0-b. Lack of notice8!roof of loss ;)ection , I.C.=

1. $onditions

a. ?otice of loss must gi*en to insurer

b. 3hen reuired by !olicy, a !reliminary !roof of loss must likewise be

gi*en

c. $asesB

1. 5ac"rac" vs. 5ritis" A*erican Assurance ;1+ &hil. 22=

". /ala'an Insurance vs. Arnaldo ;12 )$4A '+"=

". 3ai*er of Insurer to ?otice8&roof of Loss

a. Insurer recognies liability

b. Insurer denies liability under !olicy

c. @ailure to ob7ect ;)ection , I.C.=

d. $asesB

1. &acific 0i*ber vs. (ap, ;11" )$4A 1=

". Fernande vs. 3ational Life Insurance Co*pan' ;12 &hil. 2=

0-c. @iling of fraudulent claim

1. Effect – 5!erates to defeat reco*ery u!on any !art of the !olicy ;0uason vs.

3ort" C"ina Insurance Co., + &hil. 1=

". $asesB

a. An honest o*er*aluation is not a fraudulent claim ;Carreron vs. A!caoili , L-1112',

"0 @ebruary 1'1=

b. $laims more than 2 of actual loss is in bad faith and8or fraudulent. :hus, the

insured cannot reco*er ;0an It vs. un Insurance, 21 &hil "1"=


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0-d. )uicide

1. 4ules ;)ection 1-A, I.C.=

a. Insurer liable only after !olicy has been in force for a !eriod of two %"( yearsfrom date of issue or last reinstatement unless !olicy !ro*ides a shorter !eriod

b. )uicide in state of insanity is always com!ensable

1 Ece!tions – :he insurer is not liable if suicide occurred within two %"( years

after !olicy issuance of !olicy or its last reinstatement

0-e. /rounds for cancellation of insurance contract may be in*oked to defeat

reco*ery where the insurer failed to cancel the contract !rior to the commencementof an action thereon by the insured ; Ar!ente vs. +est Coast Life, 21 &hil. +"2=.

'. MARINE INSURANCE

1. :wo #a7or Di*isions of :rans!ortation Insurance

1-a. 5cean #arine Insurance – !ro*ides !rotection for

1. )hi!s or hulls

". /oods or cargoes

0. Earnings such as freightage, !assage, !rofits and commissions ;)ections 1",

12, I.C.=

. Liability incurred by owner or any !arty interested in or res!onsible for the

insured !ro!erty by reason of !erils of the sea

1-b. Inland #arine Insurance – !ro*ides !rotection for

1. &ro!erty in transit

". 9aileeHs %!ersons ha*ing tem!orary custody of the goods or !ro!erty of

others such as carriers, warehouseman, laundrymen, kee!ers of garage(

liability


21/41

0. @ied trans!ortation !ro!erty – co*ering bridges, tunnels and other

instrumentalities of trans!ortation and communication

. @loater – insurance on !ro!erty where*er they may be located

". &erils of the )ea

"-a. &rinci!leB :he insurer undertakes to insure against !erils of the sea, against

!erils of the shi!. @or !erils of the sea, the insured can hold the insurer liable. @or

!erils of the shi!, the in7ured !arty must look to the shi!owner for redress.

"-b. $o*erage –

1. Cnusual *iolence or etraordinary action of wind and wa*es

". 5ther etraordinary causes connected with na*igation

"-c. &erils of the )hi! – loss in the ordinary course of e*ents resulting from

1. ?atural and ine*itable action of the sea

". 3ear and tear of the shi!

0. ?egligent failure of the shi!owner to !ro*ide the *essel with !ro!er

eui!ment to con*ey cargo under ordinary conditions

0. Insurable Interest ofB

0-a. )hi!owner –

1. /eneral 4uleB Fis insurable interest on the *essel is u! to the etent of its *alue

;)ection 1, I.C.=

". Ece!tionsB

a. Loan on bottomry

1. ?ature – it is a loan secured by *essel !ayable only if the *essel safely com!leted

a contem!lated *oyage


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". Liability – In case of loss of the *essel, the shi!owner recei*es no indemnity for

loss but acuires immunity from !ayment of the loan

0. Insurable Interests of )hi!owner – Ecess of the *alue of the *essel o*er the

amount of bottomry loan ;)ection 11, I.C.=

b. $hartered *essels

1. >inds of $harter $ontracts –

a. Affreightment – use of the *essel only, either in whole or in !art, which may beB

:ime charter, that is, for a fied !eriod of time or a oyage charter, that is, for a

!articular *oyage

b. Demise or 9areboat – use of the whole *essel including control o*er na*igationand command of its master and crew

". Insurable Interests – :he insurable Interest of the shi!owner on theB

a. essel – to the etent of the loss which cannot be reco*ered from the charterer

b. @reightage ;)ections 1"-10, I.C.=

0-b. $reditor or lender in bottomry – Insurable interest is u! to the etent of the

loan on bottomry

0-c. $hartererB Fis insurable interest on the –

a. essel – to the etent he is liable to be damnified by the loss of the *essel

;)ection 1', I.C.=

b. @reightage

0-d. $argo 5wner – o*er the cargoes and on e!ected !rofits on his cargoes

a. 3hen shi! is !re*ented from com!leting *oyage due to !eril insured against,

liability of insurer continues after cargoes are reshi!!ed ;)ection 100, I.C.=

b. Insurer is liable for damages, e!enses of discharging, storage, reshi!ment,

etra freight and other e!enses in sa*ing cargo thus reshi!!ed ;)ection 10, I.C.=

. $oncealment


23/41

-a. Definition – @ailure to disclose any material fact or circumstance which is within

or ought to be within the knowledge of one !arty and of which the other has no

actual or !resum!ti*e knowledge ;)ection 1+, I.C.=

-b. 9roader $once!t – Insured is bound to communicate the followingB

1. @acts within his knowledge material to the contract or risk ;)ection ",I.C.=

". 9eliefs or o!inions of third !ersons

0. E!ectations of third !ersons ;)ection 1, I.C.=

-c. Effects of $oncealment

1. /eneral 4uleB Entitles insurer to rescind the contract ;)ection "+, I.C.=

". Ece!tionB #erely eonerates insurer from loss resulting from the risk concealed

–

a. ?ational character of the insured

b. Liability of the thing insured to ca!ture and detention

c. Liability to seiure from breach of foreign laws

a. 3ant of necessary documents

b. Cse of false and simulated !a!ers ;)ection 11, I.C.=

2. 4e!resentation

2-a. Definition – )tatements made to gi*e information to the insurer and otherwise

induct him to enter into the contract

2-b. @alse 4e!resentation

1. $o*erage –

a. #aterial fact with fraudulent intent

b. #aterial fact with no intent to defraud

c. As to e!ectation with fraudulent intent ;)ection 11", I.C.=


24/41

". Effect – Entitles insurer to rescind the contract ;)ection 11, I.C.=

2-c. Distinguished with #isre!resentation as to other Insurance $ontracts -

1. $o*erage – :he insurer must show that the re!resentations of the insured must

be material A?D fraudulent ;Insular Life Assurance Co. vs. &ineda, 5./. "2=

". Effect – Entitles insurer to rescind the contract ;)ection 2, I.C.=

'. Im!lied 3arranties

'-a. ?ature – :hese are warranties which are im!lied from the *ery nature of

maritime *enture. :hus, these would no necessity to ha*e them e!licitly

mentioned in the contract

'-b. @our im!lied warranties –

1. essel is seaworthy

". $arriage of documents showing nationality or neutrality when the same are

e!ressly warranted ;)ection 1", I.C.=

0. ?on-de*iation from agreed *oyage

. ?on-engagement in illegal *enture

'-c. )eaworthiness

1. Definition – a )hi! is seaworthy when it is reasonably fit to !erform the ser*ice,

and to encounter the ordinary !erils of the *oyage contem!lated by the !arties to

the !olicy ;)ection 11, I.C.=.

". 3hen seaworthiness eists

a. /eneral 4uleB At the commencement of the risk ;)ection 112, I.C.=

b. Ece!tionsB

1. :ime &olicy – essel must be seaworthy at the commencement of e*ery *oyage


25/41

". :ransshi!ment of $argoes – each *essel u!on which the cargo is

shi!!ed8transshi!!ed must be seaworthy at the commencement of each !articular

*oyage

0. oyage &olicy that contem!lates different stages, the *essel must be seaworthy

at the commencement of each stage

0. $riteria in determining seaworthiness

a. ?ature of essel – must be fit as to re!air, eui!ment, crew, cargoes and other

res!ects to !erform the *oyage and encounter the ordinary !erils of the sea

b. ?ature of oyage

c. ?ature of )er*ice – reasonably ca!able of safely carrying the cargo to its !ort ofdestination

d. $asesB

1. /adri!al, 0ian!co $ Co*pan' vs. #anson, rt" $ tevenson, Inc., 10 &hil. 02

". Roque vs. Inter*ediate Appellate Court , 10 )$4A 2'

. )co!e of Im!lied 3arranty

a. )eaworthiness must eist at the time of the commencement of the risk

b. :here is no im!lied warranty that *essel will remain seaworthy throughout the

*oyage

c. If it becomes unseaworthy during the *oyage, it is the duty of the master to

eercise diligence to make it seaworthy again through a*oidance of unnecessary

delay in the re!air of the defects ;)ection 11,I.C.=

d. A shi! may be seaworthy for !ur!oses of insurance on the shi! but may beunseaworthy for !ur!oses of insurance u!on the cargo ;)ection 11,I.C.=. In this

case, the insurer of the cargo is not liable ;%o 0iaco vs. 2nion ociet' of Canton,

&hil. =.

2. Effects of Cnseaworthiness


26/41

a. At $ommencement of the risk – insurer is eonerated from any liability arising

from *iolation of the im!lied warranty

b. During the *oyage and there is unreasonable delay in the re!air – only the

insurer on shi! or shi!ownerHs interest are eonerated from liability from any loss

arising therefrom ;Ibid =

'-d. oyage and De*iation

1. $ourse of oyage –

a. In conformity to the course of sailing fied by mercantile usage ;)ection

1"1, I.C.=

b. If no fied mercantile usage, the most natural, direct and ad*antageous way

according to the ordinary skill and discretion of the master of the *essel ;)ection

1"", I.C.=

1 De*iation

a. Defined – any unecused de!arture from the regular course or route of the

insured *oyage or any other act which substantially alters the risk

a. Fow De*iation #ade –

1. De!arture from the course of sailing fied by mercantile usage ;)ection

1"1, I.C.=

". De!arture from the most natural, direct and ad*antageous route if the course of

sailing is not fied by mercantile usage ;)ection 1"", I.C.=

0. Cnreasonable delay in !ursuing the *oyage ;)ection 1"0, I.C.=

. $ommencement of an entirely different *oyage ;Ibid =

c. $lassification of De*iation as to its $ause or &ur!ose –

1. &ro!er de*iation


27/41

a. $aused by circumstances o*er which neither the master nor the shi!owner has

any control<

b. ?ecessary to com!ly with a warranty, to a*oid !eril, whether or not such !eril is

insured against<

c. #ade in good faith and u!on reasonable grounds of belief in its necessity to a*oid

a !eril<

d. #ade in good faith for the !ur!ose of sa*ing human life or relie*ing another

*essel in distress ;)ection 1", I.C.=

1 Im!ro*e de*iation – all other de*iations not s!ecified abo*e ;)ection

1"2, I.C.=

d. Effect of Im!ro!er De*iation – Insurer is not liable for any loss ha!!ening to the

thing insured subseuent to an im!ro!er de*iation ;)ection 1"', I.C.=

+. Loss

+-a. A thing is lost –

1. 3hen it !erishes

". /oes out of commercial

0. Disa!!ears in such away that its eistence is unknown or cannot be

reco*ered ;Art. 11, Civil Code=

+-b. $lassification of Losses

1. :otal Loss, which may either beB

a. Actual loss

b. $onstructi*e Loss

". &artial Loss – one which is not total ;)ection 1", I.C.=

+-c. Actual Loss


28/41

1. ?ature – Eists when the sub7ect matter of the insurance is wholly destroyed,

lost or when it is so damaged as no longer to eist in its original character.

$om!lete !hysical destruction is not necessary to constitute actual total loss.

". &resum!tion – a *essel not heard of at all within a reasonable time after sailing

or after last seen is !resumed actual loss ;)ection 10", I.C.=

0. $auses of actual total loss

a. :otal destruction of the thing insured<

b. Irretrie*able loss of the thing by sinking or by being broken u!<

a. Damage to the thing that renders it *alueless to the owner for the

!ur!ose for which he held it<

b. Any e*ent which effecti*ely de!ri*es the owner of the !ossession of

the thing insured at the !ort of destination ;)ection 10, I.C.=

1 Effect – Insurer is liable for the whole of the amount insured e*en without

notice of abandonment ;)ection 102, I.C.=

1 $asesB

a. &/C vs. 2nion Insurance ociet' of Canton, " &hil. 0+

b. &an /ala'an Insurance Corporation vs. FA, "1 )$4A 0"

+-d. $onstructi*e :otal Loss

1. ?ature – 5ne in which the loss, although not actually total, is of such a character

that the insured is entitled, if he thinks fit, to treat it as a total loss by

abandonment ;)ection 101 in relation to )ection 10, I.C.=.

". &rinci!les –

a. :here is only a constructi*e total loss if there is abandonment.


29/41

b. If there is constructi*e total loss without abandonment, loss is treated as !artial

loss only ;)ection 122, I.C.= EJ$E&: when the insurer !ays for an actual total loss

;)ection 1+, I.C.=

c. @reightage cannot be abandoned unless the *essel is also abandoned.

0. /rounds of $onstructi*e :otal Loss -

a. #ore than K in *alue is actually loss or would ha*e to be e!ended to reco*er it

from the !eril

b. At least K in *alue is reduced

c. $ontem!lated *oyage of *essel cannot be lawfully !erformed without incurring

either an e!ense of more than K *alue of the thing insured or a risk a !rudentman would not take under the circumstances

d. $argo cannot be forwarded without incurring either an e!ense of more than K

of its *alue or a risk a !rudent man would not take under the circumstances

;)ection 10, I.C.=

. Abandonment

a. Defined – Act of the insured by which, after a constructi*e total loss, he declares

the relinuishment to the insurer of his interest in the thing insured ;)ection

10 I.C.=

b. 4euisites –

1. $onstructi*e total loss ;)ection 10, I.C.=

". Actual relinuishment by insured of thing insured to the insurer ;)ection

10, I.C.=

0. Absolute, that is, not !artial nor conditional ;)ection 1, I.C.=

. 3ithin a reasonable time after reliable information of the loss ;)ection 11, I.C.=

2. 9asis of abandonment is factual< otherwise, it is ineffectual ;)ections 1" and

12, I.C.=


30/41

'. ?otice of abandonment to the insurer, either oral or written. In case of oral

notice, written notice must be gi*en within + days from such oral notice ;)ection

10, I.C.=

+. ?otice of abandonment must be e!licit s!ecifying the !articular cause ;)ection

1, I.C.=

c. Effects –

1. Interest of the insured on the sub7ect matter of insurance is transferred to the

insurer who becomes entitled to all the rights which the insured !ossessed in the

!ro!erty insured ;)ection 1', I.C.=

". Agents of the insured become the agents of the insurer, the latter becoming

res!onsible for all their in connection with the insured !ro!erty and for all the

e!enses and liabilities in res!ect thereto ;)ection 1,I.C.=

0. Insurer becomes liable as if there was an actual total loss

2. Acce!tance of Abandonment

a. Fow #ade –

1. E!ress, which may either oral or written

". Im!lied from the conduct of insurer such as silence for an unreasonable

length of time from notice ;)ection 12, I.C.=

b. Effects –

1. $onclusi*e u!on the !arties

". Irre*ocable unless the ground u!on which the abandonment is made !ro*es to

be unfounded ;)ection 12", I.C.=

1 If abandonment is !ro!erly made, acce!tance of insurer is not necessary.

4ights of insured cannot be !re7udiced by refusal of insurer to acce!t

;)ection 1, I.C.=


31/41

'. $ases –

a. riental Assurance Corporation vs. Court of Appeals, " )$4A 2

b.

+-e. A*erage

1. Defined – Any etraordinary or accidental e!ense incurred during the *oyage for

the !reser*ation of the *essel, cargo or both

". >inds of A*erages –

a. /ross or /eneral – include damages and e!enses which are deliberately caused

by the master of the *essel or u!on his authority in order to sa*e the *essel, cargo

or both from a real and known risk

b. )im!le or &articular – include damages and e!enses caused to the *essel or to

her cargo which ha*e not inured to the common benefit and !rofit of all the !ersons

interested in the *essel and cargo

0. Liability for A*erages –

a. /ross or /eneral – loss is borne eually by all the interests concerned in the

*enture ;)ection 10', I.C.=. &rinci!leB sacrifice some to sa*e the rest.

1. 4ule B Insurer is liable to insured with right to subrogation ;)ection 1'2,I.C.=

". Ece!tionsB 3here insured wai*ed or neglected his right to contribution or after

se!aration of the interest liable to contribution ;Ibid =

b. )im!le or &articular –

1. /eneral 4ule B Insurer is liable to the loss suffered by the owner of the cargo or

of the *essel, as the case may be

". Ece!tion B If the !olicy ece!ted sim!le or !articular a*erage.

0. Ece!tion to Ece!tionB Insurer is liable to sim!le a*erage e*en if ecluded by

!olicy if the insured is de!ri*ed of !ossession of !ro!erty insured at the !ort of

destination ;)ection 10', I.C.=


32/41

. 4euisites of /eneral A*erage –

a. $ommon danger to *essel or cargo

b. Deliberate sacrifice of !art of *essel or cargo

c. @or common safety and benefit of all

d. #ade by master or u!on his authority

a. ?ot caused by !arty asking for contribution

b. )uccessful, that is, resulted in the sa*ing of the *essel and8or cargo

and

g. ?ecessary ; 8arque vs. *it" 5ell and Co*pan' , 2' &hil. +2=

. #easure of Indemnity

-a. >inds of #arine Insurance &olicies

1. alued &olicy – alue of the !ro!erty insured is determined at the time the

insurance is taken

a. 4ulesB

1. aluation in the !olicy is conclusi*e u!on the !arties

". Ece!tion B Insurer may show real *alue if the thing insured was hy!othecated

by bottomry or res!ondentia before it was insured without the knowledge of the

!erson who !rocured the insurance ;)ection 12',I.C.=

a. :otal Loss –

1. aluation in !olicy is basis of reco*ery by the insured

". In loss of !rofits, loss is conclusi*ely !resumed from loss of the !ro!erty of which

the !rofits are e!ected to arise ;)ection 1', I.C.=


33/41

0. In loss of cargo, *aluation is followed ece!t where only !art of the cargo or

freightage is e!osed to !eril, the *aluation a!!lies only in !ro!ortion to such !art

;)ection 12, I.C.=

c. &artial Loss –

1. If a !ro!erty is insured less than its *alue, the insured becomes a reinsurer for

the difference ;)ection 12+, I.C.=

@54#CLAB &artial Loss8alue of &ro!erty Insurance

". In loss of !rofits, reco*ery is based on the !ortion of such !rofits as the *alue of

the !ro!erty lost bears to the *alue of the whole !ro!erty ;)ection 12, I.C.=

@54#CLAB alue of &ro!erty lost8alue of the 3hole &ro!erty &rofits

1 5!en &olicy – alue of !ro!erty is left to be ascertained at the time of loss

a. 4ules in aluation in $ase of :otal Loss ;)ection 1'1, I.C.=B

1. alue of shi! is its *alue at the beginning of the risk including articles or charges

adding to its !ermanent *alue or necessary to !re!are it for *oyage !lus the

insurance

". alue of cargo is its actual cost to the insured when loaded, in the absence, the

@# thereof, !lus the insurance in both cases

0. alue of freightage is the gross freightage eclusi*e of !rimage, !lus insurance

b. In case of !artial loss –

1. If a !ro!erty is insured less than its *alue, the insured becomes a reinsurer for

the difference ;)ection 1'", I.C.=

@54#CLAB Loss In alue8alue before Loss Insurance

". In case of general a*erage, liability of insurer is limited to the !ro!ortion which

the general a*erage bears to the ratio of the insurance o*er the total *alue of

!ro!erties insured ;)ection 1'2, I.C.=


34/41

@54#CLAB Insurance8total *alue of &ro!erties co*ered by Insurance *alue of

!ro!erty lost thru general a*erage

0. essel –

a. Anchors – full liability of the insurer

b. $ost of the old materials is deducted towards the cost of the new materials.

Insurer is liable for only "80 of the remaining cost of re!airs after such deduction

;)ection 1'', I.C.=

I. FIRE INSURANCE

I. Definition – $ontract of indemnity by which the insurer agrees to indemnify the

insured against loss or damage arising from fire.

". Etended $o*erage –

"-a. 3hen A!!licable – a!!lies when e!licitly etended by !olicy

"-b. )co!e of Etension –

1. Lightning, windstorm, tornado, earthuake and other risks ;)ection 1'+,I.C.=

". ?ot only to direct, but also to indirect and conseuential losses likeB

a. &hysical damage – caused to other !ro!erty which is not co*ered by the basic

insurance !olicy

b. Loss of earnings due to interru!tion of business due to damage to !ro!erty

insured

c. Etra e!ense or additional charges incurred by the insured following the damage

or destruction of !ro!erty insured

0. Alterations –

0-a. >inds of Alteration

1. Alteration Entitling Insurer to 4escind $ontract ;)ection 1', I.C.=

a. Cse or condition of thing is s!ecifically limited or sti!ulated in !olicy.


35/41

b. Cse or condition is altered

c. Alteration is without consent of insurer

d. Alteration is made by means within the control of the insured

e. Alteration increases the risk

". Alteration ?ot Affecting Insurance ;)ection 1', I.C.=

a. Alteration not affecting the risk

a. Alteration not limited or s!ecified in the !olicy ;)ection 1+,I.C.=

b. Alteration with the consent of the insurer, there being no*ation

c. Alteration beyond the control of the insured

0-b. #easure of Indemnity

1. alued &olicy –

a. aluation of !ro!erty at the time insurance is taken is conclusi*e to the !arties

;)ection 1+1, I.C.=

b. If !ro!erty is insured for less than its *alue, there is no co-insurance unless

!ro*ided in the !olicy

". 5!en &olicy – aluation of !ro!erty is made at the time of loss which is the cost

to re!lace the !ro!erty insured in the condition immediately !receding the !eril

insured against ;Ibid =

0-c. 5ther $onsiderations

1. $lauses $ommon to @ire Insurance

a. $o-insurance clause

b. 5!tion to 4ebuild clause

". Limitations to :ransfer


36/41

a. A!!lies to !ledge, hy!othecation or other transfer of fire insurance !olicy or

rights thereunder

b. In fa*or of any !erson or com!any acting as agent or otherwise re!resenting the

insurer in so far as it affects the creditors of the insured ;)ection 1+0, I.C.=

0. >inds of @ire

a. @riendly fire

b. Fostile or enemy fire

0-c. $ases –

1. %alian vs. tate Assurance Co*pan' , " &hil. 10

". %eneral Insurance vs. 3! #ua, 1' &hil. 11+

(. CASUALTY INSURANCE

I. Definition – Includes all forms of insurance against loss or liability arising from

accident or misha! which are not within the sco!e of other ty!es of insurance,

namelyB marine, fire, suretyshi! and life ;)ection 1+,I.C.=

". :erminologies –

"-a. Accident or misha! means an e*ent that takes !lace without oneHs foresight or

e!ectation. It !roceeds from an unknown cause, or an unusual effect of a known

cause, and therefore not e!ected.

"-b. Liability is the financial res!onsibility of one !arty to another as a conseuence

of doing or failing to do something. :his may arise from negligence or a contractual

obligation.

0. :wo %"( /eneral Di*isions of $asualty Insurance –

0-a. Loss8Damage Insurance – insurance against s!ecified !erils which may bring

about loss or damage to the !erson of the insured or to his !ro!erty likeB

1. &ersonal accident

". #otor *ehicle loss or damage


37/41

0-b. Liability Insurance – insurance against s!ecified !erils which may gi*e rise to

liability on the !art of the insured for claims for in7uries to others or damage to

their !ro!erty such as Em!loyeesH $om!ensation and #otor *ehicle liability.

. Insurable Liability – those arising from commission of uasi-delict and

contractual obligation are insurable. If liability arises from a crime, ualifyB

-a. If commission is accidental, co*ered.

-b. If deliberate, not co*ered.

2. $asesB

2-a. illacorta vs. Insurance Co**issioner , 1 )$4A + ;Authoried Dri*er

$lause *s. :heft=

2-b. Association of 5aptists vs. Field*an:s Insurnace Co., 1" )$4A '1 ;:heft and

?ecessity of $on*iction=

2-c. toes vs. /ala'an Insurance Co*pan' , 1" )$4A +'' ;Dri*erHs License of

Aliens=

2-d. &aler*o vs. &'ra*id Insurance Co*pan' , 1'1 )$4A '++ ;A!!licability of

Authoried Dri*er $lause=

2-e. CCC Insurance Corporation vs. Court of Appeals, 01 )$4A "' ;&resum!tion

on License=

2-f. &an /ala'an Insurance Corporation vs. Court of Appeals, 1 )$4A 2

;)ubrogation=

2-g. Filipino /erc"ants Insurance Co*pan' vs. Court of Appeals, 1+ )$4A '0

;9urden of &roof on All 4isksH $lause=

2-h. un Insurance ffice, Ltd. vs. Court of Appeals, "11 )$4A 22 ;?egligence

4esulting to Death=

2-i. Fin*an %eneral Assurance Corporation vs. Court of Appeals, "10 )$4A 0

;Death due to )tabbing=

). SURETYS'IP


38/41

1. Definition – agreement whereby a !arty called the surety guarantees the

!erformance by another called the !rinci!al or obligator, of an obligation or

undertaking in fa*or of a third !erson called the obligee ;)ection 1+2, I.C.=

". ?ature of Liability – liability is 7oint and se*eral. :his means that u!on default

of the obligor in com!lying with his obligation, the surety becomes !rimarily

liable to the obligee who has the right to demand !ayment under the terms

and conditions agreed u!on ;Ibid , see also Art. "+-", 1"+-1""", Civil

Code=.

0. 4ules on &remiums –

0-a. $ontract of suretyshi! not *alid and binding unless and until !ayment of the!remium.

0-b. &remium becomes a debt as soon as the contract of suretyshi! or bond is

!erfected and deli*ered to the obligor.

0-c. 3here contract of suretyshi! or bond was acce!ted by obligee, it is *alid e*en

if !remium has not been !aid.

0-d. 3here contract of suretyshi! or bond was not acce!ted by obligee, the surety

shall collect only a reasonable amount of !remium, ece!t where such non-

acce!tance is due to the fault of surety, no ser*ice fee, stam!s and taes may be

collected.

0-e. In continuing bond, either for a term eceeding one year or with no fied

e!iration date, obligor shall !ay annual !remium as it falls due until the contract is

cancelled ;)ection 1++, I.C.=

1 $asesB

-a. 3ational "ip'ards $ teel Corporation vs. 0orrento, " )$4A "+

-b. Le'son vs. Rial uret' and Insurance Co*pan' , 1' )$4A 221

L. LIFE INSURANCE


39/41

1. Definition

1-a. Insurance on human li*es and insurance a!!ertaining thereto or connected

therewith ;)ection 1+, I.C.=

1-b. #utual agreement by which a !arty agrees to !ay a gi*en sum on the

ha!!ening of a !articular e*ent contingent on the duration of human life, in

consideration of the !ayment of a smaller sum immediately or on !eriodical

!ayments by the other !arty.

1-c. Essentially, it is a contract to make s!ecific !ayments u!on the death of a

!erson whose life is insured.

1 3hen &ayable –

"-a. C!on the death of a !erson

"-b. C!on the sur*i*al of the insured during a s!ecified !eriod

"-c. $ontingently, on the cessation of life or on the continuance of life ;)ection

1, I.C.=

1 &arties to Life Insurance –

0-a. 5wner of &olicy who

1. Fas the !ower to name or change beneficiary, if designation is not irre*ocable.

5therwise, the consent of beneficiary irre*ocably designated is reuired.

". Fas the !ower to assign !olicy

0. Fas the obligation to !ay !remiums

0-b. &erson whose life is sub7ect of !olicy, also known as the Cestui ue ie

0-c. 9eneficiary, to whom the !roceeds are !ayable. Fowe*er, the !olicy u!on life or

health may !ass by transfer, will or succession to any !erson and such !erson may

reco*er u!on it whate*er the insured might ha*e reco*ered ;)ection 1", I.C.=

1 :y!es of Insurance &olicy


40/41

-a. 5rdinary Life &olicy – one in which the insured is reuired to !ay a certain fied

!remium annually or at more freuent inter*als throughout the life of the insured

and the beneficiary is entitled to !roceeds thereof u!on death of the insured.

-b. Limited &ayment Life &olicy – !remium is !ayable only during a limited !eriod,

after which the insurance is fully !aid for. If insured dies within the s!ecified !eriod,

his beneficiary collections.

-c. :erm Insurance &olicy – one which !ro*ides co*erage only if the insured dies

during a limited !eriod. If insured dies within the !eriod s!ecified, !olicy is !aid to

beneficiary. If insured sur*i*es within such !eriod, contract is terminated.

-d. Endowment &olicy – the insurer binds himself to !ay a fied sum to the insured

if he sur*i*es for a s!ecified !eriod, or if he dies within such !eriod, to some other!erson indicated.

-e. Life Annuity – contract whereby the insurer binds himself to !ay an annual

!ension or income during the life of one or more determinate !ersons in

consideration of a ca!ital consisting of money or other !ro!erty, whose ownershi! is

transferred to him at once with the burden of the income.

1 $asesB

2-a. 5ia!tan vs. Insular Life Assurance Co*pan' , )$4A 2 ;Accidental 9enefit

$lause=

2-b. ;anapi vs. Insular Life Assurance Co*pan' , &hil. 0+ ;Double Indemnity

$lause=

2-c. Calano vs. Court of Appeals, &hil. + ;#ilitary and ?a*al )er*ice $lause=

2-d. Abella da. De Dia vs. Asia Life Insurance Co*pan' , 5/ 02 ;Eem!tion

from Eecution=

2-e. 3ario vs. &"ila*life, " )$4A 0

2-f. 5an of t"e &"ilippine Islands vs. &osadas, 2' &hil. "12 ;4efund of &remium=

2-g. Del al vs. Del al , " &hil. "0 ;Entitlement to the Insurance &roceeds=


41/41

1 )uicide

'-a. 3hen Insurer Liable –

1. If !olicy is silent, insurer is liable if !olicy has been in force for a !eriod of two

years from issuance or last reinstatement

". If !olicy !ro*ides for shorter !eriod, such !ro*ision a!!lies

0. 4egardless of the !eriod, if committed during state of insanity

'-b. 3hen Insurer ?ot Liable –

1. )uicide committed during the !eriod of sanity, !ro*ided, it is within the two %"(

year !eriod from issuance of !olicy or its last reinstatement, if !olicy does not

!ro*ide for a shorter !eriod

". )uicide committed during the !eriod of sanity and within a !eriod not eceeding

two %"( years as s!ecified in the !olicy

PREPARED*SUMMARI+ED BY,

ATTY. 'ENRY C. FILOTEO- CPA

!osted by )er*ant 3arrior M 2B2+

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