G.R. No. 197528 - PERT/CPM Manpower Exponent Co., Inc. vs. Vinuya

March 6, 1997: Felipe N. Khu, Sr. applied for a life insurance policy under Insular Life’s Diamond Jubilee Plan and declared no adverse medical condition in the medical questionnaire.
Insular Life issued Policy No. A000015683, effective June 22, 1997, with a face value of ₱1,000,000.00.

June 23, 1999: The policy lapsed for non-payment of the premium due for June 22, 1999–June 23, 2000.
September 7, 1999: Felipe applied for reinstatement and paid ₱25,020.00; only his occupation changed (now Municipal Mayor), all other declarations remained the same.

October 12, 1999: Insular Life conditioned reconsideration upon payment of additional premium and cancellation of the Accidental Death Benefit (ADB) and Waiver of Premium Disability (WPD) riders; Felipe agreed.
December 27, 1999: Felipe paid the additional premium of ₱3,054.50.
January 7, 2000: Insular Life issued Endorsement No. PN-A000015683 “approving reinstatement … effective June 22, 1999,” imposing the extra premium, deleting the ADB and WPD riders, and adjusting premium rates.

June 23, 2000 and July 2, 2001: Felipe paid the annual premiums (₱28,000.00 each) covering June 22, 2000–June 22, 2001 and June 22, 2001–June 21, 2002.
September 22, 2001: Felipe died; death certificate cited end-stage renal failure, hepatic failure, congestive heart failure, myocardial ischemia, diabetes neuropathy, alcoholism, and pneumonia.

October 5, 2001: Beneficiaries filed a death benefit claim; Insular Life denied the claim and rescinded the reinstated policy for alleged concealment and misrepresentation of pre-existing ailments.
Beneficiaries sued for specific performance, seeking declaration of validity and payment of the policy proceeds; Insular Life countered that the policy was still within the two-year contestability period.

RTC (Dec. 12, 2003): Found for beneficiaries, held policy reinstated June 22, 1999, therefore incontestable at death; awarded ₱1,000,000.00 plus moral damages (₱20,000.00), attorney’s fees (₱30,000.00), and litigation expenses (₱10,000.00).
CA Decision (June 24, 2010): Affirmed RTC’s finding on incontestability and reinstatement date; deleted awards of moral damages, attorney’s fees, and litigation expenses.
CA Resolution (Dec. 13, 2010): Denied Insular Life’s motion for partial reconsideration.

Insular Life petitioned before the Supreme Court, arguing (a) effective date of reinstatement was December 27, 1999 (date of extra premium payment), (b) two-year contestability period had not expired at death, and (c) misrepresentation justified rescission.
Respondents maintained reinstatement effective June 22, 1999 and two-year period had lapsed by September 22, 2001.

Whether Felipe’s reinstated life insurance policy had become incontestable at the time of his death on September 22, 2001.
Whether the “date of last reinstatement” under Insurance Code Section 48 is June 22, 1999 (as per insurer’s documents) or December 27, 1999 (date of extra premium payment), in light of ambiguities in the Letter of Acceptance and Endorsement.