QuestionsQuestions (Republic Act No. 171)
The main purpose of Republic Act No. 171 is to amend Section 47 and Subsection (b) of Section 184 of Act No. 2427, also known as "The Insurance Act," particularly concerning the rescission rights of insurers and the incontestability of life insurance policies after two years.
The insurer must exercise the right to rescind the contract prior to the commencement of an action on the contract.
A life insurance policy becomes incontestable after it has been in force during the lifetime of the insured for a period of two years.
No, after two years of coverage during the insured’s lifetime, the insurer cannot prove that the policy is void ab initio or rescindable due to fraudulent concealment or misrepresentations.
The exceptions are nonpayment of premiums and violation of conditions related to military or naval service in time of war.
This Act applies to all existing contracts of life or endowment insurance.
Yes, the Act is applicable to all existing contracts of life or endowment insurance at the time of its approval.
It limits the insurer’s right to rescind the contract on grounds of fraud after two years, making the policy incontestable except for specific exceptions.
The insurer’s right to rescind must be exercised before the commencement of any legal action on the insurance contract.
The two-year period serves as a contestability period after which the insurer cannot dispute the validity of the policy based on fraud or misrepresentations, providing greater security to the insured.