QuestionsQuestions (Republic Act No. 10607)
A contract of insurance is an agreement where one undertakes, for consideration, to indemnify another against loss, damage, or liability arising from an unknown or contingent event. “Doing an insurance business” includes: (a) making/proposing to make insurance contracts as insurer; (b) making/proposing to make surety contracts as a vocation (not merely incidental to another business); (c) doing any recognized reinsurance business; and (d) doing in substance equivalent business designed to evade the Code. Also, absence of profit or separate/direct consideration is not conclusive that one is not transacting insurance.
Any person, partnership, association, or corporation duly authorized to transact insurance business may be an insurer.
Anyone except a public enemy may be insured.
No. The consent of the husband is not necessary for the validity of such policies.
Yes. A minor 18 years or more may contract for life, health, and accident insurance with a duly authorized insurer. The insurance must be taken on the minor’s own life, and the beneficiary appointed must be the minor’s estate or certain close relations (including father, mother, husband, wife, child, brother, or sister).
Insurable interest must exist when the insurance takes effect and when the loss occurs for property insurance (though need not exist in the meantime). A property insurance contract is not enforceable except for the benefit of some person having an insurable interest in the property insured.
Insurable interest in life and health exists in: (1) oneself, spouse, and children; (2) persons on whom one depends wholly or in part for education or support, or in whom one has a pecuniary interest; (3) persons under a legal obligation to pay money or respecting property/services where death/illness may delay/prevent performance; and (4) persons upon whose life any estate or interest vested in the insured depends.
The beneficiary’s interest is forfeited when the beneficiary is the principal, accomplice, or accessory in willfully bringing about the death of the insured; then the nearest relative of the insured receives the proceeds if not otherwise disqualified.
No. The Code provides that the preceding section does not authorize insurance for or against drawing of any lottery, or for or against any chance or ticket in a lottery drawing a prize.
Concealment is the neglect to communicate that which a party knows and ought to communicate. Concealment entitles the injured party to rescind the contract of insurance.
Each party must communicate to the other, in good faith, all facts within his knowledge which are material and about which he makes no warranty and the other has no means of ascertaining. Communication is not required (except upon inquiry) for matters such as those the other already knows, those the other ought to know through ordinary care, those waived by the other, and certain risk-excluded/non-material or excepted risk information as specified in the Code.
Representation is a statement of fact made in/for the contract (oral/written). If intentionally false in a material point, the insurer (injured party) may rescind from the time it becomes false. Warranty is an expressed or implied undertaking; violation of a material warranty or other material provision entitles the other to rescind. For breach of warranty without fraud, it exonerates the insurer from the time it occurs or prevents the policy from attaching to the risk when broken at inception.
A representation as to the future is deemed a promise unless it appears it was merely a statement of belief or expectation. A representation cannot qualify an express provision in the contract, but may qualify an implied warranty.
The policy must specify: (1) parties between whom the contract is made; (2) amount to be insured (except open/running policies); (3) premium or basis/rates for determining final premium; (4) property or life insured; (5) insured’s interest in property if not absolute owner; (6) risks insured against; and (7) period the insurance is to continue.
No. Non-life policies cannot be cancelled by the insurer except upon prior notice to the insured, and the notice is effective only if based on grounds after the policy’s effective date, such as: non-payment of premium; conviction for crime arising out of increasing the hazard; discovery of fraud/material misrepresentation; willful/reckless acts or omissions increasing hazard; physical changes making property uninsurable; or a Commissioner determination of Code violation/placement of insurer in violation. Notice must be in writing, mailed/delivered to the named insured at the address in the policy, stating the ground and advising that the insurer will furnish facts upon written request.
No policy or contract of insurance issued by an insurance company is valid and binding unless and until the premium thereof has been paid, except in life/industrial life policies where the grace period provision applies. An acknowledgement of receipt of premium in the policy is conclusive evidence of payment as far as making the policy binding.