QuestionsQuestions (Republic Act No. 10607)
It includes: (1) making or proposing to make, as insurer, any insurance contract; (2) making or proposing to make, as surety, any contract of suretyship as a vocation and not merely incidental to another business; (3) doing any kind of business, including reinsurance, specifically recognized as constituting doing an insurance business; and (4) doing or proposing to do in substance equivalent business in a manner designed to evade the Code. Profit is not conclusive.
Any contingent or unknown event, whether past or future, which may damnify a person with an insurable interest or create liability, may be insured subject to the chapter’s provisions.
No. Section 3 expressly provides that the consent of the spouse is not necessary for validity of such policies.
No. Section 4 states that the preceding section does not authorize insurance for or against the drawing of any lottery, or for or against any chance/ticket in a lottery drawing a prize.
Every corporation, partnership, or association duly authorized to transact insurance business as provided in the Code may be an insurer.
A person must have an insurable interest in life/health as listed in Section 10 (e.g., the insured himself/spouse/children, persons depending on support/education, persons under legal obligation, or on whose life the insured’s estate/interest depends). For beneficiaries, Section 11 allows change unless waived; Section 12 forfeits beneficiary interest if beneficiary is principal/accomplice/accessory in willfully bringing about death.
No. Section 11 provides that the insured has the right to change unless he has expressly waived this right in the policy.
Under Section 12, the beneficiary’s share is forfeited and passes to other beneficiaries unless disqualified. If there are no other beneficiaries, proceeds are paid to the estate of the insured (unless policy provides otherwise in applicable way).
Section 13: any interest in property (or relation/liability in respect thereof) that a contemplated peril might directly damnify. Section 17: the measure is the extent to which the insured might be damnified by loss or injury.
No. Section 18 states that no contract/policy on property is enforceable except for the benefit of some person having an insurable interest in the property insured.
For property: it must exist when the insurance takes effect and when the loss occurs, though need not exist in the meantime. For life/health: insurable interest must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs.
It suspends the insurance to an equivalent extent until the interest in the thing and the interest in the insurance are vested in the same person, except as provided in the next four sections and in certain categories (notably life/accident/health).
Concealment is the neglect to communicate that which a party knows and ought to communicate. Under Section 27, concealment—intentional or unintentional—entitles the injured party to rescind the insurance contract.
Materiality is determined not by the event itself but by the probable and reasonable influence of the facts on the party to whom communication is due, in forming his estimate of disadvantages of the proposed contract or in making his inquiries.
No. Any condition in a policy limiting the time for commencing an action thereunder to a period of less than one year from accrual of the cause of action is void.
Cancellation must be upon prior notice based on specific grounds after the effective date (e.g., nonpayment of premium, fraud, willful/reckless acts increasing hazard, property becoming uninsurable, other insurance exceeding value, or Commissioner determination). Notices must be written, mailed/delivered to the named insured (or authorized broker), state the ground relied upon, and state that upon written request the insurer will furnish facts.
If the insurer does not at least 45 days in advance mail/deliver notice of intention not to renew or to condition renewal upon reduction/elimination of coverages, the named insured is entitled to renew upon payment of the premium due on the renewal’s effective date. Short-term policies are treated as one-year; long/no fixed expiration are treated as successive one-year periods.
Generally, no policy/contract issued by an insurance company is valid and binding unless and until the premium has been paid, except for life/industrial life when grace period applies, or when broker/agency agreements with duly licensed intermediaries provide a 90-day credit extension (with limits).