Insurance Syllabus and Personal Notes-FINAL
Insurance Syllabus and Personal Notes-FINAL
Insurance Syllabus and Personal Notes-FINAL
Notes
By: Atty. Minda C. Gapuz
Insurance Code
PD 1460, as amended
Special Law
Not Covered: New Civil Code, Family Code
Insurance Defined
Agreement to indemnify another against
loss, damage, or liability
Arising from an unknown or contingent
event
Examples: fortuitous events, natural
disasters, and negligent acts
Characteristics:
o Risk-distributing device
o Contract of Indemnity (Property
Insurance)
o Aleatory contract (cannot be based on
wagering)
o Contract of Adhesion (Fine-Print
Rule)
o Uberrima Fides Contract (utmost
good faith, disclosure of facts)
o Consensual Contract (related with
Cognition Theory)
Elements:
1 Expanded Outline for Atty. Gapuz (Insurance)
By Kevin C. Tatco
Parties to a Policy
Insurer
o The party that agrees to indemnify in
case of loss, damage, or liability
o Certificate of Authority from the
Insurance Commissioner required to
engage in the business
Insured
o The party to be indemnified/indemnify
in case of loss, damage, or liability
o Must not be a public enemy (Section
7)
Public Enemy: citizens and
corporations of a nation with
whom Philippines is at war
o General Rule: Insured may designate
anyone to be the beneficiary as long
as he has insurable interest on them.
Exception (NCC Art. 739 &
2012):
Persons guilty of adultery
or concubinage
Persons guilty of the same
crime, in the
consideration of thereof
Given to a public officer,
his wife, descendants and
ascendants, by reason of
his office
Conviction is not a
condition precedent
(Insular Life v. Ebrado)
Exception to the exception:
The designation of an
adulterous child as a
beneficiary is allowed.
Beneficiary
o The party who stands to be benefited
by the policy
o May not be a party to the policy
o Either revocable or irrevocable
o Note: A life insurance may be taken
out and be made payable to
whomsoever regardless of the
beneficiarys lack of insurable
interest.
Transfer of Policy
Life Insurance: may be transferred even
without the consent of the insurer
o Section 11: The insured shall have the
right to change the beneficiary he
designated in the policy, unless he has
expressly waived this right in the said
policy.
Property Insurance: may not be transferred
unless there is consent from the insurer
o Section 58: The mere transfer of a
thing insured does not transfer the
policy, but suspends it until the same
3 Expanded Outline for Atty. Gapuz (Insurance)
By Kevin C. Tatco
INSURABLE INTEREST
Insurable Interest Defined
The relation, connection, and concern in a
person or property that the insured will
derive pecuniary benefit or advantage from
its preservation and suffer pecuniary loss or
damage from its destruction, injury, or
death by the happening of an event insured
against.
In short, an interest to benefit from his or
its existence.
Insurable Interest: Life Insurance
Insurable Interest must only exist at the
perfection of the contract.
o Exception: Debtor insured and heirs
(?)
Every person has insurable interest on the
life and health of (Section 10):
o Himself, spouse, and children
o Person in whom he depends for
(wholly or partially) education or
support
o Person in whom he has pecuniary
interest
Life
Cash/Carry Provision:
o The insurance contract is not valid
unless and until the premium is paid
Exceptions:
If there is an
acknowledgement receipt
from the premium
although premium has not
yet been paid (Section
78).
If a grace period provision
applies in case of life and
industrial life polices.
If partial payment of the
premium was accepted
and the loss occurred
before the full payment of
the premium.
If the premium is payable
on installment or term
payment basis even if the
loss occurred before the
full payment of the
premium
If an insurance agent has
already received the
premium but failed to
remit it to the head office.
If the insurer sent a
Notice of Non-Renewal
but the said notice was
not received by the
6 Expanded Outline for Atty. Gapuz (Insurance)
By Kevin C. Tatco
FIRE INSURANCE
Fire Insurance Defined
Insurance against loss or damage caused by
fire
o May also cover other risks covered by
an extension on the insurance
contract:
Lighting
Windstorm
Tornado
Earthquake
Other allied risks
The insurer is liable if the proximate cause
of the loss is caused by fire or other allied
risks except:
o If the direct cause of the loss is a
expected peril (example: gas
explosion)
It is not necessary that the property was
directly damaged by fire as long as the loss
was a consequence of the fire.
o Examples:
Smoke and water damage when
the firemen were trying to put
out the fire
Collapse of a building damaging
other property
Damage caused by efforts to
rescue or remove people and
property
Theft after a blaze
Friendly Fire v. Hostile Fire
o Friendly Fire
A type of fire that burns in a
place where it is supposed to
burn.
Examples: gas stove, fire
place
o Hostile Fire
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By Kevin C. Tatco
MARINE INSURANCE
Coverage of Marine Insurance (Section 99)
Risks connected with navigation to which a
ship, cargo, freightage, profits or other
insurable interests maybe exposed to peril
during the duration of a voyage OR a fixed
time period.
Insurer is liable for loss or damage
occasioned by perils of the sea, NOT for
perils of the ship (Implied Warranty of
Seaworthiness):
o Warranty of Seaworthiness: that the
ship is reasonably fit to perform the
service and to encounter ORDINARY
perils of the voyage
o Perils of the Sea: unusual violence or
extraordinary perils of navigation
o Perils of the Ship: losses from
ordinary and natural action of the
sea, wear and tear of the ship
General Rule: Risks insured against are
against the perils o the sea
o Exception: All-Risk Policy: all risks
are covered
OTHER MATTERS:
SUBROGATION
OVER-INSURANCE
DOUBLE INSURANCE
2 or more insurers/same property
REINSURANCE
By the original insurer to insure its
liability
BOLDERAUX
Bk where Insurer enters its assumed
risks
POWERS OF INSURANCE COMMISSIONER:
Adjudicatory or Quasi-judicial
INSURANCE COMMISSIONER has
CONCURRENT JURISDICTION w/ RTC for
claims:
Below 100K (INSURANCE
COMMISSIONER)
10 Expanded Outline for Atty. Gapuz (Insurance)
By Kevin C. Tatco