Philamcare Health Systems, Inc. v. CA G.R. No. 125678 J.

Ynares-Santiago Facts: Ernani Trinos, deceased husband of private respondent Julita Trinos, applied for a health care coverage with petitioner, Philamcare Health Systems, Inc. He answered no in the question regarding consultations or treatments for high blood pressure, heart trouble, diabetes, cancer, liver disease, asthma or peptic ulcer. His application was subsequently approved for a period of 1 year and under such agreement, he was entitled to avail of out-patient benefits such as annual physical examinations, preventive health care and other out-patient services. The agreement was extended upon termination and the coverage was increased to a maximum sum of P75,000 per disability. Ernani Trinos suffered a heart attack and was confined for one month. During his confinement, his wife tried to claim the benefits under the agreement, but the petitioner denied her claims on the ground that such agreement was void. The petitioner claims that there was concealment regarding Ernanis medical history which forced the respondent to pay for the hospitalization expenses herself. Due to financial difficulties, respondent was forced to bring her husband home from the hospital; after which, her husband felt weak and suffering from a fever. Ernani Trinos was brought back to the hospital where he died on the same day. Private respondent filed an action for damages against petitioner and the RTC ruled in her favor against Philamcare. On appeal, the CA affirmed RTC decision; hence, this instant petition. The primary argument of petitioner is that the health care agreement between Ernani Trinos and Philamcare is not an insurance contract, therefore, the incontestability clause invoked by private respondent is not applicable. Issue: Whether or not the health care argument is an insurance contract? Held: Yes. The health care agreement between the parties is an insurance contract. The Insurance Code requires the existence of specific elements stated under Sec. 2 in order to determine whether or not an insurance contract exists. In the case at bar, the insurable interest of respondentss husband in obtaining the health care agreement was his own health and such agreement was in the nature of a non-life insurance. Petitioner also alleges that there was concealment of material fact in the application which renders the agreement void. However, exisiting stipulations in the agreement absolves the respondent and the stipulation regarding invalidation of agreement cannot be applied because Ernani Trinos had March 18, 2002

authorized the petitioner to verify the alleged information. In the case at bar, fraudulent intent must be established to warrant rescission and the cancellation of the health care agreement requires the concurrence of conditions provided under Art. 27 of the Insurance Code. None of the conditions was fulfilled in this case. Another contention of the petitioner is that the private respondent is not the legal wife of the deceased which disqualifies the claimant from any right over the benefits. The health care agreement is in the nature of a contract of indemnity; therefore, payment should be made to the party who incurred the expenses which entitles the private respondent to be reimbursed. The petition is denied and CA decision was affirmed.