Insertions for Chapter 6

A The doctrine of concealment is the last means of the insurer in its efforts to select and
control risks. (FN, Patterson, Essentials of Insurance Law, p.!
" #ection $$ pro%ides that&
'The ri(ht to information of material facts ma) *e wai%ed either *) the terms of insurance
or *) ne(lect to make in+uir) as to such fat s, where the) are distinctl) implied in other
facts of which information is communicated.,
- Note that this section considers the o*li(ation to disclose as su*sistin( where there is an
in+uir), re(ardless of the materialit) of the facts in%ol%ed.
. A situation arises where knowled(e of the information is ac+uired after the su*mission of
the application and pendin( action thereon *) the insurer is not specificall) co%ered *) the
Insurance -ode. In some courts in the /nited #tates, it has *een held that the dut) to disclose
su*sists, the dut) of disclosure *ein( considered the same as that which e0ists at the time the
application was su*mitted.
E The warrant) is more of an e%idence of an increase in risk.
F In the e0ample (i%en, where in the precedin( para(raph, knowled(e *) the insured that his
*usiness partner is usin( the
1 It is important to note that this case was decided in 234$, while the +ualif)in( phrase
'whether intentional or unintentional, was deleted with the enactment of the insurance -ode.
After "atas Pam*ansa "l(. 35 amended the -ode, restorin( the said phrase, the #upreme
-ourt arri%ed at a different rulin( in the 2346 case of Vda. De Canila v. Court of Appeals.
7 sec $2 transposition
I The Insurance -ode defines it in the followin( manner&
#ection . A representation is to *e deemed false when the facts fail to correspond with its
assertions or stipulations.
8 9 In Florendo v. PHILAM Plan recently decided in 2012 P7ILA: Plans -omprehensi%e
Pension Plan insured :anuel Florendo died of *lood poisonin(. #u*se+uentl), his widow
Lourdes filed a claim with P7ILA: Plans for the pa)ment of the *enefits, to which the latter
refused to pa). The #upreme -ourt ruled in fa%or of P7ILA: Plans, rulin( that Lourdes could
not claim *enefits as the *eneficiar) of her hus*and under the insurance plan *ecause her
hus*and :anuel concealed the true condition of health when appl)in( for the comprehensi%e
pension plan.
; 8ust like concealment, a misrepresentation is committed *efore or at the time of the
commencement of the insurance contract. #u*se+uent to this time, an insured ma) no lon(er
*e (uilt) of misrepresentation as the insurer had alread) *een persuaded to assume the risk. As
such in #ection 2, an) representation ma) *e altered or withdrawn *efore the insurance takes
effect, *ut not afterwards.
L #trictl) speakin( representations are not part of the insurance polic), unless otherwise
pro%ided, and as such ma) not +ualif) e0press pro%isions in the polic), as stated in #ec. <.
7owe%er, a representation ma) +ualif) or modif) an implied warrant).
: As amended *) "atas Pam*ansa "l(., the ri(ht ti rescind ma) *e wai%ed *) means of
acceptin( premium pa)ments despite knowled(e of the misrepresentation. 7owe%er, this
pro%ision in #ection 6 was deleted *) =epu*lic Act 2<><5 of ?<2$.