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Insurance Reviewer PDF
Insurance Reviewer PDF
GENERAL PROVISIONS
1.)
2.)
3.)
4.)
5.)
6.)
Consensual;
Voluntary;
Aleatory;
Executory;
Conditional;
Personal.
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This is an exception to the rule that all acts of the mor affects
the mee: when further obligations imposed on the mee.
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Title 4. Concealment
Requisites of concealment:
1.) A party knows a fact w/c he neglects to
communicate or disclose to the other;
2.) Such party concealing is duty bound to disclose
such fact to the other;
3.) Such party concealing makes no warranty of the facts
concealed; and
4.) The other party has no means of ascertaining the fact
concealed.
Exceptions:
1.) Life, health and accident insurance;
2.) The change of interest in the thing insured occurs
after the injury w/c results in a loss;
3.) A change of interest in one or more of several
things separately insured by one policy;
4.) A change of interest by will or succession on the death
of the insured;
5.) A transfer of interest by will or succession on the death
of the insured;
6.) A transfer of joint interest by one of several partners,
joint owners or owners in common, who are jointly
insured, to the other.
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Fieldmans Insurance v. Songco: Owner of an ownertype jeep persuaded by insurance agent to enter into a
common carrier insurance contract. After accident,
insurance co. refused to pay up on the ground that the
vehicle was not a common carrier.
Ins. Co. estopped. It knew all along that it was a
private vehicle.
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Exceptions:
1.) In answer to an inquiry; or
2.) When he is not the absolute owner (Sec. 51: items that
must be included in an insurance policy: (e) Interest of
insured in property insured, if he is not the absolute
owner thereof.)
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Effects of delivery of policy: If delivery is conditional, nonfulfillment of the condition bars the contract from taking effect.
If unconditional, the insurance becomes effective at the time of
delivery.
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RCBC v. CA:
Goyu took out a loan from RCBC. He mortgaged his
factories to RCBC. His factories were insured & he told
the insurance agent to endorse policies to RCBS.
Factories were struck by fire. Goyu claimed proceed.
MICO refused on the ground that policies were attached
& proceeds were claimed by other creditors of Goyu.
See Sec. 161: open policy rules in marine insurance; and Sec.
171: open policy rules in fire insurance.
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See Sec. 156: Valued policy rules in marine insurance; and Sec.
157: Valued policy rules in fire insurance.
Art. 1144 & 1445, CC: If no period agreed upon, the action
must be brought w/in 10 years (written contract) or 6 years
(oral contract).
You can stipulate a period when an action based on the
insurance contract can be brought. In the absence of
stipulation, the period is 10 years. However, if you do stipulate
and you limit the period to less than one year, the stipulation is
void.
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Title 7. Warranties
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Breach of warranty
1.) Without fraud: policy avoided only from time of the
breach and hence, the insured is entitled to:
a.) a return of premiums paid at the pro rata rate from
the time of the breach if it occurs after the inception
of the contract; or
b.) to all the premiums if it is broken during the
inception of the contract.
2.) With fraud: policy avoided ab initio and the insurer is
not entitled to the return of the premium paid.
Title 8. Premium
Sec. 77. Insurer entitled to premium from moment
risk attached; policy binding only when premium
paid; Exceptions (a life insurance policy where the
grace period applies)
Premium: The agreed price for assuming and carrying the risk.
It is the consideration paid an insurer for undertaking to
indemnify the insured against a specified peril.
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Title 9. Loss
Sec. 83. Agreement not to transfer claim after loss
happened is void.
Even if the proximate cause is not the peril insured against, the
insurer may still be held liable if the immediate cause is the
peril insured against.
3 kinds of causes:
1.) Remote;
2.) Proximate; and
3.) Immediate
Sec. 87. Insurer not liable for loss caused by willful act
or with connivance of insured; Insurer liable for
negligence of insured
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2.)
3.)
4.)
5.)
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Double insurance
Over insurance
Amount of insurance is
beyond the insureds insurable
interest
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Loss
= Liability of insurer
Read with Sec. 215 retention limits of non-life
companies not exceeding 20% of net worth on any one
risk. 20% of net worth= MAX liability for ONE subject of
insurance EXCEPT life insurance companies
P2M
Y:
P2M x P6M =
P12M
P1M
Z:
P4M x P6M =
P12M
P3M
Double Insurance
Original insurer remains an
insurer
Reinsurance Treaty
contract of indemnity
one insurer makes with
another to protect the 1st
insurer from a risk it has
already assumed.
Reinsurance
Reinsurance Policy
Contracts OF insurance
Formula to Pro-rate:
EXCESS x pro-rata contribution (fraction) = Share of
insurer from excess
SUBJECT: Property
Insurance of SAME interest
Insured is the party in interest
in all the contract
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Examples:
1.) Vessel will sail or is expected to sail
2.) Nature of cargo to be shipped
3.) Amt of profits expected
4.) Destination of vessel
5.) Statement that the insured has no doubt that he can
get insurance effected for a certain premium
Implied Warranties:
1.) Seaworthiness at inception of voyage (Sec. 113);
2.) Carry proper documents if nationality expressly
warranted (Sec. 120);
3.) No improper deviation (Secs. 123-125);
4.) Not an illegal venture (Vance).
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Compliance of Seaworthiness:
General Rule: Complied with if the ship be seaworthy at
time of commencement of the risk. Prior or subsequent
seaworthiness is not a breach of the warranty; nor is it material
that the vessel arrives in safety at the end of her voyage.
There is no implied warranty that the vessel will remain in
seaworthy condition throughout the life of the policy.
Exceptions:
1.) TIME POLICY: seaworthy at commencement of EVERY
voyage she may undertake
2.) CARGO POLICY: seaworthy at commencement of
EACH PARTICULAR VOYAGE
3.) VOYAGE POLICY: contemplating a voyage in different
stages, seaworthy at commencement of EACH
PORTION.
Scope of Seaworthiness:
1.) Vessel:
a.) Equipment & appliances appropriate to
voyage in which it is engaged & cargo it
carries
b.) Sufficient fuel, stores, & provisions to last for
the entire voyage
c.) Sufficient number of competent officers &
men
d.) Properly loaded, stowed, dunnaged, &
secured so as not to imperil navigation of
vessel OR cause injury to vessel or cargo
Kinds of deviation:
1.) Proper deviation;
2.) Improper deviation.
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Kinds of Average:
1.) Gross or general average: Include damages and
expenses which are deliberately caused by the
master of the vessel or upon his authority, in
order to save the vessel, her cargo, or both at
the same time from a real or known risk. A
general average loss must be borne equally by
all of the interests concerned in the venture
(Sec. 812, Code of Commerce).
2.) Simple or particular averages: Includes all
damages and expenses caused to the vessel or to
her cargo which have not inured to the common
benefit and profit of all the persons interested in
the vessel and cargo. They refer to those losses
which occur under such circumstances as do not
entitle the owners to receive contribution from
other owners concerned in the venture. It is
suffered by and borne alone by the owner of the
cargo or of the vessel, as the case may be (Sec.
808, Code of Commerce).
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Meaning: If the cause you specified in the notice is nonexistent, you will not be allowed to adduce evidence to
prove other causes for abandonment which you did not
so specify.
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Formula:
Partial Loss
Value of thing insured
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Amt of
Insurance
= Amt of
Recovery
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Compare with Sec. 172 (fire insurance) no coinsurance in fire insurance unless stipulated
Formula:
Market price
In sound state
Amt of
Depreciation
x
of
Market price in sound state
Recovery
= Amt
= Depreciation
Amt of
= Amt
Insurance
Profits
_ Market price
in damaged state
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liability
insurer
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Title 4. Suretyship
Sec. 175. Surety contract is an agreement where a party
(the surety) guarantees performance by another party
(the principal or obligor) of an obligation or undertaking
in favor of a 3rd party (obligee)
Nature of the liability of the surety:
1.) Joint and Several or Solidary This means that upon
default by the obligor in complying with his obligation
as secured by the bond, the surety becomes primarily
liable to the obligee who has the right to demand
payment under the terms and conditions of the bond.
2.) Limited to the amount of the bond
3.) Determined strictly by the terms of the contract of
suretyship in relation to the principal contract between
the obligor and the obligee.
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But see Art. 225, par. 2, Family Code which amends par.
3 of Sec. 180 Father and mother are joint legal
guardians over minor childrens property; no need of
court appointment; Guardians bond needed only when
minors annual income or property is more than P50,000
Life insurance: An insurance payable on the death of a
person, or on his surviving a specified period, or
otherwise contingently on the continuance or cessation
of life. It is a contract to make specific payments upon
the death of a person whose life is insured.
Life insurance may be made payable:
1.) On the death of the person;
2.) On his surviving a specified period; or
3.) Otherwise contingently on the continuation or
cessation of life.
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