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G.R. No.

48049 June 29, 1989 Alleging that respondent company's
refusal to pay them the proceeds of the
EMILIO TAN, JUANITO TAN, ALBERTO TAN and policy was unjustified and unreasonable,
ARTURO TAN, petitioners, petitioners filed on November 27, 1975,
vs. a complaint against the former with the
THE COURT OF APPEALS and THE PHILIPPINE Office of the Insurance Commissioner,
AMERICAN LIFE INSURANCE docketed as I.C. Case No. 218.
COMPANY, respondents.
After hearing the evidence of both
O.F. Santos & P.C. Nolasco for petitioners. parties, the Insurance Commissioner
rendered judgment on August 9, 1977,
Ferry, De la Rosa and Associates for private respondent. dismissing petitioners' complaint. (Rollo,
pp. 91-92)

The Court of Appeals dismissed ' the petitioners' appeal
from the Insurance Commissioner's decision for lack of
This is a petition for review on certiorari of the Court of
Hence, this petition.
Appeals' decision affirming the decision of the Insurance
Commissioner which dismissed the petitioners'
complaint against respondent Philippine American Life The petitioners raise the following issues in their
Insurance Company for the recovery of the proceeds assignment of errors, to wit:
from their late father's policy. The facts of the case as
found by the Court of Appeals are: A. The conclusion in law of respondent
Court that respondent insurer has the
Petitioners appeal from the Decision of right to rescind the policy contract when
the Insurance Commissioner dismissing insured is already dead is not in
herein petitioners' complaint against accordance with existing law and
respondent Philippine American Life applicable jurisprudence.
Insurance Company for the recovery of
the proceeds of Policy No. 1082467 in B. The conclusion in law of respondent
the amount of P 80,000.00. Court that respondent insurer may be
allowed to avoid the policy on grounds
On September 23,1973, Tan Lee Siong, of concealment by the deceased
father of herein petitioners, applied for assured, is contrary to the provisions of
life insurance in the amount of P the policy contract itself, as well as, of
80,000.00 with respondent company. applicable legal provisions and
Said application was approved and established jurisprudence.
Policy No. 1082467 was issued effective
November 6,1973, with petitioners the C. The inference of respondent Court
beneficiaries thereof (Exhibit A). that respondent insurer was misled in
issuing the policy are manifestly
On April 26,1975, Tan Lee Siong died of mistaken and contrary to admitted
hepatoma (Exhibit B). Petitioners then evidence. (Rollo, p. 7)
filed with respondent company their
claim for the proceeds of the life The petitioners contend that the respondent company no
insurance policy. However, in a letter longer had the right to rescind the contract of insurance
dated September 11, 1975, respondent as rescission must allegedly be done during the lifetime
company denied petitioners' claim and of the insured within two years and prior to the
rescinded the policy by reason of the commencement of action.
alleged misrepresentation and
concealment of material facts made by The contention is without merit.
the deceased Tan Lee Siong in his
application for insurance (Exhibit 3). The The pertinent section in the Insurance Code provides:
premiums paid on the policy were
thereupon refunded . Section 48. Whenever a right to rescind
a contract of insurance is given to the

(Rollo. He was only pressured by insistent salesmen to do so.000. He was the years from the date of its issue or of its object of solicitations and visits. (pp. pressure of insurance selling-especially therefore. submitting the application misrepresentation. Part II. insurance has been in force for at least two years during the insured's lifetime. premiums paid on September 11. at page 205: 99-100) It is of common knowledge that the xxx xxx xxx selling of insurance today is subjected to the whirlwind pressureof modern The petitioners contend that there could have been no salesmanship. last reinstatement. preparing and answering th insured's fraudulent concealment or e application. et al.1975. Feliciano. He could rescindable by reason of the fraudulent have obtained a bigger insurance. to wit: This Honorable Supreme Court has had The policy was issued on November occasion to denounce the pressure and 6. concluding the respondent company rescinded the transactions and otherwisesmoothing contract of insurance and refunded the out all difficulties. Again Philamlife The key phrase in the second paragraph of Section 48 is did not.1973 and the insured died on April practice indulged in by agents in selling 26. the insurer cannot prove that the policy is void ab initio or is Assured was a man of means. Guinto.00. misrepresent and to conceal his ailments in anticipation of death during According to the petitioners. 73 Phil. It was he who representations or concealment of material facts insofar accomplished the application. Guinto.. pp. insurer by any provision of this chapter. respondent company is not. not concealment or misrepresentation of the just P 80. as health and previous diseases are concerned if the medical. Insurer Philamlife could have presented The so-called "incontestability clause" precludes the as witness its Medical Examiner Dr. Insular Life v." xxx xxx xxx As noted by the Court of Appeals. Here then is a case of an assured whose application was submitted After a policy of life insurance made because of repeated visits and payable on the death of the insured solicitations by the insurer's agent. Considering that the insured pressure. insurer from raising the defenses of false Urbano Guinto. a right to rescind after the death of the insured. shall have been in force during the Assured did not knock at the door of the lifetime of the insured for a period of two insurer to buy insurance. concealment or misrepresentation by their late father because Tan Lee Siong did not have to buy insurance. barred from proving that the of the agent's practice of 'supplying the policy is void ab initio by reason of the information. He did added to prevent the insurance company from exercising not. relative to Dr. At one time or another most a period of only one year and five of us have been subjected to that months. that practice. The phrase "during the lifetime" Philamlife could have put to the witness found in Section 48 simply means that the policy is no stand its Agent Bienvenido S. he certainly could amended and the second paragraph of Section 48 have gotten a bigger insurance. 138139. a longer considered in force after the insured has died. 201. This court took died before the two-year period had judicial cognizance of the whirlwind lapsed. The policy was thus in force for insurance. Rollo) "for a period of two years. Philamlife did not.1975. previous to the commencement of this We call attention to what this Honorable Court said in action on November 27. If his purpose were to insured or his agent. Moreover. . such right must be exercised previous to The petitioners state: the commencement of an action on the contract. to their companies. 1975. the Insurance Law was the two-year period.

5(c) and (d). the assured who dies within The evidence for respondent company the two-year period. having been subjected to the Rules of Court]. 23. and On the other hand. that no evidence was presented by respondent company to show that the The agents in short do what the questions appearing in Part II of the company set them out to do. submit the We agree with the Court of Appeals which ruled: applications to their companies. a businessman. by affixing his signature overwhelming as it is now. the deceased was The legislative answer to the arguments posed by the complaining of progressive weight loss petitioners is the "incontestability clause" added by the and abdominal pain and was diagnosed second paragraph of Section 48." They supply all the information. affirmed the population of this country was less than correctness of all the entries and one-fourth of what it is now. no diabetic for five years. 1973. misrepresentation. the insurance contract or of its last reinstatement within testified that the deceased came to see which to contest the policy.n. procure applications.n. (pp. matter how patent or well founded. whirlwind pressure of insurance salesmanship this Court itself has long denounced. whether or not. Dr. one another could be counted by the would not have affixed his signature on fingers.s.s. (t. no longer lie. [Sec. 5. pp. The petitioners' interpretation would give rise to hypertension. The petitioners argue that no evidence was presented to These agents are to be found all over show that the medical terms were explained in a the length and breadth of the land. (t. Rule 131. Rollo) Victoriano Lim and was found to be diabetic and hypertensive. application for insurance were asked. the insured him on December 14. unjust if. the xxx xxx xxx presumption is that a person intends the ordinary consequence of his voluntary act and takes ordinary care of his In the face of all the above. Aug. it would be concerns.1976. conclude the transactions. 140-142. petitioners argue otherwise smooth out all difficulties. the charged of fraudulent concealment and deceased was examined by Dr. Moreover. For. explained to and understood by the The Insular Life case was decided some deceased so as to prove concealment forty years ago when the pressure of on his part." (p. should stand shows that on September 19. when the answers appearing therein. 8-10.. be conducted before its issuance otherwise the insurer "waives whatever imperfection by ratification. diabetes and liver the incongruous situation where the beneficiaries of an disorders. After two years. respondent company was insured who dies right after taking out and paying for a thus misled into accepting the risk and life insurance policy. They layman's language to the insured. the petitioners allege offered by the other rival insurance that the policy intends that the medical examination must companies. prepare and answer the applications. Insurance companies send detailed policy even if the insured fraudulently concealed material instructions to their agents to solicit and facts. the consolation and claimed to have been defenses of concealment or misrepresentation. The insurer has two years from the date of issuance of Another physician. 1976. when the on the application form. The same is not well taken. It is but to insurance companies competing with be expected that he. Wenceslao Vitug. Rollo) the application form unless he clearly understood its significance. Exhibit 2). 1973 for still lives within such period. insurance salesmanship was not The deceased. p. Exhibit 6) Because of the Congress felt this was a sufficient answer to the various concealment made by the deceased of tactics employed by insurance companies to avoid his consultations and treatments for liability. 142. would be allowed to collect on the approving his application as medically .1972. August 23. They state that the are stimulated to more active efforts by insurer should have presented its two medical field contests and by the keen competition examiners as witnesses. that by January. to be suffering from hepatoma.

1996. Inc. The to compel insurers to solicit business from or provide petitioners cite: insurance coverage only to legitimate and bona fide clients. DECISION (Rollo. 184) On July 3. 96-98) DEL CASTILLO. The ultimate aim of Section 48 of the Insurance Code is (Sweet Lines. undertakings by fine print conditions which destroy the substance of the Assailed in this Petition for Review on Certiorari 1 are the promise. If they do not.00. The questioned decision of the Court of Appeals is AFFIRMED. Orient Protective Assurance Assn.: There is no strong showing that we should apply the "fine print" or "contract of adhesion" rule in this case.. Sotero did not personally apply for insurance jurisprudence.8 and came out with the burden to show that the factual findings of the following findings: respondent court are not based on substantial evidence or that its conclusions are contrary to applicable law and 1. following such insurance business from any Tom. history are in smaller print than the rest of the printed form or that they are designed in such a way as to Petitioner issued Insurance Policy No. an MANILA BANKERS LIFE INSURANCE applicant for insurance is presumed to CORPORATION. WHEREFORE. 747411 (the conceal from the applicant their importance. For as long G. conditions. 6 General of the United States is necessary. 175666 July 29. her niece. Respondent filed a claim for the insurance ascertaining whether or not the respondent Court of proceeds on July 9.1976. concealment or misrepresentation. 6-8). J. 62286 and its November 9.n. 1993. Petitioner. Teves. Respondent. Factual Antecedents (Trinidad v. burden. and associations which adopt high regardless of fraud.. We are limited in this petition to Sotero died.000. designating respondent form for insurance regarding the insured's medical Cresencia P. further medical investigation or CRESENCIA P.R. after the requisite medical required for cigarette advertisements by the Surgeon examination and payment of the insurance premium. they will from ignorant persons by companies be obligated to honor claims on the policies they issue.7 when the insurance policy had been protection against high pressure insurance in force for more than two years and seven months. CV No. v.5 as her beneficiary. Delia Sotero (Sotero) took out a life insurance policy from Manila Bankers Life Insurance There is no showing that the questions in the application Corporation (Bankers Life). 2013 as no adverse medical history is revealed in the application form. It is the petitioners' investigation into the claim. (t. by requiring them to thoroughly investigate those It is a matter of common knowledge that they insure within two years from effectivity of the policy large amounts of money are collected and while the insured is still alive.C) and dispensing SO ORDERED. 2005 Decision2 of the Court of Appeals' exceptions which in any way tend to (CA) in CA-G. They have failed to discharge that coverage. 83 SCRA 361 [1978]). the petition is hereby DENIED for lack of merit. with further medical investigation and examination (Exhibit 5-A). April 8. pp. indiscriminately soliciting and accepting black-faced type. in Sotero’s in bold red letters or a boxed warning similar to that favor on August 30. All provisions. with a face value of P100.4 for whose benefit they are inserted. Petitioner conducted an Appeals committed reversible error. be healthy and physically fit and no vs. 1996. salesmanship. work a forfeiture of the policy should be 2006 Resolution3 denying the petitioner’s Motion for construed most strongly against those Reconsideration. . or September 28. Aban (Aban). 2. sounding titles and print the amount of The law assumes that they will do just that and not sit on benefits they agree to pay in large their laurels. 1993. as she was illiterate. 67 Phil. that is for Congress or the Insurance Commission to provide as On April 10. If a warning policy). No. ABAN. pp. Dick and Harry.s.R. and most favorably toward those against whom they are meant to operate. Sotero was sickly since 1990. examination is conducted by respondent company. standard (Exhibit 5.

1998. respondent – and not Sotero – who obtained the insurance. the of an action on the contract. Dindo coverage was obtained. which was docketed as Civil Case No. petitioner denied respondent’s seeking a rescission or annulment thereof. and x x x designated effectivity of the policy to question the same. 2006 On December 9. concealment or others that the insurance underwriter who solicited the misrepresentation was present when the insurance insurance is a cousin of respondent’s husband. since the herself as the beneficiary.15and that it was the respondent who paid the statutory two-year period. 62286. Order17 granting respondent’s Motion to Dismiss. docketed as Branch 134 of the Makati Regional Trial Court.9 and on her own life and validly designate – as she did – respondent as the beneficiary. After a policy of life insurance made payable on the SO ORDERED.R. The main CA-G. petitioner filed a civil case for ground. Sotero could legally take out insurance application for insurance. 21 but the CA denied the same in its November 9. petitioner had only two years from the insurance application. 1997 and refunded the premiums paid on the policy.10 policy had been in force for more than two years. which Ruling of the Court of Appeals provides as follows: On September 28. equipped with ample means to determine. defendant CRESENCIA P.18 pay the insurance premiums on Insurance Policy No. the present Petition. whether fraud. but in another Order19 dated October 20.11 Petitioner moved for reconsideration. claim on April 16. the insurer 48 to petitioner’s case.16 protected and allowed to claim upon the policy. Respondent was the one who filed the Section 48. Sotero did not have the financial capability to SO ORDERED. thus: Issues WHEREFORE. petitioner’s cause of action was barred by prescription pursuant to Section 48 of the Insurance Code. It held further that under 5. 747411. such right must be exercised previous to the commencement WHEREFORE. 97-867 and assigned to Petitioner interposed an appeal with the CA. then the insured must be annual premiums on the policy. which contained the following decretal portion: given to the insurer by any provision of this chapter. and not respondent. It ratiocinated that petitioner was During the proceedings on the Motion to Dismiss. CV No. within the first petitioner’s investigator testified in court. thus. 97. rescission and/or annulment of the policy. in the light of all the foregoing. Civil Case No. petitioner is now barred from contesting the same or For the above reasons. It contended that since it was under Article 139013 of the Civil Code. 3. the trial court found that Sotero.12 which thus renders it voidable prescription has set in. If it failed to do so within the Aban. Petitioner raises the following issues for resolution: 867 is hereby dismissed. Sotero did not sign the July 3. 1997. the trial court issued an Resolution. 1997. In dismissing the case. 1993 insurance. stating among two years of the policy. was the one who procured the 4. Ruling of the Regional Trial Court Petitioner moved for reconsideration. instant appeal is DISMISSED for lack of merit.20 death of the insured shall have been in force during the lifetime of the insured for a period of two years from the The CA thus sustained the trial court. 97-867. the CA held that petitioner may cannot prove that the policy is void ab initio or is no longer prove that the subject policy was void ab initio rescindible by reason of the fraudulent concealment or or rescindible by reason of fraudulent concealment or misrepresentation of the insured or his agent. . arguing that the trial by fraud.22Hence. ABAN’s Motion to Dismiss is hereby granted. the trial court stood its On April 24. concealment and/or misrepresentation under court erred in applying Section 48 and declaring that the Insurance Code. 2005. the policy issued was rendered void ab initio Respondent filed a Motion to Dismiss14 claiming that for want of insurable interest. Applying Section date of its issue or of its last reinstatement. the CA issued the assailed Whenever a right to rescind a contract of insurance is Decision. misrepresentation after the lapse of more than two years from its issuance. Petitioner questioned the thesis of the Complaint was that the policy was obtained dismissal of Civil Case No.

. courts’ finding that it was Sotero who obtained the insurance for herself. insurable interest was present. sickly. as will latter’s name without her knowledge and consent. posing as Sotero. who was merely by the trial and appellate courts’ finding that Sotero Sotero’s niece. designating respondent as her III beneficiary. conclusion should be respected. no right to conducted after the claim for the insurance proceeds rescind arises. on the other hand. Respondent PERTINENT LAWS AND APPLICABLE submits that the CA’s findings of fact leading to such JURISPRUDENCE. and that respondent was an impostor. an insurer is given two years – from the nullity or inexistence does not prescribe. the results and conclusions arrived at during apply for insurance coverage. Both courts are in accord in this respect. had no insurable interest in the life of her herself took out the insurance for herself. be discussed at length below. if not totally disproved. Petitioner adds that Insurance Policy No. Reply24 that Section 48 cannot apply to a case where the Allegations of fraud. concealment. but that originally that the policy was merely voidable." 27 In the Relying on the results of the investigation that it absence of proof of such fraudulent intent. and could validly PRESCRIPTION IN CONTRAVENTION (OF) designate anyone as her beneficiary. as such. was unlettered. or when the Comment26 that the CA is correct in applying Section 48. respondent echoes the CA’s pronouncement that since it was Sotero who WHETHER THE COURT OF APPEALS ERRED IN obtained the insurance. having by fraud. even though the policy was obtained that the policy is void ab initio merits no attention. and the Court is loath to disturb this. While petitioner insists WHETHER THE COURT OF APPEALS ERRED IN that its independent investigation on the claim reveals DENYING PETITIONER’S MOTION FOR that it was respondent. as it appeared that Sotero did not actually Moreover. are at once belied circumstances. SUSTAINING THE APPLICATION OF THE INCONTESTABILITY PROVISION IN THE INSURANCE The Court will not depart from the trial and appellate CODE BY THE TRIAL COURT. SUSTAINING THE ORDER OF THE TRIAL COURT Under Section 10 of the Insurance Code. This is not failed to raise the same below. petitioner argues in its Petition and case is severely weakened. After the two-year period lapses. as it regulates the void ab initio and could not have given rise to rights and actions of both the insurer and the insured.23 the insurance. petitioner insists that respondent’s claim was spurious. this claim is no longer feasible in the wake of the courts’ finding that it was Sotero who obtained the insurance for herself. 747411 was Section 48 serves a noble purpose. Under the obligations. This finding of fact Petitioner’s Arguments binds the Court. posing serving and may not form the basis of a cause of action as Sotero and fraudulently obtaining insurance in the given the existence and application of Section 48. "Fraudulent aunt. Sotero had DISMISSING THE COMPLAINT ON THE GROUND OF insurable interest in her own life. or misrepresentation. insured dies within the period. In praying that the CA Decision be reversed and that the With the above crucial finding of fact – that it was Sotero case be remanded to the trial court for the conduct of who obtained the insurance for herself – petitioner’s further proceedings. was filed. essentially argues in her agent. It adds that respondent. the insurer must make She adds that petitioner’s new allegation in its Petition good on the policy. which are predicated on beneficiary under the insurance contract posed as the respondent’s alleged posing as Sotero and forgery of her insured and obtained the policy under fraudulent signature in the insurance application.I On the issue of insurable interest. who obtained RECONSIDERATION. II Our Ruling WHETHER THE COURT OF APPEALS ERRED IN The Court denies the Petition. and the investigation conducted unilaterally by petitioner after had no visible source of income to pay for the insurance the claim was filed may simply be dismissed as self- premiums.25 effectivity of a life insurance contract and while the insured is alive – to discover or prove that the policy is Respondent’s Arguments void ab initio or is rescindible by reason of the fraudulent concealment or misrepresentation of the insured or his Respondent. as it had claimed to say that insurance fraud must be rewarded. intent on the part of the insured must be established to entitle the insurer to rescind the contract. the action for the declaration of its provision.

to recover under the policy. on the (2) years from the issuance of the policy or its last other hand. In After two years. The phrase "during the lifetime" professes. legitimate policy holders discover such fraudulent concealment or are absolutely protected from unwarranted denial of their misrepresentation within a period of two (2) years. will no longer lie. Section 48 prevents a situation where the insurer Congress felt this was a sufficient answer to the various knowingly continues to accept annual premium tactics employed by insurance companies to avoid payments on life insurance. from the date of the last essentially treated as legitimate and beyond question. and the individuals who wield them are made secure by the thought that they will be paid promptly upon claim. only to later on deny a claim liability. it forewarns scheming individuals that their reinstatement. concealment. concealment. public in general. on the policy on specious claims of fraudulent concealment and misrepresentation. attempts at insurance fraud would be timely uncovered – thus deterring them from venturing into such nefarious The insurer is deemed to have the necessary facilities to enterprise. or misrepresentation. the defenses of concealment or this manner. for such insurer cannot prove that the policy is void ab initio or is recklessness and lack of discrimination ultimately work rescindible by reason of fraudulent concealment or to the detriment of bona fide takers of insurance and the misrepresentation of the insured or his agent. that is. on the policy. It gives insurers contract of insurance on the ground of fraudulent enough time to inquire whether the policy was obtained concealment or misrepresentation to a period of only two by fraud.insurers who recklessly and indiscriminately solicit and the date of its issue or of its last reinstatement. petitioner appears to have turned a blind eye found in Section 48 simply means that the policy is no and opted instead to continue collecting the premiums longer considered in force after the insured has died. only to raise the issue of misrepresentation by insurers. The insurance would be exposed. or the insured is still alive. founded. It "for a period of two years. Life insurance should commence in case the policy should lapse and is policies that pass the statutory two-year period are reinstated. For nearly three years. claims which may no fraudulent concealment or misrepresentation when the longer be set up after the two-year period expires as insured dies in order to defeat the right of the beneficiary ordained under the law. the beneficiary is given the stability assurance that any dishonest scheme to obtain life to recover under the policy when the insured dies. It is claims or delay in the collection of insurance proceeds not fair for the insurer to collect the premiums as long as occasioned by allegations of fraud. The Court therefore agrees fully with the appellate court’s pronouncement that – the "incontestability clause" is a provision in law that after a policy of life insurance made payable on the death of the insured shall have been in force during the lifetime of the insured for a period of two (2) years from . Section 48 must be applied to it with full force and effect. The purpose of the law is to give protection to the Section 48 regulates both the actions of the insurers and insured or his beneficiary by limiting the rescinding of the prospective takers of life insurance. no matter how patent or well- insurance industry. 747411 which would have timely exposed the insurance has been in force for at least two years during supposed flaws and irregularities attending it as it now the insured’s lifetime. and attempts at unduly provision also makes clear when the two-year period denying a claim would be struck down. the self-regulating feature of Section 48 lies in the At least two (2) years from the issuance of the policy or fact that both the insurer and the insured are given the its last reinstatement. At the same time. petitioner collected The key phrase in the second paragraph of Section 48 is the premiums and devoted the same to its own profit. Section 48 contributes to the stability of the misrepresentation. reinstatement. the obtain business must be penalized. instead of conducting insurer from raising the defenses of false at the first instance an investigation into the representations or concealment of material facts insofar circumstances surrounding the issuance of Insurance as health and previous diseases are concerned if the Policy No. Thus. such as what The so-called "incontestability clause" precludes the obtains in the instant case." cannot now deny the claim when it is called to account. Thus.

after the two-year period. or if they do not thoroughly investigate the policy was thus in force for a period of 3 years. the Court cannot sympathize interest.As borne by the records. the Petition is DENIED. The assailed conduct investigations on each policy they issue within September 28. the two-year period mandated under Section 48. 1996. Besides. thereafter conveniently deny insurance claims by questioning the authority or integrity of their own agents Well-settled is the rule that it is the plaintiff-appellant’s or the insurance policies they issued to their premium- burden to show that the factual findings of the trial court paying clients. then they should cease . naturally it was unable to detect the scheme. Considering that the insured died they have only themselves to blame. and thus insinuates that both and/or returns on both the premiums previously paid by connived to commit insurance fraud. herein defendant-appellee. This is exactly one of the schemes which are not based on substantial evidence or that its Section 48 aims to prevent. conclusions are contrary to applicable law and jurisprudence."31 with its plight. hoping that the inevitable may be put off for years – or even decades – Petitioner claims that its insurance agent. 30 "An because it did not and it investigated the Sotero account insurance contract is a contract of adhesion which must only after a claim was filed thereon more than two years be construed liberally in favor of the insured and strictly later. then months. The insurance products. Instead. generating profits or misrepresentation or want of insurable interest on the and returns therefrom for their own benefit. 1993. who solicited by the pendency of these unnecessary court cases.R. they benefit from collecting the interest respondent’s husband. No. For against the insurer in order to safeguard the former’s its negligence and inaction. the insured died on April 10. If this were truly the the insured and the insurance proceeds which should case. But country. The plaintiff-appellant failed to discharge Insurers may not be allowed to delay the payment of that burden. if insurers cannot vouch for the integrity and SO ORDERED.28 claims by filing frivolous cases in court. happens to be the cousin of the meantime. If they could not properly screen their August 30. The business of earlier if it had in earnest conducted an investigation into insurance is a highly regulated commercial activity in the the circumstances surrounding the Sotero policy. then petitioner would have discovered the scheme otherwise go to their beneficiaries. and not 2006 Resolution of the Court of Appeals in CA-G. and agents or salesmen before taking them in to market their the claim was denied on April 16. 1997. honesty of their insurance agents/salesmen and the insurance policies they issue. the policy was issued on doing business. insurers cannot be allowed to collect premiums on therefore. barred from proving that the policy is void ab insurance policies. the plaintiff-appellant is. and part of the beneficiary. Otherwise said. its case precisely provides the strong argument for requiring insurers to diligently WHEREFORE. use these amounts collected and initio by reason of the insured’s fraudulent concealment invest the same through the years.29 and is imbued with public interest. 7 insurance contracts they enter into with their clients. 62286 are AFFIRMED. and 24 days. 2005 Decision and the November 9. CV after claims for insurance proceeds are filed with them. In the Sotero account.