Course Outline Atty, Mary Ann L. Reyes Introduction A. History of insurance 8 Laws governing insurance 1. Article 739, 2011, 2012-2017, 2189, 2207, New Civil Code 2. Insurance Code, RA 10607 (amending PD 612 as amended) 3. Family Code 4. Spetion 185, Corporation Code 5. CSIS Act, $85 Act 6 7. RA 5756 EO 250 uly 25, 1987) 8. RA3591 (PDIC Law) 9. RA 9829 (Pre-Need Cotte) 10. FO 192 (aMOs) Read: Enriquez vs, Sunlife Assurance, 41 Phil 269 (1920) Insular Life vs, Ebrado, 80 SCRA 181 (1977) Hilipinas-Compania de Seguros dle Nava, 17 SCRA 210 (1900) General concept of insurance 1. Suction 2, RA 10607 Test of insurance Kead: White Gold Marine Services vs. Pioneer Insurance, GR No, 154514, 28 July 2005; Philameare Health Services Ine. vs. CA, 379 SCRA 356 Suretyship (Sec. 2, RA 10607) Pre-need plans (See Securities Regulation Code) Variable contracts (Sec. 238, RA 10607) Doing an insurance business (Sec. 2, RA 10607) Read: Philippine Health Care Providers vs, Commissioner of internal Revenue, 600 SCRA 413, 7. Mutual insurance companies (See White Gold vs. Pioneet) - See mutual benefit associations under Sec. 403, RA 10607 Characteristics 1 risk distributing device 2 contract of adhesion (fine print rule) Read: Rizal Surety and Insurance Co, vs CA, 336 SCRA 12 Blue Cross vs. Olivares (Feb. 12, 2008) Fortune Insurance and Surety Co, vs. CA, 244 SCRA 308u x Gulf Resorts vs Philippine Charter insurance Cuxp., Gk No, 155167, May 16, 2005 ternal Gardens Memorial vs. Philaralife Insurance, GR No. 166245, April 9, 2008 Manila Bankers Life lasurance vs. Aban, GR 175666, July 29, 2013 3, aleatory (Art. 2010, Civil Code) 4 contract of indemnity (Sec. 4, RA 10807) Read: Verendlia vs, CA, 217 SCRA 417 E. Elements of insur ul a 3 4 5 Read: F, # ALB ‘ceptions to the principle of indemnity Uuberrimae fides contract nee insurable interest (See. 10-14, RA 10607) Risk of loss [Sec. 3 (1), Sec. 51 par RA 10607] ‘Assumption of risk (Sec. 2, RA 10607) Distribution of losses Premium (Sec. 77, RA 10607) Gulf Resorts vs. PCIC Philamlife Health Systems vs. CA, GR 125878, March 18, 2002 Subject matter of a contract of insurance Event or peril insured against [Sec. 3(1), Sec. 86, RA 10607] Risk, defined; pure vs. speculative risk; past event; distinguished trom Tortuitous event and condition, loss, peril, hazard Right of subrogation (Art, 2207, Civil Code) 1. Exceptions to the subrogation rule Feakied Expt. us fener Clon farce farenbinte , CRIWOTY, Mes Manila Mahogany Manufacturing Corp. vs, CA, Gi 1-52750 Oct. 12 1987 Federal Express Corp. vs. American Home Assurance, CR 150004, August 18, 2004 Keppel Cebu Shipyard vs. Pioneer Insurance, Sept. 25, 2009 Malayan Insurance vs, Alberto, GR 194320, Feb. 1, 2012 Asian Terminals v, First Lepanto, GR 185964, June 16, 2014 Ve Kins fi Insunence Contract of Insurance A. B. Read: 1994 Requisites of a contract of insurance (Ast, 1318, New Civil Coe) Perfection (Art. 1319, NCC) 1. Cognition theory Development Bank of the Philippines vs, CA, GR, 100987, March 21 Enriquez vs, Sun Life Insurance of Canada, GR. 15895, Nov. 29, 1920 osaw 30,1979 c Ansurab! A, B, ¢ D, Great Pacific Life Assurance vs, CA, GR Nos. 31845. & 31873, April Parties to a contract of insurance (Sec. 6 & 7, RA 100U7) 4. the insurer, the insured, the beneficiary 2, Soe Art. 38, NCC; 3, rule on married women (Sec. 3, RA 10607) 4. rule on minors (See. 3, RA 10607) 5. public enemy capacity of party insured (natural, juridical persons) the insurer (Sec. 199-193, RA 10607 ; Sec. 288 on professional reinsurers; Sec. 403-405 on mutual benefit associations) 8. the beneficiary [Art. 739, 2012, NCC; Read: Insular Life vs Braco; See, 11, RA 10607); Sec. 182, KA 10607); Art. 225, Family Code; Sec, 53, RA 10607)] Art-04, Foxensly Coste Subject matter of insurance (Sec. 3, RA 10607) Insurance not a wagering contract (Sec. 4, RA 10607) le Interest Concept of insurable interest in general Reason for the requirement of insurable interest insurable interest in life insurance (Sec. 10, 11, 12, RA 10607) insurable interest in property insurance (Sec. 13-18, RA 1007) 1. Kinds of insurable interest in property Read: Gaisano Cagayan Inc. vs. Insurance Company of North America, GR No. 147839, June 8, 2006) 2. Insurable interest in case of mortgaged property (Sec. 89, RA 10807) a, standard or union mortgage clause b. open mortgage or loss payable clause Read: Geagonia vs. CA, February 6, 1995 RCBC vs, CA, 289SCRA 292 brea Recetee tate 0. CA, 31 SERA G92, C4. 13, 1999 3. Separate insurable interest of mortgagor and mortgagee (See 53 and 95, RA 10607) 4. When must insurable interest in property exist (Gee, 19, K 10607) Larrea y Mastin Hele Assunamee, © 18 P52 5. __Insurable interest of beneficiary in property, lie insurance 6. _Liffect of change of interest in the thing insured (Sec. 20-24, 57858, RA 10607; Art. 1306, NCC) 7. Assignee in life, property insurance [Sec, 184, See. 18, RA 10607)Read: Spouses Cha vs, CA, August 18, 1997 Cases under this topie: Spouses Cha vs, CA, (August 18, 1997); Geagonia vs, CA,-” February 6, 1995); RCBC vs, CA (289 SCRA 282); Gaisano Cagayan, Inc. vs, Insurance Company of North America, G.R, No, 147839 (June 8, 2006}, IV. Devices For aycertaining and controlling risk and loss A. Concealment 1 Concept (See. 26, RA 10607) 2 Duty to communicate (Sec. 28, KA 10607) 3 est of materiality (See. 31, RA 10607) 4 Effect of concealment (Sec. 27 & 29, ICP) 5 ‘Matters which need not be communicated (See. 30, 32, 34, & 35, RA 10607) 6 Waiver of information (Sec. RA 10607) B, Representation Concept (Sec, 36, RA 10607) Kinds of representation (Sec. 36, 37, 39, 42, RA 10607) ‘Test of materiality (Sec. 46, RA 10607) fect of alteration or withdrawal (Sec. 41, iA 10607) ‘Time to which representation refers (Sec. 42, RA 10607) Effect when representation is obtained from third persons (See. 43, RA 10607) 7, When prosumed false; effect of falsity (Sec. 4 & 45, RA 100077) 1 2, 8. 4 5 6 C. Remedies available in case of concealment or false representation 1. When rescission by the insurer may be exercised (Ses 48, KA 110607) 2 When life insurance policy becomes incontestable (Sec. 43, RA 10607) requisites for incontestability b. theory and object of incontestability © defenses not barred by incontustability DB. Warranties Concept; distinguished from representation 2 Kinds of warranties (express, implied, aitirmative. promissory) 3, Time to which warranty refers (Sec. 68, RA 10607) 4. fect of breach (Sec. 74, 75, & 76, RA 10607) Great Pacitic Life Assurance vs, CA (316 SCRA 678); Sun Life Assurance Co, of Canada vs.CA (GR. No. 105135, June 22, 1995); Philamcare Health Systoms Inc. vs CA (379 SCRA 356); Vda de Canilang vs, CA (GR No, 92499, June 17, 1993)CA (lune 29, 1989); Prudential Guarantee vs. Trans-Asia No. 151890, 20 une 2006 Mona Himans y Anen, “ER PTC Fhacodt v. Phetenr Plons, ER set9e3, fans, GR $0983, Rb 22, 1d V. The Folicy of Insurance A. Definition and form (Sec. 49-50, RA 10007) - see new provision re electronic fora B, Tine print rule | Contents of the policy (Sec. 51, RA 10607) ‘ DB. Papers attached to the policy and their binding vtfoct (vider, | Warranties, clause, endorsement) E. | Kinds of policy ja open (See. 60, RA 10607) 2 valued (ec. 61, RA 10607) 3. running (Sec. 62, RA 10607) : Cover notes (See. 52, RA 10607) G. Cancellation of policy (See, 65-66, EA 10507) 11, Time te commence action on the policy; effect of stipulation (Sec. 03, RA 10607) =ases! Pacific Timber Export Comporation vs. CA (112 SCRA 199); Great Pacific Life Assurance Corporation vs. CA, 89 SCRA 543); PhilAm Life and General Insurance Co. vs, Judge Valencia-Bagalacsa (GR No. 139776; August 1, 2002) VL Premium A. Concept B. Effect of non-payment of premium; RA 10607, Art, 1306, NCC) ‘ceptions (Sec. 77,73, When insured entitled to return of premiums (Sec, 80-84, RA [Dob?) Payment through salary deduction (Sec. 78, RA 10807) Future premiums (Sec. 84, RA 10607) ron wus: Makati Tuscany Condominium Corp. vs CA (215 SCRA 462); UCPB Ci Insurance vs. Masagana Telamart (lune 15, 1999}, UCPB General Insurance vs, Masagana Telamart (956 SCRA 307); American Home Insurance vs. Chua (GR. No. 130421, June 28, 1999); Tibay vs. CA (257 SCRA 125); Phil, Phoenix Surety vs, Woodworks, Ine, (92SCRA S19) “angus ¢ Ba Fase AONE, ¢ 2 16,2 Vil. Persons entitled to recover on the policy and conditions to recovery Beneticiary (See, 11 A , 53, 56, 57, KA 10807) B. Limitations on the appointment of beneficiary (Art 2012 & 739, NCC) C. Rule where insurance is made by an agent or trustee (Gee. 54, RA 10607) BD. _, Rule where insurance if made by partner or part owner (Sev. 55, RA 10607)E, Loss (Gee. 83-87, ICP; Sec. 85-89 RA 10607) Sec. 175, IH-I85, RAL 10007) E Notice and proof of loss (Sec. 90-94, RA 10807), See also Sec. 185, RA 10607 Cases: Bonifacio Bros, Inc. vs, Mora (May 29, 1967); The Insular Life Assurance vs, ibrado, 80 SCRA 181); Vda. de Consuegra vs. GSIS (37 SCRA 315); Go vs. Redfern (72 Phil 71); Country Bankers Insurance Corporation vs. Lianga Bay (January 2: 2002) Hews &f Mareney, OR KURZ, bn S, 0G) Vill, Double Insurance A. Definition and requisites (See. 95, RA 1007) B. Distinguished from over-insurance C. Stipulation against double insurance D. Rules for payment where there is ov insurance (Svc 96, RA 10607) Yen) LUMEN Y Phokiyppyag Fist bnien ere, G24 SCRA 268, cea insurance by doubl IX, Reinsurance A. Definition Gee. 97, RA 10607) B. Nature (ee, 99 & 100, RA 10607) C. Distinguished from double insurance D. Duty of reinsured to disclose facts (Sec. 98, RA 106U7) X. Marine Insurance A. Definition B. Scope of marine insurance (Sec. 101, RA 10507) C. + Risks or losses covered in marine insurance 1, perils of the sea vs. perils of the ship 2, “all risks” marine insurance policy Inchimana clause (Ccbdu Shypyjend « vithewen bres, 20 SCRA Pet, He 1D, Insurable interest in marine insurance 1. ship owner's insurable interest (Sec. 102, RA 1007) a. rule where vessel is chartered (See. 102, RA 10007) b. rule where vessel hypothecated by battomry (Sec 103, RA 10607) insurable interest in freightage (Sec. 104-10, RA 10807) 2 charterer’s insurable interest (Sec. 108, RA 10607) 3 interest in the thing and in profits (Sec. 107, RA 10607), E. Concealment 1 ‘Meaning of concealment in marine insurance 2 Duty to communicate (Sec. 109, RA 10607)GC H. 3, 10607) 4, 5. Opinions or expectations of third persons (See. 110, RA When concealment does not vitiate the entire contract (See 112, RA 10607) Presumption as to knowledge (Sec. 1, RA 10007) Representations 1 2. Effect of false representation by the insured (Sec. 113, RA 10607) Bifect of false representation as to expectation (See. 114, RA 110607) Implied Wacranties in Marine Insurance 1 Loss Seaworthiness (Sec. 115, RA 10607) 2 what constitutes seaworthiness (Sec. 116, 118, 121 RA 10607 b. when complied with; Exceptions (Sec. 117, RA 110807) © when voyage consists of different portions (Sec. 119, RA 10607) 4. rule whete ship becomes unseaworthy in the course of the voyage (Sec. 120, RA 10607) @. cargo seaworthiness (Séc. 121, RA 10607) Warranty that necessary documents are carried (See. 122, KA. 10607) Warranty against improper deviation a. meaning of deviation (ec, 125, RA 10007) b. whatis voyage insured ee, 123, RA 10607) € if course of sailing not fixed (See. 124, RA 10007) 4. when proper (ee. 126, RA 10607) © effect of improper deviation (Sec, 122, KA 10807) t loss subsequent to improper deviation (Sec, 128, RA 10607) Kinds of losses (total or partial, Sec. 129-130, RA 10607) Kinds of total loss (actual and constructive) (Sec. 131-134, RA 10607) When ship prevented from completing voyage (Sec. 135, RA10607) Liability for damages in case of reshipment of cargo (Sec 136, RA 10607) Right to payment upon an actual wotal loss (Sec. 137, Ra 10607) Scope of insurance against actual total loss (See. 139, RAT0607) When constructive total loss exists Gee. 41, RALDO07) Concept of abandonment and its requisites (Sec. 140,-157, RA 10607) AverageKinds of average (particular and general) Requisites of general average Insurer's liability for general average (Sec. 166-167, RA10607) 4 New Jason Clause 10, Measure of Inclemnnity (Sec. 158-168, RA 1007) Cases: Roque vs. IAC (139 SCRA 596); Go Tiaco vs, Union Ins, Society of Canton (40 Phil 401); Cathay Insurance vs. CA (151 SCRA 710); Filipino Merchants Insuran vs. CA (179 SCRA 638); Oriental Assurance Corporation vs. CA (200SCRA 459) XL Fire Insurance A. | Definition and scope of fire insurance (Sec. 169, RA10007) B. | Risks or losses covered C. | Effect of alteration in the thing insured (Sec. 170-171, RA10007) D. | Read See. 172, RA 10607 E, — Measure of indemnity (Gee, 173-174, RA 10607) F,——Co-insurance clause G. Prohibitions (Sec. 175, RA 10607) Cases: Malayan insurance Co. vs. PAP Co., GR 200784, August 7, 2013 XI Casualty Insurance A. Concept (Gee. 176, RA 10607) B. —_ Kinds of Casualty Insurance Theft and Robbery Insurance D, Personal Accident and Health Insurance Read: Sun Insurance Office Lt vs CA, July 17, 1992 rome Finman General Assurance vs CA, Sept. 2, 1992 Biagtan vs Insular Life Assurance, 44 SCRA 58 Glass Insurance Employers Liability Insurance Motor Vehicle Liability Insurance Compulsory Motor Vehicle Liability Insurance (See. 380-402, RA 110507) 1. Third Party Liability Insurance Requirement (Sec. 387 and 389, RA 10607) ‘Third Party Defined (Gee. 386c, RA 10607) Amount of Indemnity (Sec. 390, RA 10607) No Fault ndemnity Clause (Sec. 391, RA 10007) Change or Ownership (Sec. 395, RA 10607) Notice of Claim/ Prescription of Action (Sec. 397, RA 10607) Direct Liability of insurer to Third Party Authorized Driver Clause (whether voluntary or compulsory motor vehicle insurance) exe eEeD9 Theft Clause - Read: Paramount Insurance vs. Sps. Remonduelaz, GR 173773, Nov. 28, 2012 1 _Insurable Interest in Liability Insurance J. Meaning of “Accident” and “Accidental” in Casualty Insurance K. Basis and extent of insurer's liability aaa aus Aineigade, 453 SCRA 222, spt, 2008, soarayan irisname v FO inverts, F4 KK 26, fadgy, 2012 "CTPL), Mfocerter v. prricerewee XUL, Suretyship Comonssiin, G2 19/21, vei 2¢, [pou (humrert ged! Pan V Tele Claus), Malden Inccaand © Aibcrw (oud SrA Definition (Sec. 177, RA 10607) Feat, oD Natuze of liability of surety (Gee 178, RA 10807) Distinctions between suretyship and property insurance (See. 179, RA 10607) Amevecon Tone pricneute » FF Cnty OT SCRA 248, frag ne> Au XIV. Life hisurance A. Definition (See. 181 and 182, RA 10007) B. | Kinds of life insurance C. Liability of insurer in case of suicide (See. 183, KA 10007) D. Right to assign life insurance policy (Sec. 1844185, RA 10007) E, Measure of indemnity (Sec. 186, RA 10607) XV. Microinsurance A. Definition (See, 187, RA 10607) XVI. Claims Settlement A. Unfair claim settlement practices (Sec. 247, RA 10607) B. Claims for life insurance policies (Sec. 248, RA 10607) C. Claims for non-life insurance policies (Sec. 249, RA 10607) D., Delay in payment of claims (Sec. 250, RA 10607) Cases: Tio Khe Chio_vs. CA (September 30, 1991); Finman General Assurance Corporation (luly 12, 2001); see again: Prudential Guarantee vs. Trans-Asia Shipping Lines, Ine. G-R_ No. 151890, 20 June 2006 XVI. The Lnsurance Commissioner A, Aduninistrative and Adjudicatory Powers (See. 437-139, RA 10007) XVII Pre-Need Code (RA 9829) What are Pre-Need Plans What is a Pre-Need Company Jurisdiction of the Insurance Commission over Pre-Need Companies Unfair Claims Settlement Practices (Sec. 25, Pre-Need Code) Consequences of Delay or Default (Sec. 28, Pre-Need Code) mone>HMOs (EO 192) What are Health Maintenance Organizations (Sec. 2, EO 192) ‘Authority Insurance Commission over HMOs (Sec. 1, 4 &5 EO 192) Purpose for Transfer of Regulation and Supervision over HMOs from DOH toc