INSURABLE INTEREST

PROPERTY INSURANCE LIFE INSURANCE

The EXPECTATION OF BENEFIT must have The EXPECTATION OF BENEFIT to be

a legal basis derived from the continued existence of a
life need not have any legal basis

The actual value of the interest therein There is no limit to the amount of
is the limit of the insurance that can insurance that may be taken upon life
validly be placed thereon

An interest insured MUST EXIST when the It is enough that insurable interest exists
insurance takes effect and when the loss AT THE TIME WHEN THE CONTRACT IS
occurs but need not exist in the MADE but it need not exist at the time of
meantime loss.

CO-INSURANCE REINSURANCE

is the percentage in the value of the
insured property which the insured
himself assumes or undertakes to act as
insurer to the extent of the deficiency in
the insurance of the insured property.
is where the insurer procures a third
party, called the reinsurer, to insure him
against liability by reason of such original
insurance.
Basically a reinsurance is an insurance
against liability which the original insurer
may incur in favor of the original insured

EXCEPTIONS TO CASH AND CARRY BASIS

1. Life/industrial life when the grace period applies

2. Whenever under the broker and agency agreements with duly licensed
intermediaries, a ninety (90)-day credit extension is given. No credit extension to
a duly licensed intermediary should exceed ninety (90) days from date of issuance
of the policy.

3. An acknowledgment in a policy or contract of insurance or the receipt of premium

is conclusive evidence of its payment, so far as to make the policy binding,
notwithstanding any stipulation therein that it shall not be binding until the premium
is actually paid.

4. When the parties have agreed on installment payment (Makati Tuscany case)

5. When the insurer has renewed the insurance over the years under a clear credit
term arrangement (UCPB case)

6. In Suretyship where the obligee accepts the bond even if premium has not been
paid (Sec. 177)

WHEN IS INSURED ENTITLED TO RETURN OF PREMIUM?

1. If the contract is voidable and subsequently annulled under the provisions of the
Civil Code
2. On account of fraud / misrepresentation of insure/agent, facts insured was ignorant
of, default of insured other than fraud.
 PROVISIONS
1. SECTION 84- Proximate cause of the loss must be the covered peril
2. SECTION 86- PROXIMATE CAUSE
3. SECTION 87- LOSS IN THE COURSE OF RESCUE- insurer liable
4. SECTION 89- WILLFUL ACT/ CONNIVANCE OF INSURED- insurer not liable

5. SECTION 13- INSURABLE INTEREST

6. SECTION 14- CONSISTING OF INSURABLE INTEREST
7. SECTION 18- Beneficiary should have insurable interest in the property
8. SECTION 8- Insurable interest on mortgaged property
9. SECTION 17- Extent of measure of insurable interest
10. SECTION 20- suspension of insurance in the event of change of ownership
11. SECTION 58- Transfer of property does not transfer the policy
a. EXCEPT by:
i. Will; or
ii. Sucession

12. SECTION 59- Kinds of policy (SECTION 60-62)