Insurance Law

Quiz #1

SAMANTHA T. BARICAUA
11-05086

True or False
1. Delivery of the insurance policy is necessary for the perfection of an
insurance contract. FALSE
2. Insurance contracts must always be interpreted or construed against the
insurer based on the principle that insurance contracts are contracts of
adhesion. TRUE
3. An insurer may be a natural or juridical person. TRUE
4. A foreign insurance corporation is prohibited from making or transacting
insurance business in the Philippines.TRUE
5. An insurable risk may refer only to future unknown event. FALSE
6. A beneficiary in insurance contract cannot be changed without his/her
consent. FALSE
7. A cooperative is not allowed to engage in insurance business in the
Philippines. FALSE
8. Insurable interest in life insurance must exist at the time the policy takes
effect and at the time of the death of the insured. FALSE
9. Life insurance is a contract of indemnity. FALSE
10. As a rule, contract of suretyship is deemed an insurance contract. FALSE
11. A married woman cannot take out an insurance over her life without the
consent of her husband. FALSE
12. An insurance policy taken by a minor is void. FALSE
13. A beneficiary in life insurance must have insurable interest over the life of
the insured. FALSE
14. The beneficiary in property insurance must have insurable interest over
the property insured. FALSE
15. Insurable interest is waivable on the part of the insurer. FALSE

Objective
1. RA 10607 OTHERWISE KNOWN AS THE INSURANCE CODE the
law that mainly governs insurance business in the Philippines.
2. INSURANCE COMMISSION the government office or agency that
regulates the conduct of insurance business in the Philippines.
3. INSURER The party who undertakes to indemnify another.
4. CONTRACT OF ADHESION otherwise known as the Fine Print rule
5. INSURABLE INTEREST a relation or connection with, or concern in a
subject matter, that its destruction, termination or injury will create pecuniary
loss or damage to a person having such relation, connection or concern while
its preservation will give a pecuniary benefit or advantage to him.
Professor X is a very good faculty member of USC, College of Law. He is
known for his ability to anticipate or predict questions asked in the bar every
year. When Mr. Y, a bona fide first year law student of USC learned this, he
thought that becoming a lawyer is just a matter of time for as long as Prof. X
would stay healthy and safe. Does Mr. Y, have insurable interest over the life
and health of Prof X?

NO. Mr. Y has no insurable interest. Under the definition of insurable

interest stated in the Insurance Code,one must derive his subject matter
from pecuniary benefit or advantage from its preservation or will suffer
pecuniary loss or damage from its destruction , termination or injury by
the happening of the event insured against. Here, the mere thought of
Mr. Y shall become a lawyer for as long as Prof X would stay healthy and
safe is not be considered insurable interest.

H, husband, insured the life of his wife, W. Later, they were legally separated
pursuant to a judgment of a court.
a) If W dies after the legal separation, can H get the proceeds of the
insurance?

Yes. Where the husband insures the life of his wife, a subsequent legal
separation does not terminate the policy since in life insurance, the fact
that insurable interest ceases before the death of the insured is
immaterial.

b) Will your answer be same if instead of legal separation, H and W obtained

a decree of annulment and W dies after the decree became final?

Yes, a stranger can become the beneficiary of an insurance contract.