Insurance Law

Course Syllabus
Atty. Maria Christina S. Sagmit
SY 2020-2021

GRADING SYSTEM:

Recitation - 30%
Midterms - 30%
Finals - 40%

PART ONE
Insurance Law in General

I. Introduction

A. History- www.investospedia.com The History of Insurance

B. Laws governing insurance
C. Rules of construction

Qua Chee Gan v. Law Union, Dec. 17, 1955

Gulf Resorts v. PCIC, May 16, 2005
Alpha Insurance v. Castor, September 2, 2013
Fortune Care v. Amorin, March 12, 2014

D. Regulation of the insurance business

E. Statute of Limitations

Summit v Hon. De Guzman, June 30, 1987

Gaisano Cagayan v. Insurance Company of North America, June 8,
2006
H.H. Hollero v GSIS September 24, 2014

F. Basic Framework

II. General concepts

A. Contract of Insurance – 2(1)

Philamcare v. CA, March 18, 2002

Philippine Health Care v. CIR, June 12, 2008

B. Insurance business – 2(2); 429

 White Gold v. Pioneer, July 28, 2005

C. What may be insured against – 3, 84; 1174 Civil Code

Guingon v. del Monte, 20 SCRA 1043

Bonifacio v. Mora, 20 SCRA 261

D. Insurance for or against drawing of lottery – 4, 25

Uy v. Palomar, 27 SCRA 287

Londres v. National Life, March 29, 1954

III. Kinds of Insurance

A. Life Insurance

1. Kinds – 181-183, 192 8th paragraph; 2021 Civil Code

a. Ordinary life
b. Limited Payment life
c. Term Insurance
d. Endowment
e. Life Annuity
f. Accident

Sun Insurance v. CA, 211 SCRA 554

Dela Cruz v. Capital, 17 SCRA 559
Finman v. CA, 213 SCRA 493
Gallardo v. Morales, 107 Phil 903

2. Classes

a. Individual
b. Group

Pineda v. CA, 223 SCRA 754

c. Industrial – 235
d. Microinsurance- 187, 188
 https://business.inquirer.net/268472/insurance-commission-38-9m-
filipinos-covered-by-microinsurance-in-2018

https://businessmirror.com.ph/2016/02/17/mutual-benefit-
associations-and-microinsurance/

B. Non-life Insurance

1. Types

a. fire – 169
b. casualty – 176
c. marine – 101
d. compulsory motor vehicle – 386
e. suretyship - 177

PART TWO
Life Insurance

I. What may be insured against, contingencies – 3, 89, 182-183, Sec. 3, Rule 131 Rules of
Court

Gallardo v. Morales, 107 Phil 903

Calanoc v. CA, 98 Phil 79
Biagtan v. Insular, 44 SCRA 58
Dela Cruz v. Capital, 17 SCRA 559
Sun Insurance v. CA, 211 SCRA 554

II. Insurable interest – 10, 19 2nd part, 25, 184 in relation to 11

A. In one’s own life, Section 42 of RA 11166 

A. In one’s spouse and children
B. Based on dependence for education and support – 195, Family Code
C. Based on pecuniary interest

El Oriente v. Posadas, 56 Phil 147

E. Based on legal obligation

III. The Life Insurance Policy – 49-52, 56, 232-237

Jarque v. Smith, 56 Phil 758

Fortune v.CA, 244 SCRA 308
 De Lim v. Sunlife, 41 Phil 263
Badger v. New York Life, 7 Phil 381
Enriquez v. Sunlife, 41 Phil 269
Lucero de Sindayen v. Insular, 62 Phil 9
Perez v. CA, January 28, 2000
Pineda v. CA, 226 SCRA 754
Great Pacific v. CA, 89 SCRA 543
Tang v. CA, 90 SCRA 236

IV. Premiums – 77, 78, 233(a), 234(a), 236(a)

Aleja v. GSIS, 13 SCRA 212

Areola v. CA, 236 SCRA 643
Constantino v. Asia Life, 87 Phil 248
Ocampo v. Government Insurance, 78 Phil 216
Insular Life v. Suva, 62 Phil 346

V. Parties to the Contract – 3

A. Insurer – 6, 190-197; 403

B. Insured – 7

1. In general

Filipinas v. Huenefeld, 89 Phil 54

2. Rights

a. Right to borrow on policy – 233(g)

b. Right to dividends if participating policy – 233(e), 236(e), 201,
233(j), 236(j)
c. Right to reinstatement

Andres v. Crownlife, 102 Phil 919

d. Right to transfer/bequeath – 184- 185

Sunlife v. Ingersoll, 41 Phil 331

Grepalife v. CA, October 13, 1999

C. Cestui que vie

D. Beneficiary – 2012 Civil Code, 11-12

SSS v. Davac, 17 SCRA 863

 Insular v. Ebrado, 80 SCRA 181
In re: Chanliongco, 79 SCRA 364
Gercio v. Sunlife, 48 Phil 53

VI. Measure of indemnity – 186, 10©

VII. Special rights of insured in case of default

A. Cash Surrender Value – 233(f-h), 236(f)

Manufacturer's Life v. Meer, 89 Phil 351

B. Extended Insurance – 233(j)

C. Paid Up Insurance
D. Automatic Premium Loan

PART THREE
Non-Life Insurance

I. What may be insured against – 3, 86-89

Heirs of Coscolluela v. Rico, 179 SCRA 511

Prats v. Phoenix, 52 Phil 807
East v. Globe, 57 Phil 576
Paris v. Phoenix, 49 Phil 753

II. Insurable interest – 13-18, 19 1st paragraph, 20-25, 58, Sec. 6 Act No. 3893

Lampano v. Jose, 30 Phil 357

Traders v. Golangco, 95 Phil 826
Filipino v. CA, 179 SCRA 638
Cha v. CA, 277 SCRA 690
Garcia v. Hongkong, 45 Phil 122
Lim Cuan Sy v. Northern, 55 Phil 248
Chucuhe v. Insurance Commission, 158 SCRA 366
San Miguel v. Law Union, 40 Phil 674
RCBC v. CA, 289 SCRA 292
Paramount v. Castro, April 19, 2016
Gaisano Cagayan v. Insurance Company of North America, June 8, 2006
III. The Insurance Policy – 49-51; 56-58, 66

1. In general

Ang Giok v. Springfield, 56 Phil 375

Phil. Phoenix v. Woodworks, 92 SCRA 419
Gonzales v. Yeh Ting, 55 Phil 386
Pacific Timber v. CA, 112 SCRA 199

2. Kinds of non-life insurance policy – 59-62

Harding v. Commercial, 38 Phil 464

Development v. IAC, 143 SCRA 62

IV. Premium – 77, 79, 81-82, 179

Phil Phoenix v. Woodworks, 92 SCRA 419

Arce v. Capital, 117 SCRA 63
Capital v. Plastic Era, 65 SCRA 134
Velasco v. Apostol, 173 SCRA 228
Valenzuela v. CA, 191 SCRA 1
Phil. Phoenix v. Woodworks, 20 SCRA 1271
Phil. Pryce v. CA, 230 SCRA 164
Reparations v. Universal, 83 SCRA 764
Makati v. CA, 215 SCRA 462
Tibay v. CA, 257 SCRA 126
Malayan v. Arnaldo, 154 SCRA 672
UCPB v. Masagana, April 4, 2001
Gaisano v. Development Insurance, February 27, 2017

V. Parties to the contract – 6-8

A. Insurer – 6, 190-197; 403-406

B. Insured – 7

VI. Double insurance v. Reinsurance – 95-100

Equitable v. Rural, 4 SCRA 343

 Pioneer v. Yap, 61 SCRA 426
Geagonia v. CA, 241 SCRA 152
Pioneer v. CA, 175 SCRA 668
Gibson v. Revilla, 92 SCRA 219
Artex v. Wellington, 51 SCRA 352
Malayan v. Philippine First, July 11, 2012

VII. Different kinds of non-life insurance

A. Marine insurance – 101; 102-108; 158

Malayan v. CA, 270 SCRA 242

Cathay v. CA, 151 SCRA 710
Choa v. CA, 183 SCRA 223
Filipino v. CA, 179 SCRA 638
Caltex v. Sulpicio, 315 SCRA 709
Mayer v. CA, 274 SCRA 432

B. Fire insurance – 169, 173-174

Del Castillo v. Metropolitan, 85 Phil 678

Filipinas v. Tan, 85 Phil 379

C. Bancassurance- 375-377

D. Casualty insurance – 176

Fortune v. CA, 244 SCRA 308

Machette v. Hospicio, 43 Phil 297

Phil. Pryce v. CA, 230 SCRA 164

2. Compulsory Motor Vehicle Liability – 386, 389

Tanco v. Phil. Guarantee, 15 SCRA 313

PART FOUR
Payment of Proceeds and Filing of Claims

I. In life insurance - 248, 182

1. In general
2. Death as the suspensive condition
 Fernandez v. National, 105 Phil 59

3. Proof of death v. Notice of death

Londres v. National, 94 Phil 627

4. Facility of payment clause – 234(f);237© in relation to 236(m)

II. In non-life insurance – 249-250, 88-91

A. In general

1. Loss – 86-89

2. Notice and proof of loss – 90-94

Finman v. CA, July 12, 2001

Cathay v CA, June 5, 1989
BPI v Laingo, March 16, 2016
Asian Terminals v. Malayan , April 4, 2011

3. Payment of proceeds

Mla. Mahogany v. CA, 154 SCRA 650

Yu v. Fieldmens, 14 SCRA 491
Le Bog v. Hanover, 1 SCRA 599
Chuy v. Philam, 95 Phil 282
RCBC v. CA, 289 SCRA 292
Zenith v. CA, 185 SCRA 398

4. Right of subrogation

American Federal v. American, August 18, 2004

Aboitiz v. Insurance Company, August 6, 2008
Henson v. UCPB, August 14, 2019
Gulf Resorts Inc. vs. Philippine, May 16, 2005
Federal Express vs. American, August 18, 2004
Eternal Gardens vs. Phil. American, April 9, 2008
Equitable v. Transmodal, August 7, 2017

B. In marine insurance
 1. Loss – 129-139

Phil. Manufacturer v. Insurance, 42 Phil 378

Pan Malayan v. CA, 201 SCRA 382
Jarque v. Smith, 56 Phil 758

2. Measure of Indemnity – 158-168

3. Abandonment – 140-157

Oriental v. CA, 200 SCRA 459

C. In compulsory motor vehicle liability insurance; No fault indemnity clause – 397

and 398 paragraph 2 in relation to 391; Insurance Memorandum 4-2006

GSIS v. CA, 308 SCRA 559

Tiu v. Arriesgado, Sept. 1, 2004
Perla v. Ancheta, 169 SCRA 144
Palermo v. Pyramids, 161 SCRA 677

III. Litigation to satisfy claims; Jurisdiction of the Insurance Commission and regular courts;
procedure – 63; 250; 439; 417-418

Eagle Star v. Chia, 96 Phil 696

Traveller's v. CA, 272 SCRA 536
Filipino v. Alejandro, 145 SCRA 42
ACCFA v. Alpha, 24 SCRA 151
Vda de Gabriel v. CA, 264 SCRA 137
Country Bankers v. Traveller's, 176 SCRA 523
Paramount v. Castro, April 19, 2016 supra
Philamlife v. Ansaldo, 234 SCRA 509

IV. Unfair settlement practices – 247

Malayan v. Lin, January 16, 2017

V. Illegal claims- 251

PART FIVE
Grounds for Rescission

I. Concealment – 26,27,29

A. In general
 Great Pacific Life v. CA, 89 SCRA 543
Musngi v. West Coast, 61 Phil 864
Sunlife v. CA, 245 SCRA 268
Grepalife v. CA, October 13, 1999
Philamcare v. CA, March 18, 2002
Manulife v. Ybanez, November 23, 2016

1. What must be communicated – 28, 29

2. What need not be communicated – 30, 32, 34, 35
3. Waiver of right to information of material facts -33

Ng Gan Zee v. Asian, 122 SCRA 461

4. Test of materiality - 31

Vda de Canilang v. CA, 223 SCRA 443

Philamcare v CA, March 18, 2002

B. In marine insurance – 109-112

C. In life insurance - Incontestability clause – 48 2 nd paragraph, 233(b), 234(b),

236(b)

Tan v. CA, 174 SCRA 403

Sunlife v. Bacani, June 22, 1995
Manila Bankers Life Insurance Corp.  v. Aban, July 29, 2013
Sun Life v. Sibya June 8, 2016

II. Misrepresentation

A. In general – 36-43

Eguaras v. Great Eastern, 33 Phil 263

Argente v. West Coast, 51 Phil 725
Saturnino v. Philam, 7 SCRA 316

1. as a ground to rescind – 45, 48 1st paragraph

Ng Gan Zee v. Asian, May 30, 1983

United v. Country Bankers, July 11, 2012
Benguet v CA, February 9, 2001
 2. test of falsity – 44
3. materiality – 46

B. In life insurance

1. Incontestability clause – 48 2nd paragraph, 233(b), 234(b), 236(b)

Manila Bankers v. Aban, July 29, 2013

2. Misrepresentations as to age – 233(d)

C. In marine insurance- 107, 113-114

III. Breach of warranty – 74-75

A. Warranty – 67-69

Prudential v. Trans-Asia, June 20, 2006

Union v. Philippine Guaranty, 47 SCRA 271
Florendo v. Philam Plans, February 22, 2012

1. Express – 70, 72-73, 76

2. Implied – 115-122

B. In fire insurance – 169-175

Bachrach v. British, 17 Phil 555

IV. Other grounds for rescission in non-life insurance - 64-65

Saura v. Phil. International, 8 SCRA 143

Malayan v. Arnaldo, 154 SCRA 672
Paulino v. Capital, 105 Phil 1315

V. When right to rescission must be exercised – 48; 380

Tan Chay v. West Coast, 51 Phil 80

Argente v. West Coast, 51 Phil 725
 PART VI
Regulation of Insurance Business

A. Capitalization and other requirements- 192-199

B. Solvency and Limit of Single Risk- 200-201; 221
C. Revocation and Conservator- 254-255
D. Mutualization and Demutualization- 268; 280
E. Administrative functions of the insurance commission-307, 319, 322, 327, 332, 344, 378,
404,

PART VII
Special Laws

I. RA 9302, RA 9576

Phil. Deposit Insurance v. CA, April 30, 2003