INSURANCE LAW – RA 10607 of his children; thereof, of such nature that a

contemplated peril might

SECTION 2  A contract of insurance is an agreement whereby one "(b) Of any person on whom he directly damnify the insured, is
undertakes for a consideration to indemnify another against loss, depends wholly or in part for an insurable interest.
damage or liability arising from an unknown or contingent event. education or support, or in "Section 14. An insurable
whom he has a pecuniary interest in property may consist
ELEMENTS (P-A-R-I-S) interest; in:
Premium "(a) An existing interest;
Assumption of risk "(c) Of any person under a legal "(b) An inchoate interest
Risk of loss obligation to him for the founded on an existing interest;
Insurable Interest payment of money, or or
Scheme to distribute losses respecting property or services, "(c) An expectancy, coupled with
of which death or illness might an existing interest in that out of
CHARACTERISTICS delay or prevent the which the expectancy arises.
Consensual performance; and
Voluntary
Not mandatory except compulsory motor vehicle insurance "(d) Of any person upon whose
Aleatory life any estate or interest vested
Unilateral in him depends.
Conditional
Contract of Indemnity ASSIGNEE
Personal may pass by transfer, will or The policy can be transferred so
succession to any person, long as the transferee has
PARTIES whether he has an insurable insurable interest in the thing
INSURER, INSURED, ASSURED/BENEFICIARY interest or not, and such person insured. Nevertheless, the
may recover upon it whatever insurer’s assent is necessary for
INSURABLE INTEREST the insured might have the transfer.
In general – a person has an insurable interest in the subject recovered.
matter if he is so connected, so situated, so circumstanced, so related,
that by the preservation of the same he shall derive pecuniary benefit,
and by its destruction he shall suffer pecuniary loss, damage or
prejudice. CLASSES OF INSURANCE

1. LIFE
LIFE PROPERTY Individual, Group, Industrial
AS TO DESIGNATION OF BENEFICIARY 2. NON-LIFE
 Insured your life Beneficiary must have insurable Marine- perils of the sea, ship or any peril related to
anyone can be a interest in such property which navigation
beneficiary subject to must exist not only at the time Fire
the limitation of the policy takes effect but also Casualty – accident or mishap (theft, mishap,
739,2012 NCC when the loss occurs. (SEC 13 robbery)
AND 18) 3. CONTRACT OF SURETYSHIP OR BONDING (SEC2)
 Insured the life of 4. COMPULSORY MOTOR VEHICLE LIABILITY INSURANCE
another and Requirement in LTO.
designated yourself as 5. MICROINSURANCE
the beneficiary you Usually an insurance for low income households
must have insurable
interest in the life of VARIABLE CONTRACTS
the insured.  Any policy on either a group or an individual basis issued
by an IC providing for benefits or other contractual
AMOUNT OF INSURANCE payments or values thereunder to vary so as to reflect
General rule: Limited to the value of the investment results of any segregated portfolio of
No limit property. investments or of a designated separate accounts in
EXPN Subject to the limit of the "Section 17. The measure of an which amounts received in connection with such
insurable interest of the insurable interest in property is contracts shall have been placed and accounted for
beneficiary. the extent to which the insured separately and apart from other investments and
Eg. Creditor insured the life of might be damnified by loss or accounts.
the debtor, the amount of injury thereof.
insurance is only up to the Basically it’s just an Insurance contract with additional
amount of the loan. benefits (investment portion) the benefit is dependent upon the
INSURABLE INTEREST performance of the investments or a designated portfolio and you will
Required to exist at the time the 2 points: perfection and loss but receive the benefit after a certain period of time.
insurance at the time it was need not exist in the meantime
perfected but not at the time of Bancassurance – the presentation and sale to bank customers by an
the loss insurance company of its insurance products within the premises of
"Section 10. Every person has an Section 13. Every interest in the head office of such bank duly licensed by the BSP or any of tis
insurable interest in the life and property, whether real or branches under rules and regulations by the Commissioner and the
health: personal, or any relation BSP.
"(a) Of himself, of his spouse and thereto, or liability in respect
iii. Mutual Insurance Company - is a cooperative enterprise where
the members are both the insurer and insured.
Who may issue variable contracts?
 Those authorized by the Commissioner.
 If foreign insurance for eg Japan dapat authorized din sya
ng Japan to issue Variable Contracts
PERFECTION
Consensual – upon meeting of the minds. 1319 – meeting of
the offer and acceptance
CONTRACT ITSELF- printed or written form.
 COGNITION THEORY - the contract is perfected from the
moment the acceptance comes to the knowledge of the
offeror (applicant) of the insurance contract.
 It is the INSURED who makes the offer by the submission of the
application to the insurer or the authorized agent. The insurer
then accepts the offer by approving the application and the
contract is perfected upon receipt of the notice by the insured of
the approval.
BASIC CONTENTS OF POLICY
1. Parties
2. Amount except in open or running policies
3. Rate of premium
4. Property or life insured
5. Interest of the insured in the property if he is not the absolute
owner
6. Risk insured against
7. Period during wc the insurance is to continue.
CASH AND CARRY RULE
-No policy of the insurance contract is valid and binding
unless and until the premium is paid. Any agreement to the contrary is
void.
EXCEPTIONS: G-A-W-C-E-P-C
1. Grace period
2. Acknowledgment in the policy of a receipt of a
premium
3. When there is an agreement allowing the insured to
pay the premium in installments and partial
payment has been made at the time of the loss.
4. Credit extension
5. Estoppel
Eg. Nirecognize nung company na may
delay in the payment
6. Public Interest as determined by the Insurance
Commission
RECISSION OF CONTRACTS
Instances when Contract may be rescinded
1. Concealment
Info concealed must be material whether intentional
or unintentional. Influences the decision of the
insurer/insured.
2. Misrepresentation
3. Breach of warranties
When it may be canceled by the insurer: SEC 64
1. "(a) Nonpayment of premium;
2. "(b) Conviction of a crime arising out of acts increasing the
hazard insured against;
3. "(c) Discovery of fraud or material misrepresentation;
4. "(d) Discovery of willful or reckless acts or omissions
increasing the hazard insured against;
5. "(e) Physical changes in the property insured which result in
the property becoming uninsurable;
6. "(f) Discovery of other insurance coverage that makes the
total insurance in excess of the value of the property insured;
or
7. "(g) A determination by the Commissioner that the
continuation of the policy would violate or would place the
insurer in violation of this Code.
NOTICE OF CANCELLATION
Section 65. All notices of cancellation mentioned in the preceding
section shall be in writing, mailed or delivered to the named insured at
the address shown in the policy, or to his broker provided the broker is
authorized in writing by the policy owner to receive the notice of
cancellation on his behalf, and shall state:
"(a) Which of the grounds set forth in Section 64 is relied upon; and
(b) That, upon written request of the named insured, the insurer will
furnish the facts on which the cancellation is based.
INCONTESTABILITY CLAUSE
SEC 48 - 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 the date of its issue or of its last
reinstatement, the insurer cannot prove that the policy is void ab
initio or is rescindable by reason of the fraudulent concealment or
misrepresentation of the insured or his agent.
Q: If the insured dies within the 2 yr period can the insurer refuse to pay?
 NO. . As discussed in Manila Bankers, the death of
the insured within the two-year period will render the
right of the insurer to rescind the policy nugatory. As such,
the incontestability period will now set in.
Sun Life of Canada (Philippines), Inc. v. Sibya, G.R. No. 211212, [June
8, 2016])
Follow this ruling lang because this is the most recent case however
TAN VS CA talaga dapat yung correct ruling. It is believed that the
insurer can deny the claim on the ground of concealment if the insured
dies before the expiration of the 2yr period. The policy of Section 48
will not be served if the insurer’s right to rescind or deny the
claim will be denied if the insured dies within the two-year
period.
Q: Is suicide treated as a circumstance which exonerate the insurer in
the life insurance?
DEPENDS.
YES if the insured committed suicide within 2 years from the date of
the policy’s issue or it’s last reinstatement.
NO if the insured was in a state of insanity, insurer is liable regardless
of the commission.
CLAIM SETTLEMENT AND SUBROGATION
Indemnification of that suffered by the insured.
Section 90. In case of loss upon an insurance against fire, an insurer is
exonerated, if written notice thereof be not given to him by an insured,
or some person entitled to the benefit of the insurance, without
unnecessary delay. For other non-life insurance, the Commissioner
may specify the period for the submission of the notice of loss.
Section 91. When a preliminary proof of loss is required by a policy,
the insured is not bound to give such proof as would be necessary in a
court of justice; but it is sufficient for him to give the best evidence
which he has in his power at the time.
WHEN MUST A CLAIM BE PAID?
Upon maturity if there is a maturity date
 If it matures upon death of insured within 60 days after
presentation of the claim and filing of the proof of the death of the
insured.
LIFE NON-LIFE
Beneficiary - within 60 days Within 30 days after proof of
after presentation of the claim loss is received by the insurer
and filing of the proof of the and ascertainment of the loss or
death of the insured. damage is made either by
agreement or by arbitration.
If no ascertainment is made
within 60 days after receipt of
proof of loss , it shall be paid
within 90 days after such
receipt.
"an association Lottery – because
composed of shipowners insurance is not a
in general who band wagering contract
together for the specific
purpose of providing
insurance cover on a
mutual basis against
liabilities incidental to
shipowning that the
members incur in favor
of third parties. A P & I
Club is "a form of
insurance against third
party liability

WHEN SHOULD THE CLAIM BE FILED?

GENERAL RULE – date agreed upon but not less than 1 yr from the
date of insurer’s rejection of the claim. If no stipulation 10 YEARS. LATUN TERMS
 De minis non curat lex - trivial losses are not insurable
EXCEPTION (MUST NOT BE TOO MINISCULE)
CMVI – 6months from date of accident 
MOTOR VEHICLE INSURANCE- 1 yr from the denial of the claim.

SUBROGATION
2207 - If the plaintiff's property has been insured, and he has received
indemnity from the insurance company for the injury or loss arising
out of the wrong or breach of contract complained of, the insurance
company shall be subrogated to the rights of the insured against the
wrongdoer or the person who has violated the contract. If the amount
paid by the insurance company does not fully cover the injury or loss,
the aggrieved party shall be entitled to recover the deficiency from the
person causing the loss or injury.

APPLICABLE ON IN PROPERTY INSURANCE.

CASES
HEALTH PLAN – Insurance Contract (Philamcare vs CA)
A HEALTH CARE AGREEMENT BY A HEALTH MAINTENANCE
ORGANIZATION
INSURANCE INSURANCE
CONTRACT CONTRACT
HEALTH PLAN A health care agreement
(Philamcare vs CA) by a health maintenance
organization
(Philippine Health Care
Providers, Inc. v).

a contract by which a a law firm which enters

corporation, in into contracts with
consideration of a clients whereby in
stipulated amount, consideration of
agrees at its own expense periodical payments, it
to defend a physician promises to represent
against all suits for such clients in all suits
damages for malpractice for or against them