INSURANCE LAW

(LAW 59)
Course Outline
COURSE LEARNING OUTCOMES :

At the end of the course, the students are expected to:

1. Analyze how insurance law works in this jurisdiction;

2. gain comprehensive understanding of the facets of insurance;
3. determine the relationship of insurance law and other laws;
4. appreciate the importance and value of insurance

WEEK 1 AND 2

I. Introduction
A. History of Insurance Law in the Philippines
B. Laws governing insurance
C. General concept of insurance
D. Characteristics
1. risk distributing device
2. contract of adhesion
3. aleatory
4. contract of indemnity
5. uberrimae fides contract
E. Elements of insurance
F. Right of subrogation

WEEK 3

II. Contract of Insurance

A. Requisites of a contract of insurance
B. Perfection
C. Parties to a contract of insurance (Sec. 6 & 7, ICP)
1. rule on minors (Sec. 3, ICP)
2. rule on married women (Sec. 3, ICP)
D. Subject matter of insurance (Sec. 3 & 4, ICP)
E. Insurance not a wagering contract (Sec. 4, ICP)

WEEK 4

III. Insurable Interest

A. Concept of insurable interest in general
B. Reason for the requirement of insurable interest
C. Insurable interest in life insurance (Sec. 10, ICP)
D. Insurable interest in property insurance (Sec. 13 & 14, ICP)
1. Insurable interest in case of mortgaged property (Sec. 8, ICP)
a. standard or union mortgage clause
b. open or loss payable clause
2. Effect of change of interest in the thing insured (Sec. 20, 21, 22, 23, 24, 57 & 58, ICP, Art.
1306, NCC)

WEEK 5 – 7

IV. Devices for ascertaining and controlling risk and loss

A. Concealment
1. Concept (Sec. 26, ICP)
2. Duty to communicate (Sec. 28, ICP)
3. Test of materiality (Sec. 31, ICP)
 4. Effect of concealment (Sec. 27 & 29, ICP)
5. Matters which need not be communicated (Sec. 30, 32, 34, & 35 ICP)
6. Waiver of information (Sec. 33, ICP)
B. Representation
1. Concept (Sec. 36, ICP)
2. Kinds of representation (Sec. 36, 37, 39, 42, ICP)
3. Test of materiality (Sec. 46, ICP)
4. Effect of alteration or withdrawal (Sec. 41, ICP)
5. Time to which representation refers (Sec. 42, ICP)
6. Effect when representation is obtained from third persons (Sec. 43, ICP)
7. When presumed false; effect of falsity (Sec. 44 & 45, ICP)
C. Remedies available in case of concealment or false representation
1. When rescission by the insurer may be exercised (Sec. 48, ICP)
2. When life insurance policy becomes incontestable (Sec. 48, ICP)
a. requisites for incontestability
b. theory and object of incontestability
c. defenses not barred by incontestability
D. Warranties
1. Concept; distinguished from representation
2. Kinds of warranties (express, implied, affirmative, promissory)
3. Time to which warranty refers (Sec. 68, ICP)
4. Effect of breach (Sec. 74, 75, & 76, ICP)

WEEK 8

V. The Policy of Insurance

A. Definition and form (Sec. 49-50, ICP)
B. Fine print rule
C. Contents of the policy (Sec. 51, ICP)
D. Papers attached to the policy and their binding effect (rider, warranties, clause, endorsement)
E. Kinds of policy
1. open (Sec. 60, ICP)
2. valued (Sec. 61, ICP)
3. running (Sec. 62, ICP)
F. Cover notes (Sec. 52, ICP)
G. Cancellation of policy (Sec. 65-66, ICP)
H. Time to commence action on the policy; effect of stipulation (Sec. 63, ICP)

WEEK 9 – 10

VI. Premium
A. Concept
B. Effect of non-payment of premium; Exceptions (Sec. 77, 78, ICP, Art. 1306, NCC)
C. When insured entitled to return of premiums (Sec. 79-82, ICP)
VII. Persons entitled to recover on the policy and conditions to recovery
A. Beneficiary (Sec. 11-12, 53, 56, & 57 ICP)
B. Limitations on the appointment of beneficiary (Art 2012 & 739, NCC)
C. Rule where insurance is made by an agent or trustee (Sec. 54, ICP)
D. Rule where insurance if made by partner or part owner (Sec. 55, ICP)
E. Notice and proof of loss (Sec. 88-92, ICP)

WEEK 11

VIII. Double Insurance

A. Definition and requisites (Sec. 93, ICP)
B. Distinguished from over-insurance
C. Stipulation against double insurance
 D. Rules for payment where there is over-insurance by double insurance (Sec. 94, ICP)
IX. Reinsurance
A. Definition (Sec. 95, ICP)
B. Nature (Sec. 97 & 98, ICP)
C. Distinguished from double insurance
D. Duty of reinsured to disclose facts (Sec. 96, ICP)

WEEK 12 – 15

X. Marine Insurance
A. Definition
B. Scope of marine insurance (Sec. 99, ICP)
C. Risks or losses covered in marine insurance
1. perils of the sea vs. perils of the ship
2. “all risks” marine insurance policy
D. Insurable interest in marine insurance
XI. ship owner’s insurable interest (Sec. 100, ICP)
a. rule where vessel is chartered (Sec. 100, ICP)
b. rule where vessel hypothecated by bottomry (Sec. 101, ICP)
c. insurable interest in freightage (Sec. 102-103, ICP)
d. charterer’s insurable interest (Sec. 106, ICP)
E. Concealment
1. Meaning of concealment in marine insurance
2. Duty to communicate (Sec. 107, ICP)
3. Opinions or expectations of third persons (Sec. 108, ICP)
4. When concealment does not vitiate the entire contract (Sec. 110, ICP)
F. Representations
1. Effect of false representation by the insured (Sec. 111, ICP)
2. Effect of false representation as to expectation (Sec. 112, ICP)
G. Implied Warranties in Marine Insurance
1. Seaworthiness (Sec. 113, ICP)
a. what constitutes seaworthiness (Sec. 114, 116, 119, ICP)
b. when complied with; Exceptions (Sec. 115, ICP)
c. rule where ship becomes unseaworthy in the course of the voyage (Sec. 118, ICP)
2. Warranty that necessary documents are carried (Sec. 120, ICP)
3. Warranty against improper deviation
a. meaning of deviation (Sec. 123, ICP)
b. when proper (Sec. 124, ICP)
c. effect of improper deviation (Sec. 125, ICP)
H. Loss
1. Kinds of losses (actual and constructive) (Sec. 130, 131, & 132, ICP)
2. Right to payment upon an actual total loss (Sec. 135, ICP)
3. Scope of insurance against actual total loss (Sec. 137, ICP)
4. When constructive total loss exists (Sec. 139, ICP)
5. Concept of abandonment and its requisites
6. Average
a. Kinds of average (particular and general)
b. Requisites of general average
c. Insurer’s liability for general average

WEEK 16 - 18

XII. Fire Insurance

A. Definition and scope of fire insurance (Sec. 167, ICP)
B. Risks or losses covered
C. Effect of alteration in the thing insured (Sec. 168, ICP)
 D. Measure of indemnity
E. Co-insurance clause
XIII. Casualty Insurance
A. Concept (Sec. 174, ICP)
B. Third Party Liability insurance
C. Insurable interest
D. Meaning of “accident” and “accidental” in casualty insurance
E. Basis and extent of insurer’s liability
XIV. Life Insurance
A. Definition (Sec. 179 & 180, ICP)
B. Kinds of life insurance
C. Liability of insurer in case of suicide (Sec. 180-A, ICP)
D. Right to assign life insurance policy (Sec. 181 & 182, ICP)
E. Measure of indemnity (Sec. 183, ICP)
XV. Compulsory Motor Vehicle Liability Insurance
A. Reason for the requirement
B. Scope of coverage required
C. Persons subject to the requirement
D. No-fault indemnity claim (Sec. 378, ICP)
E. Notice of claim (Art. 384, ICP)
XVI. Claims Settlement
A. Unfair claim settlement practices (Sec. 241, ICP)
B. Claims for life insurance policies (Sec. 242, ICP)
C. Claims for non-life insurance policies (Sec. 243, ICP)
D. Delay in payment of claims (Sec. 244, ICP)

REFERENCES :

RA 10607, the law amending PD 612, Insurance Code as amended.

De Leon, Hector Jr., Insurance Code of the Philippines, Annotated, 2019 Edition. Rex Publishing

COURSE REQUIREMENTS:
1. JOURNAL OF LEARNING
a. Submit a weekly/biweekly outline/summary of the lessons.
b. Handwritten in a clean sheet of paper. Scan or take a picture and send as pdf/jpg file
to my email (attyrodbautista@gmail.com)
c. Specify the subject of your journal when emailing (e.g. JOL Insurance Law WEEK
1)
d. Please follow the course outline and faithfully comply with the submissions without
need for demand or reminder on my part.
2. ASSESSMENTS
a. They will be in the form of short-answered essays, case digests and phone in or
messenger question and answer
b. Submission of assessments will likewise be Handwritten in a clean sheet of paper.
Scan or take a picture and send as pdf/jpg file to my email
(attyrodbautista@gmail.com)
c. In submitting, please follow the file name I will instruct you to use which will be
included in the assessment when it will be given Major exams (prelim, midterm and
finals) will be through google forms or email
3. Miscellaneous
a. Should you have any questions, please feel free to DM me or should you need to be
clarified on some lessons, inform me and I will discuss the matter with you.
b. References can be found online

HAVE FUN LEARNING AND ENJOY 2021

Roderick L. Bautista