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    15 views12 pages

    Sec. 247 251 de Leon Insurance

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    Ferb de Jesus

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    © All Rights Reserved
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    Reinstatement and cha © life nse. — Contract changes involving Analg et gran the policyoneners and no greater ompursiion tothe mien bres ir ne met —000— ame tt CLAIMS SETTLEMENT 6 247) No nsrance company doing business Ee satan wanout at cause, 10 PAY 15 Sous calms asing under coverages provided By ce oven company engage i wtat Pattee ent practices any ofthe following acts BY an ftrnce Conny. commited wows ut caus ad a a antn eaquncy ato nceate a gener Pisinets practice, shall conetitoteunfalr claim settlement peostenee (1) Knowingly misreprsering to cleans pet an et or poteyprovslons reiting to coverage at us (2) Faliog to acknowledge with, reasonable promptness pertinent communications with respect to claims arising under its policies; (8) Failing to adopt and implement reasonable standards for the prompt Investigation of claims aig uncer t pole, (4) Not attempting In good faith to effectuate promt tar and) gush aetlement of cla FEbmited in wie Tabity han become ressonebiy Cheer or (5) Compelling policyholders to Institute sults to rmcover amounts die under x poles by eftering ‘Ctvout jostle resson eubstandaly less than the Svounts utimataly recovered in su brought by (0) Evidence a8 to numbers and types of valid and Juscabie complaints to the Commistione’ against an Insurance company, and the Commissioner's complaint ‘tperonca wih other insurance companies wg sat SRE fon of the“ Authorired tines of insurance shall be admissible In evidence In (insurer) contended that there was viola imitative or Judea procredngisght ne His Repat Lin lose . on. it appeared that tice 0 the cident wan ent 10 R (©) 1s found, after notice and an opportunity to wat he aetna ton ts eompeting 1h be ead tat ‘insurance company hey ted is thee ed toon ond ped section, each instance of noncompliance with paragraph enited to indemnity under the foregoing, (a) may be treated as a separate violation of this section and — 7" ies Dunder the situation actin evident ood ith vith no other purpone but to expedite the repait, 1 prevent hall be considered sufficient cause for the suspension or ‘revocation of the company's certificate of authority. Unfair claims settlement practices. Tanker inconvenience appr tht Toss of se Being . Consejos eceped fom he pg: was ore Claims sctlement is the indemnification of the loss (see Sec AE ee ed \ondnn eaperces ax ented UT £86, suffered by the insured. The claimant may be the insured ot Foe eae crete ion (Pi Epica Chancho. The reinsured the insurer whois ened fo subrogation, oF 9 tind th pig pus tiny os Toad 24 1779) party who has a claim against the insured! Section 247 enumerates the grounds which shall be ‘considered as sufficient cause of the suspension or revocation of an insurance company’s conificate of authority. tis designed to nate unfair claim settlement practices. 2. Repair done yan insured afer insure filed to see lim despite easter go Fats: A claim was filed by D (insured) for damage caused to his truck covered by a commercial vehicle comprehensive cy with (nares hich assigned itvadjuser to tavestigal Sts {End inspect he damaged wehice- An extimate a damage By C aonb ince tr arr fle in nt ston “Machineres, Ine. was subrmited by the adjuster, pf ecicen cause didnot setle the claim despite the adjustr’s ts way to Baguio, a spark coming from the report, D inated the repair ofthe truck with C, Machine FUSE M2 THEDSURANCECOOEOF THEFHIUIPINES ANNOTATED Se 27 In case of liability insurance, itis usually in the interest ofthe insured that the case be settled. The rule has come tobe generally accepted that while the express terms of the policy donot impose fon the insurer the duty to settle the claim at all costs, there isan implied duty on his part to give due consideration tothe interest of the insured in its exercise ofthe option to reject a compromi settlement and proceed with tigation. Ininsurance contracts, the law requires strict observance ofthe standards of good faith and fair dealing on the part ofthe insurer. (Yap vs. Perla Compafia de ‘Seguros, Inc, LC. Case No, 103, Nov. 26, 1976) EXAMPLE: Ina suit for personal injuries led by Tagsinst (insured), D offered to sete fora sum that was within the policy limits of 'P10,000. R (insurer) however, refused the offer and elected to _g0 with the tal ofthe case. T obtained a verdict for 15,000. 1s R also liable forthe P5,00, the amount in excess of the Limits? seimbursement of 7900 on the ground that D settled the case Shout fiat obtaining Ree concent in violation of policy Provisions Issue ts D ented to reimbursement? ett Yes. tn the instant cae, the case against the insured seas. Svat wae a criminal prosecution that e had to face, The risks to be assumed by D and R were, therefore, sa frther considering tht the amount involved is smal By proceding withthe criminal ease, R exhibited ack of Consideration for D who. was then facing the prospect of pousible criminal conviction Moreover there was no showing that R exerted any effort to asvtin the ftrese of the hind party lam a8 justify sctlement Therews onl oteght rejection fD’s demand that the cme be etl. This alone shoves R's ack of consider and esponaiity forthe intent of D. (aps Pera Comp ae Sepurs Inc supra) FUSE $2 mERSURANCE CEE EREUTTIESASNOTD eg cance, in fe insurance there is no specialized clay ) The defniteness of the death per ce payable makes it possible for the mt to arrange the yen oe einer nh una situation where a claim is questioned the egal de he legal department and insurer company provide the necessary fields of insur adjuster. (ce Seow 23 Claim depart of legal adv (2) Pref dat. — Techical hee OP : iroorance ply not provide or payment upon death but athe fo payne ups Submision of proof of death tothe insurer. This notice may be ven bya henetar othe ipa mprsentativeof he insted (9) Neture of lam — Since ie insurance i its simplest form raed ae") open the death fe = Endowment contracts and paysa limp insured. ms (8) Income. ben iy prov tpn the ural toa ined dae rage The cea fo the metho of ured or by he ener 2 choice. (DL. sae day pesiod fixed by law within which to pay the proceeds after ation of proof of death is merely procedural in nature, the exact amount to be paid and the Flares may be entitled 10 ot the company to pay. and the fact of death, Evidently to determine {terest theron to sshich the bene! Callect in case of unwarranted refusal Shooto enable the insurer to verify or check on t which # may even validly waive It is the happening of the that renders the life policy matar fof death for even if such proof were presented, but Inter that the insured is alive, such fling does not give maturity tothe policy The delay in the presentation of proof of death does rot alter the date of maturity of the policy nor the lability ofthe of the insurance, (Fernandez vs. suspensive condition of death red and not the filing of proof turns out Company to pay the proceeds National Life Ins. Co. 105 Phil. 59 [1959] ) ‘The death ofthe insured may be sufficiently established by the death certificate issued by the Civil Registrar of the place ‘where the insured died. (Londres vs, National Life Ins. Co ofthe FUSE TMEINSURANCECODEOFTHEMMLIFINES ANNOTATED yy Fre insuranc tosses ( Obttn ona — The sr gpd lon seni a de theoccurenee ofa tee a 1) Tw ofthat mutt hose gel les floss cade ae ihe cured mut oe ie fa fay oh Prt inu totaae ot) ()Farthemore ae fhe nae erie de Sreniing rsa ope es dag ge ier nae ars hoa assur orate aoa ce the additional loss thus occasioned. oes (2) Option of sete tte are — The re insrange sur teal provera opnsof ements isu: the pant of anaes oe ae either o inca ore ‘Sec. 174.) aes 1 the insurer eects to meu, the amount of damage fecverblefraBrcch emt heretic amet insurance. The option to repair or plas involve the insuter the busines of building consecton siti ery uncommon to txersse the option, When all pot es proce all losses by cash payment (ee DL ickelhaps op 102-183) 7” pay (s ickelhaupt, op. cit., pp. = ‘epusnes oF RANGE i sits evidence if it the company o have intaduced said report ait no hs ae et Sn ice in a ean Seaegsonainonen tena at ice pe rei ig te Te paper (Noda vs, Cruas Arnaldo, 151 SCRA 227 (19871) Liability Insurance losses. (2) Difirence from other oss. ni afer fm det damage Sete inrprsentng th rmuren the ater See [324) is not dealing with a customer of the insurer asi the case in fetling the usual dircet damage property less (2) Cla for personal injures. — Determining an adequate amount to compensate for a personal injury is not a simph Tn ne other area of claim settlement are there s0 many Uncertain factors where the measure of damages will t a large “dogree, be influenced by the falibilities and prejudices that are characteristics of human nature. Minot injuries that involve primarily a toss of time are not too difficult fo handle, The sae i true with respect to medical bills and hospital expenses fany. The area of uncertainty in such ‘cases involves suifering and inconvenience. The situ different with more serious injuries, When the in land suffers permanent injury the problem of d ‘increasingly complex. (G) Direct property damage claim. — The ex for damages to property is measured by the [oper owner The men “The adjustment of Hability ‘las in thatthe claimant is SRE (4) Property dara clin. — One poet in epee o property damage ability aims mast be differentiated from ete imran cams A i aim for evap stay includes only pasment forte det damape fo the Po ile additonal cove pred Pv for the indret rest ofthe Toso seo the propery sch 3 Tos profits or rents, iid 4 In propery damage lib claims, however the loss of use maybe includ, The rental cot ofa sir automobile for instance would be inched in a habit clan against the person causing damage cenous enough fo prve emgth of time. (D.L- Bickelhaupt. op. et pp 187 for payment of claims life policies. 19 refers to insurance policies other than lie be pl within 3 dys afer exp by the Co, 64 Phil. 258 [1937} Tuason vs. North China Insurance CO. {id 42 Phi. 14 [1924]; East Furniture, Inc. vs. Globe & Rutgers Fire Insurance Co, 57 Phil, 876 (1932) Fraud in any part of the lai fants the whole, (Tuason vs. North China Insurance Co. Supra: Uy Hu & Co, vs Prudential Assurance Co, Ltd. 51 Phil. 231 [19271) The mere filing of such a claim will exonerate the insurer, (Vu Cua vs. South British Insurance Co., 41 Phil. 134 [1920] Aeriche vs. Law Union & Rock Insurance Co. 48 Phil. 592 {n926}) “The burden of proving fraud rests on the insurer. “The falsity of invoices submitted by the insured to prove actual existence at the burned premises ofthe stocks mentioned in the insured’s inventory is evidence of a fraudulent claim and ‘wll avoid the insurer's habit. The insured’s inventory of stocks {snot binding on the insurer where it as prepared without the Intter’s intervention. (Yu Ban Chuan vs, Fieldmen’s, Insurance FUSE Reference to arbitration. (0) Where artitraton not ures inser den Hin ich Mpultion inate inatance ple tha nthe event of loss, unless the eompany should deny ability 38a condition recent to bringing an action an the poiyby tensed he latter should at submt ean arbivation one valid ow an lunes tbe fst complied wit no acon on be brought Bet if {nthe course ofthe settlement othe loss, the company should in any case refuse fo pay wil be deemed to have waived the Sean pazeent with ces oar, sd pon policy will ie. (Chang vs. Royal Exchange Assur Co. Pil sepa iv Royal Exchange Assur Co, 8 Fil (2) Where arbitration titel to amount of insirer's Hab = An insurance contract provision for prior aritration befor {o court action, which reads: "If ary depute shall arse as it of company's Hablity under ths policy xXx" was ‘only at to disputes regarding the amount of the fy But nota: to any dispute as tothe existence Of liability, ie, where the insurer completely sc onthe stiputation of fats, met rinse). ve ikevise aamited She pain ot depute ea 178 19651) ispute between the parties becaus the defendant (insurer) has admitted that pl has paid ite lability o the insured, and bi its Hebility as insurer under the ageeement 10 P- iis proportional shares, the amounts of which {(Cenquia v3 Fielden’ Insurance Co., Inc, 26 (4) Were settlement by arbitration not incoked. — A clause in 1 policy concerning reference of dispute to an arbitrator, as & Condition precedent to aright of action or suit upon the policy, twas deemed swaived where none of the partes to the contract Invoked the same, of made any reference to arbitration during the negotiations preceding the institution of the action against the insurer; and in fact, counsel for both partes stipulated in the tial court that none of them had, at any time during said negotiations, even suggested the sotlement ofthe issue between, them by arbitration, as provided in said clause Tit.) (6) Where insured voluntarily submited to arbitration. —On the other hand, where the insured commenced an action to recover insurance policy and then vo snarbite FUSE Policies in the standard form now provide for subrogation, ane thus determine he right othe sre in he eopet the ube ght of stn ste eal to Fyre inures to the insurer shot any fonnel assignment or express stipulation to that effec oh spree stpation tha eet in he oly. 8 A Ju Stated otherwise, when the insurance when the isurance company pays forthe loss, such payment operates ss an equitable signtont to the ‘ofthe property and all the rede which the insured the recovery ther. Tha right snot dependent the provisions in the bill of lading issued by the common carrier, a suit by the insurer as subrogee necessarily is subject to like limitations and restrictions. (St, Paul Fire & Marine Ins. Co. vs. Macondray & Co, Inc, 70 SCRA 122 (1976) The rule does not apply where it would be “unfair and inequitable” to limit the Tabilty of the wrongdoer to the amount stipulated between him and the insured. ILLUSTRATIVE CASE: FUSE Court rongnizes instances whe slice om such contac «te fvoned espa where the acs and creurtances nt that sober stiplatns he dsegaded. Ths in slid ad opcablty a the tpuletion isting the tity ot CSE foe nehigence 49 One Mion Tesow (P1001 00) only, the facts and eumstances eds the nature ef the provi sought tobe enforced sce tain nin te ps ya (2) Cli of WL found te ead compen, — "1 worthy to note that M/W Alaa Cty wae sed wth PGA, 2450000. To determine the vlity and bustin ino Lf loa MGA andy, omough investigation bys hull suveyoe co be beyond economia Nts OF INSURANCE as ‘business might be continued without embarrassment, to fend to theie assured the amount of the loss payable only out of money ‘ollected on account of the loss Such losses are not payment of Snsurance (First National Bank of Ottawa v. Loyd’ of London, M6F-24, 221,226 cited in Galutera vs. Maersk Line, 11 SCRA 251 [i964] Consequently, na suit by the insured against the party indisputably Hable for the loss, recovery should not be denied merely because the insured received such Toan from the insures. ‘As the advancement des not constitute payment of Toss, the insurer is not, therefore, subrogated to the rights of the insured 0 isnot divested of his right to file the sull. Furthermore, 10 cove ° jon to the ASME (©) Frasdtenty prepare, make of ral its rete, i presenta Supp af hc ‘yoann Conan vpn oy OY rons ur econ ehalb united no a cache ee aman eo piconet ayers aretha ern of Liability of insurer to iy of Insurer to pay damages ana a iso erate ny — Under Scions 88 26, ans 20 the Comisiner orth Court mst ill ake nding {iat pv tana sR oe Rithhetd before the insured shall be to collect damage $54 the interest provided which ha Boe ines {0M 125 tp 245, Thev appiyonly when the Commsione oF he COU ny, an unredsonable delay rsa inte parent of the clas {gee To Khe Chi ws Court of Appel A SCRA 19 [1991 absence of such express finding, the jodgment should bear only: the legal rate of 1a : {ints the legal rate of 12 forthe delay in the payment of the 2) Good fit of insurer in contesting cain. — agreed that an instirer may. n god faith an honesty, entertain g _fiference of opinion as ots abt: According the saatory nalty for vexatious refusal of an insurer to pay’ a claim shoul fhe pose unt viene he cress hae hat such refusal was will and without reasonable ase asthe facts appear toa reasonable and prudent man. (Rizal Commercial Banking Corp. vx. Court of Appeals, 289 SCRA 292 [1958]: see Insurance Corporation vs. Court of Appeals, 185 SCRA, 403 [1990).) sca (a) Thus, the mere fact that the evidence justified the payment of the claim does not necessarily: mean that the insurer. in contesting payment, acted without justification, (see Teal Motor Co, Inc. vs. Continental Insurance Co,, 58 Phil, 804 [1934}.) (b) Where the delay in payment was due to the investigation the insurer conducted to ascertain the truth of is generally the ivoration resin at he insured waster fino sap the cl ee ai (Chuy vs. Philippine American Life Ins. Co. 95 Phil 282, tess (0 Sima, whore he insurer wos feed ty the problem ef erm ho ws the acne of Simeone ploy sted gerne te lan of vous ies nk wanted pare of he SINS rowed ot to menton ieee by heed of She pice ton ont che omg te popes tote ty the eames we lt the aes fonted in bling payment tthe ised, (zal ES Rating enn v= Cou AT Es (3) Presunpvion of uenoatiedlg, — There rin fe presumption a urwehsonae ely, however te esure falls eet such cm wn he ae pseibed in Sections 248 sow3i. e250) Ione case, the cout found that hore as no mei inthe insurrs contention tat the promis fxs subrateBY U red were insuffcent. “Ae the fie which destroyed the red propery cere on December 1, 1981 and the peools Fos were subvted wom Jnary 15, 1982 ths une 2, Mode n compliance with te adjusters numerous requests FOF “ari documents, payment should have Been made within 99 ays thereafter or anor before Sepember 21, 982 Hence, when thgaatured ed er complnt on Dscece 1, 1982, het cause Uisetom had trendy ncerued” The neuer sas held Hable 10 mages consisting 10% of the amount of the os as attorney's feos and to double interest (24%) onthe said amount saring from the time the case was filed, (Cathay Insurance Co, Inc. v5. {Cour of Appeals, 174 SCRA 1 (1989) ng resltions of trintcourt and Commission. — [Aside from the revocation /suspension of license, the Insurance ‘Commissioner also has the discretion to impose upon the erring, freuranee companies and its directors, officers and agents, fines sind penalties asset out in Section 438. (nf) The Bindings of BSE HEINSURANCE CODE OF MIEMUILIVINESANNOTATED Se. 3035, the tial court wil not necessarily forelose the administrate {ase before the Commision or etre Tr, the partes are the fame, and both actions are predated on the same et of fact and will require identical evidence Butte ess tobe resolve, quantum of evidence, the procedure tobe flloseed and ty reliefs to be adjudged by these two bodies ae diferent. (2) In the civil case the insured must establish his case by a prponderance of evidence, or simply pul such evidence that is of greater weight, or more convincing than that which is offered in opposition to it In an administrative cise the degree of proof required ofthe insured 0 establish his ling 4s substantial ede, which hasbeen defined 2 that amount ‘of relevant evidence that a reasonable mind might accept ag adequate to justify the conclusion. (©) In addition, the procedure to be followed by the tia

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