Insurance

19.Case of Cha.

1. Case of Eastern Shipping.

20.What does insurable interest in life & in health

consist of?

2. Case of Bankers Insurance Corp.

3. What is the reason why public enemy is not
allowed to be a party?

21.Personal in nature.
22.

a.

Insured, spouse, children

Is it allowed as to common-law

4. Who are the parties?

wife?

5. Case of Filipinas.

spouse.

6. Case of Tongco.

b.
Of any person on whom he depends
wholly
or
in
part
for
education/support, or in whom
he has a
pecuniary interest.

7. Insurance proceeds cannot be taken as part of

the estate.
8. Beneficiary not a party -- as a
9. As a general rule, he has the right to designate
beneficiaries -subject to certain limitations.
10.Can a common law wife be --- beneficiary?
NO. (Insular v. Ebrada 80S131)
11.Art. 739 NCC.
12.Revocable (can be changed) designation of
beneficiary
13.What if the contract (of insurance) is deemed
revocable?
14.Significance of revocable designation?
Beneficiary
a. revocable - inchoate
b. irrevocable - vested (consent needed to
borrow cash surrender value)
Refusal to pay premiums - the beneficiary
may continue paying.
15.Insurer.
16.Insured Interest Life (himself or another)
Health
Property
The connection between insured & life,
health &/or
property.
17.GR: Need insurable interest.
even

BUT:

There can be an insurance contract

without insurable interest.

18.If you are in possession of a property, you have

an insurable interest.

NO. It only refers to the lawful

c.
Of any person under a legal
obligation to him
for the payment of
money, or respecting
property
or services, of which death or illness
might delay or prevent the performance; &
d.
estate or
depends.

Of any person upon whose life any

interest
vested
in
him

November 28, 2014

10.Insurable interest on property. (Sec. 13)

May consist:
Existing interest -- present
Inchoate interest --- founded on
existing
term/period.
Expectancy --- conditional
may/may not happen

1. In life/ in health insurance, is it also required

that the beneficiary must have insurable
interest in the life of insured?
IT DEPENDS.

Differentiate.
Example.
11.Must II exist at the time of the perfection until
the loss happened? (Sec. 19)

2. A have an insurance company with X

corporation. If he will take insurance on his own
life/health & designate himself as the
beneficiary, is it allowed?
NO. X Corp (insurer)
3. What if A insured himself & he instituted Dean
as beneficiary?
YES. In this case, Dean does not need
insurable
interest.
4. A

insured
beneficiary A

Dean

A must have an insurable interest in the life

of Dean.
5. What if Y, not related to A nor Dean?

12.What happens if the II is lost before the

peril/loss happened? (Sec. 21, 22)
13.Sec. 23
14.Sec. 24
15.Sec. 22, 23, 24 - exception
16.The rule is when there is change of interest,
you can not recover anymore.
17.Condo
A
B
common
18.1 2 3 4 All insured property.
1 sold to 2, there can be recovery.
1 sold to 5, there can be no recovery.

6. Can you insure the life of another and the

beneficiary is another who has no relation
between the two?
7. How about, A (insured) has II son.
Friend
beneficiary has II son.
Beneficiary needs to have insurable
interest.
8. In life insurance, how much is the minimum
(limit) on the amount of indemnity?
GR:
Unlimited.
Depends
on
the
assessment of the
insurer.
XPN: Creditor insuring the life of the
debtor up to
the amount of debt.
9. Is it required that it must exist all the time until
the loss happened (in life insurance)?
At the time of perfection of contract.
XPN:

insures the life of the debtor

taken on the life of employee by

employer
of

[There is revocable/irrevocable designation

beneficiary.]
2

12.Explain, what is risk of loss?

13.Why use the term designated peril? --- either

unknown, contingent, ---- future event
January 9, 2015

14.What if the boat sank & it was ----

1. In so far in a carrier/depository, how much is

his interest to the property he is holding?
To the extent of his liability BUT not to
exceed the
value thereof.

15.What is ASSUMPTION OF RISK?

2. If a property is mortgaged (real) to Ms. E, does

Mr. M have insurable interest over the
property?
3. If the value of the property is 1M, how much is
the value with interest over the property of Mr.
M?

16.RISK DISTRIBUTING
distribute losses.)

DEVICE.

(Scheme

to

17.PAYMENT OF PREMIUM.
GR:
The contract of insurance is valid &
binding
until the premium is paid. Any
agreement to the
contrary is void.
CASH & CARRY RULE.

4. Can Mr. E also insure the property?

5. If debt is 60k, how much is the interest of Ms.
E?

EXP:
1. Grace period given.
Case of Life & Industrial.
What is grace period?

6. What if Mr. M finally paid the debt?

happens to the contract?

What

7. Is it necessary that the beneficiary to non-life

insurance must also have insurable interest in
the property? YES
8. My property was leased to Mr. H, son. Can Mr. H
apply for life insurance? YES
Nature of Bottomry loan.
9.

M obtain a loan from E, bottomry loan --will

pay the loan if the vessel arrive safely on
destination. Can M also obtain an insurance
contract?
YES, with respect only to the excess of the
bottomry
loan.
10.Responcia loan - subject is goods.
same rule.

Apply the

For life insurance, how many grace

period?
1 mo./30 days from payment of 1st
premium.
How about for industrial?
4 wks from 1st payment, except if
payment is
monthly.
2. Estoppel.
Sec. 79
ACME case. consistent practice
When there is an agreement that the
premium shall be payable by
installment.
3. Surety --- valid tender of payment.
18.What is the rationale for the payment of
premium?
To safeguard the insured/other insured.

11.(2nd element) RISK OF LOSS.

3

17.Can the parties agree to limit the prescriptive

period within which to file a claim for
insurance? -- for five years?
18.Prescriptive run - when upon filing of claim it is
deemed.
19.Sec. 63 -- if theres an agreement that the
prescriptive periods are only for 3/11 months, it
is void -- period less than one year.
Discussion.
1. Is the consent of the spouse needed in securing
an insurable contract?
NO. Consent of spouse is not required.
2. What is theory of cognition?

A written contract under CC you have only

10 years to
enforce the contract parties can
stipulate the period which in no case be less than
1 year.

Art. 1144
May lengthen -- not more than 10 years.
May shorten -- not less than 1 year.

made through letter

from the time the insured learned of the
acceptance

20.RIDERS, WARRANTIES, CLAUSE, ENDORSEMENT

3. What if there was an offer --- one year have

already
lapsed/
have
passed
still
no
acceptance...What is the status?

21.Additional stipulations to be binding.

It must be described in the policy.
Signature.

4. What if the delay is already unreasonable?

22.Is there a need for both to sign? NO

XPN:

5. (2) cases
6. INSURANCE POLICY

23.Sec. 54 --principal must be indicated

7. What is insurance policy?

24.Sec. 55 In case of co-partners.

8. What is the requirement as to form?

must be in printed form
includes electronic copy

25.What is a cover note?

9. Sec. 56

27.Period of validity?

10.Sec. 57

28.What is requirement for extension?

11.What is open policy?

29.Cases.

12.What is valued policy?

30.Construction of insurance contract.

13.What is running policy?

31.CANCELLATION.

14.Sec. 62.

32.Examples of fraud.

15.Can the premium be determined at the time of

occurrence of loss?
YES. In case of open & running policy BUT
there must
be a fixed rate on how it shall be
computed.

33.How can you say that there is material

misrepresentation?

16.RISK INSURED AGAINST

26.What is the purpose of the cover notes?

34.Requirement for cancellation.

35.RENEWAL
36.Sec. 66
Must notify the insured.

Insurer -- 45 days prior the expiration ---if

not
complied -insured shall have the right
renew the
insurance contract under the same terms.
Kahit ayaw ng insurer, gusto pa din ng
insured wala siyang magagawa.
CONCEALMENT,
WARRANTIES,
MISREPRESENTATION, REPRESENTATION
1. What is loss?
2. The liability of insurer will depend on cause of
loss.
3. What are the kinds of causes?
4. How do you distinguish these three?