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Insurance - Batas Natin
Insurance - Batas Natin
A case for collection of actual damages with interest and attorneys fees was filed with RTC.
Aboitiz disavowed any liability and asserted that the claim had no factual and legal bases, and
that complaint had no cause of action, plaintiff Y Insurance had no personality to sue, cause of
action was barred, suit was premature there being no claim made upon Aboitiz. RTC rendered
decision against Y Insurance and case was elevated to CA, which reversed RTC decision. Case
was then elevated to SC.
ISSUES:
a. Is Respondent Y Insurance the real party-in-interest that possesses the right of subrogation to
claim reimbursement from Aboitiz?
RESOLUTION:
a. YES. A foreign corporation not licensed to do business in the Philippines is not absolutely
incapacitated from filing a suit in local courts. Only when that foreign corporation is
transacting or doing business in the country will a license be necessary before it can institute
suits. It may, however, bring suits on isolated business transactions, which is not prohibited under
Philippine law. Thus, this Court has held that a foreign insurance company may sue in the
Philippine courts upon the marine insurance policies issues by it abroad to cover international-
bound cargoes shipped by a Philippine carrier, even if it has no license to do business in this
country. It is the act of engaging in business without the prescribed license, and not the lack of
license per se, which bars a foreign corporation from access to our courts. Thus, the payment by
the insurer to the assured operates as an equitable assignment of all remedies the assured may
have against the third party who caused the damage. Subrogation is not dependent upon, nor
does it grow out of, any privity of contract or upon written assignment of claim. It accrues
simply upon payment of the insurance by the insurer. (Aboitiz Shipping Corporation vs.
Insurance Company of North America, G.R. No. 168402, August6, 2008, [Reyes, R.T.,J.])
Cover Note
Law On Insurance
inShare
By its nature, it is subject to all conditions in the policy expected even though that policy may
never issue. In life insurance, where an agreement is made between an applicant and the
insurers agent, no liability shall attach until the insurer approves the risk. Thus, in life
insurance, a binding slip or binding receipt DOES NOT insure itself.
Can you explain a preliminary
executory contract of insurance?
By a preliminary executory contract of insurance, the insurer makes a contract to insure the
subject matter at some subsequent time which may be definite or indefinite. Under such an
executory contract, the right acquired by the insured is merely to demand the delivery of the
policy in accordance with the terms agreed upon and the obligation assumed by the insurer is to
deliver the said policy.
2) A cover not shall e deemed to be a contract of insurance within the meaning of Sec. 1(1) of
IC.
3) NO cover note shall be issued or renewed unless in the form previously approved by the
Insurance Commission.
4) A cover not shall be valid and binding for a period NOT exceeding 60 days from the date
of its issuance, whether or not the premium therefore has been paid or not, BUT such cover note
may be canceled by either party upon at least 7 days notice to the other party.
5) If a cover not is not so canceled, a policy of insurance shall, within 60 days after the
issuance of the cover not be issued in lieu thereof. Such policy shall include within its terms the
identical insurance bound under the cover note and the premiums therefore.
6) A cover note may be extended or renewed beyond the aforementioned period of 60 days
with the written approval of the Insurance Commissioner, provided that such written approval
may be dispensed with upon the certification of the Pres, VP or General Mgr of the Insurance
company concerned, that the risks involved, the values of such risks, and the premiums therefore
have not as yet been determined or established and that such extension or renewal is NOT
contrary to and is not for the purpose of violating any provision of the Insurance Code.
7) The insurance companies may impose on cover notes a deposit premium equivalent to at
least 25% of the estimated premium of the intended insurance coverage but in no case less than
P500.
Representation and
Misrepresentation in Insurance
Law On Insurance
inShare
Representation and
Misrepresentation in Insurance
Section 36. A representation may be oral or written.
What is a representation?
A representation is a factual statement made by the insured at the time of, or prior to, the
issuance of the policy to give, information to the insurer and otherwise induce him to enter into
the insurance contract.
What is a misrepresentation?
A Misrepresentation is a statement:
1. As a fact of something which is untrue
2. Which the insured stated with knowledge that it is untrue and with an intent to deceive or
which he states as true without knowing it to be true and which has the tendency to mislead; and
3. Where such fact in either case is material to the risk.
Is misrepresentation synonymous
with concealment?
NO. Misrepresentation is an active form of concealment.
Section 37. A representation may be made at the time of, or before, issuance of the policy.
Section 41 provides that A representation may be altered or withdrawn before the insurance is
effected, but not afterwards.
Section 38. The language of a representation is to be interpreted by the same rules as the
language of contracts in general.
How are misrepresentations
construed?
They are construed liberally in favor of the insured.
Section 39. A representation as to the future is to be deemed a promise, unless it appears that it
was merely a statement of belief or expectation.
What are the different kinds of
representations?
They may either be:
1. Oral or written;
2. Made at the time of the issuance of the policy or before;
3. Affirmative or promissory
What is an affirmative
representation?
It is any allegation as to the existence or non-existence of a fact when the contract begins. An
example would be when the insured states that the house subject of the insurance is used only for
residential purposes.
What is a promissory
representation?
A promissory representation is any promise to be fulfilled after the contract has come into
existence or any statement concerning what is to happen during the existence of the insurance.
Examples of promissory
representations
1. An applicant for fire insurance on a building orally promised that the building will be
occupied.
2. An applicant for fire insurance on a building orally promised to install two fire
extinguishers within the bldg.
3. A TV hostess saying Will be back.. promise.. saranghameda po
Examples
1) If the policy expressly provides that the house insured is used as a warehouse, any
representation made by the insured prior to the issuance of the policy to the effect that the house
was used only as a residence is NOT a defense in the action for the recovery of the amount of the
insurance.
2) The representation of the insured to the effect that the last time the vessel was drydocked
was six months ago would NOT qualify the implied warranty that the vessel is seaworthy.
Section 41. A representation may be altered or withdrawn before the insurance is effected, but
not afterwards.
Section 42. A representation must be presumed to refer to the date on which the contract goes
into effect.
Insurance Gambling
Contract contract
Parties seek to distribute loss by reason of Parties contemplate gain through mere chance
mischance or the occurrence of a contingent event.
What one insured gains is not at the expense of Essence is whatever one person wins from a
another insured. The entire group of insureds wager is lost by the other wagering party.
provides through the premiums paid, the funds
which make possible the payment of all claims;
Purchase of insurance does not create a new and As soon as a party makes a wager, he creates a
non-existing risk of loss to the purchaser. In risk of loss to himself where no such risk
purchasing insurance, the insurer faces an existed previously.
already existing risk of economic loss.
In either case, one party may receive more, much more, than he paid or agreed to pay.
There is consideration of price aid if it appears that the prizes offered by whatever name they may be
called came out of the fund raised by the sale of chances among the participants in order to win the
prizes.
Art. 2012. Any person who is forbidden from receiving any donation under Art. 739 cannot be named
beneficiary of a life insurance policy by a person who cannot make any donation to him, according to
said article.
Art. 2021. The aleatory contract of life annuity binds the debtor to pay an annual pension or income
during the life of one or more determinate persons in consideration of a capital consisting of money
or other property, whose ownership is transferred to him at once with the burden of income.
Art. 2022. The annuity may be constituted upon the life of the person who gives the capital, upon
that of a third person, or upon the lives of various persons, all of whom must be living at the time the
annuity is established.
It may also be constituted in favor of the person or persons upon whose life or lives the contract is
entered into, or in favor of another or other persons.
Art. 2023. Life annuity shall be void if constituted upon the life of a person who was already dead at
the time the contract was entered into, or who was at the that time suffering from an illness which
caused his death within twenty days following said date.
Art. 2024. The lack of payment of the income due does not authorize the recipient of the life annuity
to demand the reimbursement of the capital or to retake possession of the property alienated, unless
there is a stipulation to the contrary; he shall have only a right judicially to claim the payment of the
income in arrears and to require a security for the future income, unless there is a stipulation to the
contrary.
Art. 2025. The income corresponding to the year in which the person enjoying it dies shall be pain
in proportion to the days during which he lived; if the income should be paid by installments in
advance, the whole amount of the installment which began to run during his life shall be paid.
Art. 2026. He who constitutes an annuity by gratuitous title upon his property, may provide at the
time the annuity is established that the same shall not be subject to execution or attachment on
account of the obligations of the recipient of the annuity. If the annuity was constituted in fraud of
creditors, the latter may ask for execution or attachment of the property.
Art. 2027. No annuity shall be claimed without first proving the existence of the person upon whose
life the annuity is constituted.
5. EO 250; and
6. RA 3591