Professional Documents
Culture Documents
Insurance Code of The Philippines PD No. 1460, As Amended: July 26, 2012
Insurance Code of The Philippines PD No. 1460, As Amended: July 26, 2012
1460, as amended
July 26, 2012
Insurance
A contract of insurance is an agreement
whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event. (Section 2)
Characteristics
Insurance as a risk distributing device
By paying a pre-determined amount into a general fund out of which payment will be made for an economic loss of a defined type, each member contributes to a small degree toward compensation for losses suffered by any member of the group
Characteristics
Contract of adhesion or fine print rule
Aleatory
In case of doubt, the contract shall be interpreted strictly against the insurer and liberally in favor of the insured The obligation of the insurer to pay the proceeds of the insurance arises only upon the happening of an event which is uncertain or which is to occur at an indeterminate time
Characteristics
Commutative
The amount paid by the insured is deemed the equivalent of the protection given by the insured based on the insurance contract
Contract of indemnity
The insured who has insurable interest over a property is only entitled to recover the amount of actual loss sustained and the burden is upon him to establish the amount of such loss
Characteristics.
Applicable only to property insurance, except
creditor insuring the life of his debtor; Life insurance is not a contract of indemnity. There is no overinsurance in life insurance There is overinsurance only in property insurance and if this is present, the insurer is only liable up to the extent of the loss. Insurance contracts are not wagering contracts. (Section 4)
Characteristics
Uberrimae fides contract
The contract of insurance is one of perfect good faith not for the insured alone, but equally so for the insurer, in fact, it is more so for the latter since its dominant bargaining position carried with it stricter responsibility.
Personal contract
The law presumes that the insured considered the personal qualifications of the insured in approving the insurance application.
Elements of insurance
Existence of an insurable interest Risk of loss Assumption of risks Scheme to distribute losses; and, Payment of premiums
The Policy
It is a written instrument where the terms and conditions
of the contract of insurance are set forth. ( Section 49) Basic contents of policy ( Section 51)
Parties Amount of insurance, except in open of running policies Rate of premium Property or life insured Interest of the insured in the insured in the property if he is not the absolute owner Risk insured against The period during which the insurance is to continue
The Policy
Rider
An attachment to an insurance policy that modifies the conditions of the policy by expanding or restricting its benefits or excluding certain conditions from the coverage
Kinds of Policies
Open policy- value of the thing insured is not
agreed upon, but left to be ascertained at the time of loss (Section 60) Valued policy-definite valuation is agreed by both parties and written on the face of the policy Running policy- contemplates successive insurances and which provides that the subject of the policy may from time to time be defined. (Section 62) Life insurance policies are always valued policies.
Types
Non-life insurance
Marine Fire Casualty
Contracts of suretyship
Parties
Insured-the person with capacity to
contract and having an insurable interest in the life or property of the insured Beneficiary- person designated to received proceeds of policy when the risk attaches
Insurable Interest
Life Insurance Every person has an insurable interest in the life and
health:
Of himself, of his spouse and of his children; Of any person on whom he depends wholly or in part for education or support or in whom he has pecuniary interest Of any person under a legal obligation to him for the payment of money or respecting property or services, of which death might delay or prevent the performance Of any person upon whose life any estate or interest vested in him depends
Insurable interest
Insurable interest in property is any
interest therein, or liability in respect thereof and it may consist in an existing interest, an inchoate interest founded on an existing interest or any expectancy coupled with an existing interest
Insurable interest
A person has an insurable interest in the
property if he derives pecuniary benefit or advantage from its preservation or would suffer pecuniary loss, damage or prejudice by its destruction whether he has or has no title in or lien upon or possession of the property.
Return of premiums
Insurer never incurred liability; When the insurance is for a definite period and
the insured surrenders his policy before the termination thereof; Contract is voidable because of the existence of facts of which the insured was ignorant without his fault; When there is over-insurance; When rescission is granted due t the insurers breach of contract.
Devices
Warranties- statements or promise by the
insured set forth in the policy itself or incorporated in it by proper reference. The same may be expressed, implied, affirmative or promissory Condition- the insurer must also protect himself against fraudulent claims of loss and this he attempts to do by inserting in the policy various conditions which take the form of conditions precedent.
Incontestability Clause
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 years from the date of its issuance 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. (Section 48)
insurable interest; That the cause of the death of the insured is an excepted peril; That the premiums have not been paid That the beneficiary failed to furnish proof of death or to comply with any condition imposed by the policy after the loss has happened; That the action was not brought within the time specified.
Double insurance
The person insured is the same; There are two or more insurers insuring
separately; The subject matter is the same; The interest insured is also the same; The risk or peril insured against is likewise the same
Insurance of different interest Insurer becomes an insured in relation to the reinsurer Original insured has no interest in reinsurance contract Subject of insurance is the original insurers risk
Consent of original insured is not necessary
Liabilities
The insurer is liable if:
Loss the proximate cause of which is the peril insured against; Loss the immediate cause of which is the peril insured against except where the proximate cause is an excepted peril; Loss through negligence of the insured; Loss caused by efforts to rescue the thing from peril insured against
Liabilities
The insurer is not liable:
Loss by insureds willful act or gross negligence; Loss due to connivance of the insured; and, Loss where the expected peril is the proximate cause.
Fire insurance
A contract of indemnity by which the
insurer for the consideration agrees to indemnify the insured against loss of or damage to, property by fire, but may include loss by lighting, windstorm, tornado or earthquake and other allied risks, when such risks are covered by extension to fire insurance policies or under separate policies.
Casualty insurance
An insurance covering loss or liability
arising from accident of mishap, excluding those falling under other types of insurance as fire or marine; Third Party Liability-
Purpose of CTPL
To give immediate financial assistance to
victims of motor vehicle accidents. No fault clause:
The injured party or passenger is given the option to file a claim of death or injury without the necessity of proving fault or negligence of any kind.
No fault clauseconditions
The total indemnity in respect of any person
shall not exceed five thousand pesos; The following proof of loss, when submitted under oath, shall be sufficient evidence to substantiate the claim:
Police report of accident; Death certificate and evidence sufficient to establish the proper payee; Medical report and evidence of medical or hospital disbursement in respect of which refund is claimed.
Amount of indebtedness must exceed one thousand pesos Bond is not required
may be made by the Petitioner except insofar as concerns the ordinary operations of commerce or if industry in which he engaged; No payments may be made by the petitioner except in the ordinary course of his business or industry; and, Upon request to court, all pending executions against the debtor shall be suspended except execution against property especially mortgaged.
Discharge
The insolvent debtor is released from:
All his debts and liabilities set forth in the schedule; and, All debts, liabilities or claims which were or might have been proved against the estate in insolvency.
Discharge
Only natural persons may ask for
discharge; Corporations cannot ask for discharge