RFBT - Insurance Law

INSURANCE LAW (RA No.
10607)
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.
Insurer -it assumes the risk of loss and undertakes for a consideration to indemnify the insured
PARTIES upon the happening of the designated peril.
Insured -the person whose loss is the occasion for the payment of the insurance proceeds by
the insurer
ELEMENTS: CHARACTERISTICS:
1 The insurer has an insurable interest 1 Risk-distributing device
2 The insurer assumes the risk 2 Contract of adhesion
3 The insured is subject to a risk of loss by the happening of 3 Aleatory
the designated peril 4 Contract of Indemnity
4 in consideration of the insurer's promise, the insured pays 5 Contract of Utmost Good Faith
the premium. 6 Personal Contract
5 Such assumption of risk is part of a general scheme to
distribute losses among a large group of persons bearing
a similar risk
Insurer's Premium
-amount of money a person pays for an insurance policy in consideration of the risk of loss as a result of the
happening of the designated peril.
CLASSES:
a. Individual Life
1) LIFE INSURANCE b. Group Life
c. Industrial Life
a. Marine insurance
2) NON-LIFE INSURANCE b. Fire insurance
c. Casualty
Suretyship
is a contract where a person binds himself solidarily to the creditor to fulfill the obligation of the debtor in case
the latter should fail to do so.
4) Contract of suretyship
shall be deemed to be an an insurance contract, w/n the meaning of the Insurance Code, only if made by a
surety who or which, as such, is doing an insurance business.
a. contibutions does not exceed 7.5% of

4) MICROINSURANCE the current daily MW for nonagricultural
b. Max sum of guaranteed benefits is workers in Metro
≤1000 times the MW Manila
5) VARIABLE INSURANCE
a permanent life insurance product with separate accounts comprised of various instruments and investment funds
INSURABLE INTEREST in property vs. in life

IN PROPERTY IN LIFE
Limited to the actual value of the interest thereon Unlimited (save: by a Creditor on the life of the
Debtor)
Insurable interest exists when the insurance takes effect & It exists at the time the policy takes effect & need
when the loss occurs, but need not exist in the meantime NOT exist at the time of the loss
There must be a legal basis as to the expectation of the Need NOT have such legal basis
benefit
Beneficiary must have insurable interest over the thing need NOT have insurable interest of the life of the
insured insured if the insured himself secured the policy
Assignee must have insurable interest & the assignment need NOT have insurable interest
must be w/ the consent of the insurer
General Rule: A change of interest suspends the insurance to an equivalent extent
Exceptions: (LAW OPS)

L Life & Accident insurance
A After occurrence of the injury w/c results in a loss
W by Will or succession on the death of the insured
O by One or several partners, joint owners or owners in common who are jointly insured, to the others.
P Policy is so framed tha it will inure to the benefit of whomsoever
S Several distinct things, separately insured by one policy
General Rule: NO binding contract of insureance if there is NO payment of the premium
Exceptions:
1 Grace period provision applies
2 Credit extension granted as an agreement
3 Parties intended payment in installment
4 Insurer grnated a credit term for the payment of the premium
5 Parties are barred by estoppel
Nonpayment of the premium

Conviction of a crime arising out of acts increasing the hazard insured against
Discovery of frad of material misrepresentation
RESCISSION Discovery of willful or reckless acts or omissions the hazard insured against
Physical changes in the property insured & becomes uninsurable
Discovery of other insurance coverage (insurance > value of the property insured)
Commissioner decision
1) Concealment
Othergrounds: 2) False representation or misrepresentation
3) Breach of Warranty
upon maturity - IMMEDIATE

LIFE upon death - w/n 60 days after presentation
CLAIMS by agreement of arbitration - w/n 30 days after proff

of loss
PROPERTY if no ascertainment is made w/n 60 days after receipt
of proof of loss -- w/n 90 days after such receipt
1 interest
DELAY entitles the beneficiary to: 2 Attorney's fees
3 Appropriate damages
*Prescription: 10 years or shorter if agreed but NOT less than 1 year

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INSURANCE LAW (RA No.

a. contibutions does not exceed 7.5% of

INSURABLE INTEREST in property vs. in life

Exceptions: (LAW OPS)

General Rule: NO binding contract of insureance if there is NO payment of the premium

Nonpayment of the premium

upon maturity - IMMEDIATE

CLAIMS by agreement of arbitration - w/n 30 days after proff

*Prescription: 10 years or shorter if agreed but NOT less than 1 year

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