1 INSURANCE CODE OF 1978 1 GENERAL PROVISIONS Sec. 1. This Decree shall be known as “The Insurance Code of 1978. 2 ” A. Brief History The business and contract of insurance in the Philippines are generally governed by the provisions of Presidential Decree No. 612 (PD 612), as amended, then known as the Insurance Code. The In- surance Code was ordained and instituted by Former President Fer- dinand E. Marcos (President Marcos) on 18 December 1974. Prior to the enactment of PD 612, the applicable law was the Insurance Act which took effect on 1 July 1915. The Insurance Act was practically a verbatim copy of the California Insurance Act ex- cept for some provisions taken from the New York Insurance Law. The Insurance Code had undergone several amendments since its promulgation on 18 December 1974. A substantial number of pro- visions were rendered obsolete by subsequent issuances of amenda- tory laws, decrees and executive orders. It then became imperative to consolidate, codify and integrate such amendatory laws, decrees and executive orders to harmonize their provisions for the proper guidance of the public and efcient administration thereof. There likewise existed in the Insurance Code certain provisions which were impractical in application in the Philippines thereby necessitating revision in order to infuse exibility, keep pace with the changing needs and demands of industries in line with new risks and arising out of new international developments. Thus, on 11 June 1978, then President Marcos signed Presi- dential Decree No. 1460 (PD 1460) for the purpose of consolidating and codifying all insurance laws embodied in PD 612 and various 1 Presidential Decree No. 612 and related laws codied by Presidential Decree No. 1460. 2 Inserted by virtue of Presidential Decree No. 1460.
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INSURANCE CODE OF 19781
GENERAL PROVISIONS
Sec. 1. This Decree shall be known as “The Insurance Code of 1978.2”
A. Brief History
The business and contract of insurance in the Philippines are generally governed by the provisions of Presidential Decree No. 612 (PD 612), as amended, then known as the Insurance Code. The In-surance Code was ordained and instituted by Former President Fer-dinand E. Marcos (President Marcos) on 18 December 1974.
Prior to the enactment of PD 612, the applicable law was the Insurance Act which took effect on 1 July 1915. The Insurance Act was practically a verbatim copy of the California Insurance Act ex-cept for some provisions taken from the New York Insurance Law.
The Insurance Code had undergone several amendments since its promulgation on 18 December 1974. A substantial number of pro-visions were rendered obsolete by subsequent issuances of amenda-tory laws, decrees and executive orders. It then became imperative to consolidate, codify and integrate such amendatory laws, decrees and executive orders to harmonize their provisions for the proper guidance of the public and ef cient administration thereof. There likewise existed in the Insurance Code certain provisions which were impractical in application in the Philippines thereby necessitating revision in order to infuse exibility, keep pace with the changing needs and demands of industries in line with new risks and arising out of new international developments.
Thus, on 11 June 1978, then President Marcos signed Presi-dential Decree No. 1460 (PD 1460) for the purpose of consolidating and codifying all insurance laws embodied in PD 612 and various
1Presidential Decree No. 612 and related laws codi ed by Presidential Decree No. 1460.
2Inserted by virtue of Presidential Decree No. 1460.
2 THE INSURANCE CODE OF THE PHILIPPINES
laws, presidential decrees and executive orders. It is now known as the Insurance Code of 1978.
On 16 January 1981, Presidential Decree No. 1814 was signed into law amending certain sections of PD 1460 to: (i) ensure the due execution and performance of insurance contracts in the interests of the sound development of the national economy in view of the pre-vailing economic conditions during that time; and (ii) further assure reasonable insurance services for the protection of the interests of the policy holders and the public.
On 12 June 1985, Batas Pambansa Blg. 874 amended Sections 27, 45, 384 and 416 and inserted Section 180-A.
B. How Insurance Works3
“Life is a risk.” — A time proven cliché. The world is surround-ed by risks. There are risks everywhere. Some risks are minimal and can be lived with, but most are not. Thus, the need for insur-ance. But insurance does not work to protect one against the risks happening, instead, it covers the consequences of the happening.
Thus, insurance is something one buys hoping he never has to use. It is purchased to protect oneself from unexpected losses he cannot afford — the accident he hopes he never gets into, the re he prays never destroys his home, the storm he knows sooner or later is bound to batter his roof, the lawsuit that threatens to wipe out all his savings.
While it may seem complex, insurance is really quite simple: The payments (or premiums) of the many pay for the losses of a few. The premiums go into a large pool. The claims of the few are paid from that pool. Because there are more people contributing to the pool than there are making claims, there is always enough to pay the claims — even large single claims like when someone is perma-nently disabled as a result of a car collision, or many smaller claims like those resulting from a natural disaster.
Even when the pool comes close to emptying, there is another pool from which insurance companies can draw to pay claims. Some of the premiums are used by the insurance company to buy reinsur-ance — insurance for insurance companies. Sometimes losses are
3The Insurance Bureau of Canada, “How Insurance Works.”
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so big — like those resulting from an earthquake — that there is no way that an insurance company can cover the costs. Reinsurance is an extra layer of protection against large losses.
C. Imbued with Public Interest
The business of insurance is imbued with public interest. It is subject to regulations by the State, with respect not only to the rela-tions between the insurer and the insured, but also to the internal affairs of insurance companies.4
Sec. 2. Whenever used in this Code, the following terms shall have the respective meanings hereinafter set forth or indicated, unless the context otherwise requires:
(1) A “contract of insurance” is an agreement where-by one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event.
A contract of suretyship shall be deemed to be an insur-ance contract, within the meaning of this Code, only if made by a surety who or which, as such, is doing an insurance busi-ness as hereinafter provided.
(2) The term “doing an insurance business” or “trans-acting an insurance business,” within the meaning of this Code, shall include:
(a) making or proposing to make, as insurer, any insurance contract;
(b) making or proposing to make, as surety, any contract of suretyship as a vocation and not as merely incidental to any other legitimate business or activity of the surety;
(c) doing any kind of business, including a rein-surance business, speci cally recognized as constituting the doing of an insurance business within the meaning of this Code;
4Republic vs. Del Monte Motors, Inc., G.R. No. 156956, October 9, 2006.
INSURANCE CODE OF 1978GENERAL PROVISIONS
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PREFACE
Upon reaching the age of thirty (30) and after fi ve (5) academic years of teaching the subject, the author felt that it was time to collate his materials and sit down in writing his views and thoughts on the subject of insurance.
This book, although it consists of almost a thousand pages, rep-resents a simple discussion of the insurance law in the Philippines. A substantial proportion of the material is adapted from the legal provisions and jurisprudence, both here and abroad; opinions and annotations of authors, both local and foreign; and other published articles, both in the papers and in the internet. Some Supreme Court decided cases are reproduced herein in full for the readers to appre-ciate the correlation of insurance law principles with one another as well as with other laws, both substantive and remedial.
The author wrote this book in the hope that his humble work would be of great help to the law students, bar candidates and law practitioners.
A. Brief History ............................................................................ 1B. How Insurance Works ............................................................. 2C. Imbued with Public Interest ................................................... 3
A. Essential Elements of Insurance ............................................ 4B. Characteristics of an Insurance Contract .............................. 5C. Requisite of an Insurance Contract ....................................... 16D. Parties ...................................................................................... 19E. Consent .................................................................................... 20F. Theory of Cognition ................................................................. 23G. Defects of Consent ................................................................... 27H. Object ....................................................................................... 27I. Cause/Consideration ............................................................... 28J. Governing Law ........................................................................ 28K. Construction of the Insurance Code ....................................... 32L. Policy Construction ................................................................. 33
Case: QUA CHEE GAN vs. LA UNION AND ROCK INSURNACE CO. LTD. ................................. 38
M. Principle of Subrogation ......................................................... 43N. The Business of Insurance ...................................................... 50
Case: WHITE GOLD MARINE SERVICES INC. vs. PIONEER INSURANCE AND SURETY CORPORATION .......................................................... 52
O. Types of Insurance .................................................................. 56P. Classifi cation Under the Code ................................................ 59Q. Lending Investors vs. Insurance Companies ......................... 60
A. What may be Insured .............................................................. 62B. Minors ...................................................................................... 64C. Married Woman ...................................................................... 66
A. Drawing Lottery ...................................................................... 69B. Insurance is not Gambling ..................................................... 70C. Risk Management ................................................................... 71
A. Who may be an Insurer ........................................................... 74B. Certifi cate Authority ............................................................... 75C. Entities Prohibited to Act as an Insurer ................................ 76D. Separate License from an Insurance Agent ........................... 77
A. Who is a Public Enemy ........................................................... 78B. Control Test on the Corporations ........................................... 78C. Effect of War Generally .......................................................... 81D. Dealing with Dual Citizenship ............................................... 81E. Effect of Termination of War .................................................. 86
Case: FILIPINAS COMPAÑA DE SEGUROS vs. CHRISTERN, HUENEFELD AND CO., INC. .......... 86 CONSTANTINO vs. LIFE INSURANCE COMPANY .................................................................. 89 HIDALGO vs. MANUFACTURER’S LIFE INSURANCE COMPANY ........................................... 97
F. May a Public Enemy Be a Benefi ciary ................................... 102
A. Mortgagor and Mortgagee’s Interest ...................................... 103B. Mortgage Redemption Insurance ........................................... 105C. Types of Mortgage Clause ....................................................... 106D. Simple vs. Standard ................................................................ 107E. Proper Party to Bring the Suit ............................................... 111F. Effect of Assent of the Insurer to the Transfer of Insurance ............................................................................. 113
Case: GREAT PACIFIC LIFE ASSURANCE CORPORATION vs. COURT OF APPEALS ............. 113
A. Requirement of Insurable Interest ......................................... 120B. Moral Hazard in Life Insurance ............................................. 122C. In whose Life or Health does a Person Have an Insurable Interest ................................................................... 125D. Consent of Person Whose Life is Being Insured is not Estate Necessary ..................................................................... 135
A. Policy Owner, Insured and Benefi ciary ................................. 135B. Types of Benefi ciaries ............................................................. 136C. Revocable vs. Irrevocable ........................................................ 137D. Importance of Choosing a Benefi ciary ................................... 139E. Disqualifi ed to be Benefi ciaries .............................................. 141F. What if Benefi ciary Dies Before the Insured ......................... 144G. Paying Life Insurable Proceeds into a Trust ......................... 145
A. Insurable Interest in Property ............................................... 150B. Title or Security Interest Not Required ................................. 151C. Exceptions to Insurable Interest ............................................ 154D. Stolen Property ........................................................................ 155E. Effects of War to Insurable Interest ....................................... 157F. Insurable Interest of Consignee, Factor or Agent ................. 158
1) Different Expressions ............................................................. 1612) Insurance not Invalid .............................................................. 163
Case: GARCIA vs. THE HONGKONG FIRE & MARINE INSURANCE CO., LTD. ............................ 163
A. Property and Liability Insurance ........................................... 168B. Life Insurance ......................................................................... 169
A. Life and Health Insurance ...................................................... 171B. Change After the Occurrence of the Loss .............................. 172C. Change of Interest in One or More Several Distinct Things Separately Insured by One Policy ............... 173D. Change by Will or Succession ................................................. 173E. Transfer by One of Several Partners Joint Owners or Owners in Common ..................................... 173F. Policy Inures to the Benefi t of Whomsoever May Become the Owner .......................................................... 174
A. Grounds and Rationale for Rescission of Contract of Insurance ............................................................................. 177B. Intentional or Unintentional .................................................. 179C. Good Faith not a Defense ....................................................... 179
Case: GREAT PACIFIC LIFE ASSURANCE COMPANY vs. HONORABLE COURT OF APPEALS ................. 180
D. Waiver of Medical Examination ............................................. 185
A. Within the Knowledge ............................................................ 187B. Makes No Warranty ................................................................ 188
A. Truth of Warranty ................................................................... 188B. Intent to Deceive a Question of Fact ...................................... 188
A. What Need to be Disclosed ..................................................... 189B. Public Character and Notoriety ............................................. 189C. Insurer’s Duty to Inquire ........................................................ 191D. Obligation in Good Faith ........................................................ 191E. Knowledge of Agent ................................................................ 192
A. Inducement to Enter Into a Contract .................................... 192B. Need Not be the Cause of the Loss ......................................... 193
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C. Matters of Inquiries ................................................................ 194
A. General Causes Open to Inquiry ............................................ 195B. Full Conversant in the Usual Course of Trade ..................... 196C. Rule on Judicial Notice ........................................................... 197
A. Right to Rely on the Truthfulness of Answers ...................... 198B. Imperfect Answers .................................................................. 199
Cases: NG GAN ZEE vs. ASIAN CRUSADER LIFE ASSURANCE CORPORATION ....................... 199
C. No Waiver in Non-Medical Insurance .................................... 203
A. Representation vs. Misrepresentation ................................... 207B. Representation vs. Warranty ................................................. 208C. Misrepresentation vs. Concealment ....................................... 208D. Orally or in Writing ................................................................ 208E. Representation in the Application Process ............................ 209
A. Time in Which Representation is Made ................................. 210B. Effect of Provisions .................................................................. 211C. Must be Made by the Insured ................................................. 211
A. Construction ............................................................................ 211B. Applicability of Rules on Interpretation of Contracts ........... 212C. Applicability of the Rules of Court ......................................... 213
A. Affi rmative vs. Promissory ..................................................... 214B. Statement of Belief or Expectation vs. Promissory Representation ........................................................................ 215
A. Representation vs. Warranty ................................................. 216B. Qualifying an Implied Warranty ............................................ 216C. Express Warranty Supersedes Representation ..................... 216
A. No Personal Knowledge ......................................................... 217
Case: HARDING vs. COMMERCIAL UNION ASSURANCE COMPANY ............................ 218
B. Knowledge of Agent ................................................................ 226
Cases: THE INSULAR LIFE ASSURANCE CO., LTD. vs. FELICIANO ......................................... 228 THE INSULAR LIFE ASSURANCE CO., LTD. vs. FELICIANO ......................................... 231
C. Knowledge of Insured Corporation ........................................ 235
A. False Representation .............................................................. 235B. No Misrepresentation if Substantially True .......................... 236C. Need not be Intended .............................................................. 236D. Facts of Loss Not Material ...................................................... 236E. Mistake of Forgetfulness ........................................................ 237F. Misstatement of Age ............................................................... 237
A. Contract of Speculation ........................................................... 237
Case: SATURNINO vs. THE PHILIPPINE AMERICAN LIFE INSURANCE COMPANY ........... 238
B. Kinds of Misrepresentation .................................................... 241C. No Misrepresentation ............................................................. 242D. Affi rmative Defense ................................................................ 242E. Waiver by Acceptance of Premiums ....................................... 243
Case: EDILLON vs. MANILA BANKERS LIFE INSURANCE CORPORATION .................................. 243
A. Determination of Materiality ................................................. 247B. Falsity of Answers ................................................................... 248
A. Previous to the Commencement of Action ............................. 249B. Presupposes Existence of Contract ........................................ 250
Cases: TAN CHAY HENG vs. WEST COAST LIFE INSURANCE COMPANY ................... 250 ARGENTE vs. WEST COAST LIFE INSURANCE COMPANY ................................. 258
C. Incontestability Clause ........................................................... 265
Cases: PHILAMCARE HEALTH SYSTEMS, INC. vs. COURT OF APPEALS ................................................ 266 TAN vs. COURT OF APPEALS ................................. 272
D. Not a License to Commit a Fraud .......................................... 278
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E. Mutual Advantage of Insurer and Insured ............................ 279F. Applicability of Reinstated Policies ........................................ 279G. Exceptions to Incontestability Clause .................................... 279H. Rationale of Imposter Defense ............................................... 280
A. Forms of Insurance Contract .................................................. 282B. Rider, Clause, Warranty and Endorsement .......................... 292C. Counter-Signature of the Insured .......................................... 293D. Group Insurance ...................................................................... 294E. Group Annuity ......................................................................... 295
Case: COMMISSIONER OF INTERNAL REVENUE vs. LINCOLN PHILIPPINES LIFE INSURANCE COMPANY, INC. ........................................................ 295
A. Parties ...................................................................................... 300B. Amount of Insurance ............................................................... 305C. Premium .................................................................................. 306D. Property, Life or Liability Insured ......................................... 307E. Interest of the Insured in Property ........................................ 308F. Risk Insured Against .............................................................. 309G. Period During Which the Insured is to Continue .................. 309
A. Person Designated in the Policy ............................................. 318
Case: SUNLIFE ASSURANCE COMPANY OF CANADA vs. TORIBIO ............................................... 318
B. Third Party’s Right to Insurer ................................................ 328C. Not Solidary ............................................................................. 328
Cases: LAMPANO vs. JOSE .................................................. 329 BONIFACIO BROS. INC. vs. MORA ......................... 333 COQUIA vs. FIELDMEN’S INSURANCE CO., INC. .................................................................... 338 GUINGON vs. DEL MONTE ...................................... 343
A. Open and Valued Policies ....................................................... 354B. Running Policy ........................................................................ 356
1) Prescription Under the Civil Code ......................................... 3562) Prescription by Agreement ..................................................... 357
Cases: ANG vs. FULTON ....................................................... 357 FILIPINO MERCHANT INSURANCE COMPANY, INC. vs. ALEJANDRO ........................... 361 MAYER STEEL PIPE CORPORATION vs. COURT OF APPEALS ................................................ 367
3) Oral Contract of Insurance ..................................................... 3704) Cause of Action ........................................................................ 3705) Denial of Reconsideration ....................................................... 371
A. Primary Concerns ................................................................... 383B. Devices to Ascertain and Control Risk and Loss ................... 383C. Construction of Warranty ....................................................... 385
Case: AMERICAN HOME ASSURANCE COMPANY vs. TANTUCO ENTERPRISE, INC. ................................ 385
A. Past, Present of Future ........................................................... 392B. Affi rmative or Promissory ...................................................... 393
1) Express and Implied Warranty .............................................. 4032) Implied Warranty and Representation .................................. 4033) Express Warranty and Representation ................................. 4034) Forms of Express Warranty ................................................... 404
A. Effect of Non-Compliance ....................................................... 405B. When Compliance Dispense With .......................................... 406
A. Effect of Breach ....................................................................... 406B. Expressly Included .................................................................. 407
Case: YOUNG vs. THE MIDLAND TEXTILE INSURANCE COMPANY ........................................... 407
Cases: ARCE vs. THE CAPITAL INSURANCE & SURETY CO., INC. ..................................................... 423 ACME SHOE RUBBER & PLASTIC CORPORATION vs. THE COURT OF APPEALS .... 425 THE MANUFACTURERS LIFE INSURANCE CO. vs. MEER .............................................................. 429
A. Exceptions to Cash and Carry Basis ...................................... 434B. Payment by Installments ........................................................ 437C. Credit Agreement ................................................................... 438
Case: UCPB GENERAL INSURANCE CO., INC. vs. MASAGANA TELEMART, INC. ................................ 439
D. Payment by Promissory Notes or Bill of Exchange ............... 456E. Acknowledgement of Receipt if Premium .............................. 456
A. Return of Entire Premium ...................................................... 457B. Return of Portion of Premium ................................................ 460C. No Return of Premium ............................................................ 461
Case: GREAT PACIFIC LIFE INSURANCE CORPORATION vs. COURT OF APPEALS ............. 461
A. Proximate Cause ..................................................................... 470B. Burden of Proof ....................................................................... 471
Case: COUNTRY BANKERS INSURANCE CORPORATION vs. LIANGA BAY AND COMMUNITY MULTI-PURPOSE ............................ 471
A. Willful Act and Negligence ..................................................... 480B. Negligence or Misconduct ....................................................... 480C. Agreement to Indemnity ......................................................... 481
Cases: FGU INSURANCE CORPORATION vs. THE COURT OF APPEALS ....................................... 481 SUNRISE INSURANCE OFFICE, LTD. vs. COURT OF APPEALS ................................................ 494
A. Condition ................................................................................. 499B. Requisite for Recovery ............................................................ 499C. Notice in Fire Insurance ......................................................... 500
A. When Double Insurance Exists .............................................. 507B. Same Subject Matter, Same Interest, and Same Risk .......... 508
Case: GEAGONIA vs. COURT OF APPEALS ..................... 508
C. Prohibition Against Double Insurance ................................... 516
Cases: SANTA ANA vs. COMMERCIAL UNION ASSURANCE COMPANY, LTD. ............................... 517 GENRERAL INSURANCE & SURETY CORPORATION vs. NG HUA .................................... 522
D. Waiver of Annulment .............................................................. 524
A. Over Insurance by Double Insurance .................................... 525B. Recovery from Insurers ........................................................... 525C. Cannot Recover Doubly ........................................................... 525D. Refund of Premiums ............................................................... 526
A. Protection if Insurer ................................................................ 529B. Functions of Reinsurance ....................................................... 530C. Types Reinsurance .................................................................. 531D. Contracts ................................................................................. 533E. Applicability of Rules on Representation and Concealment ............................................................................ 533F. Retrocession ............................................................................. 533G. Importance of Reinsurance ..................................................... 534H. Rules on Reinsurance Under the Insurance Code ................. 535I. Reinsurance vs. Double Insurance ......................................... 538J. Policy vs. Treaty ...................................................................... 538
A. Indemnity Against Liability ................................................... 539B. Defense of Reinsured Available to Reinsurer ........................ 540
A. General Principles ................................................................... 542B. Coverage .................................................................................. 543C. Hull Insurance and Marine Cargo Policy .............................. 545D. Kinds of Marine Policies ......................................................... 546E. Assignment of Policy ............................................................... 547F. Perils of the Sea vs. Perils of the Ship ................................... 548
Cases: LA RAZON SOCIAL “GO TIAOCO Y HERMANOS” vs. UNION INSURANCE SOCIETY OF CANTON, LTD. ................................... 551 MALAYAN INSURANCE CORPORATION vs. COURT OF APPEALS ................................................ 556
G. Barratry ................................................................................... 564H. Inchmaree Clause ................................................................... 564I. All Risks Policy ........................................................................ 565
Case: FILIPINO MERCHANTS INSURANCE CO., INC. vs. COURT OF APPEALS ......................... 566
J. Wages of Mariners and Property on Board ........................... 572
A. Requirement of Insurable Interest ......................................... 573B. Charter Party .......................................................................... 574C. Kinds of Charter ...................................................................... 575D. Charterer’s Liability ............................................................... 576E. Charterer’s Interest ................................................................ 577F. Charterer’s Loss of Hire .......................................................... 577
A. Respondentia and Bottomry ................................................... 578B. Payment is Conditional ........................................................... 578C. Insurable Interest of Lender .................................................. 578D. Insurable Interest of Borrower ............................................... 579E. Not Subject to Usury Law ....................................................... 580F. Interest of Lender and Underwriter ...................................... 580
A. Existence of Interest in Freightage ........................................ 580B. Ship Owner’s Interest on Freight ........................................... 581C. Partial Lost on Freight ........................................................... 582D. Arrival in Bulk ........................................................................ 582
A. Stricter Application of Rules on Concealment and Representation ........................................................................ 584B. Required Disclosure ................................................................ 584C. Belief or Expectation of Third Person .................................... 585
A. High Degree of Good Faith ..................................................... 586B. Matter of Fact or Expectation ................................................ 587
A. General Term .......................................................................... 588B. When is a Ship Seaworthy ...................................................... 589C. Presumption of Seaworthiness ............................................... 591D. Must be in Navigation ............................................................ 592
A. Relative Term .......................................................................... 593B. Seaworthy at the Time of Sailing ........................................... 593
A. Warranty Not a Representation ............................................. 597B. Neutrality ................................................................................ 598C. Documents of Nationality or Neutrality ................................ 599
A. Covered Voyage ....................................................................... 599B. Common Usage ........................................................................ 599
A. Concept of Deviation ............................................................... 600B. Distinguished from Breach of Warranty ................................ 601C. Goods on Board ........................................................................ 601
A. Proper and Improper Deviation ............................................. 602B. Effect of Deviation ................................................................... 602C. What Constitute Deviation ..................................................... 604
A. Actual and Constructive Loss ................................................. 606B. Right to Abandon .................................................................... 607C. Loss of Vessel ........................................................................... 608
A. Reshipment .............................................................................. 609
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B. Lien of Finder or Salvor .......................................................... 609C. Loss of Value ........................................................................... 610
A. Rules on Average ..................................................................... 611B. Particular and General ........................................................... 614C. Free From Particular Average Clause ................................... 615
Case: PHILIPPINE HOME ASSURANCE CORPORATION vs. COURT OF APPEALS ............. 619
A. Restrictions on Abandonment ................................................ 628B. The Three-Fourth Rule ........................................................... 628
1. Effect of Non-Acceptance ........................................................ 6312. Annulment of Abandonment .................................................. 6323. Election of the Insured ............................................................ 632
A. Primage and Demurrage ........................................................ 635B. Partial Loss of the Cargo ........................................................ 635
A. Coverage .................................................................................. 639B. Extension or Under Separate Policies ................................... 640C. Fire Following Earthquake ..................................................... 640D. Friendly Fire/Hostile Fire ....................................................... 641E. Direct and Indirect Losses ...................................................... 641F. Lightning ................................................................................. 642G. Double Insurance .................................................................... 642
A. Measure of Indemnity ............................................................. 644B. Repair, Rebuild and Replace .................................................. 645
Case: ONG GUA CAN vs. THE CENTURY INSURANCE CO., LTD. ............................................. 645
A. Direct Result of Accident ........................................................ 648B. Direct Suit Against the Insurer .............................................. 649C. Not Solidarily Liable ............................................................... 649
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D. Accidental Means .................................................................... 650
A. Three Party Contract .............................................................. 655B. Guaranty vs. Surety ................................................................ 655C. Credit Accommodation ............................................................ 656
Case: PHILIPPINE PRYCE ASSURANCE CORPORATION vs. COURT OF APPEALS ............. 656
A. Concept of Life Insurance ....................................................... 664B. Parties to the Contract ............................................................ 665C. Types of Life Insurance ........................................................... 666
A. Compulsory Motor Vehicle Liability Insurance .................... 795B. Accrual of Liability .................................................................. 796C. Right to Sue Insurer Directly ................................................ 796D. The No-Fault Clause ............................................................... 797
Cases: PERLA COMPANIA DE SEGUROS, INC. vs. ANCHETA ................................................................... 798 VDA. DE MAGLANA vs. CONSOLACION ............... 801 GOVERNMENT SERVICES INSURANCE SYSTEM vs.COURT OF APPEALS ........................... 806
E. Authorized Driver Clause ....................................................... 813
Cases: VILLACORTA vs. THE INSURANCE OMMISSION ............................................................... 814 PALERMO vs. PYRAMID INSURANCE, CO., INC. ..................................................................... 818 TANCO vs. THE PHILIPPINE GUARANTY COMPANY .................................................................. 821 GUTIERREZ vs. CAPITAL INSURANCE AND SURETY CO. ...................................................... 824
F. Presumption of Regularity in Issuance of License ................ 827
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G. Joy Ride/Theft Clause ............................................................. 827
Case: ASSOCIATION OF BAPTISTS FOR WORLD EVANGELISM, INC. vs. FIELDMAN’S INSURANCE CO., INC. ..................... 828
H. Expired License ....................................................................... 830I. Period to File Claim ................................................................ 831
A. Regulatory Powers .................................................................. 844B. Duty to Hold Security Deposits .............................................. 844C. Commissioner’s Interpretation to Great Respect .................. 845D. Contract Between the Insurer and Its Agents ...................... 846E. Quasi-Judicial Powers ............................................................ 847F. Jurisdiction .............................................................................. 848