Insurance Flashcards
What test is used to determine w/n a contract is one of insurance?
The primary purpose test, ie. w/n the primary purpose or object of the contract is the indemnification of loss and the assumption of risk.
What is a contract insurance? What are the elements (5)?
A contract of insurance is a contract whereby one undertakes, for a consideration, to indemnify another for a loss, damage, or liability, incurred by the happening of an unknown, contingent event.
The elements are:
1. insurable interest
2. payment of premiums
3. assumption of risk
4. distribution of risk
5. indemnification of loss.
What is a contract insurance? What are the elements (5)?
A contract of insurance is a contract whereby one undertakes, for a consideration, to indemnify another for a loss, damage, or liability, incurred by the happening of an unknown, contingent event.
The elements are:
1. insurable interest
2. payment of premiums
3. assumption of risk
4. distribution of risk
5. indemnification of loss.
What constitutes doing an insurance business? (4)
- Making or proposing, as insurer, to make an insurance contract.
- Making or proposing, as surety, to make a contract of surety as a vocation and not as a casual incident to any legitimate business of a surety.
- Engaging in any insurance business such as reinsurance and similar acts.
- Doing or proposing to do any business equivalent to the abovementioned.
What are the requisites for the cancellation of a non-life insurance policy as provided by Sec. 64 and 65? (4)
- There must be prior notice to the insured.
- The notice of cancellation must be in writing and must be mailed to the insured named, to the address written on the policy, or to his broker provided that such broker has written authority to receive such notice.
- Must be based on the occurrence of grounds under Sec. 64 after the date of effectivity of the policy.
- It must state the grounds relied upon, and upon request of the insured, the insured must be furnished with facts upon which the cancellation is based.
What are the grounds for the cancellation of non-life insurance? (7)
- conviction of a crime from acts which increase the risk insured
- willful acts or omissions that increase the risk insured
- fraud or material misrepresentation
- physical changes in the thing insured which render the thing uninsurable.
- discovery of other insurance such that the total insurance is greater than the value of the property insured.
- non-payment of premium
- the Insurance Commissioner determined that the policy violates the Insurance Code.
Where one insures his own life, who may and may not be designated as beneficiary?
Generally, anyone may be designated as a beneficiary whether or not they have insurable interest on the life of the insured.
Except, those disqualified from receiving donations under Art. 739 NCC cannot be designated as beneficiaries. These are:
1. donations as between persons who were guilty of adultery or concubinage at the time of donation (conviction =/= a condition precendent)
2. donations between parties found guilty of the same criminal offense in consideration thereof
3. donations made to public officers, their spouses, descendants, or ascendants, by reason of their office.
What is the effect if the designated beneficiary is one of those under Art. 739 NCC?
Designation is void, but the policy remains valid.
When is a beneficiary to an insurance policy required to have insurable interest?
In non-life insurance and where one insures the life of another, payable to himself.
In life insurance, when does a beneficiary forfeit his/her right to the policy?
When s/he becomes a principal, accomplice, or accessory in willfully bringing about the death of the insured.
In life insurance, what is the effect of the forfeiture of a beneficiary’s right to the policy?
The forfeited share shall pass on to:
1. The other beneficiaries, if not otherwise disqualified
2. In the absence of other beneficiaries, proceeds shall be paid in accordance to the policy
3. If the policy is silent, to the estate of the insured.
What are the requisites for the cancellation of a non-life insurance policy as provided by Sec. 64 and 65? (4)
- There must be prior notice to the insured.
- The notice of cancellation must be in writing and must be mailed to the insured named, to the address written on the policy, or to his broker provided that such broker has written authority to receive such notice.
- Must be based on the occurrence of grounds under Sec. 64 after the date of effectivity of the policy.
- It must state the grounds relied upon, and upon request of the insured, the insured must be furnished with facts upon which the cancellation is based.
What are the grounds for the cancellation of non-life insurance? (7)
- conviction of a crime from acts which increase the risk insured
- willful acts or omissions that increase the risk insured
- fraud or material misrepresentation
- physical changes in the thing insured which render the thing uninsurable.
- discovery of other insurance such that the total insurance is greater than the value of the property insured.
- non-payment of premium
- the Insurance Commissioner determined that the policy violates the Insurance Code.
What constitutes doing an insurance business? (4)
- Making or proposing, as insurer, to make an insurance contract.
- Making or proposing, as surety, to make a contract of surety as a vocation and not as a casual incident to any legitimate business of a surety.
- Engaging in any insurance business such as reinsurance and similar acts.
- Doing or proposing to do any business equivalent to the abovementioned.
What are the exceptions to the general rule that no insurance policy is valid and binding until actual payment of the premium?
- In case of life and industrial life, whenever the grace period provision applies. (Sec 77)
- Where there is an acknowledgment in the contract or policy of insurance that the premium has already been paid. (Sec 78)
- The rule laid down in Makati Tuscany Condominium v CA to the effect that Sec 77 may not apply if the parties have agreed to the payment of the premium in installments and partial payment has been made at the time of loss.
- Where the credit term was agreed upon like the agreement in UCPB General Insurance Inc. v Masagana Telemart where the insurer granted a 60-90 day credit term for the payment of premiums despite full awareness of Sec 77.
- Where the parties are barred by estoppel.
-UCPB General Insurance Co. v Masagana Telemart, SC Reso
