Insurance Law Flashcards
What is an Insurance Contract?
It is an agreement whereby one undetakes, for a consideration, to indemnify another against, loss, damage, or injury arising from an unknown or contingent event.
Is Philippine Health Care Providers Inc. engaged in the business of insurance?
No, the Supreme Court has held that health maintenance organizations do not partake of the nature of an insurance company.
Further, the Court held that under the principal purpose test, the test applied is whether or not the assumption of risk and the indemnification of loss is the primary object and purpose of the organization. If such is merely incidental and service is the primary purpose, then the organization is not engaged in the business of insurance.
In this case, it is clear that Maxicare is a service provider and not an insurer. Maxicare does not assume risk nor does it undertake to indemnify the members in case of loss, damage, or injury.
Parties to an insurance contract?
Insurer - the one who assumes risk of loss and undertakes to indemnify another for a consideration upon the happening of a designated peril.
Insured - the person whose loss is the occasion for the payment of insurance proceeds.
Assured - also the insured when the proceeds of the insurance contract are payable to him.
Beneficiary - The third person designated by the insured to receive the the proceeds.
Elements of an Insurance Contract?
- Insurable interest
- Insured is subject to a risk of loss by the happening of a designated peril.
- Assumption of risk by the insurer.
- Assumption of risk is part of a general scheme to distribute actual loss among a large number of group of persons bearing similar risk.
- Payment of premium - to the insured for the assumption of risk.
Insurable Interest?
That interest which a person is deemed to have in the subject matter of the insurance where he has a relation or connection to it such that the person will derive pecuniary benefit or advantage from the preservation of the subject matter or will suffer pecuniary loss or damage from its destruction, termination, or injury by the happening of the vent insured against it.
What may be insured against?
Any contingent or unknown event whether part or future, which may damnify a person having an insurable interest, or create a liability against him, may be insured against, subject to the relevant provisions of the Insurance Code. (Sec. 3)
Actuarial risk?
The cost of insurance claims might be higher than the premiums paid.
Insurance Premium
The amount of money a person pays for an insurance policy, in consideration for the assumption by the insurance of the risk of loss as a result of the happening of the designated peril.
Characteristics of an insurance contract?
A. Risk-distributing device
B. uberrimae fides contract (perfect good faith)
C. Contract of indemnity
D. Contract of adhesion
E. Voluntary contract
F. Personal
Insurable interest in life
Sec. 10 - Every person has an insurable interest in the life and health :
a. of himself, his spouse, and children
b. any person on whom he depends wholly or partially for education, support, or whom he has a pecuniary interest;
c. any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might delay or prevent performance;
d. any person on whose life any estate or interest vested on him depends.
Insurable interest in property?
Every interest in property, whether real or personal, or any relation thereto, or liability in respect thereof, of such nature that a contemplated peril might directly damnify the insured, is an insurable interest.
