Professional Documents
Culture Documents
1. Concealment
1.2 Requisites
Q: For concealment to vitiate a contract of insurance, what requisites
must be present?
1. A: A party knows a fact which he neglects to communicate or
disclose to the other.
2. Such party concealing is duty bound to disclose such fact to the
other.
3. Such party concealing makes no warranty of the fact concealed.
4. The other party does not have the means of ascertaining the fact
concealed.
5. The fact concealed is material.
Q: In June 2011, Juan applied for a life insurance policy with a double
indemnity provision in case of death by accident. Despite an express
inquiry in the application form for insurance, he did not mention the fact
that he had suffered from viral hepatitis the previous year. As Juan had
fully recovered from the disease, the medical examination performed by
the insurance companys physician did not reveal such previous illness,
and showed that Juan was healthy and was an insurable risk. The policy
was issued forthwith.
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concealment of his liver ailment, and that Juans death was caused by
his own negligence.
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however to the application of the incontestability clause in the proper
cases.
Good faith is no defense in concealment.
After Juan died in a plane crash, Petra filed a claim with Good Life.
Discovering Juans previous hospitalization, Good Life rejected Petras
claim on the ground of concealment and misrepresentation. Petra sued
Good Life, invoking good faith on the part of Juan.
A: No, Petras suit will not prosper. Juan was guilty of concealment.
Good faith is not a defense in concealment. This assumes that the policy
has been in effect for less than two years from date of issue.
The failure of the insured to reveal other insurances where required by
the policy is a material concealment and can prevent recovery. The
contract is void ab initio.
1.4.1 The matter concealed need not be the cause of the loss.
a. Exceptions
a.1 Incontestability Clause (Sec. 48, ICP)
a.1.a Requisites
2. Misrepresentations/Omissions
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2.1 Representation defined (Sec. 36, ICP)
2.2 Classes (Sec. 39, ICP)
Q: On May 15, 2014, Juan applied for a life insurance policy with Acme
Life Insurance Company. The policy was issued to Juan on June 30,
2014 but the date of issue, as appearing in the policy, was May 15, 2014,
the date of his application. Juan subsequently realized that some of his
answers in the insurance application were erroneous. Accordingly, he
supplied the insurance company with the correct replies. However, his
letter to the insurance company giving the correct answers was lost in
the mails. Juan died on June 1, 2014.
The insurance company now refuses to pay Juans beneficiary
contending that he (Juan) misrepresented the state of his health at the
time of his application. Is the insurance company liable? State your
reasons. (BAR)
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Q: Pabaya paid for a fire insurance on his multi-storey building. At the
time he applied for the insurance, he told the representative of the
insurance company that he planned to assign a security guard on every
floor of the building right away. Except for the ground floor, no security
guards were assigned. Eleven months after the policy was issued, the
building was gutted by fire which started on the third floor. Unknown to
Pabaya, the insurance company had incorporated his planned
undertaking in the policy.
A: Pabaya can recover on the fire insurance policy. The plan to assign
a security guard on every floor of the building, by the fact that it is a mere
plan, cannot amount to a promissory representation or warranty.
The inclusion in the policy of the said plan, if worded as a mere plain in the
policy, does not amount to a promissory representation or a warranty, and the
failure of Pabaya to push through with the plan, is not violative of the
insurance contract.
Therefore, Pabaya is entitled to recover under the policy inspite of his failure to
comply with his plan to assign a security guard on every floor of the insured
building
Q: Atty. Roberto took out a life insurance policy from the Dana
Insurance Corp. (DIC) on September 1, 2009. On August 31, 2010,
Roberto died. DIC refused to pay his beneficiaries because it
discovered that Roberto had misrepresented certain material facts
in his application. The beneficiaries sued on the basis that DIC can
contest the validity of the insurance policy only within two (2) years
from date of issued and during the lifetime of the insured. Decide
the case. (BAR)
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On July 3, 2008, X was killed on the occasion of a robbery in
their house. While processing the claim of Xs beneficiary, Phoenix
found out that X was not an eligible employee as defined in the
group policy since he has not been employed 30 hours a week by
Manpower. Phoenix refused to pay. May Xs beneficiary invoke the
incontestability clause against Phoenix? Reasons. (BAR)
3. Breach of Warranties
3.1 Defined
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3.2 Classes (Sec. 67, ICP)
3.2.1 Express Warranty
3.2.2 Implied Warranty
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