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Claim Settlement KAMM | 2018

CLAIM SETTLEMENT

1. P R E R E Q U I SI T E S T O E ST A B L I S H I N G In case of death:
I N SU R A N C E B E N E F I T S a. Death certificate
Sec. 2(a): Insurance contract – an indemnity agreement for loss, In case of injuries:
damage or liability arising from an unknown or contingent event a. Medical certificate;
b. Receipts, etc.
Legal Consequence:
Such occurrence of the “unknown or contingent event” must be brought PHILAM vs CA
to the attention of the party insurer, pursuant to the law or agreement. 3 4 4 S C RA 6 2 0 ( 2 0 0 0 )
FACTS: A beneficiary of a non-medical life insurance was claiming under
A claim on the policy is to be made upon “notice” given of the occurrence the policy but PHILAM denied the claim, saying that it was fraudulent
of the “event”. since the ID was allegedly dead at the time the policy was applied for,
presenting as evidence documents submitted by their investigators.
The Code contains specific provisions dealing with these prerequisites of
notices, proofs of loss, as well as actions or suits (when necessary) to RULING: The Court ruled in favor of the beneficiary stating that there is no
receive insurance benefits. Along with these prerequisites are the reason to doubt the correctness of the entries in the Certificate of Death
“timeliness provisions” imposed either by law or by the policy and with which declared that the ID died while the policy was already in effect.
which the parties have to comply within the specific periods fixed therein. Death Certificates and notes by a municipal health officer prepared in the
regular performance of his duties are prima facie evidence of the facts
For an ID to be able to claim from the IR, there are provisions that stipulate stated therein. A duly registered death certificate is considered as public
certain acts that the ID must do after the loss insured against has taken document and entries found therein are presumed correct, unless a party
place. Loss shall only be payable upon notice of the loss, and presentation who contests its accuracy can produce positive evidence establishing the
of satisfactory proof of loss by the ID or claimant to the IR. contrary.

Though required, the said giving of notice and proofs of loss are not o Prudential Guarantee vs Trans-Asia Shipping Lines, Inc.,
conditions for the liability of the IR. (The liability of the IR arose when the GR#151890 (June 20, 2006)
loss happened.) Notice and proof of such loss are therefore merely for o Aboitiz Shipping vs Insurance Company of North
evidentiary purposes – for the IR to know to what extent he is liable. They America, 561 SCRA 262 (2008)
do not properly form any part of the conditions of liability. o Insurance Co. vs Alberto, GR#194320 (Feb. 1, 2012)
o United Merchants Corporation vs Country Bankers Insurance
Corporation, GR#198588 (July 11, 2012)
a. CONDITIONS BEFORE THE INSURED MAY RECEIVE ON THE o Stronghold Insurance Company vs Interpacific
POLICY AFTER THE LOSS (SECS. 90, 91, ICP) Container Services and Gloria Dee Chong, GR#194328
(July 1, 2015)
“SEC. 90. In case of loss upon an insurance against fire, an insurer is o BPI and FGU Insurance Corporation vs Yolanda Laingo,
exonerated, if written notice thereof be not given to him by an insured, or GR#205206 (Mar. 16, 2016)
some person entitled to the benefit of the insurance, without unnecessary
delay. For other non-life insurance, the Commissioner may specify the b. NOTICE AND PROOF OF LOSS
period for the submission of the notice of loss.”
Notice of Loss is distinct and separate from Proof of Loss.
In fire insurance – notice of loss should be given without unnecessary
delay, otherwise, the insurer is exonerated (Sec. 90) Notice is intended merely to give the IR information upon which he may
act promptly to take steps that his interests may require. (Purpose)
In other types of insurance – not required; failure to give will not  NoL is the formal notice given to the IR by the ID or claimant
exonerate the insurer; unless, there is a stipulation in the policy requiring under a policy that the loss or event insured against has
the insured to do so occurred.
 The notice requirement is to afford the IR a reasonable
“SEC. 91. When a preliminary proof of loss is required by a policy, the opportunity to protect its rights. (e.g. timely investigation
insured is not bound to give such proof as would be necessary in a court when witnesses are most likely to be available.
of justice; but it is sufficient for him to give the best evidence which he has  Giving notice of loss without unreasonable delay so that
in his power at the time.” a. the ID can take steps or actions to minimize further
losses; and
Conditions subsequent - must be fulfilled after the effectivity of the policy. b. to be able to determine the extent of the liability to
Non-performance of conditions subsequent will NOT avoid the policy but prevent the filing of fraudulent claims
will result in the forfeiture of the rights of the ID against the IR. Failure to do so, especially in fire insurance, will exonerate the
IR. (Sec. 92, ICP)
In a vehicular accident, proofs of loss are:  In CMVTPLI, any person having a claim upon such policy
a. Police report; must, without unnecessary delay, present to the IR a
b. Affidavit of witnesses; written notice of claim, if any, certified by a licensed
c. Pictures of the damaged car; physician. Such notice must be filed within six (6) months
d. Estimate of invoice from the date of the accident, otherwise, the claim shall be
deemed waived. (Sec. 397)

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Claim Settlement KAMM | 2018

 NO-FAULT CLAUSE (In Motor Vehicle Insurance)  In all cases, the right of the party paying the claim to
Sec. 391 (a): Any claim for death or injury to passengers recover against the owner of the vehicle responsible for
or third persons shall be paid without necessity of proving the accident shall be maintained.
fault or negligence of any kind, provided that total claim in
respect of any person shall not be less than P15,000*. Effect of delay or failure to file and serve NoL or PoL as required by
(Note: There seems to be an error here considering that, the policy
without the necessity of proving fault, the passenger or - The longer the period that lapses from the time of the loss, the more
third party can claim ANY amount even MORE than possible it is to actually tamper with evidence and for fraudulent
P15,000.) (1978 Code = P5,000) claims to be presented to the IR.
- ICP: Prohibits filing of NoL and PoL that is unattended by
Proof of Loss (PoL) is to give the IR information by which he could
unnecessary delay.
determine the extent of his liability. It is the evidence given to the IR by the
ID or the claimant regarding the particulars of said loss, and other
o Parties may stipulate among themselves as to the effects.
information necessary to enable the IR to determine the extent of his
o Since the evidence necessary to prove the claim is with the ID,
liability, and also to detect if the claim is fraudulent or not based on the then it is but reasonable for the IR to lay down penalties to be
evidence presented. suffered by the ID in case of delay or failure to serve such notice
or proof.
 PoL that is satisfactory to the IR is required to be given. But it is
not that evidence which is necessary in a court of justice that is
o There is delay where notice or proof of loss was given but not
within the time provided for by the law or the policy.
required of the ID or claimant to present. (Sec. 91)
o Such delay is considered waived if (1) caused by any act of the
 The IR must be satisfied that the ID engaged in diligent efforts IR, or (2) if IR fails to object promptly and specifically to such
and has done all within his power at the time to give the “best
delay. (Sec. 93)
evidence” within his power at the time.
o When there are defects in the notice and proof, it is the duty of
 Submission of proof of loss that will enable the IR to determine: the IR to indicate the defects in the notice or in the proofs of loss
a. WON there was really a loss as given, so that the defects may be remedied by the ID or
b. WON the property insured was the one involved in claimant. Failure to do so, without unnecessary delay,
the accident constitutes waiver of said defects by the IR. (Sec. 92)
c. Amount of damages
 Such proof would enable the IR to estimate the extent of the loss A b o i t i z S hi p p i n g v s C A
so it could determine how much it would be liable. 5 6 9 S C RA 2 9 4 ( 2 0 0 8 )
 The law does not require a particular form unless the policy
provide for a particular form to be submitted. RULING: The giving of noticed of loss or injury is a condition precedent to
 There are other conditions which the policy may require the ID the action for loss or injury or the right to enforce the carrier’s liability. But
to comply with before there can be recovery. said conditions must be given reasonable and practical construction
 Sec. 94: When the policy requires, by way of preliminary rather than strict construction x x x
proof of loss the certificate or testimony of a person other A condition subsequent should never be construed as defeating an already
than the ID, it is sufficient for the ID to use reasonable vested right, unless the intention of the parties to create a forfeiture in
diligence to procure it. In case of refusal of such person to unquestionable.
give it, it is the duty of the ID to furnish reasonable
evidence to the IR that such refusal was not induced by Other Cases:
any just grounds of disbelief in the facts necessary to be o Finman’s General Assurance vs CA, 361 SCRA 214 (2001)
certified or testified. o Country Bankers Insurance vs Llanga Bay and Community Multi-
purpose Cooperative, 374
In CMVTPLI: o SCRA 653 (2002) o FGU Insurance vs CA, 454 SCRA 337 (2005) o
 The purpose of the CTPL requirement is to protect the general public Philippine Charter Insurance Corp vs Chemoil Lighterage White Gold
from the dangers caused by motor vehicles. Corp, GR#136888 (June 29, 2005)
 In a CTPL policy, the insurance company agrees to pay up to o Mitsubishi Motors Philippines Salaried Employees Union vs
P100,000 to a third party for hospitalization, bodily injury and/or Mitsubishi Motors Philippines Corporation GR#175773 (June 17,
death in an accident caused or arising out of the use or operation of 2013) (collateral source rule)
the insured car. Contrary to popular understanding, a CTPL policy FINAL EXAMINATON
does not cover loss or damage to property of third parties.
 To substantiate a claim, the following, when submitted under oath, 2. A C T I O N B Y T H E I N S U R E R
shall be sufficient: Upon the occurrence of the loss or damage, the ID has to furnish the IR a
1. Police report of accident; and notice of claim and proof of loss within the period prescribed by law or by
2. Death certificate and evidence sufficient to establish the proper contract. After receipt of such notice and proof, the obligation of the IR to
payee; OR act on them arises.
3. Medical report and evidence of medical or hospital
disbursement in respect of which refund is claimed (Sec. 391b) The IR has to accept or reject their claim. If rejected, the cause of action of
the ID accrues. If accepted, the IR must pay the proceeds of the policy
 Such claim may be made against one motor vehicle only,
within the period provided by law or by the policy.
and if the claimant is an occupant of a vehicle, his claim
shall lie against the IR of the vehicle in which he is riding,
mounting or dismounting from. (Sec. 391c) The obligation of the IR to pay the amount of the proceeds which the
beneficiary is entitled to has to be complied with within the time
 In any other case, his claim shall lie against the IR of the prescribed by law. The prescribed period by law is dependent on whether
directly offending vehicle.
the policy is a life insurance, or a non-life insurance policy.

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Claim Settlement KAMM | 2018

a. IN LIFE INSURANCE (SEC. 248, ICP) 3. D E L A Y I N P A Y M E N T O F I N SU R A N C E


Analysis Tree: What time of insurance cover? When did the policy mature? PROCEEDS
What is the time for payment of claims? Failure to pay any such claim within the time prescribed under Secs. 248
and 249 shall be considered prima facie evidence of unreasonable delay
Sec. 248: In a LI that matures upon the death of the person insured, the in payment. Furthermore, refusal or failure to pay the claim within the
claims / proceeds should be delivered within 60 days after presentation time prescribed entitles the beneficiary to collect interest on the proceeds
of the claim and the filing of proof of the death of the ID. of the policy for the duration of the delay at the rate of twice the ceiling
FINAL EXAMINATON prescribed by the Monetary Board, unless refusal to pay is based on the
ground that the claim is fraudulent.
In a LI that matures upon surviving a specific period, proceeds are
immediately payable. The exception to this rule would be if the proceeds In case damages are awarded, these will include the attorney’s fees and
are payable in installments or as an annuity. In such cases, these other expenses incurred by the ID due to the unreasonable clerical or
installments or annuities shall be paid as they become due. withholding of payment, plus interests prescribed in Secs. 248 & 249.

Rules / Guidelines on Claims Settlement: Ca t ha y v s . C A


a. The proceeds shall be paid immediately upon the maturity of 1 7 4 S C RA 1 1 ( 1 9 8 9 )
the policy if there is such a maturity date
b. If the policy matures by the death of the ID, within 60 days after Plaintiffs here were claiming on five insurance policies covering stocks of
presentation of the claim and filing of the proof of the death of printing material and general merchandise.
the ID
Beneficiary EL submitted sworn Statements of Loss and Formal Claims to
Fernandez vs National Life Ins. Co., the IRs but was still waiting to collect on the fire insurance policies eight
1 0 5 P hi l 5 9 ( 1 9 5 9 ) (8) years after the event. The insurance companies refused to pay due to
alleged violation of certain conditions of the policy. They argued that
RULING: In LI, the policy matures either upon expiration of the term set action filed against them was premature as they had not rejected the
forth therein in which case proceeds are immediately payable to the ID claim.
himself, or upon his death occurring at any time prior to the expiration of
such stipulated term. The sixty-day period fixed by law within which to The trial court ruled in favor of the ID but on appeal the IRs reiterated their
pay the proceeds after presentation of proof of death is merely procedural argument that the filing of the case was premature.
in nature, evidently to determine the exact amount to be paid and the
interest thereon to which the beneficiaries may be entitled to collect is RULING:
case of unwarranted refusal of the company to pay, and also to enable the 1. The cause of action had indeed accrued since the IR failed to act
IR to verify or check on the fact of death which it may even validly waive. upon the claim.
It is the happening of the suspensive condition of death that renders a life Proof of loss had been submitted from Jan. 15, 1982 up to June
policy matured and not the filing of proof of death. Consequently, the 21, 1982. Applying the provisions, then, the IR should have
delay in the presentation of proof of death does not make any difference, paid on Sept. 21 even if they had not made ascertainment of the
for it does not alter the date of maturity of the policy nor the ability of the loss. When the plaintiff filed their complaint on Dec. 15, their
company to pay the proceeds of the insurance. cause of action had already accrued due to the non-payment of
the IR.
b. IN PROPERTY INSURANCE (SEC. 249, ICP) 2. The non-payment of the claim within the maximum period of
A non-life insurance policy matures upon the happening of a loss due to an 90 days after receipt of the proofs of loss by the IR or within the
event insured against. The event insured against should occur within the time fixed in both secs. 242 and 243 of the then IC of 1978 (now
period specified in the insurance policy, otherwise, the IR incurs no secs. 248 & 249) is prima facie evidence of unreasonable delay
liability. in payment of the claim.
FINAL EXAMINATON 3. Under the said provisions, in case of any litigation for the
enforcement of any policy or contract of insurance, it shall be
Rules / Guidelines on Claims Settlement the duty of the Commissioner or the Court to make a finding as
a. Proceeds shall be paid within thirty days after proof of loss is to whether the payment of the claim of the ID has been
received by the IR and ascertainment of the loss or damage is unreasonably denied or withheld. (Sec. 250)
made either by agreement or by arbitration 4. The insurance company, in judging whether or not evidence
b. If no ascertainment is made, within 60 days after receipt of presented by the ID as to the extent of loss is satisfactory or not,
proof of loss shall be paid within 90 days after such receipt may not set up for themselves an arbitrary standard of
satisfaction. Substantial compliance with the requirements will
Fernandez vs National Life Ins. Co., always be deemed sufficient.
105 Phil 59 (1959)
F i n m a n G en er a l A s s u r a n c e Co r p . v s C A
RULING: With regard to the time for payment of claims in non-life 3 6 1 S C RA 2 1 4 ( 2 0 0 1 )
insurance policies, it should be within 30 days after proof of loss is
received by the IR and an ascertainment of loss or damage is made either The trial court ordered IR to pay the amount of the insurance proceeds
by agreement between the ID and IR or by arbitration. However, if an plus a 24% interest rate per annum until fully paid. IR argued among
ascertainment is not had or made within 60 days after such receipt by the others, that since there was no express finding that it unreasonably
IR of proof of loss, the proceeds are payable within 90 days after such withheld or denied the payment of the subject insurance claim, then the
receipt. (Sec. 249) award of 24% per annum was not proper.

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SC upheld the validity of the 24% interest rate per annum awarded by the the surrounding circumstances, discloses a material overvaluation made
lower courts as the same is authorized by then Sec. 244 (now Sec. 249 of intentionally and willfully.
the Code).
U y H u & Co . v s t h e P r u d e n t i a l A s s u r a n c e Co . , L t d
Zenith vs CA, 185 SCRA 398 5 1 P hi l 2 3 1 ( 1 9 2 7 )
May 14, 1990
FINAL EXAMINATION RULING: Where a fire insurance policy provides that “if the claim be in
any respect fraudulent, or if any false declaration be made or used in
Go v. Office of the Ombudsman support thereof, or if any fraudulent means or devices are used by the ID
FINAL EXAMINATION or anyone acting on his behalf to obtain any benefit under this Policy” and
the evidence is conclusive that the proof of claim which the ID submitted
Does it violate the DEAR Doctrine? No. Concurrent Jurisdiction of the IC was false and fraudulent both as to the kind, quality and amount of the
where every single claim does not exceed 5M arising from insurance goods and their value destroyed by the fire, such a proof of claim is a bar
contract, suretyship, and similar cases. Otherwise, go to regular courts. against the ID from recovering on the policy even for the amount of his
actual loss.
Often times a claimant both a claims case and an administrative case. In
such instances, both proceedings may continue at the same time, 5 . U N F A I R C L A I M S E T T L E M E N T ( S E C . 24 7 , I C P )
independently and conflicting decisions is of no moment. Section 247(a). Enumerates the common practices by IRs considered as
unfair claim settlement. These are:
It may be filed either on the IC and the Regular Courts depending on the 1. Knowingly misrepresenting to claimants pertinent facts or
amount. policy provisions relating to coverage at issue;
2. Failing to acknowledge with reasonable promptness pertinent
M i t s u b i s hi M o t o r s P hi l i p p i n e s S a l a r i e d E m p l o y e e s communications with respect to claims arising under its policies
U n i o n v s M i t s u b i s hi M o t o r s P hi l i p p i n e s 3. Failing to adopt and implement reasonable standards for the
Corporation prompt investigation of claims arising under its policies
(June 17, 2013) 4. Not attempting in good faith to effectuate prompt, fair and
FINAL EXAMINATION equitable settlement of claims submitted in which liability has
Co l l a t e r a l s o u r ce r u l e become reasonably clear; or
5. Compelling policyholders to institute suits to recover amounts
It does not apply to no fault insurance, under which the … a no fault IR due under its policies by offering without justifiable reason
cannot be obliged… substantially less than the amounts ultimately recovered in
suits brought by them
When is an IR liable for interest and damages? The foregoing grounds are considered sufficient cause for the
With unreasonable delay. suspension or revocation of the IR’s certificate of authority. (Sec.
247c)
4 . F R A U D U L E N T C L A I M S B Y T H E I N SU R E D ( I D )
( SE C . 2 5 1 , I C P ) 6. B R I N G I N G A N A C T I O N A N D P R E S C R I P T I O N O F
ACTION
While the ID is protected against the unreasonable withholding or denial
by, and unfair settlement practices of the IR, the IR is likewise protected Rule 2, Sec, 1, Rules of Court; Sec. 63, ICP; Article 1144, Civil Code
against any fraudulent claims that the ID might set up. A fraudulent claim Should the IR reject the claim of the ID, the remedy of the latter would be
is made by giving a false testament as to the existence of a legitimate claim, to file an action against the IR with the proper tribunal.
in order to receive the proceeds of the insurance policy, to which the ID is
An action or suit has been defined, to mean “act by which one sues another
not otherwise entitled.
in a court of Justice for the enforcement or protection of a right, or the
prevention or redress of a wrong.”
Sec. 251: It is unlawful to:
a. Present or cause to be presented any fraudulent claim for the
Rule 2, Sec. 1 of the Rules of Court: defines a cause of action as an act or
payment of a loss under a contract of insurance; and
omission by which a party violates a right of another.
b. Fraudulently prepare, make or subscribe any writing with
intent to present or use the same, or to allow it to be presented
in support of any such claim. Article 1144, NCC: actions upon written contracts must be brought within
ten years.
Any person who violates this section shall be punished by a fine not
exceeding twice the amount claimed or imprisonment of two (2) years, or Sec. 63 of the ICP – “A condition, stipulation, or agreement, in any policy of
both, at the discretion of the court. insurance, limiting the time for commencing an action thereunder to a
period less than 1 year from the time when the cause of action accrues, is
void.”
Illustration:
A fire of unknown origin destroyed a portion of the goods and
a) In case of a policy of industrial life insurance, the period cannot be
merchandise covered by the fire insurance policy. The evidence
less than 6 years after the cause of action accrues.
presented constituted a serious discrepancy between the true value of the
property and that sworn to in the proofs of loss. b) Nature of condition limiting period for filing claim – the condition is
an important matter essential to prompt settlement of claims against
RULING: Characterized such discrepancy as more than an honest
insurance companies, as it demands that insurance suits be brought
misstatement, more than a slight exaggeration, and in connection with all
by the ID while the evidence as to the origin and cause of the loss or
destruction has not yet disappeared. It is in the nature of a condition
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precedent to the liability of the IR, or, in other terms, a resolutory RULING: SC sustained the lower court in its ruling that the filing of the
cause, the purpose of which is to terminate all liabilities in case the complaint with the IC could not be considered an action or suit which may
action is not filed by the ID within the period stipulated. toll the running of the period as it was not a court of justice. There was
c) The court cannot, by interpretation, extend the clear scope of the nothing in the then applicable law, Act. No. 2427, which empowered the
agreement beyond what is agreed upon the parties. IC to adjudicate on disputes relating to an insurance company’s liability to
d) The bringing of such action against the agent cannot have any legal an ID under a policy.
effect except that of notifying the agent of the claim. Beyond such
notification, the filing of the action serves no purpose. There is no law Sec. 416, IC of 1978: The IC was given adjudicatory powers with respect
giving any effect to such action upon the principal. to claims on contracts of insurance, where the amount of loss, damage, or
e) The right of the ID to the payment of loss accrues from the happening liability did not exceed a single claim of P100,000.
of the loss. However, the cause of action in an insurance contract
does not accrue until the IR’s claim is finally rejected by the IR. In Sec. 439, ICP, RA 10607: The Code retained the same adjudicatory power
other words, the period for commencing an action under a policy of but increased the jurisdictional amount of P5,000,000.
insurance under Sec. 63 is to be computed not from the time when
the loss actually occurs but from the time when the ID has a right to T r a v el l er ’ s I n s u r a n c e v s C A
bring an action against the IR. 2 7 2 S C RA 5 3 6 ( 1 9 9 7 )
f) Stipulated prescriptive period begins from happening of the loss –
Where the policy provided that no suit or action thereon “for the Plaintiff Mendoza filed a case against the taxi company involved in an
recovery of any claim shall be sustainable in any court of law or accident which killed his mother. He also impleaded the Traveller’s
equity unless the ID shall have fully complied with all the terms and Insurance & Surety which was alleged to have covered the taxicab in a
conditions of the policy or unless commenced within 12 months next policy of third-party liability insurance.
after the happening of the loss,” it has been held that the above
stipulation is void because if given effect, it would reduce the period IR argued against recovery partly on the ground that Mendoza did not file
allowed the ID for bringing his action to less than 1 yr. a written notice of claim with the IR.
g) As the stipulation is upon a written contract, the time limit is 10 yrs
from the time the cause of action accrues. The Court held that the lack of any written notice of claim means that no
h) Stipulated prescriptive period begins from rejection of claim cause of action accrued. It is the rejection of the claim which forms the
– On the other hand, where the policy provided that if a claim be cause of action and triggers the prescriptive period to bring action before
made and rejected, an “action or suit” should be commenced within the proper tribunal. Without the written notice of claim, the IR does not
12 months after such rejection otherwise the claim would prescribe, even have an opportunity to reject the claim as none had been filed in the
it was held that an action filed 17 months after the rejection had first place.
already prescribed although the ID, 1 month after his claim was
rejected, by the IR, had filed a complaint with the Insurance Ang vs. Fulton Fire Insurance
Commissioner, the Court interpreting the words “action or suit” in 2 S CR A 9 4 5 ( 1 9 6 1 )
the policy as referring to a claim or demand in a court of justice.
i) Under Sec. 384, “an action or suit for recovery of damage due to loss Plaintiff’s filed a claim to recover on a fire insurance policy. Their claim
or injury must be brought in proper cases, with the Commissioner or
was denied in April 1956 but they did not file a case before the court until
the Courts within 1 year from denial of the claim, otherwise, the
May 1958, though the policy contained a condition that action must be
claimant’s right of action shall prescribe.”
commenced within 12 months.
j) Stipulated prescriptive period beings from filing of claim – A fidelity
bond is, in effect, in the nature of a contract of insurance against loss
Ang explained this late filing by saying they had previously filed an action
from misconduct and is governed by the same principle of
in May 1956 against their insurance agent to assert their claim but this had
interpretation. Consequently, the condition of the bond is subject to
been dismissed, without prejudice, in Sep. 1957. The trial court held that
the provisions of Sec. 63, and may be brought within the statutory
in suing first the insurance agent, Ang had merely committed a procedural
period of limitation of 10 years for written contracts.
mistake which led to the tolling of prescriptive period.
k) Contractual limitations contained in insurance policies are regarded
with extreme jealousy by courts and will be strictly construed
RULING: SC disagreed saying that the condition to bring action within a
against the IR and should not be permitted to prevent a recovery
specific time is not a mere procedural requirement but is an important
when their just and honest application would not produce that
manner as it is essential to bring action on the claim while the relevant
result.
evidence has not yet disappeared. Because of the plaintiff’s non-
compliance with the condition, their case was ordered dismissed.
Lopez vs Filipinas Compania de Seguros
16 SCRA 855 (1966)
The filing of a case against the insurance agent did not toll the running of
the prescriptive period.
The plaintiff wanted to recover on insurance taken out on two of his
vehicles which later figured in an accident. Upon rejection of the claim,
S u n I n s u r a n c e v s CA
Lopez initially filed a complaint with the Office of the IC and did not file a
1 9 5 S C RA 1 9 3 ( 1 9 9 1 )
complaint before the court until Sept. 29, 1651.
RULING: SC held that the filing of a motion for reconsideration with the
The IR raised the defense of prescription as the policy provided that action
insurer after it has already rejected the claim does not toll the running of
must be commenced within 12 months from the rejection of the claim.
the prescriptive period either.
The lower court dismissed the case on the ground of prescription and the
SC affirmed this dismissal.

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E a g l e S t a r I n s u r a n c e v s C hi a Y u
6 9 P hi l 6 9 6 ( 1 9 5 5 )
The IR raised the defense of prescription in a case for recovery on a marine
insurance, arguing that the action had been filed out of time. The condition
in the policy provided that the action must be brought within 121 months
from the happening of the loss. The court held that this provision was void
because it effectively reduces the time for commencing action to a period
less than one year from the time the cause of action accrues. Though the
period provided is a year, it is discounted form happening of the loss and
not from accrual of action. The time between the happening of the loss
and the accrual of the cause of action would consume part of the one year
resulting in a remaining period of less than a year to commence an action.

Vda. De Gabriel vs CA
264 SCRA 137

7. A P P E A L T O C O U R T O F A P P E A L S ( SE C . 4 3 9,
PAR. 6, ICP)
Sec. 439: Any decision, order or ruling rendered by the Commissioner
after a hearing shall have and effect of a judgment. Any party may appeal
from a final order, ruling or decision of the IC by filing with the
Commissioner within thirty (30) days from receipt of copy of such order,
ruling or decision , a notice of appeal the CA in the manner provided for in
the Rules of Court for appeals from the RTC to the CA.

Article 2207, Civil Code


After a claim settlement, the right of subrogation, if proper, accrues in favor
of the insurance company upon its payment to the ID.

a. Right of Subrogation
o Fireman’s Fund Insurance v. Jamilla & Co., 70 SCRA 323 (1976)
o Malayan Insurance v. CA, 165 SCRA 536 (1988)
o Pan Malayan Insurance v. CA, G.R. No. 81026 (1990)
o PhilamGen v. CA, 273 SCRA 262 (1997)

W a l l e n P hi l i p p i n e S hi p p i n g , I n c . v . P r u d e n t i a l
Guarantee Assurance, Inc. ,
G.R. No. 152158
Feb. 7, 2003

Evidentiary. When does it fatal and not fatal? When is the Insurance Policy
fatal to the claim of subrogation?
GR: Meron dapat siya.
XPN: If the policy, the contract as it is, in not the issue

b. Where no right of subrogation

Pointers for Final Examination

 Secs. 248 & 249


 Zenith v. CA
 Go v. Ombudsman - Jurisdiction
 Mitsubishi v. Mitsubishi– Collateral Source Rule
 Lopez v. Filipinaz
 Traveler’s Insurance v. CA
 Ang v. Fulton Fire Insurance
 Vda de Gabriel v. CA
 Prescription – Sec. 63
 Subrogation with respect to reinsurance
 Tax liabilities of Insurance Companies

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