What is Insurance Law?
Subject matter - refers to the thing
A “Contract of Insurance” is an agreement
whereby one undertakes for a consideration
to indemnify another against loss, damage
or liability arising from an unknown or
contingent event. (Section 2 (a), RA No.
10607)
What is the principle behind insurance?
Insurance is based upon the principle of
aiding another from a loss caused by an
unfortunate event.
What is the principal purpose of insurance
law?
The principal object and purpose of
insurance is the transfer and distribution of
risk, damage or liability arising from an
unknown or contingent event.
What is subrogation?
It is basically a process of legal
substitution; the insurer, after paying the
amount covered by the insurance policy,
stepping into the shoes of the insured, as it
were, and availing himself of the latter’s
rights that exist against the wrongdoer at the
time of the loss.
Is subrogation applicable to life insurance?
No. The right of subrogation under
Article 2207 of the New Civil Code applies
only to property, and not to life insurance.
And the risk must be covered by the policy
to entitle the insurer to subrogation.
What are the elements of insurance law?
In determining the existence of a
contract on insurance, it is important to
consider the following:
1.
insured.
2. Consent - meeting of the minds of
the parties where there is an offer
and acceptance.
3. Object - the principal object and
purpose of insurance is the transfer
and distribution of risk, damage or
liability arising from an unknown or
contingent event.
4. Consideration - refers to the
premium paid by the insured to the
insurer.
5. Insurable Interest - means that the
insured possesses an interest of some
kind susceptible of pecuniary
estimation.
What are the requisites of contract of
insurance?
In order that there will be a valid will and
enforceable contract of insurance, it is
necessary that the following be present:
1. A subject matter in which the insured
has an insurable interest;
2. Event or peril insured against which
may be any (future) contingent or
unknown event, past or future and a
duration for the risk thereof;
3. A promise to pay or indemnify in a
fixed of ascertainable amount;
4. A consideration for the promise,
known as the “premium”;
5. A meeting of minds of the parties
upon all foregoing essentials.
What are the characteristics of insurance
law?
A contract of insurance has the following
characteristics:
 1. Consensual – perfected by the
meeting of the minds of the parties
2. Voluntary – it is not compulsory and
the parties may incorporate such
terms and conditions as they may
deem convenient which will be
binding provided they are not
against the law or public policy
3. Aleatory – depends upon some
contingent event
4. Executed – as to the insured after the
payment of the premium
5. Executory – as to the insurer as it is
not executed until payment for a loss
6. Conditional – subject to conditions
the principal one of which is the
happening of the event insured
against
7. Personal – each party in the contract
have in view the character, credit
and conduct of the other
What are different kinds of insurance
contract (by classification)?
Under the Insurance Code, insurance
contracts are classified according to the
nature of the risk involved as follows:
1) Life insurance contracts
a) Individual Life (Sections 181-
186, 233)
b) Group Life (Sections 50, last
par., 234)
c) Industrial Life (Sections 235-
237)
2) Non-Life Insurance Contracts
a) Marine (Sections 101-168)
b) Fire (Sections 169-175)
c) Casualty (Section 176)
3) Contracts of Suretyship or
bonding (Sections 177-180).
How are insurance contracts construed?
Ambiguities or obscurities must be strictly
interpreted against the party that caused
them. As the insurance policy is prepared
solely by the insurer, the ambiguities shall be
construed against it and in favor of the
insured.
What is an “authorized driver clause”?
The “authorized driver clause” of the
insurance policy states that the insurance
company shall not be liable for damages
caused to insured vehicle if driven by a
person not “permitted in accordance with
licensing laws or regulations to drive the
motor vehicle covered by this policy.”
Why insurance contract a matter of public
policy?
What is the effect if the insurance contract is
entered into by a minority?
The contract of insurance entered into
by a minor (below 18 years) is not entirely
void. It is one which is merely voidable, that
is, it is valid until annulled in a proper action
in court by the minor or his legal
representative (Article 1390, NCC)
What are the provisions in the NCC which
are applicable to Insurance Law?
The provisions of the Civil Code
dealing on insurance are found in articles
739 and 2012 (void donations), Article 2011
(applicability of the Civil Code), Articles
2021-2027 (life annuity contracts), Article
2186 (compulsory motor vehicle liability
insurance), and Article 2207 (right of
subrogation).
What is fraud? What are two kinds of fraud?
What is an insurable interest?
Who are to be included as beneficiaries? Are
there limitations?
What is the essence of rescission? Law of Insurance in the Philippines, 1968
ed.)
What are the limitations of the
insurer/insured? Whether intentional or intentional, will it be
a ground of concealment?
What if the premium is not yet paid?
Is contract of insurance and policy the same?
What is concealment?
What is variable insurance?
What is the test of materiality?
Does a mortgagor or mortgagee have an
What are the requisites of concealment? insurable interest?
What are the matters to be communicated? Can a convicted person be insured?
May information be waived? What is a wagering contract?
What is representation? Is a contract of insurance a wagering
contract?
What is misrepresentation?
As to public or private employment, who
Distinguish misrepresentation from
are considered as beneficiaries?
concealment.
What are risks to be insured?
What are the kinds of representation?
What are the contents of policy?
Distinguish between affirmative
representation and promissory What are the requisites of risks?
representation.
What is “open policy”?
What is policy?

When is the period to rescind?

What is a contract of adhesion?

What is a “rider”?

It is a printed stipulation usually

attached to the policy because it
constitutes additional stipulation between
the parties. (Ang Giok Chip vs. Springfield,
56 Phil. 275)

In case of conflict between a rider

and the printed stipulations in the policy,
the rider prevails, as being a more
deliberate expression of the agreement of
the contracting parties. (C. Alvendia, The