FIRE INSURANCE

- property insurance

- covers even those due to earthquake but me specified

- covers hostile fire

- value depends if it is open policy or not

LIFE INSURANCE

- valued policy not indemnity

- paid upon death, on surviving beneficiaries

- paid upon maturity unless in installments or as annuity

- minor can gave life insurance, adults or get for them

- public enemy cannot have life insurance

KINDS OF LIFE INSURANCE:

[Link] Life Insurance

- covers the life of person permanently for whole life

paid either single, continuous or limited time

2. Term Insurance : contingent depends on whether the insured dies in

specified period; if they survive, then policy expires. It has fixed period and
no cash may be accumulated

3. Endowment: Pays full in sum if insured if insured dies or if survives, there

will be a lump sum after the term

4. Industrial Life Insurance: Small-value policies with premiums collected

monthly or weekly (not more than 50% of the prevailing with the minimum
wage)

LIABILITY OF INSURER OF SUICIDE

- insurer is liable if committed after 2 years from date of enforcement from
the date of issue or reinstatement

- if suicide is due to insanity, it is compensable regardless of date of

commission

ASSIGNMENT OF LIFE INSURANCE POLICY

- Absolute Assignment: All rights transferred permanently

- Collateral Assignment: Transferred to creditor as security for loan but can

be returned to the owner

MEASURE OF LIFE INSURANCE

- the sum fixed in the policy

NON-DEFAULT OPTIONS

- Cash surrender value : accumulated value

-Reduced Paid up: purchase additional policy using the premiums but with
lower amount

- Extended Term Insurance: purchase additional policy using paid up amount

but for a fixed term

1. Cash Surrender Value

You take the money and end the policy.

The insurer gives you the accumulated value of the policy.

The coverage stops completely.

You walk away with cash.

Example:

You paid into the policy for years and it has ₱200,000 value.

If you surrender it, you receive that amount (sometimes less fees), and the
insurance ends.

Think of it like withdrawing your savings and closing the account.

2. Reduced Paid-Up Insurance

You stop paying, but keep a smaller life insurance coverage for life.

The insurer uses the value you built to “buy” a fully paid policy.

No more premiums.

Coverage amount becomes smaller.

Example:

Original policy:

₱3,000,000 coverage

After stopping payments:

Policy becomes maybe ₱900,000 coverage, but it stays active permanently.

Think of it like using your remaining balance to buy a smaller but fully paid
product.

3. Extended Term Insurance

You keep the same coverage amount, but only for a limited time.

The value in the policy pays the premiums for you.

Coverage stays the same.

But it expires after a certain number of years.

Example:

Original policy:

₱3,000,000 coverage

Your accumulated value might keep that coverage for another 8 years.

After that, the insurance ends.

Think of it like prepaying the insurance until the money runs out.

Requisites for an alteration that will prevent recovery on the policy:

The alteration is on the use or condition of the thing insured

The use or condition of the thing insured is limited in the policy

The alteration is without the consent of the insurer

The alteration is within the control of the insured

The alteration increases the risk

COMPULSORY MOTOR VEHICLE LIABILITY INSURANCE (CMVLI)

- Di pwede payagan marehistro

- pasahero: fare paying or not paying (those authorized to ride without fare)

-innocent third parties, di pasahero pero di kamag anak ng may ari ng

sasakyan (2nd degree of consanguinity), di employee

- No fault indemnity claims: optional, can recover in case of death, excluded

property, only made agains one motor vehicle only, Di bababa sa 15K : If
passenger mag claim, against the owner of vehicle na sinasakyan; If third
party, against owner of vehicle na nakabangga

- Proof of Loss: Claim Form, Police Report or any evidence, Affidavit, Medical
or Death Certificate

Unlawful: CMVLI unless with surety bond or cash deposit

Coverage: Death and bodily injuries to third parties or passengers as a result

of negligent operation and use of motor vehicles

NATURE:

Accrues: upon death or injury; no need for court decision

INSURER: limited only to the terms and conditions

CASUALTY INSURANCE

- covering loss or liability arising from accident or mishap

- catch-all category pag di sakop nung ibang insurance

-Comparison: Life = life: Casualty= liability sa ibang tao

Insurable Interest in CI: direct legally recognized in the insured asset; may
financial stake

KINDS

1. Liability Insurance: protects person liable for damage

2. Personal and Health: covers loss of insured due to health or death

ACCIDENT vs. ACCIDENTAL

Accident - happens by chance sudden

Accidental -

SURETY

- Suretyship: Agreement whereby a party called the surety guarantees the

performance by another party called principal or obligor

- Involves principal relationship: principal and obligee

- Accessory relationship: Principal and surety

CIVIL CODE PROVISIONS FOR SURETYSHIP:

- Contract of adhesion

- In case of doubt, should be construed against the surety. In suretyship,

when there is doubt in the interpretation of the contract, it is generally
construed in favor of the surety.
Why

Because a surety’s obligation is considered strictissimi juris. This is a long-

standing rule in civil law and common law systems.

DOING AN INSURANCE BUSINESS MEANING:

- making or proposing to make insurer any insurance contract

- making or proposing to make insurer any surety

- doing reinsurance or those recognized by code

- similar with those above Kahit di ganun yung tawag

LIABILITY OF THE SURETY AND PRINCIPAL IS SOLIDARY meaning you can go

directly to the surety

The Surety - entitled to payment of premium as soon as contract of surety is

perfected

If the obligee accepts the bond even without the payment of premium, the
obligee is already protected.

OFW: Filipino Citizen, activity with compensation in another country na di

siya citizen; including nasa barko

Agency Hired: availed service by agency authorized by DOLE or POEA

AGENCY HIRED OFW COMPULSORY INSURANCE

Compulsory Insurance for Agency Hired Workers: not mandatory for direct or
name hired

Compulsory Insurance: No cost of the worker; with benefits and coverage

MEDICAL REPATRIATION BENEFIT: No longer able to perform to work

Money Claims (nanalo against NLRC), Compassionate Benefit (7 days

nagkasakit), medical repatriation

Claim Form must be submitted with the attachment

INSURANCE BUSINESS

- May be corporation, associations, cooperative or GOCC, including

professional reinsurers

MUTUAL BENEFIT ASSOCIATION - not insurance companies but still regulated

by IC, with guarantee fund of at least 5M. Certificate should be issued to
members

- para sa members ito

WHO MAY TRANSACT INSURANCE BUSINESS?

1. with required capital and assets; paid up capital (1B for domestic newly
established)

2. with certificate of authority from Commissioner: valid for 3 years and

renewable
3. Can be insurance agent of a legit insurance company

INSURANCE COMMISSION

OFFICE OF THE INSURANCE COMMISSIONER:

PD 612, 1974

Started in the Spanish Era

RA 10607 signed into law and strengthened insurance industry

Pre-need Code, 2009

HMO > DOH to Insurance Code

FUNCTION OF INSURANCE COMMISSSION

- promulgate and implement policies, rules and regulations governing the

operations of entities engaged in insurance, pre-need and HMO

- approved and amend revoke license of insurance and mutual benefit

associations

- sanctions for violations of laws

- fix assess etc. for regulatory powers

- ensure solvency of those engaged in insurance

- issue cease and desist orders to insurance pre-need companies and HMOs

- appoint conservators receivers etc.

- conduct exams for egents

- review policies

- adjudicate dispute 5M per single claim

- assist public
- reorganization power based on Pre-need Code

INSURANCE COMMISSION:

1. Enlist and aid for the implementation of the code