FOR FINAL EXAM COVERAGE, PLEASE CONFER THE ANNOTATIONS WITH THE

AMENDMENTS OF THE INSURANCE CODE

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PD 612 AS AMENDED BY REPUBLIC ACT NO. 10607 (August 5, 2013)

October 20, 2019

G. Warranties
Title 7, Sec. 67-76, PD 612 as amended by RA 10607; De Leon, pages 221-237

1. Definition
2. Distinguished from representations
3. Kinds of warranty – Sec. 67
4. Time to which warranty relates – Sec. 68
(a) Past, present or future
(b) Affirmative or promissory
5. Language – Sec. 69
6. Where express warranty contained – Sec. 70
7. Express warranty – Sec. 71
8. Warranty of facts or omissions – Sec. 72
9. When breach of warranty does not avoid policy- Sec. 73
10. Effect of violation of material warranty – Sec. 74
11. Immaterial provision in policy – Sec. 75
12. Breach of warranty without fraud – Sec. 76
13. Conditions; distinguished from warranties
14. Exceptions; distinguished from warranties and conditions
15. Effect warranties, conditions and exceptions

See: American Home Insurance v. Tantuco Enterprises, 366 SCRA 740 (2011)
Ang Giok v. Springfield Fire & Mutual Insurance, 56 Phil. 375 (1931)
Qua Chee Gan v. Law Union and Rock Insurance, 98 Phil 85 (1955)
Pioneer Insurance v. Yap, 61 SCRA 426 (1974)
Prudential Guarantee v. Trans Asia Shipping, 491 SCRA 411 (2006)

H. Premium
Title 8, Sec. 77-84, PD 612 as amended by RA 10607; De Leon, pages 238-276

1. Definition of premium; distinguished from assessment

2. Payment of premium; effect of non-payment – Sec.77
- Nature of obligation; extension of credit; when policy binding despite non-payment of
premium
- Salary Deductions for Government Employees – Sec. 78
3. Effect of acknowledgement of payment; effect of acceptance – Sec. 79
4. When insured entitled to return of premium paid – Sec. 80, 81, 82, 83, 84

See: Arce v. Capital Insurance, 117 SCRA 63 (1982)

 Phil. Phoenix Surety & Assurance v. Woodworks, Inc., 20 SCRA 1270 (1967) and
92 SCRA 419 (1979)
Makati Tuscany Condominium v. Court of Appeals, 215 SCRA 463 (1992)
Tibay v. Court of Appeals, 257 SCRA 126 (1996)
Malayan Insurance v. Court of Appeals, 154 SCRA 672 (1987)
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UCPB General Insurance v. Masagana Telemart, 356 SCRA 307 (2001)
American Home Insurance v. Tantuco Enterprises, 366 SCRA 740 (2001)
Great Pacific Life Insurance v. Court of Appeals, 184 SCRA 501 (1990)
Stokes v. Malayan, 127 SCRA 766 (1984)
Capital Insurance v. Plastic Era, 65 SCRA 134 (1975)

I. Loss
Title 9, Sec. 85-89, PD 612 as amended by RA 10607, De Leon, pages 277-297

1. Claim defined
2. Loss defined; scope of loss; see also Art. 1189, Civil Code
3. Transfer of claim after loss occurs – Section 85, IC
4. Liability of insurer for loss – Section 86, IC
- Proximate cause; extent of loss; burden of proof; proximate cause
5. Extension of the principle of proximate cause – Section 87, IC
6. Where proximate cause is an excepted peril – Section 88, IC
7. Liability of insurer for loss due to willful act; due to negligence– Section 89, IC

See: CCC Insurance v. Court of Appeals, 31 SCRA 264

Country Bankers Insurance v. Llanga Bay and Community Multi-purpose
Cooperative, 374 SCRA 653 (2002)
Paris-Manila Perfumery v. Phoenix Assurance, 49 Phil. 753 (1926)
FGU Insurance v. Court of Appeals, 454 SCRA 337 (2005)

J. Notice and proof of loss

Title 10, Sec. 90-94, PD 612 as amended by RA 10607; De Leon, pages 289-297

1. Conditions before and after loss

2. Notice of loss to insurer – Sec. 90, IC
3. Proof of loss – Sec. 91, 92, 93, 94, IC
- Meaning and nature; form; purpose; burden of proof of loss; defects; delay

See: Malayan Insurance vs. Cruz-Arnaldo, 154 SCRA 672 (1987)

Yu Ban Chuan v. Fieldmen’s Insurance, 14 SCRA 491 (1965)
Go Lu v. Yorkshire Insurance, 43 Phil. 633 (1922)
Finman’s General Assurance v. Court of Appeals, 361 SCRA 214 (2001)
Pacific Timber v. Court of Appeals, 112 SCRA 199 (1982)

November 3, 2019

K. Double insurance
Title 11, Sec. 95-96, PD 612 as amended by RA 10607, De Leon, pages 298-305
 1. Double insurance defined – Sec. 93, IC
- Requisites, distinguished from over-insurance; binding effect of stipulation against;
purpose of prohibition
2. Payment of claim where there is over-insurance by double insurance – Sec. 94, IC
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See: Sta. Ana v. Commercial Union Assurance, 55 Phil. 329 (1930)
Union Manufacturing v. Phi’ Guaranty, 47 SCRA 271 (1972)
Pioneer Insurance v. Yap, 61 SCRA 426 (1974
Geagonia v. Court of Appeals, 241 SCRA 152 (1995)
Pacific Banking Corp. v. Court of Appeals, 168 SCRA 1 (1968)
L. Reinsurance
Title 12, Sections 97-100, PD 612 as amended by RA 10607; De Leon, pages 306-316

1. Reinsurance defined – Section 97, IC

- Purpose, functions, distinguished from double insurance
2. Duty of reinsured to disclose facts – Section 98, IC
- Treaty v. facultative reinsurance
3. Nature of reinsurance contract - Section 99, IC
- Subrogation in reinsurance
4. Original insured and contract of reinsurance – Section 100, IC

See: Pioneer Insurance v. Court of Appeals, 175 SCRA 668 (1989)

Gibson v. Revilla, 92 SCRA 219 (1979)
Artex Development v. Wellington Insurance, 51 SCRA 352 (1973)

III. CLASSES OF INSURANCE (Chapter II, Insurance Code)

A. Marine Insurance
Title 1, Sec. 101-168, PD 612 as amended by RA 10607; De Leon, 317-391

1. Definition of marine insurance – Sec. 101; See De Leon, pages 319-330

a) Scope of ocean marine insurance
b) Risks or losses covered in ocean marine insurance
c) Perils of the sea; distinguished from perils of the ship
d) Proximate cause of loss
e) “All risks” marine policy
See: Roque v. Intermediate Appellate Court, 139 SCRA 596 (1985)
Go Tiaco v. Union Insurance of Canada, 40 Phil. 40 (1919)
Choa Tiek Seng v. Court of Appeals, 183 SCRA 223 (1990)
Filipino Merchants Ins. v. Court of Appeals, 179 SCRA 638 (1989)
2. Insurable interest – Sec. 102-108; De Leon, pages 330- 340
a) Of ship owner
- in the vessel – Sec.101; Sec. 102
- in the freightage – Sec. 103, 104, 105, 106
b) Of the shipper or consignee
c) In the profits – Sec. 107
d) Of charterer – Sec. 108
See: Puromines v. Court of Appeals, 220 SCRA 281 (1993)]
3.
Caltex (Phils.) Inc. v. Sulpicio Lines, 315 SCRA 709 (1999)
San Miguel v. Heirs of Inguito, 384 SCRA 87 (2002)
Concealment in marine insurance – Sec. 109-112; De Leon, pp. 340-345
a) Additional duty to communicate – Sec. 109
b) Opinions or expectations of third party – Sec. 110
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c) Presumptive knowledge by insured of prior loss – Sec. 111
d) Instances where concealment does not vitiate entire contract – Sec.112
4. Representation in marine insurance – Sec.113-114; De Leon, pp. 343-345
a) Effect of false representation – Sec. 113
b) Falsity of representation as to expectation – Sec. 114
5. Implied warranty of seaworthiness – Sec.115-122; De Leon, pp. 345-355
a) Implied warranty of seaworthiness – Sec. 115
b) What constitutes seaworthiness – Sec. 116
c) When complied with; exceptions – Sec. 117
d) Scope of seaworthiness of vessel – Sec. 118
e) Seaworthiness during voyage in stages – Sec. 119
f) Delays in repairs where ship becomes unseaworthy during voyage – Sec. 120
See: Caltex (Phils.) Inc. v. Sulpicio Lines, 315 SCRA 709 (1999)
San Miguel v. Heirs of Inguito, 384 SCRA 87 (2002)
Philippine American General Insurance v. CA, 273 SCRA 262 (1997)
Delsan Transport v. CA, 369 SCRA 24 (2001)
6. Express warranty as to nationality or neutrality - implied warranty to carry requisite
documents – Sec. 122
7. Voyage and Deviation – Sec. 123-128; De Leon, pp. 356-359
a) Meaning of deviation; cases of deviation – Sec. 123-125
b) Proper deviation – Sec. 126
c) Improper deviation – Sec. 127
d) Effect of improper deviation – Sec. 128
8. Loss – Sec. 129-139; De Leon, pages 359-369
a) Kinds of loss – Sec. 129-131
b) Actual total loss – Sec. 132
c) Constructive total loss – Sec. 133
d) Presumption of actual total loss – Sec. 134
e) Liability of insurer in case of reshipment – Sec. 135
f) Additional liability of insurer of goods – Sec.136
g) Right of insured to payment upon actual total loss – Sec. 137
h) Average – Sec. 138
i) Scope of insurance against actual total loss – Sec. 139
See: Oriental Assurance v. Court of Appeals, 200 SCRA 459 (1991)
Philippine Home Assurance v. Court of Appeals, 257 SCRA 468 (1996)
9. Abandonment – Sections 140-157; De Leon, pp. 381
a) Meaning – Sec. 140
b) Requisites
(i) Relinquishment – Sec. 141
(ii) Constructive total loss – Sec. 141
(iii) Must be absolute – Sec. 142
(iv) Within reasonable time – Sec. 143
(v) Factual – Sec. 144
(vi) Notice – Secs. 145-147
 c) Effect of valid abandonment – Sec. 148
d) Rights & liabilities of insurer who pays – Sec. 149-150
f) Refusal to accept abandonment – Sec. 151
g) Acceptance of abandonment – Sec. 152, 153, 154, 155, 156, 157
10. Measure of indemnity – Sections 158-168, De Leon, pages 381-391
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November 17, 2019

B. Fire insurance
Title 2, Sections 169-175, PD 612 as amended by RA 10607, IC; De Leon, pages 392 – 405

1. Definition; coverage – Sec. 169

a) Fire and extended coverage
b) Concept of fire
c) Direct and indirect losses
d) Ocean marine and fire policies distinguished
2. Alteration in thing insured – Sec. 170; Sec. 171
a) Alterations that increase risk or hazard
b) Alterations that do not increase risk or hazard
c) Effect of alteration on policy
d) Insured’s control or knowledge of alteration
e) Application of Section 75 (breach of immaterial warranty)
3. Acts of insurer subsequent to execution of policy – Sec. 172
4. Measure of indemnity – Sec. 173; Sec. 174
a) Open policy
b) Valued policy
c) Co-insurance clause
d) Option to rebuild clause
5. Pledge or transfer of fire insurance policy after loss – Sec. 175
a) General rule – Sec. 21; Sec. 83

See: Philippine Home Assurance v. Court of Appeals, 257 SCRA 468 (1996)
Bachrach v. British American Assurance, 17 Phil. 35 (1910)
Tan Chuco v. Yorkshire Fire and Life Insurance, 14 Phil. 346 (1909)
Malayan Insurance v. Cruz-Arnaldo, 154 SCRA 672 (1987)

C. Casualty Insurance
Title 3, Sec. 176, PD 612 as amended by RA 10607; De Leon, pp. 406 – 420

1. Definition
2. Two general divisions of casualty insurance
3. Liability insurance
a) Definition
b) Insurable liability
c) Insurrable interest in liability insurance
d) When payable
e) When does injured party have the right to sue the insurer directly?
f) Basis and extent of insurer’s liability
g) Accident and health insurance
 Review: Guingon v. Del Monte, 20 SCRA 1043 (1967)
De la Cruz v. Capital Insurance, 17 SCRA 559 (1966)
Pan Malayan v. Court of Appeals, 184 SCRA 54 (1990)
Sun Insurance v. Court of Appeals, 211 SCRA 554 (1990)
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Biagtan v. Insular Life, 144 SCRA 58 (1972)
Calanoc v. Court of Appeals, 98 Phil. 79 (1955)
Phil Am Care Health Systems v. Court of Appeals, 379 SCRA 356 (2002)
D. Suretyship
Title 4, Sections 177-180; De Leon, pp. 421 – 431

1. Suretyship defined – Sec. 177

a) Undertakings within scope of suretyship
b) Corporate suretyship
2. Nature of liability – Sec. 178
a) Joint and several with principal
b) Limited to amount of the bond
c) Determined strictly by the terms of the contract
3. Distinction from: property insurance; guaranty
4. Payment of premiums – Sec. 179
5. Types of surety bonds
6. Applicability of Civil Code provisions – Sec. 180

See: Philippine Pryce Assurance v. Court of Appeals, 230 SCRA 164 (1994)
AFP General Insurance v. Molina, 556 SCRA 630 (2008)
Reparations Com. v. Universal Deep Sea Fishing 83 SCRA 764 (1978)
Arranz v. Manila Fidelity, 101 Phil. 272 (1957)
Capital Insurance v. Ronquillo Trading, 123 SCRA 526 (1983)

E. Life Insurance
Title 5, Sections 181-186, PD No. 612 as amended by RA No. 10607

1. Definition; nature
a) Sec. 181; Sec. 182
b) Parties involved
c) Distinguished from fire and marine (property) insurance
d) Kinds: ordinary life; term; endowment;
e) Scope
f) Annuity
2 Liability of insurer in case of suicide – Sec. 183
3 Right of insured to assign life insurance policy – Sec. 184
4 Measure of indemnity – Sec. 186
5 Other provisions pertinent to life insurance
a) Grace period for payment of premium – Sec. 227(a)
b) Cash surrender value – Sec. 227(f),(g),(h)
c) Reinstatement – Sec. 227(j)
d) Industrial life insurance – Sec. 229; Sec. 230
 F. Microinsurance
Title 6, Sections 187-188, PD No. 612 as amended by RA No. 10607
1. Definition; nature – Sec. 187
2. Engagement in Microinsurance – Sec. 188
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FINAL EXAM – November 24, 2019