14. Distinguish suretyship from property insurance.

SURETYSHIP PROPERTY INSURANCE

Accessory contract
3 parties: surety, obligor, oblige
Credit accommmodation
Surety can recover from the principal
Bond can be cancelled only with the
consent of the oblige, commissioner, or
court
Requires acceptance of oblige to be valid
Risk-shifting device; premium paid being
in the nature of a service fee
Principal contract
2 parties: insurer, insured
Contract of indemnity
Insurer has no such right; only right of
subrogation
May be cancelled unilaterally either by
insured or insurer on the grounds
provided by law
No need of acceptance by any third
party
Risk-distributing device; premium paid
as a ratable contribution to a common
fund

15. Discuss in details the rule on insurance claims when the insured commits suicide.
Insurer is liable in the following cases:
1. If committed after two years from the date of the policy issue or its last
reinstatement;
2. If committed in state of insanity regardless of the date of commission unless
suicide is an excepted peril (Sec. 180-A); and
3. If committed after a shorter period provided in the policy.

NOTE: Any stipulation extending the two-year period is null and void.

16. Distinguish Double Insurance from Over Insurance.

DOUBLE INSURANCE OVER INSURANCE
In double insurance, there may be no over- There is over-insurance when the amount of
insurance as when the sum total of the the insurance is beyond the value of the
amounts of the policies issued does not insureds insurable interest
exceed the insurable interest of the insured.
There are always several insurers There may be only one insurer involved
THEREFORE, double insurance and over-insurance may exist at the same time or neither may
exist at all.

17. Discuss in details the rule on insurance claims when the insured dies at the hands of the
law.
*EXAMPLE: legal execution*
It is one of the risks assumed by the insurer under a life insurance policy in the absence
of a valid policy exception.

If the insured is sane, it obviates against recovery as being more in consonance with
public policy and as being implicit under section 87, ICP.
18. Discuss in details the rule on insurance claims when the insured is killed by the beneficiary.
General Rule: The interest of the beneficiary in a life insurance policy shall be forfeited
when the beneficiary is the principal accomplice or accessory in willfully bringing about
the death of the insured, in which event, the nearest relative of the insured shall receive
the proceeds of said insurance if not otherwise disqualified (Section 12).
Exceptions:
1. Accidental killing;
2. Self-defense;
3. Insanity of the beneficiary at the time he killed the insured.

NOTE: if the premiums paid came from conjugal funds, the proceeds are considered
conjugal. If the beneficiary is other than the insureds estate, the source of premiums
would not be relevant.

NOTE: The measure of indemnity on life or health insurance policy is the sum dixed in
the policy except when a creditor insures the life of his debtor.

19. What is Cash Surrender Value?

It is the amount the insured in case of default, after the payment of at least 3 full annual
premiums, is entitled to receive if he surrenders the policy and releases his claims upon it.

20. What is Authorized Driver Clause?

A clause which aims to indemnify the insured owner against loss or damage to the car
but limits the use of the insured vehicle to the insured himself or any person who drives
on his order or with his permission. (Villacorta v. Insurance Commissioner)

21. Enumerate the compulsory insurance coverage under the insurance code and related laws

Compulsory Motor Vehicle Liability Insurance (Note: it is the only compulsory insurance
coverage under the insurance code)

- A species of compulsory insurance that provides for protection coverage that will answer for
legal liability for losses and damages for bodily injuries or property damage that may be
sustained by another arising from the use and operation of motor vehicle by its owner.

Method of coverage

1. Insurance Policy
2. Surety Bond
3. Cash Deposit
22. Define Seaworthiness in Marine Insurance

A relative term depending upon the nature of the ship, voyage, service and goods, denoting in
general a ships fitness to perform the service and to encounter the ordinary perils of the
voyage, contemplated by the parties to the policy. (Sec. 114)

23. What are the implied warranties in Marine Insurance?

1. Seaworthiness of the ship at the inception of the insurance (sec.113);

2. Against improper deviation (sec. 123, 124, 125);
3. Against illegal venture;
4. Warranty of neutrality: the ship will carry the requisite documents of nationality or
neutrality of the ship or cargo where such nationality or neutrality is expressly warranted;
(sec. 120)
5. Presence of insurable interest.

24. What are the matters embraced by the term doing an insurance business?
Doing an insurance business or transacting an insurance business shall include (RISO)
a) Doing any kind of business including a Reinsurance business, specifically
recognized as constituting the doing of an insurance business within the
meaning of this code;
b) making or proposing to make as an insurer, any Insurance contract;
c) making or proposing to make as a surety any contract of Suretyship as a
vocation and not as merely incidental to any other legitimate business of the
surety;
d) Others doing or proposing to do any business in substance equivalent to any
of the forgoing in a manner designed to evade any of the provisions of this code.
25. Distinguish insurable interest in life insurance from insurable interest in property as to
definition, coverage, limitation or extent, as to the time it must exist and as to rules with
regard to beneficiary.
INSURABLE INTEREST IN LIFE INSURABLE INTEREST IN
PROPERTY
DEFINITION
COVERAGE Unlimited except in life Limited to actual value of
insurance effected by the interest in property insured
creditor on life of the debtor
LIMITATION/EXTENT
EXISTENCE Must exist onlyt at the time Must exist at the time the
the policy takes effect and policy takes effect and when
need not exist at the time of the loss occurs
loss
RULES AS TO The expectation of An expectation of the
BENEFICIARY benefit to be derived benefit to be derived
from the continued from the continued
existence of life need existence of the
not have any legal property insured must
basis whatever. A have a legal basis.
reasonable The beneficiary must
probability is have an insurable
sufficient without interest over the thing
more. insured.
The beneficiary need
not have an
insurable interest
over the life of the
insured if the insured
himself secured the
policy. However if
the life insured was
obtained by the
beneficiary, the
latter must have
insurable interest
over the life of the
insured.