ATENEO

DE MANILA UNIVERSITY
SCHOOL OF LAW

COURSE SYLLABUS

Course Title: INSURANCE Instructor:

No. of Units: 2 units Felicisimo F. Agas III
Semester/ SY: 1st (2020-2021)
Department/Track: COMMERCIAL LAW

I. COURSE DESCRIPTION AND OBJECTIVES

Course Description

The course will cover Philippine insurance law, focusing on the concept, functions and characteristics
of insurance contracts; what may be insured; insurable interest; devices for ascertaining risk of loss
(concealment and representation; warranties; exceptions); premium; the concepts of loss, notice and
proof of loss; double insurance; reinsurance; classes of insurance; the business of insurance and
regulation of the insurance industry. Philippine insurance law is rich in jurisprudence, and discussions
will be focused on the Supreme Court decisions and the precedents they set.

Course Objectives

Upon completion of this course, students are expected to be able to know and understand the principles
of insurance law and their application to different factual situations.

Methodology

Daily recitation
Examination (midterms and finals)
Hypothetical cases- problem solving
Participatory class discussion

II. COURSE MATERIALS

Philippine Supreme Court cases

De Leon, Insurance Code of the Philippines Annotated (“de Leon”)

III. COURSE OUTLINE

I. General

A. Concept, purpose, history

B. Contract of insurance

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 Sec. 2(a), Insurance Code (the “Code”)1

C. Nature, characteristics, distinguishing elements of an insurance contract

1. Fields/classifications, see de Leon

2. Characteristics, see de Leon
3. Risk distribution device, see de Leon
4. Distinguishing/essential elements
Gulf Resorts v. Philippine Charter Ins., GR 156167, 16 May 2005 Philamcare
Systems, Inc., GR No. 125678, 18 March 2002

D. Applicability of the Civil Code

1. Requisites for a valid contract under Civil Code

Articles 1318, 1319, 1347, 1353, Civil Code

Enriquez v. Sun Life Assurance, GR 15895, 29 Nov. 1920
Perez v. CA, GR 112329, 28 January 2000
De Lim v. Sun Life of Canada, GR 15774, Nov. 29, 1920
Musngi v. West Coast Life, GR 41794, 30 Aug. 1935

2. Civil Code provisions on insurance

Art. 2011, 2012, Civil Code

Art 739, Civil Code
Insular Life v. Ebrado, GR 44059, 28 October 1977
Zenith Insurance v. CA, GR 85296, 14 May 1990

E. The Business of insurance

Sec. 2(b), Insurance Code

White Gold Marine v Pioneer Insurance, GR 154514, 28 July 2005
Philamlife v Ansaldo, GR 76452, 26 July 1994

F. Construction of insurance contracts

1. Contract of adhesion

Art. 1377, Civil Code

Rizal Surety & Insurance v CA, GR 112360, 18 July 2000
Landicho v GSIS, GR L-28866, 17 March 1972
Fieldmen’s Insurance v Vda. De Songco, GR L-24833, 23 September 1968

2. Where there is ambiguity or doubt

Del Rosario v Equitable Insurance, GR L-16215, 29 June 1963

Taurus Taxi v Capital Insurance, GR L-23491, 31 July 1968
CCC Insurance v CA, 19 GR L-25920, 19 January 30, 1970
Villacorta v Insurance Commission, GR L- 54171, 28 October 1980
Association of Baptists v Fieldmen’s Insurance, GR L-28772, 21 Sept. 1983

1RA 10607 adopts amendments to PD 612 (as amended). References to sections in this Outline are to sections of the
Insurance Code as amended by RA 10607.
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 Fortune Insurance v CA, GR 115278, 23 May 1995
Del Rosario v. Equitable Insurance and Casualty, GR L-16215, 29 June 1963
Verendia v CA, GR 75605, 22 January 1993
Qua Chee Gan v Law Union and Rock Insurance, GR L-4611, 17 Dec. 1955
Paramount Insurance v Spouses Remondeulaz, G.R. No. 173773, 28 Nov. 2012

Meaning of accident

Calanoc v CA, GR 8151, 16 December 1955

Biagtan v Insular Life, GR L-25579, 29 March 1972
Finman General Assurance v CA, GR 100970, 2 September 1992
De la Cruz v. Capital Insurance, GR L-21574, 30 June 1966
Sun Insurance Office Ltd v CA, GR 92383, 17 July 1992

3. Where the terms of the contract are clear

Art. 1370, Civil Code

Misamis Lumber v Capital Insurance, GR L-21380, 20 May 1966
New Life Enterprises v CA, Equitable Insurance, GR 94071, 31 March 1992
Ty v Filipinas Cia de Seguros, GR L-21821-22 and L-21824-27, 31 May 1966

4. Contract “uberimae fidae”: perfect good faith2

Qua Chee Gan v Law Union and Rock Insurance, GR L-4611, 17 December 1955
Velasco v Apostol & Maharlika Insurance, GR L-44588, 9 May 1989

G. Subrogation

Article 2207, Civil Code

Fireman’s Fund et al v Jamila et al., GR 27427, 7 April 1976
Philippine American General Insurance v CA, GR 116940, 11 June 1997
Delsan Transport v CA, GR 127897, 15 November 2001
Pan Malayan Insurance v CA, GR 81026, 3 April 1990
SverigesAnfartygs Assurance v Qua Chee Gan, L-22146, 5 Sept 1967
Rizal Surety v Manila Railroad, GR L-24043, 25 April 1968
St. Paul Fire v Macondray, GR L-27796, 25 March 1976
National Union Fire Insurance v. Stolt Nielsen, GR 87958, 26 April 1990
Cebu Shipyard v William Lines, GR 132607, 5 May 1999

H. The Business of Insurance

Section 2(2), Code

White Gold Marine v Pioneer Insurance, GR 154514, 28 July 2005
Philamlife v Ansaldo, GR 76452, 26 July 1994
Philippine Health Care Provider v Commissioner of Internal Revenue, GR 167330, 18
September 2009

II. Contract of insurance

2 Case under this topic will not be recited. Where a case in this part of the outline is listed under other topics, they will be
recited under that topic.
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A. What is an insurance contract: Sec. 2, Code

B. Requisites of contract of insurance – see Part I(C) and (D), page 1 of this Outline

C. What may be insured

Sections 3, 4, 5, Code

D. Parties to insurance contracts

1. Who may be an insurer

Sec. 6, Code

2. Who may be insured

Sec. 7 Code
Filipinas Cia. De Seguros v Christern Huenefeld, GR L-2294, 25 May1951
Constantino v Asia Life, GR L-1669, 31 August 1950
Fidela Sales Gonzaga v Crown Life, GR L-4197, 20 March 1957

3. Mortgagor/mortgagee
Sec. 8 and 9, Code; Sec. 13 and 53, Code
Palileo v Cosio, GR L-7667, 28 November 1955
San Miguel Brewery v Law Union, GR L-14300, 19 January 1920
Geagonia v. CA, GR 114427, 6 February 1995
Saura Import & Export v Phil Int’l Surety, GR L-15184, 31 May 1963
Phil. National Bank v CA, GR L-57757, 31 August 1987

E. Insurable interest

1. Meaning, necessity for insurable interest

2. Insurable interest in life insurance

Sec. 10, 19, 184, Code

El Oriente v Posadas, GR 34774, 21 September 1931

3. Beneficiaries

Sections 11 and12, IC
Art. 2012 and 739, Civil Code
Insular Life v Ebrado, GR L-44059, 28 October 1977
Vda. De Consuegra v GSIS, GR L-28093, 30 January 1971
Southern Luzon Employees v Golpeo, GR L-6114, 30 October 1954
Heirs of Maramag v Maramag, GR 181132, 5 June 2009
Philamcare v CA, GR 125678, 18 March 2002
Sec. 182, Code
Villanueva v Oro, GR L-2227, 31 August 1948

4. Insurable interest in property insurance

Sections 13 to 18, Code; Section 25, Code

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 Harvardian College v Country Bankers, CA CV 03771, 6 Jan. 6, 1986, 1 CARA 1
Commercial Union Assurance v. Lepanto, GR L-52027, 27 April 1982
Harding v Commercial Union, GR L-12707, 10 August 1918
Lampano v Jose, GR L-9401, 30 March 1915
Gaisano v Insurance Co. of North America, GR 147839, 8 June 2006
Ong Lim Sing, Jr. v FEB Leasing, GR 168115, 8 June 2007
Traders Insurance v Golangco, GR L-6442, 21 September 1954
Lopez v del Rosario, GR L-19189, 27 November 1922
San Miguel v Law Union Rock Insurance, GR L-14300, 19 Jan.1920
Spouses Cha v Court of Appeals, GR 124520, 18 August 1997
Garcia v Hong Kong Fire & Marine Insurance, GR 20341, 1 Sept 1997

5. When insurable interest must exist; transfers of interest

Sections 19, 20, 21, 22, 23, 24, 25, Code

Tai Tong Chuache v Insurance Comm, GR L-55397, 29 February 1988
Bachrach v British American Insurance, L-5715, 20 December 1910
San Miguel v Law Union Rock Insurance, GR L-14300, 19 January 1920

F. Concealment and Representation

1. Concealment

Sections 26-35, Code

Argente v West Coast Life, GR L-24899, 9 March 1928
Great Pacific Life v CA, GR L-31845, 30 April 1979
Saturnino v Philippine American Life, GR L-16163, 28 February 1963
Canilang v CA and Great Pacific Life, GR 92492, 17 June 1993
Sun Life v Bacani, GR 105135, 22 June 1995
Philamcare Health Systems v CA, GR 125678, 18 March 2002
Yu Pang Cheng v CA, GR L-12465, 29 May 1959
Colado v Insular Life, 51 O.G. (No. 12), 1955

2. Representation

Sections 37-48, Code

Edillon v Manila Bankers Life, GR L-34200, 30 September 1982
Insular Life v Feliciano, GR L 47593, 13 Sept 1941; Insular Life v Feliciano, GR
47593, 29 December 1943
Ng Zee v Asian Crusader Life Insurance, GR L-30685, 30 May 1983
Great Pacific Life Assurance v Court of Appeals, GR 113899, 13 Oct 1999
Tan Chay Heng v West Coast Life, GR L-27541, 21 Nov. 1927

3. Incontestability Clause

Sec. 48, Code

Tan v Court of Appeals, GR 48049, 29 June 1989
Manila Bankers Life v Aban, G.R. 175666, 29 July 2013
Sun Life of Canada v Sibya, GR 211212, 8 June 2016

G. The Policy

1. Form, contents, cover notes

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 Sections 49-52; Sec. 232, Code

Mandatory provisions
• Sec. 233, Code (individual life insurance policies)
• Sec. 234, Code (mandatory provisions - group life insurance policy)
• Sec. 236, 237, Code (mandatory provisions - industrial life insurance)

Rizal Commercial Banking v CA, GR 128833, 20 April 1998

Great Pacific Life CA, GR L-31845, 30 April 1979
Tang v CA, GR L-48563, 25 May 1979
De Lim v Sun Life of Canada, GR 15774, 29 Nov 1920

2. Terms of the contract constitute measure of insurer's liability; compliance a condition

precedent to the insured's right of recovery

Stokes vs. Malayan Insurance Co., Inc., L-34768, February 28, 1984
Perla Compania de Seguros, Inc. v.CA, G.R. No. 78860, May 28, 1990
Pacific Banking v CA, GR L-41014, 28 November 1988
Perez v CA, GR 112329, 28 January 2000
Oriental Assurance v CA, GR 94052, 9 August 1991
Alpha Insurance v Castor, GR 198174, 02 September 2013

3. Persons entitled to recover on policy

Sections 53-58, Code

Bonifacio Brothers v Mora, GR L-20853, 29 May 1967
Heirs of Maramag v Maramag, GR 181132, 5 June 2009
Vda de Consuegra v GSIS, GR L-28093 January 30, 1971
Coquia v Fieldmen’s Insurance, GR L-23276, 29 November 1968
Rizal Commercial Banking v CA, GR 128833, 20 April 1998

4. Types of Policy

Sections 59-62, Code

Development Insurance v. IAC, GR 71360, 16 July 1986

5. Period to bring action

Section 63, Code

Ang v Fulton Fire Insurance, GR L-15862, 31 July 1961
New Life Enterprises v CA, GR 94071 March 31, 1992
ACCFA v Alpha Insurance, GR L-24566, 29 July 1968
Ang v Fulton Fire Insurance, GR L-15862, 31 July 1961
Sun Insurance CA, GR 89741; 13 March 1991
Pacific Banking v CA, GR L-41014, 28 November 1988
Mayer Steel Pipes v CA, GR 124050, 19 June 1997

6. Cancellation of policy; notice

Sections 64-66, Code

Saura Import & Export v Phil Int’l Surety, GR L-15184, 31 May 1963
Malayan Insurance v Cruz-Arnaldo, GR L-67835, 12 October 1987
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H. Warranties

Sections 67-76, Code

Sta. Ana v Commercial Union Insurance, GR L-32889, 20 Nov. 1930
Ang Giok Chip v Springfield Fire & Marine, GR L-33637, 31 December 1931
Young v Midland Textile, GR L-9370, 31 March 1915
American Home Assurance v Tantuco, GR 138941; 6 October 2001
Qua Chee Gan v Law Union & Rock Insurance, GR L-4611, 17 Dec. 1955
Fieldman’s Insurance v Songco, GR 24833, 23 September 1968
Pioneer Insurance v Yap, GR L-36232, 19 Dec. 1974
Prudential Guarantee v Trans Asia, GR 151890, 20 June 2006
General Insurance v Ng Hua, GR L-14373, 30 January 1960

I. Premium

Sections 77-84, Code

Arce v Capital Insurance, GR L-28501, 30 September 1985
Philippine Phoenix v Woodworks, GR L-25317, 6 August 1979 – differentiate ruling in
Philippine Phoenix v Woodworks, GR L-22684, 31 August 1967
Makati Tuscany v CA, GR 95546, 6 November 1992
Tibay v CA, GR 119655, 24 May 19967
UCPB General v Masagana Telamart, GR 137172, 4 April 2001 (reversing Decision
dated 15 June 1999)
American Home Ins. v Chua, GR 130421, 28 June 1999
Great Pacific Life v CA, GR 57308, 28 April 1990
Jaime T. Gaisano v Development Insurance & Surety, GR190702, 27 February 2017

J. Loss, Notice and Proof of Loss

1. Loss

Sections 85-89, Code

a) Transfer of claim after loss – Sec. 85, Code

b) Proximate cause is peril insured against – Sec. 86, Code
Hostile fire v. friendly fire
c) Extension of principle of proximate cause – Sec. 87, Code
d) Willful act of insured; negligence of insured – Sec. 89, Code

Paris-Manila Perfume v Phoenix Assurance, GR L-25845, 17 Dec 1926

Prats v Phoenix Assurance, GR L-28607, 21 February 1929
Country Bankers v Lianga Bay Multipurpose, GR 36914, 25 January 2002
Heirs of Coscolluela v Rico General, GR 84628, 16 Nov. 1989
FGU Insurance v CA, GR 137775, 31 March 2005
East Furniture v Globe & Rutgers Fire, L-35848, 22 Nov. 1932
DBP Pool of Accredited Insurance Companies v Radio Mindanao Network,
GR 147039, 27 January 2006

2. Notice and proof of loss

Sections 90-94, Code

Vda. de Gabriel v CA, GR 103883, 14 November 1996
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 Malayan Insurance v Cruz Arnaldo, GR L-67835, 12 October 1987
Yu Ban Chan v Fieldmen’s Insurance, GR L-19851, 29 June 1965
Go Lu v Yorkshire Insurance, G.R. No. L-18090, 25 July 25 1922
Pacific Banking v CA, GR L-41014, 28 November 1988
Pacific Timber v CA, GR L-38613, 25 February 1982
Phil. Charter Ins. v Chemoil Lighterage, GR 136888, 29 June 2005
Finman General Assurance v CA, GR 138737, 12 July 2001
Sec. 397, Code
Vda. De Gabriel v CA and Fortune Insurance, GR 103883 14 November 1996

K. Double Insurance

Sections 95-96, Code

Geagonia v CA, GR 114427, 6 February 1995
Pacific Bank v CA, L-41014, 28 November 1988
Sta. Ana v Commercial Union Insurance, GR L-32889, 20 Nov. 1930
Pioneer Insurance v Yap, L-36232, 19 December 1974
New Life Insurance v CA, GR 94071, 31 March 1992
Emilio Gonzalez La O v Yek Tong Lin, GR L-33131, 13 Dec. 19308
General Insurance v Ng Hua, GR L-14373, 30 January 1960
Union Manufacturing v Philippine Guaranty, GR L-27932, 30 October 1972

L. Reinsurance

Sections 97-100, Code

Fieldmen’s Insurance v Asian Surety, L-23447, 31 July 1970
Pioneer Insurance v CA, GR 84197, 28 July 1989
Gibson v Revilla, GR L-41432, 30 July 1979
Artex Development v Wellington Insurance, GR L-29508, 27 June 1973

III. Marine Insurance

A. Scope
1. What marine insurance includes
Section 101, Code

2. Risks covered

Roque v IAC, GR L-66935 November 11, 1985

La Razon Social Go Tiaoco v Union Insurance, GR 13983, 1 S ep. 1919
Delsan Transport v CA, GR 127897, 15 November 2001
Choa Tiek Seng v CA & Filipino Merchants, GR 84507, 15 March 1990
Filipino Merchants v CA & ChoaTiekTeng, GR 85141, 28 Nov. 1989
Cathay Insurance v CA, GR 76145, 30 June 1987
B. Insurable interest in marine insurance
Sections 102-108, Code
Caltex Phil v Sulpicio Lines, GR 131166, 30 Sept. 1999 (re charter)
San Miguel v Heirs of Inguito, GR 141716, 4 July 2002 (re charter)

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C. Concealment and representation in marine insurance

Sections 109-112, Code

Sec. 113-114, Code
D. Implied warranties
1. Seaworthiness
Sections 115-121, Code
Philippine American General Ins. v CA, 116940, 11 June 1997
Caltex Phil v Sulpicio Lines, GR 131166, 30 September 1999
Delsan Transport v CA, GR 127897, 15 November 2001
Madrigal v Hanson, GR L-6106-07, 18 April 1958
Roque v IAC, GR L-66935, 11 November 1985
San Miguel Corporation v Heirs of Inguito, GR 136054, 5 Sept. 20019
2. To carry requisite documents where nationality expressly warranted

Section 122, Code

3. Against deviation

Sections 123-128, Code

E. Loss in marine insurance

Sections 129-139, Code

Loss

a) Partial or total
b) Total loss
(i) Actual total loss
(ii) Constructive total loss
c) Liability of insurer in case of reshipment
d) Average
(i) Gross or general average
(ii) Simple or particular average

Philippine Manufacturing v Union Insurance, GR L-16473, 22 Nov 1921

Malayan v CA, GR 119599, 20 March 1997
Pan Malayan v CA, GR 95070, 5 September 1991
Philippine American General Ins. v CA, 116940, 11 June 1997 (limited liability)
Manila Steamship v Insa Abdulhaman, GR L-9534, 29 Sep 1956 (limited liability)
Philippine Home Assurance v CA, GR 106999, 20 June 1996 (average)
Jarque v Smith Bell, GR L-32986, 11 November 1930 (average)
F. Abandonment

Sections 139-155, Code

Oriental Assurance v CA, GR 94052, 9 August 1991
G. Measure of indemnity in marine insurance
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 Sections 158-166, Code
Co-insurance – Sec. 159

IV. Fire Insurance

Sections 169-175, Code

Philippine Home Assurance v CA, GR 106999, 20 June 1996
Bachrach v British American Assurance, GR L-5715, 20 Dec. 1910
Ong Guan Can v Century Insurance, GR L-21196, 6 February 1924
Galian v State Assurance, GR L-8405, 10 February 191510

V. Casualty Insurance

Section 176, Code

Sections 386 to 402, Code, on Compulsory Motor Vehicle Liability Insurance
Sec. 391, Code – No fault indemnity
Coquia v Fieldmen’s Insurance, GR L-23276, 29 November 1968
First Integrated Bonding v Hernando, GR 51221, 31 July 1991
Pan Malayan Insurance v CA, GR 81026, 3 April 1990
Malayan Insurance v CA and Vallejos, et al., GR L-36413, 26 Sept. 1988
Vda de Maglana v Consolacion, GR 60506, 6 August 1992
GSIS v CA, GR 101439, 21 June 1999
Shafer v RTC Judge, GR 78848, 14 November 1988
Guingon v Del Monte, GR L-22042, 17 August 1967
Perla Cia v Ancheta, GR L-49699, 8 August 1988
Villacorta v Insurance Commission, GR 54171, 28 October 1980
Palerno v Pyramid Insurance, L-36480, 31 May 1988
Tanco v Philippine Guaranty Company, GR L-17312, 29 November 1965
Travellers Insurance v CA, GR 82036, 22 May 1997
Fortune Insurance v CA, GR 115278, 23 May 1995
Review cases on meaning of accident
Calanoc v CA, GR 8151, 16 December 1955
Biagtan v Insular Life, GR L-25579, 29 March 1972
Finman General Assurance v CA, GR 100970, 2 September 1992
De la Cruz v. Capital Insurance, GR L-21574, 30 June 1966
Sun Insurance Office Ltd v CA, GR 92383, 17 July 1992

VI. Suretyship
Sections 177-180, Code
National Power Corporation v CA, GR L-43706 14 November 1986
Leyson v Rizal Surety, GR L-21250, 31 March 1966
Philippine Pryce Assurance v. CA, GR 107062, 21 February 1994
AFP General Insurance v. Molina, GR 151133, 30 June 2008
Capital Insurance v. Ronquillo Trading, GR L-36488, 25 July 1983

VII. Life Insurance

Art. 2021-2023, Civil Code
Sections 181-186, Code

A. Definition; nature

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 B. Parties involved

C. Distinguished from fire and marine insurance

D. Exemption from execution

E. Kinds of life insurance policies

F. Suicide

G. Mandatory provisions in individual life policies - Section 233, Code11

Gallardo v Morales, GR L-12189, 29 April 1960

Sun Life v Ingersoll, GR 16475, 8 November 1921

VIII. Other provisions

A. Claims settlement

Sections 247-251, Code

Cathay Insurance v CA, GR 85624, 5 June 1989
Zenith Insurance v. CA, GR 85296, 14 May 1990
Tio Khe Chio vs. CA, GR 76101-02, 30 September 1991

B. Jurisdiction of Insurance Commission to adjudicate claims

Section 439, Code

C. Mutualization

Section 268, Code

Republic v Sun Life, G.R. No. 158085, 14 October 2005

D. Insurance agents and brokers

Sections 307, 308, 309, Code – Insurance agent

Sections 310-311, Code – insurance brokers

E. Adjusters – Sec. 332, Code

Actuary – Sec. 344, Code

F. Bancassurance – Sec. 375-377, Code

G. Micro insurance – Section 187, Code
H. Variable contracts – Section 238, Code

*The professor reserves the option of amending the reading list and assignments as exigencies
warrant.

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IV. COURSE REQUIREMENTS AND GRADING SYSTEM

Course Requirements Grade Breakdown

Attendance, Recitation, Quizzes 1/3
Midterm Exam 1/3
Final Exam 1/3

V. COURSE POLICIES

1. Please see the Rules and Regulations on attendance, dress code, discipline, and J.D.
scholastic responsibility and plagiarism, in the ALS Catalogue.

2. Step out of the class if you need to use your mobile phone. Laptops and similar gadgets
may not be used during class unless otherwise instructed.

VI. CONTACT AND OTHER INFORMATION

Email: [email protected]; [email protected]

Consultation schedule: After class or on appointment.

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