GENERAL PROVISIONS

A. Governing Laws
Primary:
PD 1460 as amended, Insurance Code of
1978
PD 1146 as amended, Revised
Government Services Insurance Act of
1977
RA 656 as amended, Government Property
Insurance Law
RA 3591 as amended, Philippine Deposit
Insurance Corporation Law
Code of Commerce
Suppletory:
Civil Code
General Principles prevailing in the State
of California and New York

History: Evolution of laws which primarily

governed the business of insurance in the
Philippines

obsolete and/or impractical in the

Philippines necessitating its revision.2
Presidential Decree No. 1141 - amended
section 249 and Title 15 (Proceedings
upon insolvency) of PD 612.3
Presidential Decree No. 1280 - amended
Title 17, Chapter III, (Mutualization of
stock life insurance companies) of PD
612.4
Presidential Decree No. 1460, the
Insurance Code of 1978(June 11,
1978) consolidated and codified
insurance laws embodied in PD 612
and various laws, presidential
decrees and executive orders.5
Presidential Decree No. 1814 (January
16, 1981) amended sections of PD
1460 to ensure the due execution and
performance of insurance contracts
in the interest of the national
economy during that time and assure
reasonable insurance service for the
protection of interests of policy
holders and the public.6
Batas Pambansa Blg. 874 (June 12,
1985) amended Sections 27, 45,

Insurance Act (July 1, 1915) a verbatim

copy of the California Insurance Act,
except for some provisions taken from
the New York Insurance Law.1

2 Ibid

Presidential Decree No. 612, the Insurance

Code (December 18, 1974) substantial
number of its provisions was rendered

4 Presidential Degree No. 1280

3 Presidential Degree No. 1141

5 Dizon 2009
1 The Insurance Code of the
Philippines, Dizon 2009

6 Ibid

384 and 416 and inserted Section

180-A7
Republic Act 10607 (August 15, 2013 amended PD 1141, 1280, 1455,
1460, 1814 and 1981, and Batas
Pambansa blg. 874 (Revised
Government Insurance Act)8
Changes made by Republic Act 10607 9
By Chapter and title
1. For Chapter I, Title 1: Section 3 was
modified.
2. For Chapter I, Title 2: Section 6 was
modified.
3. For Chapter I, Title 3: Sections 11
and 12 were modified.
4. For Chapter I, Title 5: Section
45 was reverted to version prior to
amendment by Batas Pambansa 874.
5. For Chapter I, Title 6: Sections 50,
60, 64 and 65 were modified.
6. For Chapter I, Title 8: Section
77 was modified. A new Section
78 was added. The old Sections 78 to
80 were renumbered as Sections 79 to
81. The old Sections 81 and 82 was
modified and renumbered as Sections
7 Presidential Degree No. 874
8 Republic Act 10607
9
https://berneguerrero.wordpress.com/2
014/04/05/list-of-changes-in-thephilippine-insurance-code-pd612-vizra-10607/ April 5, 2014

82 and 83. A new Section 84 was

added.
7. For Chapter I, Title 9: The old
Sections 83 to 87 were renumbered as
Sections 85 to 89.
8. For Chapter I, Title 10: The old
Section 88 was modified and
renumbered as Section 90. The old
Sections 89 to 92 were renumbered as
Sections 91 to 94.
9. For Chapter I, Title 11: The old
Section 93 was renumbered as Section
95.
The old Section 94 was modified and
renumbered as Section 96.
10. For Chapter I, Title 12: The old
Sections 95 to 98 were renumbered as
Sections 97 to 100.
11. For Chapter II, Title 1, Subtitle 1-A:
The old Section 99 was modified and
renumbered as Section 101.
12. For Chapter II, Title 1, Subtitle 1-B:
The old Sections 100 to 106 were
renumbered as Sections 102 to 108.
13. For Chapter II, Title 1, Subtitle 1-C:
The old Sections 107 to 110 were
renumbered as Sections 109 to 112.
14. For Chapter II, Title 1, Subtitle 1-D:
The old Sections 111 to 112 were
renumbered as Sections 113 to 114.
15. For Chapter II, Title 1, Subtitle 1-E:
The old Sections 113 to 120 were
renumbered as Sections 115 to 122.
16. For Chapter II, Title 1, Subtitle 1-F:
The old Sections 121 to 126 were
renumbered as Sections 123 to 128.

17. For Chapter II, Title 1, Subtitle 1-G:

The old Sections 127 to 137 were
renumbered as Sections 129 to 141.
18. For Chapter II, Title 1, Subtitle 1-H:
The old Sections 140 to 155 were
renumbered as Sections 142 to 157.
19. For Chapter II, Title 1, Subtitle 1-I:
The old Sections 156 to 166 were
renumbered as Sections 158 to 168.
20. For Chapter II, Title 2: The old
Sections 167 to 171 were renumbered
as Sections 169 to 173. The old
Section 172 was modified and
renumbered as Section 174. The old
Section 173 was renumbered as
Section 175.
21. For Chapter II, Title 3: The old
Section 174 was modified and
renumbered as Section 176.
22. For Chapter II, Title 4: The old
Sections 175 to 178 were renumbered
as Sections 177 to 180.
23. For Chapter II, Title 5: The old
Sections 179 to 180 were modified
and renumbered as Sections 181 to
182. The old Section 180-A (as
inserted by Batas Pambansa 874) was
renumbered as Section 183. The old
Sections 181 to 183 were renumbered
as Sections 184 to 186.
24. Chapter II, Title 6 was added, along
with new Sections 187 and 188.
25. Chapter II-A was added, along
with new Section 189.
26. For Chapter III, Title 1: The old
Section 184 was modified and

renumbered as Section 190. The old

Section 185 was replaced and
renumbered as Section 191. The old
Sections 186 to 188 were modified
and renumbered as Section 192 to
194. The old Section 189 and 190
were renumbered as Sections 195 and
196. The old Sections 191 to 193 was
modified and renumbered as Sections
197 to 199.
27. For Chapter III, Title 2: The old
Sections 194 and 195 were modified
and renumbered as Sections 200 and
201.
28. For Chapter III, Title 3: The old
Section 196 was modified and
renumbered as Section 202. The old
Section 197 was renumbered as
Section 203.
29. For Chapter III, Title 4: The old
Sections 198 to 206 were modified
and renumbered as Sections 202 to
212. The old Section 207 was
renumbered as Section 213. The old
Section 208 was modified and
renumbered as Section 215. The old
Section 209 was renumbered as
Section 216.
30. For Chapter III, Title 5: The old
Sections 210 to 213 were modified
and renumbered as Sections 216 to
219. The old Section 214 was
renumbered as Section 220.
31. For Chapter III, Title 6: The old
Section 215 was modified and
renumbered as Section 221.

32. For Chapter III, Title 7: The old

Sections 216 to 218 were renumbered
as Sections 222 to 224. The old
Sections 219 to 221 were modified
and renumbered as Sections 225 to
227. The old Section 222 was
renumbered as Section 228.
33. For Chapter III, Title 8: The old
Section 223 was modified and
renumbered as Section 229. The old
Section 224 was renumbered as
Section 230. The old Section 228 was
modified and renumbered as Section
234.
34. For Chapter III, Title 9: The old
Sections 226 and 227 were
renumbered as Sections 232 and 233.
The old Section 228 was modified
and renumbered as Section 234. The
old Sections 229 and 230 were
renumbered as Section 235 and 236.
The old Section 231 was modified
and renumbered as Section 237.
35. For Chapter III, Title 10: The old
Sections 232 to 237 were renumbered
as Sections 238 to 243. The old
Section 238 was modified and
renumbered as Section 244. The old
Sections 239 and 240 were
renumbered as Section 245 and 246.
36. For Chapter III, Title 11: The old
Sections 241 to 243 were renumbered
as Sections 247 to 249. The old
Section 244 was modified and
renumbered as Section 250. A new
Section 251 was added.

37. For Chapter III, Title 12: The old

Sections 245 and 246 were
renumbered as Sections 252 and 253.
38. For Chapter III, Title 13: The old
Section 247 was modified and
renumbered as Section 254.
39. For Chapter III, Title 14: The old
Section 248 was modified and
renumbered as Section 255.
40. For Chapter III, Title 15: The old
Section 249 was modified and
renumbered as Section 256. The old
Section 250 was repealed. The old
Section 251 was modified and
renumbered as Section 257.
41. For Chapter III, Title 16: The old
Sections 252 to 261 were renumbered
as Sections 258 to 267.
42. For Chapter III, Title 17: The old
Section 262 was renumbered as
Section 268. The old Sections 263 to
267 were modified and renumbered as
Section 269 to 273. The old Section
268 was renumbered as Section 274.
The old Sections 269 and 269A were modified and renumbered as
Section 275 and 276. The old Section
270 was renumbered as Section 277.
The old Sections 271 and 272 were
modified and renumbered as Section
278 and 279. A new Section 280 was
added.
43. For Chapter III, Title 18: The old
Section 273 was renumbered as
Section 281. The old Section 274 was
modified and renumbered as Section

282. The old Section 275 was

renumbered as Section 283. The old
Sections 276 and 277 were modified
and renumbered as Sections 284 and
285. The old Section 278 was
renumbered as Section 286. The old
Section 279 was modified and
renumbered as Section 287.
44. For Chapter III, Title 19: The old
Sections 280 and 281 were modified
and renumbered as Sections 288 and
289.
45. For Chapter III, Title 20: The old
Sections 282 to 284 were modified
and renumbered as Sections 290 to
292. The old Sections 285 to 292 were
renumbered as Sections 293 to 300.
The old Sections 293 to 295 were
modified and renumbered as Sections
301 to 303. The old Sections 296 and
297 were renumbered as Sections 304
and 305. The old Section 298was
modified and renumbered as Section
306.
46. For Chapter IV, Title 1: The old
Section 299 was modified and
renumbered as Section 307. A new
Section 308 was added. The old
Section 300 was modified and
renumbered as Section 309. The old
Section 301 was renumbered as
Section 310. The old Sections 302
and 303 were modified and
renumbered as Sections 311 and 312.
The old Sections 304 and 305 were
renumbered as Sections 313 and 314.

The old Section 306 was modified

and renumbered as Section 315. The
old Sections 307 and 308 were
renumbered as Sections 316 and 317.
The old Section 309 was modified
and renumbered as Section 318.
47. For Chapter IV, Title 2: The old
Section 310 was renumbered as
Section 319. The old Section 311 was
modified and renumbered as Section
320. The old Section 312 was
renumbered as Section 321.
48. For Chapter IV, Title 3: The old
Sections 313 and 314 were
renumbered as Sections 322 and 323.
The old Section 315 was modified
and renumbered as Section 324. The
old Section 316 was renumbered as
Section 325. The old Section 317 was
modified and renumbered as Section
326.
49. For Chapter IV, Title 4: The old
Sections 318 to 321 were renumbered
as Sections 327 and 330. The old
Section 322 was modified and
renumbered as Section 331.
50. For Chapter IV, Title 5: The old
Sections 323 to 327 were renumbered
as Sections 332 to 336. The old
Section 328 was modified and
renumbered as Section 337. The old
Sections 329 to 334 were renumbered
as Sections 338 to 343.
51. For Chapter IV, Title 6: The old
Sections 335 to 338 were modified

and renumbered as Sections 344 to

347.
52. For Chapter IV, Title 7: The old
Sections 339 and 340 were
renumbered as Sections 348 and 349.
The old Section 341 was modified
and renumbered as Section 350. The
old Sections 342 to 350 were
renumbered as Sections 351 to 359.
The old Section 351 was modified
and renumbered as Section 360. The
old Sections 352 to 360 were
renumbered as Sections 361 to 369.
The old Section 361 was modified
and renumbered as Section 370. The
old Section 362 was renumbered as
Section 371. The old Section 363 was
modified and renumbered as Section
372.
53. For Chapter IV, Title 8: The old
Section 364 was modified and
renumbered as Section 373. A new
Section 374 was added.
54. Chapter IV, Title 9 was added,
along with new Sections 375 to 377.
55. For Chapter V: The old Section
365 was modified and renumbered as
Section 378. The old Section 366 was
renumbered as Section 379. The old
Section 367 was modified and
renumbered as Section 380. The old
Sections 368 to 372 were renumbered
as Sections 381 to 385.
56. For Chapter VI: The old Sections
373 to 382 were modified and
renumbered as Sections 386 to 395.

The old Sections 383 and 384 were

renumbered as Sections 396 and 397.
The old Section 385 was modified
and renumbered as Section 398. The
old Sections 386 and 387 were
renumbered as Sections 399 and 400.
The old Section 388 was modified
and renumbered as Section 401. The
old Section 389 was renumbered as
Section 402.
57. For Chapter VII, Title 1: The old
Section 390 was renumbered as
Section 403. The old Sections 391 to
392 were modified and renumbered as
Sections 404 and 405. The old
Sections 393 and 394 was renumbered
as Sections 406 and 407. The old
Sections 395 to 396 were modified
and renumbered as Sections 408 and
409. The old Sections 397 to 407 was
renumbered as Sections 410 to 420.
The old Sections 408 and 409were
modified and renumbered as Sections
421 and 422. A new Section 423 was
added.
58. For Chapter VII, Title 2: The old
Sections 410 to 412 were renumbered
as Sections 424 to 426. The old
Section 413 was modified and
renumbered as Section 427. A new
Section 428 was added.
59. Chapter VIII was added, along
with new Section 429.
60. Chapter IX was added, along
with new Sections 430 to 436.

61. For Chapter X (Formerly Chapter

VIII), Title 1: The old Sections 414 to
416 were modified and renumbered as
Sections 437 to 439.
62. For Chapter X (Formerly Chapter
VIII), Title 2: The old Sections 417 to
418 were modified and renumbered as
Sections 440 to 441.
63. For Miscellaneous Provisions:
The old Section 419 was modified
and renumbered as Section 442. The
old Sections 420 to 421 were
renumbered as Sections 443 and 444.
A new Section 445 was added.
The old Sections 422 to 424 were
modified and renumbered as Sections
446 to 448.
By Section references (Amendments and
renumbering)
For the purpose of referring to prior
literature, i.e. especially those subsequent to
the last amendment on 12 June 1985 (as per
BP 874), the following provisions were
modified (as to their content, whether
substantially or not):
Sections 3, 6, 11, 12, 45, 50, 60, 64, 65, 77,
81, 82, 88, 94, 99, 172, 174, 179, 180, 184,
185, 186, 187, 188, 191, 192, 193, 194, 195,
196, 198, 199, 200, 201, 202, 203, 204, 205,
206, 208, 210, 211, 212, 213, 215, 219, 220,
221, 223, 228, 231, 238, 244, 247, 248, 249,
251, 263, 264, 265, 266, 267, 269, 269-A,
271, 272, 274, 276, 277, 279, 280, 281, 282,
283, 284, 293, 294, 295, 298, 299, 300, 302,
303, 306, 309, 311, 315, 317, 322, 328, 335,

336, 337, 338, 341, 351, 361, 363, 364, 365,

367, 373, 374, 375, 376, 377, 378, 379, 380,
381, 382, 385, 388, 391, 392, 395, 396, 408,
409, 413, 414, 415 416, 417, 418, 419, 422,
423, and 424.
The current numbering of the old provisions
are as follows:
1.
2.

3.

4.

5.

6.

7.

The numbering for (Sections 1 to 77)

remained as is.
With the introduction of a new
Section 78, the numbers for former
sections 78 to 82 were adjusted by 1
(Sections 79 to 83).
With the introduction of a new
Section 84, the numbers for former
sections 83 to 180 were adjusted by 2
(Sections 85 to 182).
With the number for former section
180-A adjusted as (Section 183), the
numbers for former sections 181 to
183 were adjusted by 3 (Sections 184
to 186).
With the introduction of new
Sections 187 to 189, the numbers for
former sections 184 to 244 were
adjusted by 6 (Sections 190 to 250).
With the introduction of a new
Section 251, the numbers for former
sections 245 to 249 were adjusted by
7 (Sections 252 to 256).
With the repeal of the former Section
250, the numbers for former sections
251 to 269 were adjusted by 6
(Sections 257 to 275).

8.

With the number for former section

269-A adjusted as (Section 276), the
numbers for former sections 270 to
272 were adjusted by 7 (Sections 277
to 279)
9. With the introduction of a new
Section 280, the numbers for former
sections 273 to 299 were adjusted by
8 (Sections 281 to 307).
10. With the introduction of a new
Section 308, the numbers for former
sections 300 to 364 were adjusted by
9 (Sections 309 to 373).
11. With the introduction of new
Sections 374 to 377, the numbers for
former sections 365 to 409 were
adjusted by 13 (Sections 378 to 422).
12. With the introduction of a new
Section 423, the numbers for former
sections 410 to 413 were adjusted by
14 (Sections 424 to 427).
13. With the introduction of new
Sections 428 to 436, the numbers for
former sections 414 to 421 were
adjusted by 23 (Sections 437 to 444).
14. With the introduction of a new
Section 445, the numbers for former
sections 422 to 424 were adjusted by
24 (Sections 446 to 448).
* It referred to a revision of Presidential
Decree 612 and not 1460.

Contract of Insurance
an agreement whereby one undertakes for a
consideration to indemnify another against
loss, damage or liability arising from an
unknown or contingent event.10
Contract of Suretyship
an agreement whereby a party called the
surety guarantees the performance by
another called the principal or obligor of a n
obligation or undertaking in favour of a third
party called the oblige. It is an insurance
contract if made by a surety who or which,
as such, is doing an insurance business11.
Doing an insurance
business or transacting an insurance
business
A person is doing an insurance
business or transacting an insurance
business if he performs any of the following:
(1) Making or proposing to make, as
insurer, any insurance contract;
(2) Making or proposing to make, as
surety, any contract of suretyship as a
vocation and not as merely incidental
to any other legitimate business or
activity of the surety;
(3) Doing any kind of business, including
a reinsurance business, specifically
recognized as constituting the doing of
10 Ibid, Sec 2., par 2

A. Definitions
11 Ibid, Sec 175 and Sec 2., par 3

an insurance business within the

meaning of this Code;
(4) Doing or proposing to do any business
in substance equivalent to any of the
foregoing in a manner designed to
evade the provisions of this Code.12
Does absence of profit in making
insurance contracts, agreements or
transactions means non-engagement in an
insurance business or transacting an
insurance business?
No. The fact that no profit is derived from
the making of insurance contracts,
agreements or transactions or that no
separate or direct consideration is received
therefor, shall not be deemed conclusive to
show that the making thereof does not
constitute the doing or transacting of an
insurance business.13
Test to determine if a contract is a
contract of insurance
Nature of promise;
Act required to be performed;
Exact nature of the agreement in the light of
the occurrence, contingency, or
circumstances under which performance
becomes requisite
*it is not determined how the parties called
it14

12 Ibid, Sec. 2, par 4

13 Ibid, sec2, par 5

B. Essential elements of an insurance

contract15
Existence of an insurable interest;
Risk of loss on the insured;
Assumption of risks by the insurer;
Scheme to distribute loss among a large
group of persons bearing the same risks;
Payment of premiums by the insured

*Insurance contract must have all the

essential elements of a contract (consent,
object, cause)
C. Characteristics of an Insurance
Contract
Risk-distributing device distribution of
economic loss among those who are
subject to the same kind of risk
Contract of adhesion contract drafted by
one party and offered on a take-it-or leave
it basis, or which with little opportunity
for the offeree to bargain or alter the
provisions
Aleatory contract insurers obligation is
dependent on the happening of an
event,which is uncertain, or which occurs
at an indeterminate time.
14 43 Am Jur. 2d Insurance Sec 4
(1982)
15 Ibid, sec 2; sec 12-14; sec 51 par 9;
sec 77, Philmacare Health Systems,
Inc. vs CA, GR 125678, March 12,
2002, Gulf Resorts, Inc. vs Phil.
Charter Insurance Corp. GR 156167,
May 16, 2005, Dizon, 2009, Reviewer
on Commercial Law, Sundiang &
Aquino, 2013

 Contract of indemnity insurer promises

to make good on the loss of the insured, in
exception of life and accident insurance.
Uberrimae Fides Contract (principle of
utmost good faith) both parties are
expected to deal in good faith
Personal contract cannot be assigned, it
follows the insured and not the property
Executory and conditional contract
executed on the part of the insurer upon
payment of premium, and conditional
upon the loss caused by the peril insured
against

D. Essentials of a Valid Insurance

Contract16
There must be an offer and acceptance
There must be a consideration involved
(premiums)
Parties must have the legal capacity to enter
in a contract
The purpose of the contract must be lawful

The insurer steps into the shoes of the

insured so as to have the benefit of the
insureds rights and remedies against a third
party. As a normal incident of indemnity
insurance, once an insurance company pays
for the loss, such payment operates as an
equitable assignment to the insurer of the
property and all remedies which the insured
may have for the recovery thereof.19
Indemnity insurers subrogation rights

E. Perfection of an Insurance contract

An insurance contract is a consensual
contract and is therefore perfected the
moment there is a meeting of the minds with
respect to the object and the cause of
consideration.17 Insurance contracts follow
the cognition theory over manifestation
theory.
The mere submission of the application
without corresponding approval of the
policy does not result in the perfection of the
contract18. Application is merely an offer
made by the applicant/insured, and approval
of the application by the insurer constitutes
acceptance

F. Principle of subrogation in the business

of insurance
16 Dizon. 2009

Take over the remedies of the insured

against third persons in order to recover
the sums paid out by the insurer to the
insured and by which the insured would be
overcompensated
Recover from the insured up to the amount
which the insurer paid to the insured by
which the insured is overcompensated.
Suretys subrogation rights
Take over the claims and remedies the
creditor have over the debtor
Recover the sum paid to the creditor from
the debtor

G. Types of Insurance (the following are

non-exhaustive)
Life insurance/Life assurance

17 Sec 1315, 1318, and 1319 of the

Civil code
18 Great Pacific Life Assurance Corp.
vs. CA , 89 SCRA 543

19 ibid

Insurance on human lives and insurance

appertaining thereto or connected
therewith20
Marine insurance
Insurance against risks connected with
navigation to which a ship, a cargo,
freightage, profits or other insurable interest
in movable property may be exposed during
a certain voyage or fixed period of time.21

Compulsory Motor Vehicle Liability

Insurance
Compulsory insurance that provides
protection coverage that will answer for the
legal liability for losses & damages for
bodily injuries or property damage that may
be sutained by another arising from the use
and operation of a motor vehicle.24

Fire insurance
Insurance against loss by fire, lightning,
windstorm, tornado or earthquake and other
allied risks, when such risks are covered by
extension to fire insurance policies or under
separate policies.22
Casualty insurance

Suretyship
An insurance contract within the meaning of
the code if made by a surety who or which,
as such, is doing an insurance business25

Insurance covering loss or liability arising

from accident or mishap, excluding certain
types of loss which by law or custom are
considered as falling exclusively within the
scope of other types of insurance such as fire
or marine. It includes, but is not limited to,
employers liability insurance, motor vehicle
liability insurance, plate glass insurance,
burglary and theft insurance, personal
accident and health insurance as written by
non-life insurance companies, and other
substantially similar kinds of insurance23.

General rule: any risk that can be quantified

or known, can potentially be insured

20 RA 10607, Sec 181

24 Ibid, Sec 386

21 Ibid, Sec 101

25 Ibid, Sec 2

22 Ibid, Sec 169

26 Dizon, 2009

Exception: those contrary to law, morals,

public order, good customs or public policy
H.
Lending investors vs, Insurance Companies26
Cannot hold anyone
Underwriting of risks
harmless for loss,
is the prerogative of
23 Ibid, Sec 176

damage or liability for

compensation, nor
provide compensation
or indemnity for loss

insurers

Lending activities are

not circumscribed and
strictly regulated by the
state

Lending activities are

circumscribed and
strictly regulated by
the state

Not required by law to

possess and maintain
substantial legal
reserves

Required by law to
possess and maintain
substantial legal
reserves to meet their
obligations to policy
holders
WHAT MAY BE INSURED

No, under Sec 3 of the Insurance code, as

amended, the consent of the spouse is not
necessary for the validity of an insurance
policy taken out by a married person on his
or her life or that of his or her children.

Any contingent or unknown event, whether

past or future, which may damnify a person
having an insurable interest, or create a
liability against him, may be insured
against.27

The wife can procure a contract of insurance

without the consent of the husband so long
as the insurance is upon her life, her
children, and that of her husband. She could
also procure an insurance without the
consent of the husband for her exclusive
properties.28

Contingent or unknown event

As to communal property, consent is also

not necessary, but such shall be subject to
objection of the husband on valid, serious
and moral grounds. The premiums are
chargeable to the property. 29

An event which may or may not happen;

that which is unforeseen, undetermined, or
dependent on some future contingency.
Past or Future events
Events which happened, or will happen,
unknown to both insurer and insured. As to
Past events, the parties must also expressly
stipulate that a prior loss is insured by the
policy (lost or not lost clause)
Are fortuitous events a valid defence
against liability in an insurance contract?
No. insurance contract involves assumption
of risk, hence such defence cannot be raised.

What happens to the insurance policy

upon death of the original owner prior to
the occurrence of the risk insured against
over the life or health of another?
The insurance code as amended by RA
10607 provides that all rights, title and
interest in the policy of insurance taken out
by an original owner on the life or health of
the person insured shall automatically vest
in the latter upon the death of the original
owner, unless otherwise provided for in the
policy.
Can insurance be issued against the
drawing of any lottery?

Is consent of the spouse necessary for the

validity of an insurance policy?

28 Family code art 110, 111

27 Ibid, Sec 3 par 1

29 Ibid, Art 23, 94, 96

No. SEC. 4. Of the insurance code provides

that the law does not authorize an insurance
for or against the drawing of any lottery, or
for or against any chance or ticket in a
lottery drawing a prize.
Insurance vs. Gambling30
Protection from risk
Risk in itself
Common interest of Different interests
both parties (nonof the parties
occurrence of risk)
Loss and
Loss and gain
reimbursement
Spending is limited
Continuous
to the amount the
spending, buying
insurer will accept more risk than what
to insure. Loss is
one can afford to
limited to the
pay
amount of premium
Required existence
Creation of risk
of insurable interest
with no link to
personal and family
situation
Insured is a risk
Gambler is a risk
avoider
seeker

30 Dizon, 2009