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PART FOUR PAYMENT OF PROCEEDS AND FILING OF CLAIMS

Life Insurance
General Rule: Paid immediately

upon maturity of the policy (death, survival, cessation or continuance of life)

Exceptions:

proceeds are payable in installments annuity

Life Insurance
If maturity is due to death
Proceeds

are paid within 60 days from presentation of the claim and proof of death

Delay = interest unless due to fraudulent

claim

Proof of death v. Notice of Death


What is required for payment of proceeds is

proof of death and NOT merely notice of death

Proof of death - death certificate

Illustration
A dies on November 1, 2007
The claim is presented and the death certificate is submitted to the insurer on December 1, 2007 Proceeds must be paid within 60 days from December 1, 2007 or until February 1, 2007.

Illustration
A dies on November 1, 2007

Claim is presented on December 1, 2007

60-day period to pay claims does not run until the

death certificate is submitted

Who gets benefits in life insurance?


General

rule: beneficiaries

designated

Exception: Facility of payment

clause EXCEPT in individual life

Facility of Payment Clause: Group Life


no designated beneficiary a third person incurs funeral or

other expenses incident to the last illness or death of insured


pay for expenses not exceeding

P500.00

Facility of Payment Clause: Industrial Life


If beneficiary does not surrender policy or is the estate of insured OR is legally incompetent payment may be made to

the executor or administrator of insured or any of insureds relative by blood or legal adoption or by marriage or any person who incurred expenses for maintenance, medical attention or burial

PAYMENT OF PROCEEDS: Non Life Insurance


Sec. 243 General Rule: proceeds shall be

paid within 30 days after proof of loss is received by insurer and ascertainment of loss is made
Ascertainment of loss made either by

agreement between parties or by arbitration

PAYMENT OF PROCEEDS: Non Life Insurance


If no ascertainment is made or can be had

within 60 days from receipt of proof of loss, insurer must pay within 90 days after receipt of proof Refusal to pay within period unless due to a fraudulent claim = interest

ILLUSTRATION
A presents proof of actual loss of

vessel and insurer ascertains amount of loss on March 1, 2007


Proceeds must be paid within 30

days after March 1, 2007 or until April 1, 2007. Otherwise, interest must be paid.

ILLUSTRATION

A presents proof of loss of vessel on

March 1, 2007 but parties cannot agree on amount of loss by May 1, 2007 (within 60 days).

Proceeds must be paid within 90 days

from March 1, 2007 or until June 1, 2007. Otherwise, interest will accrue.

Claiming under a motor vehicle liability insurance


File a written claim stating nature, extent and duration of accident As certified by physician Within 6 months Insurer ascertains truth And extent of claim After 6 months

Claim is waived

Parties dont agree

No fault Indemnity clause

Parties agree on extent of claim


Insurer pays within 5 days From agreement

No fault Indemnity Clause: Section 378


death or injury of 3rd party without necessity of proving

fault or negligence of any kind total indemnity person shall not P5,000. of one exceed

if

No fault Indemnity Clause: Section 378


Proof of loss must be submitted under

oath.

police report of accident ; and Death certificate and evidence to establish payee OR medical report and evidence of medical and hospital disbursement.

No fault Indemnity Clause: Section 378


Claim against one motor vehicle only
if

occupant of a vehicle, claim against insurance of vehicle otherwise, claim against offending vehicle

Effect of payment under no fault indemnity clause


Claimant is not required to give a quitclaim

Claimant can still sue as to balance of claim

PRESCRIPTIVE PERIOD: 1 year from denial of the

claim (Sec. 384)

Vda de Gabriel v. Court of Appeals

If written notice of claim is filed beyond the 6-month

period = claim is deemed waived

If action is filed beyond one-year prescriptive period =

the right of action shall prescribe

Reasonable Delay in Payment


delay due to investigation to ascertain the

truth of reports that insured was not insurable at time of application (Chuy v. Philamlife)
delay caused by determination of actual

beneficiary and claims of creditors (RCBC v. CA)

Preliminary Proof of Loss ( Section 89 )


best evidence which insured has

not evidence in ordinary courts purpose : Apprise insurer of loss and make proper investigation while evidence is still fresh and to prevent further loss

Notice of Loss in Fire Insurance ( Sec. 88 )

must

be given without unnecessary delay

otherwise, the insurer is exonerated

Subrogation

when insurer pays for the loss payment operates

as an equitable assignment to the insurer all remedies which insured may have for the recovery

subrogation is limited to the amount recoverable by the insured

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