Professional Documents
Culture Documents
1. Give the order of priority of LAWS governing e. Executory contract after payment of
insurance. premium
a. Insurance code
b. New civil code
Definitions:
c. Special laws
d. Decisions of the SC a. ALEATORY CONTRACT. One of the parties or
e. General principles prevailing on the subject both reciprocally bind themselves to give or
in the United States particularly in to do something in consideration of what
California the other shall give or to do upon the
happening of an event which is uncertain at
an indeterminate time.
Note: The exact origin of insurance is unknown, b. CONDITIONAL CONTRACT. Insurance is
but some writers say that similar concept may conditional in the sense that the insurer is
be traced in ancient Greeks, romans, Chinese, not obliged to pay, unless the loss arises
Hebrews, and Christians for mutual benefit and from a specified peril.
assistance.
Note: In property, loss may or may not happen.
Modern insurance started with MARINE In life, death will definitely happen.
INSURANCE, and from there the law of
c. EXECUTORY UPON PAYMENT OF PREMIUM.
insurance has gradually taken form, or kind of
Executed on the part of the insured upon
risk seems to be covered.
payment of premiums, and wholly
executory on the part of the insurer.
d. PERSONAL CONTRACT. (self-explanatory)
2. Define Contract of Insurance. ex. A insured his house from fire. A sold the
house to B. Can be recover from the
An agreement whereby one undertakes for a insurance company? No. Because
consideration to indemnify another against Insurance contract is personal. The
loss, damage or liability arising from an insurance taken by one person will not
unknown or contingent event. apply to the interest of another person in
the same property insured. The assignment
Note: The requisites of a CONTRACT are: a) or conveyance of the property insured does
Consent; b) Objects; c) Consideration not transfer the insurance, and instead the
policy is suspended.
Note: a contract of insurance must be assented e. CONTRACT OF INDEMNITY
to by both parties. So long as an application
has not been accepted, it is merely an offer or 5. How do we know if a contract is an insurance
proposal to make a contract. There must be contract?
meeting of minds of the parties, and the
premium on the policy must be paid before the The description of the agreement controls, NOT
contract can be valid and binding. The insurer’s the designation.
acceptance is manifested when it issues a
corresponding policy to the applicant. We need to look on the nature of the promise,
the act required, exact nature of the agreement
in light of the occurrence, contingency, or
3. What are the elements of CONTRACT OF circumstance under which the performance
INSURANCE? becomes requisite.
a. Payment of premium
b. Assumption of risk
6. Define premium.
c. Insurable interest
d. Risk of loss
It is the consideration paid an insurer for
e. Scheme to distribute losses
undertaking to indemnify the insured against a
specified peril.
7. When can we consider a person to have an insurable 12. Define beneficiary and assured.
interest on the subject matter?
Beneficiary
A person is deemed to have an insurable - A person who is entitled to the benefit of a
interest in the subject matter insured, when he contract, that is, the one whom the insurance is
has a relation, connection, or concern in it, that payable or who is entitled to the proceeds of
he will derive pecuniary benefit or advantage the policy on the occurrence of the event
for its preservation. And will suffer pecuniary designated.
loss from its destruction or injury by the
happening of the event insured against. Assured
- The person whose application policy was
8. What is a suretyship? issued, who is the beneficiary and who pays the
premiums.
An agreement whereby a surety guarantees the
performance by the principal or obligor of an
obligation or undertaking in favor of an obligee.
13. PROVIDE THE RULES: SEC. 8
SEC. 3