GENERAL PROVISIONS

1. Mr. X is indebted to Mr. Y for the amount of P500,000. Mr.

Z undertakes to pay Mr. Y in case of insolvency of Mr. X. Is
this a contract of insurance?

2. Mr. X owed Mr. Y the amount of P500,000.00. Mr. Z binds

himself to become solidary liable with Mr. X. Is there I
contract of insurance?

3. St. Peter are selling coffins and funeral services to the

public. However, they likewise offer to the public that for a
monthly payment of P2,000.00 for five (5) years, they could
give free funeral services upon the death of the policyholder
or his or her assignee. Is St. Peter engaged in insurance
business?

4. Mr. Z, who is a mechanic, is accepting monthly payment

from her friends in exchange for free car services if their car
break down. Is he engaged in insurance business?

5. Mitsubishi Motors offered that in case of accident of the car

they sell, they would shoulder the repair and the driver
would be entitled P100,000.00. Is it engaged in insurance?

6. There were 1000 employees of the DOJ. They pooled their

monthly contribution of P100 and in case an employee dies,
a P100,000 death benefit will be given to his or her family.
Is it engaged in insurance business?

7. The employees of St. Paul decided to form a cooperative

where the members will pay P100 per month. The
employees could loan from the fund with minimal interest.
Likewise, the cooperative gives dental and medical benefits.
It is likewise provided that if an employee dies the family
will receive P100,000.00. Is it engaged in insurance
business?
 8. Mr. X gathered 10 of his friends and they agreed that in
case Cavaliers win each of them will pay him P1000.00 and
in case he loses, he would pay them P500 each. Are they
engage in insurance?

9. Mr. X, is a Chinese Citizen, and Mr. Y is a US Citizen. They

took a life insurance in the Philippines. Meanwhile, the
Philippines and US declared war against China. What is the
effect of the war to the life insurance taken by Mr. X and Mr.
Y? How about after the war?

10. Could a member of Maute group be insured?

11. Mr. X mortgaged his building to Mr. Y for P1,000,000.

The property is worth P1,500,000.00. Mr. X insured his
property for P1,000,000. It was lost due to fire.
a. Is Mr. Y entitled to the proceeds of P1,000,000.00?
b. If Mr. X assigned the insurance policy to Mr. Y, is Mr.
Y entitled to the proceeds?
i. How about if the property is insured up to
P1500,000. How much could Mr. Y received?
ii. How about if Mr. Y was at fault which led to the
occurrence of the fire, is Mr. Y still entitled?
iii. How about if the assignee made another contract
with the insurer with a newly imposed condition?

INSURABLE INTEREST – LIFE INSURANCE

12. Mr. X (Insured) takes an insurance on his own life and

designate his wife (assured) as beneficiary. Is the insurance
valid?
13. Mr. X (Insured) takes an insurance on his own life and
designate his girlfriend Y (assured) as beneficiary. Is the
insurance valid?
 14. Mr. X (Insured) takes an insurance on his own life and
designate his common-law wife (assured) as beneficiary. Is
the insurance valid?
15. Mr. X takes an insurance on the life of his wife and
designated himself as beneficiary. Is the insurance valid?
16. Mr. X takes an insurance on the life of his friend Mr. Y
and designate his friend Mr. Z as beneficiary. Is the
insurance valid?
17. Mr. Y is supporting the studies of Ms. Z who is not
related to him. Ms. Z takes an insurance in the life Mr. Y. Is
the insurance valid?
18. Mr. X owed Mr. Y the amount of P50,000.00. Mr. Y
takes an insurance to on the life of Mr. X to protect his
interest for the amount P100,000.00.
a. In case Mr. X dies, how much could he collect?
b. When Mr. X dies, the obligation has been settled
already. Can Mr. Y collect?
19. Mr. X owed Mr. Y the amount of P50,000.00. Mr. X
takes an insurance on his life and designates Mr. Y as
benificary. When Mr. X dies, the obligation has already been
paid. What will happened to the proceeds?
20. Mr. X takes an insurance on the life Mr. Y who owed
him P50,000.00 without his consent. Is it valid?
21. Mr. X takes an insurance on his own life and
designated his girlfriend Ms. Y as his beneficiary. When they
broke up, Mr. X designates his new girlfiend Mr. Z as
beneficiary. Could he do it?
INSURABLE INTEREST (Property)
22. Mr. X insured his house from fire. It is valued
P100,000.00. A fire broke out.
a. The amount of policy is P120,000.00 and he suffered a
total loss. How much could he recover?
b. The amount of policy is P80,000 and he suffered a
total loss. How much could he recover?
 c. The amount of policy is P120,000 and he suffered a
partial loss of P50,000.00. How much could he
recover?
d. How about if the amount of policy is not stated and the
same to be determinable after the loss?
23. Tell whether an insurable interest exist:
a. Mr. X insuring the property of his neighbour and
naming himself as the beneficiary. – no insurable
interest. What will happened to the premium paid?
b. Mr. X a buyer of a new machine insuring it before
delivery yet he did not paid yet the price.
c. Mr. X sold machines to Mr. Y and the same is unpaid.
In transit, Mr. X took an insurance for the machines.
d. A partner insuring the property of the partnership and
naming himself as the benificiary.
e. A stockholder insuring a corporate property. –
f. A farmer insuring the crops he is about to plant.
g. A mortgagee insuring the property mortgaged.
h. An unsecured creditor insuring the property of the
debtor who is alive.
i. A son, insuring the property of his father.
24. Mr. X insured a property from fire on June 1, 2017:
a. It was only in June 15, 2017 when he bought said
property. Is the insurance valid?
b. He bought the property on March 1, 2017 but he sold
it to Mr. Y on June 5, 2018. The fire broke out on June
6, 2018. Who is entitled to recover?
c. He bought the property on March 1, 2017 but he sold
it to Mr. Y on June 2, 2018. On June 8, 2018, he
bought it back from Mr. Y. The fire broke out on June
9, 2018. Who is entitled to recover?
25. On May 8, 2018, Mr. Y took a loan from Mr. X the
amount of P100,000.00 payable on June 5, 2018. Mr. X
took an insurance on the life of Mr. Y. On June 1, 2018, Mr.
Y settled his debt. On June 5, 2018, Mr. Y died. Is Mr. X
entitled to insurance?