Insurance Quiz #1

Quiz #1
Definition of Insurance Contract

An insurance contract is an agreement whereby one undertakes, for a
consideration, to indemnify another against loss, damage or liability arising from
a contingent or unknown event
Doing or Transacting an Insurance Business
(1) Making or proposing to make, as an insurer, any insurance contract
(2) Making or proposing to make, as a surety, any contract of suretyship as
a vocation and not merely incidental to the legitimate business or
activity of the surety
(3) Doing any kind of business, including a reinsurance business, specifically
recognized as constituting the doing of 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
Functions of Insurance
(1) Principal function: risk bearing
(2) Subsidiary functions
(a) Stimulates business enterprises
(b) Encourages business efficiency and enterprises
(c) Promotes loss-prevention
(d) Encourages savings
(e) Solves social problems
(3) Indirect functions
(a) Investment of funds
(b) Use of reserve funds
(c) Effect on prices
(d) As a basis of credit
What may be Insured
Sec 3: Any contingent or unknown event, whether past or future, which may
damnify a person having insurable interest, or create a liability against him, may
be insured against, subject to the provisions of this chapter.
The consent of the spouse is to necessary for the validity of an insurance policy
taken out by a married person on his/her life or that of his/her children.
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.
Insurance Taken by a Minor
(Deleted portion) Any minor of age 18 years or more, may, notwithstanding such
minority, contract for life, health, and accident insurance, with any insurance
company
duly authorized to do business in the Philippines, provided the
insurance is taken on his own life and the beneficiary appointed is the minors
estate or the minors father, mother, wife, child, brother or sister.
The married woman or the minor herein allowed to take out an insurance policy
may exercise all the rights and privileges of an owner under a policy.
Characteristics of an Insurance Contract
(1) Voluntary
(2) Aleatory
(3) Consensual
(4) Conditional
(5) Personal
(6) Contract of indemnity
(7) Property in legal contemplation
(8) Unilateral
Requisites of an Insurance Contract
(1) A subject matter in which the insured has an insurable interest
(2) Event or peril insured against which may be any (future) contingent or
unknown event, past or future, and a duration for the risk thereof
(3) A promise to pay or indemnify in a fixed or ascertainable amount
(4) A consideration for the promise, known as the premium
(5) A meeting of the minds of the parties upon all the foregoing essentials
(6) Competent to enter into a contract
(7) Not contrary to law
(8) Not contrary to public policy
Elements of Insurance Contract
(1) The insured possesses an interest capable of pecuniary estimation
(insurable interest)
(2) The insured is subject to a risk of loss through the destruction or
impairment of that interest by the happening of designated perils
(3) The insurer assumes the risk of loss
(4) Such assumption of risk is part of a general scheme to distribute actual
losses among a large group of persons bearing a similar risk
(5) As consideration for the insurers promise, the insured makes a ratable
contribution (premium)
Main Classification of Insurance
(1) Insurance against loss or impairment of property interest
(2) Insurance against loss of earning power due to death, accidental injury,
ill-health, sickness, old age, or any other disability
(3) Insurance to against contingent liability to make payment against
another
Insurable Interest
Sec 10: Every person has an insurable interests in the life and death:
(1) Of himself, his spouse and of his children

(2) Of any person on whom he depends wholly or in part for education or
support, or in whom he has a pecuniary interest
(3) Of any person under a legal obligation to him for the payment of money,
respecting property or services, of which death or illness might delay or
prevent the performance
(4) Of any person upon whose life any estate or interest vested in him
depends
General Classes of Life Policies
(1) Insurance upon ones life
(2) Insurance upon life of another
(3)
Classification of Insurance Contracts under the Code
(1) Life insurance contracts
(2) Non-life insurance contracts
(3) Contracts of suretyship or bonding
Types of
(1)
(2)
(3)
Life Insurance
Individual life
Group life
Industrial life
Types of
(1)
(2)
(3)
Non-Life Insurance
Marine
Fire
Casualty
Persons
(1)
(2)
(3)
Obliged to Support Each Other (Art 195 FC)

The spouses
Legitimate ascendants and descendants
Parents and their legitimate children and the legitimate or illegitimate
children of the latter
(4) Parents and their illegitimate children and the legitimate or illegitimate
children of the latter
(5) Legitimate brothers and sisters, whether of full or half-blood
Parties to an Insurance Contract

Sec 6: Every corporation, partnership, or association duly authorized to transact
insurance business as elsewhere provided in this Code, may be an insurer
Parties in a Contract of Insurance

(1) Insurer assumes or accepts the risk of loss and undertakes for a
consideration to indemnify the insured on the happening of a specified
contingent event
(2) Insured in whose favor the contract is operative and who is indemnified
against
Who may be an Insurer
(1) Foreign or domestic insurance company or corporation
(2) Individual, partnership or association
Capacity of Party Insured
(1) Natural person
(a) Must be competent to make a contract
(b) Must possess insurable interest in the subject of insurance
(c) Not a public enemy
(2) Juridical person may take out insurance on property owned by it
Lawyers Oath
I, (state your name), do solemnly swear that I will maintain my allegiance to the
Republic of the Philippines; I will support its Constitution and obey laws as well as
the lawful orders of the duly constituted authorities therein; I will do no falsehood,
nor consent to doing of any in court; I will not wittingly nor willingly promote or
sue any groundless, false, or unlawful suits, or give aid or consent to the same; I
will delay no man for money or malice, and will conduct myself as a lawyer
according to the best of my knowledge and discretion with all good fidelity as well
as to the courts as to my clients; and I impose upon myself this voluntary
obligations without any mental reservation or purpose of evasion. So help me
God.

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Quiz #1

Definition of Insurance Contract

(1) Of himself, his spouse and of his children

Obliged to Support Each Other (Art 195 FC)

Parties to an Insurance Contract

Parties in a Contract of Insurance

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