INSURANCE LAW

First Activity
October 09, 2020

Instructions:

a. Answer the questions legibly, clearly, and concisely.

Best of Luck!

(1) Cristor, a married man, obtained a life insurance policy designating his common-law
wife, Carponio, as beneficiary. In the policy, Carponia was described as the wife of
Cristor. Sometime thereafter, Cristor died as his head was hit by a falling branch of
a tree. Carponia then filed with the insurer a claim for the proceeds of the policy.
On the other hand, the widow of Cristor, Pascuala, contested the right of Carponia
to receive the proceeds of the policy.
Who is entitled to recover the proceeds of the policy? Explain.

(2) Primitivo has been insured with BF Insurance Corporation for P100,000.00. Having
been convinced by the insurance agent of BF Insurance Corporation, Primitivo
applied for additional coverage of P200,000.00 with the same insurance company
and immediately paid part of the premium for such additional coverage. The
application was forwarded to the office of BF Insurance Corporation at Quezon for
transmittal to its head office in Manila. Perez died before his application was brought
to the Manila Office. Without knowing of his death, BF Insurance Corporation
approved the application for the additional insurance coverage. When the
beneficiary filed a claim with the insurer, the latter only paid the coverage for the
original insurance but refused to pay on the additional coverage on the ground that
the contract was not perfected.
Was the insurance contract on the additional insurance coverage perfected? Explain
your answer.

(3) Bank of Cebu obtained insurance against theft and robbery from Lucky Insurance.
Excluded in the policy is “any loss caused by any dishonest, fraudulent or criminal act of
the insured or any officer, employee, partner, director, trustee or authorized representative.”
While in the process of transferring money from its Cebu Branch to its Mandaue
 Branch, the armored car carrying the money was robbed. During the investigation it
was found that among the perpetrators of the crime were the driver of the armored
car and the escort security guard. The insured claims that there is no employee-
employer relationship with both driver and security guard as they were merely
assigned by separate manning agencies to the insured.

Can the insured recover from the loss? Please explain.

(4) Memorial Gardens obtained a group life policy with P Insurance Inc., wherein clients
of Memorial Gardens who purchased burial lots on installment would be insured by
P Insurance Inc. Insurance coverage is equivalent to the remaining balance of the
purchased burial lots. Provision on its effectivity date, ambiguously states that:

“EFFECTIVE DATE OF BENEFIT.

The insurance of any eligible Lot Purchaser shall be effective on the date he contracts a loan
with the Assured. However, there shall be no insurance if the application of the Lot Purchaser
is not approved by the Company.”

Memorial Gardens was further required to submit a list of new lot purchasers
together with their respective application forms and statement of their unpaid
balances. On September 20, 2019 a list of new buyers including their insurable
balances was sent, yet it was not acted upon by P Insurance, Inc.. One of those listed
was a certain JC, who died a few months later on December 20, 2019 leaving an
insurable balance of P100,000.00. When Memorial Gardens demanded payment
from P Insurance Inc., it was denied on the ground that no application was submitted
prior to the death of JC.

Was there a valid insurance contract to cover the life of JC? Please explain your
answer.

(5) Black Marine Services procured a protection and indemnity for its vessels from
Steamship Mutual Association (SMA), which issued to the former a Certificate of
Entry and Acceptance. SMA is a Protection and Indemnity Club, composed of
shipowners who band together to provide mutual protection against liability
incidental to ship owning. SMA has no license to do insurance business in the
Philippines and it claims that it does not derive any profits from its operation.

Is SMA doing an insurance business or transacting an insurance business? Explain.

(6) Smithkline Nebraska, USA shipped 109 cartons of vaccines to Smithkline Manila,
Philippines. The shipment was stamped marked on its face “REFRIGERATE
WHEN NOT IN TRANSIT” and “PERISHABLE.” The shipment was insured with
XYZ Insurance Corp. Upon arrival in Manila, it was found out that the vaccines had
gone bad because it was merely stored in an airconditioned room instead of a
refrigerated room. As a result, Smithkline Manila abandoned the unusable shipment,
declaring total loss and filed a claim with XYZ Insurance Corp., which recompense
them for the whole insured amount. XYZ Insurance Corp. then filed a case against
the shipping company and the warehouse company imputing negligence in the
handling and storage of the cargo.
 Does XYZ Insurance Corp have personality to sue the shipping company and the
warehouse company? Explain

(7) Mr. Trump insured his Mercedes Benz 2-door with XYZ Insurance Corp. On January
18, 2020, the insured vehicle was bumped and damaged by a truck owned by Ginebra
Corporation. Total damages were valued at Nine Thousand Five Hundred Pesos
(Php9,500.00). XYZ Insurance Corp paid Mr. Trump Five Thousand Pesos
(Php5,000.00) in amicable settlement. Mr. Trump also got compensation from
Ginebra Corporation in the amount of 4,500 and released the latter from all actions
and claims in relation to the incident by executing a waiver and quitclaim.

By virtue of its right of subrogation, can XYZ Insurance Corp. recover from Ginebra
Corporation the amount it had paid to Mr. Trump? Please Explain.

(8) Mr. Biden owns a resort and had all its properties insured with XYZ Insurance, Inc.
From 2000-2004, the risk of loss against earthquake shock was extended only to the
two (2) swimming pools using the phrase “item 5 – P100,000.00 – on the two swimming
pools only (against the peril of earthquake shock only).” The same phrase was used verbatim
for the subsequent policies in 2005 and 2006, the only difference being the
designation of the two (2) swimming pools as “item 3.” In all six policies, the same
premium of Two Hundred Pesos (Php200.00) was paid against earthquake shock.
While the policy was in force in 2006, an earthquake struck resulting in heavy
damage not only to the two (2) swimming pools, but also to the other insured
properties in the resort. Except for the two (2) swimming pools, XYZ Insurance, Inc.
denied compensation on the damage of the other insured properties claiming that it
is not covered under loss against earthquake shock. Taking a vigorous contrary stand,
Mr. Biden contends that pursuant to a rider, no qualifications were placed on the
scope of the earthquake shock coverage. Thus, it must cover all the insured
properties. Mr. Biden likewise stressed that all ambiguities in the contract of
insurance must be resolved in his favor being the insured.

Decide with reasons.