Insurance

Dominador Awiten .

WHEN I took the Insurance Commission-administered examination (Saturday, Oct. 19), hopefully to become a licensed life insurance agent, some legal learning I had when I was a law student readily came to mind. 

Insurance is not a wagering or a gambling proposition, which is a transaction wholly dependent on chance. 

It is a contract to indemnify the insured for the happening of a contingency, an event that will come, only that its actual happening is not yet known. The contract is aleatory, one dependent on random occurrence of events and susceptible of statistical analysis for patterns.

Further, a person has no insurable interest on his mistress. Otherwise, the indiscretion which is not sanctioned by society nor by law may be legitimately rewarded.

The contract requires utmost good faith. 

In an insurance contract, there are the requirements of honest representation and non-concealment of a material fact or circumstance.

However, when there is a dispute by reason of the ambiguity or doubt as to the real meaning of an insurance contract, the rule is to resolve the ambiguity or doubt liberally in favor of the insured and strictly against the insurer.

In one instance, the insurance policy promises to indemnify for the death of the insured for bodily injury at a certain range of amounts, and specific amounts are mentioned. However, there is no mention of a specific amount for recovery for death by drowning, although it is a ground for recovery.

The court held that the ambiguity is to be interpreted in favor of the insured.

In another case, there was the insurer’s claim that the authorized driver clause excuses the insurer’s liability when the driver is not permitted in accordance with the licensing law or regulations. However, the driver, at the time of the incident, did not know how to read and write but was able to secure his driver’s license by bribing somebody in the issuing office.

The court held that a certification issued later by the issuing office that the license was procured in a dishonest manner could not overcome the legal presumption of the genuineness of the driver’s license in its issuance.

The authorized driver clause was also of no avail to the insurer when the car of the insured was deposited to the custody of a repair shop.  The shop’s employees took the car for a joyride, and they had an incident which caused extensive damage to the car.

Once more, the Supreme Court overruled the Insurance Commissioner and held that, if the authorized driver clause is inapplicable, the insurer was still liable under the “theft clause.”

The last amendment to the Insurance Code (originally Presidential Decree 612) under Republic Act No. 10607, signed into law on Aug. 15, 2013 was for the purpose to strengthen the Philippine insurance industry and re-align Philippine law with global developments in the insurance sector, according to Baker McKenzie in his September 22, 2014 article in Lexology, “a free, tailored, daily legal newsfeed service.”

Specifically, the amendment includes “the recognition of financial products such as bancassurance. Bancassurance, also known as cross-selling, is defined as the presentation and sale to bank customers by an insurance company of its insurance products within the premises of the head office of such bank.”

The aspiration to procure the agent’s license is because of that irresistibly compulsive vision of a life insurance company:  bigger, bolder, stronger.

In the 1943 novel (that was later rendered as a film) Double Indemnity, written by James M. Cain, there is another cautionary tale about infidelity as a motive for murder.

The story is about Walter, an insurance agent, who is consulted by Phyllis about accident insurance for her husband.  He sheds off his decency, and helps her kill the husband for the insurance money. The insurance company’s claim manager Barton Keyes becomes suspicious of them.  With each other developing a mutual distrust, both decide to kill their accomplice.  She shoots him first but he survives.  In the end, both of them get on board a steamship heading to Mexico.  Without their knowing, it is Keyes who arranges for their ostensible escape from justice.  With “nothing ahead of” them, they finally decide to commit suicide and they jump off the ship together.