Insurance VIII - IX
Distinguish Double Insurance vs. Reinsurance
1. DI involves the same interest; R is an insurance of different interests; 2. In DI, the insurer remains in such capacity; In R, insurer becomes an insured in relation to reinsurer; 3. In DI, insured in the 1st contract is a party in interest in the 2nd contract; In R, the original insured has no interest in reinsurance contract; 4. In DI, subject of insurance is property; In R, subject of insurance is the original insurer's risk; 5. In DI, insured has to give his consent; In R, consent of original insured is not necessary.
What is the nature of reinsurance?
1. Separate from original insurance policy 2. Contract of Indemnity against liability 3. Insurable interest in requirement applicable 4. Contract based on the original policy 5. Subrogation applicable
Requisites of double insurance
1. Subject matter is the same 2. Two or more insurers insuring separately 3. Risk or peril insured against is the same 4. Interest insured is the same 5. Person insured is the same
What is the rule when the insured in a policy other than life is over insured by double insurance?
1. The insured, unless the policy otherwise provides, may claim payment from the insurers in such order as he may select, up to the amount which the insurers are severally liable under their respective contracts. 2. Where the policy under which the insured claims is a VALUED POLICY, any sum received by him under any policy shall be deducted from the value of the policy without regard to the actual value of the subject matter insured. 3. Where the policy under which the insured claims is an UNVALUED POLICY, any sum received by him under any policy shall be deducted against the full insurable value, for any sum received by him under any policy. 4. Where the insured receives any sum in excess of the valuation in the case of valued policies, or of the insurable value in the case of unvalued policies, he must hold such sum in trust for the insurers, according to their right of contribution among themselves. 5. Each insurer and the other insurers, to contribute ratably to the loss in proportion to the amount for which he is liable under his contract (IC Sec 96)
What is reinsurance?
It is a contract through which the insurer procures a third person to insure him against loss or liability by reason of such original insurance.
Is there double insurance when two policies were both issued to the same subject matter, both cover the same peril insured against, if the two policies were issued to different entities?
NO (Malayan Insurance Co. V. Philippine First Insurance Co.)
TRUE OR FALSE: Reinsured has a specific obligation to disclose all representations and all the knowledge and information he possesses.
TRUE. This is in line with Section 98.
What is over-insurance?
Whenever the insured obtains a policy in an amount exceeding the value of his insurable interest.
What is Double Insurance? (IC, Sec. 95)
this exists where the same person is insured by several insurers separately, in respect to the same subject and interest
TRUE OR FALSE: Double insurance is prohibited by law
FALSE. Double insurance is not contrary to law.