Article 39p. 39

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

CHAPTER I The Contract of Insurance

TITLE 1 What May be Insured

SECTION

3.

Any

contingent

or

unknown

event,

whether past or future, which may damnify a person

having an 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 not necessary for the

validity of an insurance policy taken out by a married

person on his or her life or that of his or 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.

SECTION 4. The preceding section does not authorize

an insurance for or against the drawing of any lottery, or

for or against any chance or ticket in a lottery drawing a

prize.

SECTION 5. All kinds of insurance are subject to the

provisions of this chapter so far as the provisions can

apply.

TITLE 2 Parties to the Contract

SECTION

6.

Every

corporation,

partnership,

or

association,

duly

authorized

to

transact

insurance

business as elsewhere provided in this Code, may be an

insurer.

SECTION 7. Anyone except a public enemy may be

insured.

SECTION 8. Unless the policy otherwise provides,

where a mortgagor of property effects insurance in his

own name providing that the loss shall be payable to the

mortgagee,

or

assigns

a

policy

of

insurance

to

a

mortgagee, the insurance is deemed to be upon the

interest of the mortgagor, who does not cease to be a

party to the original contract, and any act of his, prior to

the loss, which would otherwise avoid the insurance, will

have the same effect, although the property is in the

hands of the mortgagee, but any act which, under the

contract

of

insurance,

is

to

be

performed

by

the

mortgagor, may be performed by the mortgagee therein

named, with the same effect as if it had been performed

by the mortgagor.

SECTION 9. If an insurer assents to the transfer of an

insurance from a mortgagor to a mortgagee, and, at the

time of his assent, imposes further obligations on the

assignee, making a new contract with him, the acts of the

mortgagor cannot affect the rights of said assignee.

TITLE 3 Insurable Interest

SECTION 10. Every person has an insurable interest in

the life and health:

(a) Of himself, of his spouse and of his children;

(b) Of any person on whom he depends wholly or in

part for education or support, or in whom he has a

pecuniary interest;

(c) Of any person under a legal obligation to him for

the payment of money, or respecting property or services,

of which death or illness might delay or prevent the

performance; and

(d) Of any person upon whose life any estate or

interest vested in him depends.

SECTION 11. The insured shall have the right to

change the beneficiary he designated in the policy,

unless he has expressly waived this right in said policy.

Notwithstanding the foregoing, in the event the insured

does not change the beneficiary during his lifetime, the

designation shall be deemed irrevocable.

SECTION 12. The interest of a beneficiary in a life

insurance policy shall be forfeited when the beneficiary is

the

principal,

accomplice,

or

accessory

in

willfully

bringing about the death of the insured. In such a case,

the share forfeited shall pass on to the other beneficiaries,

unless otherwise disqualified. In the absence of other

beneficiaries, the proceeds shall be paid in accordance

with the policy contract. If the policy contract is silent, the

proceeds shall be paid to the estate of the insured.

SECTION 13. Every interest in property, whether real or

personal, or any relation thereto, or liability in respect

thereof, of such nature that a contemplated peril might

directly damnify the insured, is an insurable interest.

SECTION 14. An insurable interest in property may

consist in:

(a) An existing interest;

(b) An inchoate interest founded on an existing

interest; or

(c) An expectancy, coupled with an existing interest in

that out of which the expectancy arises.

SECTION 15. A carrier or depository of any kind has an

insurable interest in a thing held by him as such, to the

extent of his liability but not to exceed the value thereof.

SECTION 16. A mere contingent or expectant interest

in any thing, not founded on an actual right to the thing,

nor upon any valid contract for it, is not insurable.

SECTION 17. The measure of an insurable interest in

property is the extent to which the insured might be

damnified by loss or injury thereof.

SECTION 18. No contract or policy of insurance on

property shall be enforceable except for the benefit of

some person having an insurable interest in the property

insured.

SECTION 19. An interest in property insured must exist

when the insurance takes effect, and when the loss

occurs, but need not exist in the meantime; and interest

in the life or health of a person insured must exist when

the insurance takes effect, but need not exist thereafter

or when the loss occurs.

SECTION 20. Except in the cases specified in the next

four sections, and in the cases of life, accident, and health

insurance, a change of interest in any part of a thing

insured unaccompanied by a corresponding change of

interest in the insurance, suspends the insurance to an

equivalent extent, until the interest in the thing and the

interest in the insurance are vested in the same person.

SECTION 21. A change of interest in a thing insured,

after the occurrence of an injury which results in a loss,

does not affect the right of the insured to indemnity for

the loss.

SECTION 22. A change of interest in one or more of

several distinct things, separately insured by one policy,

does not avoid the insurance as to the others.

SECTION

23.

A

change

of

interest,

by

will

or

succession, on the death of the insured, does not avoid an

insurance; and his interest in the insurance passes to the

person taking his interest in the thing insured.

SECTION 24. A transfer of interest by one of several

partners, joint owners, or owners in common, who are

jointly insured, to the others, does not avoid an insurance

even though it has been agreed that the insurance shall

cease upon an alienation of the thing insured.

SECTION 25. Every stipulation in a policy of insurance

for the payment of loss whether the person insured has

or has not any interest in the property insured, or that the

policy shall be received as proof of such interest, and

every policy executed by way of gaming or wagering, is

void.

© Compiled by RGL

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