Article 40p. 40

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

TITLE 4 Concealment

SECTION 26. A neglect to communicate that which a

party knows and ought to communicate, is called a

concealment.

SECTION 27. A concealment whether intentional or

unintentional entitles the injured party to rescind a

contract of insurance.

SECTION 28. Each party to a contract of insurance

must communicate to the other, in good faith, all facts

within his knowledge which are material to the contract

and as to which he makes no warranty, and which the

other has not the means of ascertaining.

SECTION 29. An intentional and fraudulent omission,

on the part of one insured, to communicate information

of matters proving or tending to prove the falsity of a

warranty, entitles the insurer to rescind.

SECTION 30. Neither party to a contract of insurance

is bound to communicate information of the matters

following, except in answer to the inquiries of the other:

(a) Those which the other knows;

(b) Those which, in the exercise of ordinary care, the

other ought to know, and of which the former has no

reason to suppose him ignorant;

(c) Those of which the other waives communication;

(d) Those which prove or tend to prove the existence

of a risk excluded by a warranty, and which are not

otherwise material; and

(e) Those which relate to a risk excepted from the

policy and which are not otherwise material.

SECTION 31. Materiality is to be determined not by the

event,

but

solely

by

the

probable

and

reasonable

influence of the facts upon the party to whom the

communication is due, in forming his estimate of the

disadvantages of the proposed contract, or in making his

inquiries.

SECTION 32. Each party to a contract of insurance is

bound to know all the general causes which are open to

his inquiry, equally with that of the other, and which may

affect the political or material perils contemplated; and all

general usages of trade.

SECTION 33. The right to information of material facts

may be waived, either by the terms of insurance or by

neglect to make inquiry as to such facts, where they are

distinctly implied in other facts of which information is

communicated.

SECTION 34. Information of the nature or amount of

the interest of one insured need not be communicated

unless in answer to an inquiry, except as prescribed by

Section 51.

SECTION 35. Neither party to a contract of insurance

is bound to communicate, even upon inquiry, information

of his own judgment upon the matters in question.

TITLE 5 Representation

SECTION 36. A representation may be oral or written.

SECTION 37. A representation may be made at the

time of, or before, issuance of the policy.

SECTION 38. The language of a representation is to be

interpreted

by

the

same

rules

as

the

language of

contracts in general.

SECTION 39. A representation as to the future is to be

deemed a promise, unless it appears that it was merely a

statement of belief or expectation.

SECTION

40. A representation cannot qualify an

express provision in a contract of insurance, but it may

qualify an implied warranty.

SECTION 41. A representation may be altered or

withdrawn before the insurance is effected, but not

afterwards.

SECTION 42. A representation must be presumed to

refer to the date on which the contract goes into effect.

SECTION 43. When a person insured has no personal

knowledge

of

a

fact,

he

may

nevertheless

repeat

information which he has upon the subject, and which he

believes to be true, with the explanation that he does so

on the information of others; or he may submit the

information, in its whole extent, to the insurer; and in

neither case is he responsible for its truth, unless it

proceeds from an agent of the insured, whose duty it is to

give the information.

SECTION 44. A representation is to be deemed false

when the facts fail to correspond with its assertions or

stipulations.

SECTION 45. If a representation is false in a material

point, whether affirmative or promissory, the injured

party is entitled to rescind the contract from the time

when the representation becomes false.

SECTION 46. The materiality of a representation is

determined by the same rules as the materiality of a

concealment.

SECTION 47. The provisions of this chapter apply as

well to a modification of a contract of insurance as to its

original formation.

SECTION 48. Whenever a right to rescind a contract

of insurance is given to the insurer by any provision of this

chapter, such right must be exercised previous to the

commencement of an action on the contract.

After a policy of life insurance made payable on the

death of the insured shall have been in force during the

lifetime of the insured for a period of two (2) years from

the date of its issue or of its last reinstatement, the insurer

cannot prove that the policy is void ab initio or is

rescindable by reason of the fraudulent concealment or

misrepresentation of the insured or his agent.

TITLE 6 The Policy

SECTION 49. The written instrument in which a

contract of insurance is set forth, is called a policy of

insurance.

SECTION 50. The policy shall be in printed form which

may contain blank spaces; and any word, phrase, clause,

mark, sign, symbol, signature, number, or word necessary

to complete the contract of insurance shall be written on

the blank spaces provided therein.

Any

rider,

clause,

warranty

or

endorsement

purporting to be part of the contract of insurance and

which is pasted or attached to said policy is not binding

on the insured, unless the descriptive title or name of the

rider, clause, warranty or endorsement is also mentioned

and written on the blank spaces provided in the policy.

Unless applied for by the insured or owner, any rider,

clause, warranty or endorsement issued after the original

policy shall be countersigned by the insured or owner,

which countersignature shall be taken as his agreement

to

the

contents

of

such

rider,

clause,

warranty

or

endorsement.

Notwithstanding the foregoing, the policy may be in

electronic form subject to the pertinent provisions of

Republic Act No. 8792 , otherwise known as the ' Electronic

Commerce Act ' and to such rules and regulations as may

be prescribed by the Commissioner.

SECTION 51. A policy of insurance must specify:

(a) The parties between whom the contract is made;

(b) The amount to be insured except in the cases of

open or running policies;

(c) The premium, or if the insurance is of a character

where the exact premium is only determinable upon the

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