Article 41p. 41

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

termination of the contract, a statement of the basis and

rates upon which the final premium is to be determined;

(d) The property or life insured;

(e) The interest of the insured in property insured, if

he is not the absolute owner thereof;

(f) The risks insured against; and

(g) The period during which the insurance is to

continue.

SECTION 52. Cover notes may be issued to bind

insurance temporarily pending the issuance of the policy.

Within sixty (60) days after issue of a cover note, a policy

shall be issued in lieu thereof, including within its terms

the identical insurance bound under the cover note and

the premium therefor.

Cover notes may be extended or renewed beyond

such sixty (60) days with the written approval of the

Commissioner if he determines that such extension is not

contrary to and is not for the purpose of violating any

provisions

of

this

Code.

The

Commissioner

may

promulgate

rules

and

regulations

governing

such

extensions for the purpose of preventing such violations

and may by such rules and regulations dispense with the

requirement of written approval by him in the case of

extension in compliance with such rules and regulations.

SECTION 53. The insurance proceeds shall be applied

exclusively to the proper interest of the person in whose

name or for whose benefit it is made unless otherwise

specified in the policy.

SECTION 54. When an insurance contract is executed

with an agent or trustee as the insured, the fact that his

principal or beneficiary is the real party in interest may be

indicated by describing the insured as agent or trustee, or

by other general words in the policy.

SECTION 55. To render an insurance effected by one

partner or part-owner, applicable to the interest, of his

co-partners or other part-owners, it is necessary that the

terms of the policy should be such as are applicable to

the joint or common interest.

SECTION 56. When the description of the insured in a

policy is so general that it may comprehend any person

or any class of persons, only he who can show that it was

intended to include him, can claim the benefit of the

policy.

SECTION 57. A policy may be so framed that it will

inure

to

the

benefit

of

whomsoever,

during

the

continuance of the risk, may become the owner of the

interest insured.

SECTION 58. The mere transfer of a thing insured

does not transfer the policy, but suspends it until the

same person becomes the owner of both the policy and

the thing insured.

SECTION

59.

A

policy

is

either open, valued or

running.

SECTION 60. An open policy is one in which the value

of the thing insured is not agreed upon, and the amount

of

the

insurance

merely

represents

the

insurer's

maximum liability. The value of such thing insured shall

be ascertained at the time of the loss.

SECTION 61. A valued policy is one which expresses on

its face an agreement that the thing insured shall be

valued at a specific sum.

SECTION

62.

A

running

policy

is

one

which

contemplates successive insurances, and which provides

that the object of the policy may be from time to time

defined, especially as to the subjects of insurance, by

additional statements or indorsements.

SECTION 63. A condition, stipulation, or agreement in

any

policy

of

insurance,

limiting

the

time

for

commencing an action thereunder to a period of less

than one (1) year from the time when the cause of action

accrues, is void.

SECTION 64. No policy of insurance other than life

shall be cancelled by the insurer except upon prior notice

thereof to the insured, and no notice of cancellation shall

be effective unless it is based on the occurrence, after the

effective date of the policy, of one or more of the

following:

(a) Nonpayment of premium;

(b) Conviction of a crime arising out of acts increasing

the hazard insured against;

(c) Discovery of fraud or material misrepresentation;

(d) Discovery of willful or reckless acts or omissions

increasing the hazard insured against;

(e) Physical changes in the property insured which

result in the property becoming uninsurable;

(f) Discovery of other insurance coverage that makes

the total insurance in excess of the value of the property

insured; or

(g) A determination by the Commissioner that the

continuation of the policy would violate or would place

the insurer in violation of this Code.

SECTION 65. All notices of cancellation mentioned in

the preceding section shall be in writing, mailed or

delivered to the named insured at the address shown in

the

policy,

or

to

his broker provided the broker is

authorized in writing by the policy owner to receive the

notice of cancellation on his behalf, and shall state:

(a) Which of the grounds set forth in Section 64 is

relied upon; and

(b) That, upon written request of the named insured,

the insurer will furnish the facts on which the cancellation

is based.

SECTION 66. In case of insurance other than life,

unless the insurer at least forty-five (45) days in advance

of the end of the policy period mails or delivers to the

named insured at the address shown in the policy notice

of its intention not to renew the policy or to condition its

renewal

upon

reduction

of

limits

or

elimination

of

coverages, the named insured shall be entitled to renew

the policy upon payment of the premium due on the

effective date of the renewal. Any policy written for a term

of less than one (1) year shall be considered as if written

for a term of one (1) year. Any policy written for a term

longer than one (1) year or any policy with no fixed

expiration date shall be considered as if written for

successive policy periods or terms of one (1) year.

TITLE 7 Warranties

SECTION 67. A warranty is either expressed or implied.

SECTION 68. A warranty may relate to the past, the

present, the future, or to any or all of these.

SECTION 69. No particular form of words is necessary

to create a warranty.

SECTION 70. Without prejudice to Section 51, every

express warranty, made at or before the execution of a

policy, must be contained in the policy itself, or in another

instrument signed by the insured and referred to in the

policy as making a part of it.

SECTION 71. A statement in a policy, of a matter

relating to the person or thing insured, or to the risk, as

fact, is an express warranty thereof.

SECTION 72. A statement in a policy, which imparts

that it is intended to do or not to do a thing which

materially affects the risk, is a warranty that such act or

omission shall take place.

SECTION 73. When, before the time arrives for the

performance of a warranty relating to the future, a loss

insured

against

happens,

or

performance

becomes

unlawful at the place of the contract, or impossible, the

omission to fulfill the warranty does not avoid the policy.

© Compiled by RGL

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