Philamlife v. Ansaldo - Jurisdiction of the Insurance Commissioner 234 SCRA 509 Facts: > Ramon M. Paterno sent a letter-complaint to the Insurance Commissioner allegi ng certain problems encountered by agents, supervisors, managers and public cons umers of the Philamlife as a result of certain practices by said company. > Commissioner requested petitioner Rodrigo de los Reyes, in his capacity as Ph ilamlife's president, to comment on respondent Paterno's letter. > The complaint prays that provisions on charges and fees stated in the Contrac t of Agency executed between Philamlife and its agents, as well as the implement ing provisions as published in the agents' handbook, agency bulletins and circul ars, be declared as null and void. He also asked that the amounts of such charge s and fees already deducted and collected by Philamlife in connection therewith be reimbursed to the agents, with interest at the prevailing rate reckoned from the date when they were deducted > Manuel Ortega, Philamlife's Senior Assistant Vice-President and Executive Ass istant to the President, asked that the Commissioner first rule on the questions of the jurisdiction of the Insurance Commissioner over the subject matter of th e letters-complaint and the legal standing of Paterno. > Insurance Commissioner set the case for hearing and sent subpoena to the offi cers of Philamlife. Ortega filed a motion to quash the subpoena alleging that t he Insurance company has no jurisdiction over the subject matter of the case and that there is no complaint sufficient in form and contents has been filed. > The motion to quash was denied. Issue: Whether or not the insurance commissioner had jurisdiction over the legality of the Contract of Agency between Philamlife and its agents. Held: No, it does not have jurisdiction. The general regulatory authority of the Insurance Commissioner is described in S ection 414 of the Insurance Code, to wit: "The Insurance Commissioner shall have the duty to see that all laws relating to insurance, insurance companies and other insurance matters, mutual benefit asso ciations and trusts for charitable uses are faithfully executed and to perform t he duties imposed upon him by this Code, . . . ." On the other hand, Section 415 provides: "In addition to the administrative sanctions provided elsewhere in this Code, th e Insurance Commissioner is hereby authorized, at his discretion, to impose upon insurance companies, their directors and/or officers and/or agents, for any wil lful failure or refusal to comply with, or violation of any provision of this Co de, or any order, instruction, regulation or ruling of the Insurance Commissione r, or any commission of irregularities, and/or conducting business in an unsafe or unsound manner as may be determined by the Insurance Commissioner, the follow ing: a) fines not in excess of five hundred pesos a day; and b) suspension, or after due hearing, removal of directors and/or officers and/or agents." A plain reading of the above-quoted provisions show that the Insurance Commissio ner has the authority to regulate the business of insurance, which is defined as follows: "(2) The term 'doing an insurance business' or 'transacting an insuranc e business,' within the meaning of this Code, shall include (a) making or propos ing to make, as insurer, any insurance contract; (b) making, or proposing to mak e, as surety, any contract of suretyship as a vocation and not as merely inciden tal of the surety; (c) doing any kind of business, including a reinsurance busin

ess, specifically recognized as constituting the doing of an insurance business within the meaning of this Code; (d) doing or proposing to do any business in su bstance equivalent to any of the foregoing in a manner designed to evade the pro visions of this Code. (Insurance Code, Sec. 2 [2]) Since the contract of agency entered into between Philamlife and its agents is n ot included within the meaning of an insurance business, Section 2 of the Insura nce Code cannot be invoked to give jurisdiction over the same to the Insurance C ommissioner. Expressio unius est exclusio alterius. Development Bank of the Philippines v CA 231 SCRA 370 March 21, 1994 Facts: Juan B. Dans, together with his family applied for a loan of P500,000 with DBP. As principal mortgagor, Dans, then 76 years of age was advised by DBP to obtain a mortgage redemption insurance (MRI) with DBP MRI pool. A loan in the reduced amount was approved and released by DBP. From the proceeds of the loan, DBP dedu cted the payment for the MRI premium. The MRI premium of Dans, less the DBP serv ice fee of 10%, was credited by DBP to the savings account of DBP MRI-Pool. Acco rdingly, the DBP MRI Pool was advised of the credit. Dans died of cardiac arrest. DBP MRI Pool notified DBP that Dans was not eligibl e for MRI coverage, being over the acceptance age limit of 60 years at the time of application. DBP apprised Candida Dans of the disapproval of her late husband s MRI application. DBP offered to refund the premium which the deceased had paid, but Candida Dans refused to accept the same demanding payment of the face value of the MRI or an amount equivalent of the loan. She, likewise, refused to accep t an ex gratia settlement which DBP later offered. Hence the case at bar. Issue: Whether or not the DBP MRI Pool should be held liable on the ground that the con tract was already perfected? Held: No, it is not liable. The power to approve MRI application is lodged with the DB P MRI Pool. The pool, however, did not approve the application. There is also no showing that it accepted the sum which DBP credited to its account with full kn owledge that it was payment for the premium. There was as a result no perfected contract of insurance hence the DBP MRI Pool cannot be held liable on a contract that does not exist In dealing with Dans, DBP was wearing 2 legal hats: the first as a lender and th e second as an insurance agent. As an insurance agent, DBP made Dans go through the motion of applying for said insurance, thereby leading him and his family to believe that they had already fulfilled all the requirements for the MRI and th at the issuance of their policy was forthcoming. DBP had full knowledge that the application was never going to be approved. The DBP is not authorized to accept applications for MRI when its clients are more than 60 years of age. Knowing al l the while that Dans was ineligible, DBP exceeded the scope of its authority wh en it accepted the application for MRI by collecting the insurance premium and d educting its agent s commission and service fee. Since the third person dealing wi th an agent is unaware of the limits of the authority conferred by the principal

on the agent and he has been deceived by the non-disclosure thereof by the agen t, then the latter is liable for damages to him. Insurance Law case digests SY 2010-2011 Estoppel due to insurer s inequitable cond uct FIELDMEN S INSURANCE CO., INC. vs. MERCEDES VDA. DE SONGCO G.R. No. L-24833, 2 3 September 1968 FACTS: Federico Songco, a man who was only able to finish grade 1, owned a private jeepney which he, through the inducement of Fieldmen s insuran ce agent, insured with the plaintiff company. The policy is a Common Carrier s Acc ident Insurance Policy. The insurance agent told Federico that whether his vehic le was an owner type or for passengers it could be insured because their company i s not owned by the Governent and that the Government has nothing to do with thei r company, hence, they could do what they please whenever they believe a vehicle is insurable. During the policy s covered period, the insured vehicle while being driven by Rodolfo, a duly licensed driver and son of Federico figured in a vehi cular accident resulting in the death of both father and son as well as physical injuries to the other passengers of the jeepney. The insurance company refused payment. ISSUE: Whether or not the insurance company is liable HELD: YES. Where inequitable conduct is shown by an insurance firm, it is estopped from enforcing forfeitures in its favor, in order to forestall fraud or imposition on the insur ed. After petitioner Fieldmen s Insurance Co., Inc. had led the insured Federico So ngco to believe that he could qualify under the common carrier liability insuran ce policy, and to enter into contract of insurance paying the premiums due, it c ould not, thereafter, in any litigation arising out of such representation, be p ermitted to change its stand to the detriment of the heirs of the insured. As es toppel is primarily based on the doctrine of good faith and the avoidance of har m that will befall the innocent party due to its injurious reliance, the failure to apply it in this case would result in a gross travesty of justice. That is a ll that needs be said insofar as the first alleged error of respondent Court of Appeals is concerned, petitioner being adamant in its far-from-reasonable plea t hat estoppels could not be invoked by the heirs of the insured as a bar to the a lleged breach of warranty and condition in the policy. It would Insurance Law case digests SY 2010-2011 now rely on the fact that the insured ow ned a private vehicle, not a common carrier, something which it knew all along w hen not once but twice its agent, no doubt without any objection in its part, ex erted the utmost pressure on the insured, a man of scant education, to enter int o such a contract. WHEREFORE, the decision of respondent Court of Appeals of Jul y 20, 1965, is affirmed in its entirety. Costs against petitioner Fieldmen s Insur ance Co., Inc.

Insurance Law case digests SY 2010-2011 Interpretation of insurance contracts SI MEON DEL ROSARIO vs. THE EQUITABLE INSURANCE and CASUALTY CO., INC. G.R. No. L-1 6215, June 29, 1963 8 SCRA 343 FACTS: The defendant insurance company issued a p ersonal accident policy on the life of Francisco del Rosario, herein plaintiff s s on, binding itself to pay the sum of P1,000.00 to P3,000.00 as indemnity for the death of the insured. In the said policy, for the different causes of death, di sability of the insured, there is a corresponding is a specific amount as indemn ity. As for death due to drowning, there was no specific amount, hence, an ambig uous provision. Later, Francisco died of drowning as he was forced to jump off t he motor launch on which he was riding on account of fire that broke out on the said vessel. Simeon then filed a claim for payment with defendant company which then paid him the sum of P1,000.00. However, Simeon s lawyer, informed the said co mpany that the amount was wrong. In turn, the defendant company referred the mat ter to the Insurance Commissioner, who rendered an opinion that the liability of the company was only P1,000.00. Hence, it refused to pay more than P1,00.00.A c omplaint for the recovery of the balance of P2,000.00 was instituted with the CF I of Rizal. ISSUE: Whether or not the amount paid is the correct indemnity HELD:

And so it has been generally held that the terms in an insurance policy, which a re ambiguous, equivocal or uncertain are to be construed strictly against, the in surer, and liberally in favor of the insured so as to effect the dominant purpos e of indemnity or payment to the insured, especially where a forfeiture is invol ved, and the reason for this rule is that the insured usually has no voice in the selection or arrangement of the words employed and that the language of the cont ract is selected with great care and deliberation by expert and legal advisers e mployed by, and acting exclusively in the interest of, the insurance company . Insurance Law case digests SY 2010-2011 Where two interpretations, equally fair, of languages used in an insurance policy may be made, that which allows the gre ater indemnity will prevail. At any event, the policy under consideration, cover s death or disability by accidental means, and the appellant insurance company a greed to pay P1,000.00 to P3,000.00 is indemnity for death of the insured. In vi ew of the conclusions reached, it would seem unnecessary to discuss the other is sued raised in the appeal. The judgment appealed from is hereby affirmed. Withou t costs