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COURT OF APPEALS
July 2, 2014 Leave a comment
FACTS:
Ernani Trinos applied for a health care coverage with Philamcare Health Systems, Inc. To the
question Have you or any of your family members ever consulted or been treated for high blood
pressure, heart trouble, diabetes, cancer, liver disease, asthma or peptic ulcer?, Ernani answered
No. Under the agreement, Ernani is entitled to avail of hospitalization benefits and out-patient
benefits. The coverage was approved for a period of one year from March 1, 1988 to March 1,
1989. The agreement was however extended yearly until June 1, 1990 which increased the amount
of coverage to a maximum sum of P75,000 per disability.
During the period of said coverage, Ernani suffered a heart attack and was confined at the Manila
Medical Center (MMC) for one month. While in the hospital, his wife Julita tried to claim the benefits
under the health care agreement. However, the Philamcare denied her claim alleging that the
agreement was void because Ernani concealed his medical history. Doctors at the MMC allegedly
discovered at the time of Ernanis confinement that he was hypertensive, diabetic and asthmatic,
contrary to his answer in the application form. Thus, Julita paid for all the hospitalization expenses.
After Ernani was discharged from the MMC, he was attended by a physical therapist at home. Later,
he was admitted at the Chinese General Hospital. Due to financial difficulties, however, respondent
brought her husband home again. In the morning of April 13, 1990, Ernani had fever and was
feeling very weak. Respondent was constrained to bring him back to the Chinese General Hospital
where he died on the same day.
Julita filed an action for damages and reimbursement of her expenses plus moral damages
attorneys fees against Philamcare and its president, Dr. Benito Reverente. The Regional Trial court
or Manila rendered judgment in favor of Julita. On appeal, the decision of the trial court was
affirmed but deleted all awards for damages and absolved petitioner Reverente. Hence, this
petition for review raising the primary argument that a health care agreement is not an insurance
contract; hence the incontestability clause under the Insurance Code does not apply.
ISSUES:
(1) Whether or not the health care agreement is not an insurance contract
HELD:
(1)YES. Section2 (1)of the Insurance Code defines a contract of insurance as an agreement
whereby one undertakes for a consideration to indemnify another against loss, damage, or liability
arising from an unknown or contingent event.
Section 3 of the Insurance Code states that any contingent or unknown event, whether past or
future, which my damnify a person having an insurable against him, may be insured against. Every
person has an insurable interest in the life and health of himself.
Section 10 provides that every person has an insurable interest in the life and health (1) of himself,
of his spouse and of his children.
The insurable interest of respondents husband in obtaining the health care agreement was his own
health. The health care agreement was in the nature of non-life insurance, which is primarily a
contract of indemnity. Once the member incurs hospital, medical or any other expense arising from
sickness, injury or other stipulated contingent, the health care provider must pay for the same to
the extent agreed upon under the contract.
(2) NO. The answer assailed by petitioner was in response to the question relating to the medical
history of the applicant. This largely depends on opinion rather than fact, especially coming from
respondents husband who was not a medical doctor. Where matters of opinion or judgment are
called for answers made I good faith and without intent to deceive will not avoid a policy even
though they are untrue.
The fraudulent intent on the part of the insured must be established to warrant rescission of the
insurance contract. Concealment as a defense for the health care provider or insurer to avoid
liability is an affirmative defense and the duty to establish such defense by satisfactory and
convincing evidence rests upon the provider or insurer. In any case, with or without the authority to
investigate, petitioner is liable for claims made under the contract. Having assumed a responsibility
under the agreement, petitioner is bound to answer to the extent agreed upon. In the end, the
liability of the health care provider attaches once the member is hospitalized for the disease or
injury covered by the agreement or wherever he avails of the covered benefits which he has
prepaid.
Being a contract of adhesion, the terms of an insurance contract are to be construed strictly
against the party which prepared the contract the insurer. By reason of the exclusive control of
the insurance company over the terms and phraseology of the insurance contract, ambiguity must
be strictly interpreted against the insurer and liberally in favor of the insured, especially to avoid
forfeiture. This is equally applicable to Health Care Agreements.
Lessons Applicable:
Elements (Insurance)
FACTS:
Ernani Trinos, deceased husband of Julita Trinos, applied for a health care
diabetes, cancer, liver disease, asthma or peptic ulcer? (If Yes, give details). - NO
the application was approved for a period of one year from March 1,
1988 to March 1, 1989. Accordingly, he was issued Health Care Agreement No.
P010194
Under the agreement, respondents husband was entitled to
per disability.
During the period of his coverage, Ernani suffered a heart attack and was
confined at the Manila Medical Center (MMC) for 1 month beginning March 9,
1990.
While her husband was in the hospital, Julina Trinos tried to claim the
July 24, 1990: She brought action for damages against Philamcare Health
CA: affirmed the decision of RTC but deleted all awards for damages and
absolved Philamcare
Philamcare brought an instant petition for review arguing that:
2.
W/N the spouse being "not" legal wife can claim - YES
insurance is taken on his own life and the beneficiary appointed is the
minor's estate or the minor's father, mother, husband, wife, child, brother or
sister.
The married woman or the minor herein allowed to take out an insurance
policy may exercise all the rights and privileges of an owner under a policy.
All rights, title and interest in the policy of insurance taken out by an original
owner on the life or health of a minor shall automatically vest in the minor
upon the death of the original owner, unless otherwise provided for in the
policy.
from sickness, injury or other stipulated contingent, the health care provider
must pay for the same to the extent agreed upon under the contract.
The answer in response to the question relating to the medical history of the
applicant largely depends on opinion rather than fact, especially coming from
should construe them in such a way as to preclude the insurer from non
construed strictly against the party which prepared the contract - the insurer.
(U)nder the title Claim procedures of expenses, the defendant Philamcare
Health Systems Inc. had twelve months from the date of issuance of the
Agreement within which to contest the membership of the patient if he
had previous ailment of asthma, and six months from the issuance of the
agreement if the patient was sick of diabetes or hypertension. The periods
not the legal wife (deceased was previously married to another woman who
was still alive)
health care agreement is in the nature of a contract of indemnity.
payment should be made to the party who incurred the
expenses