7. Sun Life v.

CA - Concealment in Insurance
245 SCRA 268 (1995)
Facts:
> On April 15, 1986, Bacani procured a life insurance contract for himself from Sun Life. He was issued a life insurance policy with double indemnity in case of accidental death. The designated beneficiary was his mother, Bernarda. > On June 26, 1987, the insured died in a plane crash. Bernarda Bacani filed a claim with Sun Life, seeking the benefits of the insurance. Sun Life conducted an investigation and its findings prompted it to reject the claim. > Sun Life discovered that 2 weeks prior to his application, Bacani was examined and confined at the Lung Center of the Philippines, where he was diagnosed for renal failure. During his confinement, the deceased was subjected to urinalysis, ultra-sonography and hematology tests. He did not reveal such fact in his application. > In its letter, Sun Life informed Berarda, that the insured did not disclosed material facts relevant to the issuance of the policy, thus rendering the contract of insurance voidable. A check representing the total premiums paid in the amount of P10,172.00 was attached to said letter. > Bernarda and her husband, filed an action for specific performance against Sun Life. RTC ruled for Bernarda holding that the facts concealed by the insured were made in good faith and under the belief that they need not be disclosed. Moreover, it held that the health history of the insured was immaterial since the insurance policy was "non-medical." CA affirmed.

Issue:
Whether or not the beneficiary can claim despite the concealment.

Held:
NOPE. Section 26 of the Insurance Code is explicit in requiring a party to a contract of insurance to 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 no means of ascertaining. 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 communication is due, in forming his estimate of the disadvantages of the proposed contract or in making his inquiries (The Insurance Code, Sec 31) The terms of the contract are clear. The insured is specifically required to disclose to the insurer matters relating to his health. The information which the insured failed to disclose were material and relevant to the approval and the issuance of the insurance policy. The matters concealed would have definitely affected petitioner's action on his application, either by approving it with the corresponding adjustment for a higher premium or rejecting the same. Moreover, a disclosure may have warranted a medical examination of the insured by petitioner in order for it to reasonably assess the risk involved in accepting the application. Thus, "good faith" is no defense in concealment. The insured's failure to disclose the fact that he was hospitalized for two weeks prior to filing his application for insurance, raises grave doubts about his bonafides. It appears that such concealment was deliberate on his part.

8. Edillon v. Manila Bankers Life Insurance Corp. Concealment

117 SCRA 187
Facts:
In Apr. 1969, Carmen Lapuz applied for insurance with Manila Bankers. In the application she stated the date of her birth as July 11, 1904 (around 64 yrs old). The policy was thereafter issued. Subsequently, in May 1969, Carmen died of a car accident. Her sister, as beneficiary claimed the proceeds of the insurance. Manila Bankers refused to pay because the certificate of insurance contained a provision excluding its liability to pay claims to persons under 16 or over 60.

Issue:
Whether or not the policy is void considering that the insured was over 60 when she applied.

Held:
NO. The age of Carmen was not concealed to the insurance company. Her application form indicated her true age. Despite such information, Manila Bankers accepted the premium and issued the policy. It had all the time to process the application and notice the applicants age. If it failed to act, it was because Manila Bankers was willing to waive such disqualifications or it simply overlooked such fact. It is therefore estopped from disclaiming any liability.

9. Ng Gan Zee v. Asian Crusader Life - Imperfection in the Application Form

122 SCRA 61
Facts:
In 1962, Kwon Nam applied for a 20yr endowment insurance on his life with his wife, Ng Gan Zee as the beneficiary. He stated in his application that he was operated on for tumor of the stomach associated with ulcer. In 1963, Kwong died of cancer of the liver with metastasis. Asian refused to pay on the ground of alse information. It was found that prior to his application, Kwong was diagnosed to have peptic ulcers, and that during the operation what was removed from Kwongs body was actually a portion of the stomach and not tumor.

Issue:
Whether or not the contract may be rescinded on the ground of the imperfection in the application form.

Held:
NO. Kwong did not have sufficient knowledge as to distinguish between a tumor and a peptic ulcer. His statement therefore was made in good faith. Asian should have made an inquiry as to the illness and operation of Kwong when it appeared on the face of the application that a question appeared to be imperfectly answered. Asians failure to inquire constituted a waiver of the imperfection in the answer.

10. Great Pacific Life Assurance Co. v Court of Appeals89 SCRA 543April 30, 1979
Facts: Respondent Ngo Hing filed an application with petitioner Great Pacific Life Assurance Company(Pacific Life) for a twenty-year endowment policy in the life of Helen Go, his one year olddaughter. Petitioner Lapulapu D. Mondragon, the branch manager, prepared application formusing the essential data supplied by respondent. The latter paid the annual premium andMondragon retained a portion of it as his commission. The binding deposit receipt was issued torespondent.Mondragon wrote his strong recommendation for the approval of the insurance application.However, Pacific Life disapproved the application since the plan was not available for minorsbelow 7 years old but it can consider the same under another plan. The non-acceptance of theinsurance plan was allegedly not communicated by Mondragon to respondent. Mondragon againasserted his strong recommendation.Helen Go died of influenza. Thereupon, respondent sought the payment of the proceeds of theinsurance, but having failed in his effort, he filed an action for the recovery of the same. Hencethe case at bar. Issue:Whether or not the insurance contract has been perfected on the ground that a binding receipthas been issued? Held: NO, it was not perfected. The binding deposit receipt is merely an acknowledgement, on behalf of the company, that the latters branch office had received from the applicant the insurancepremium and had accepted the application subject for processing by the insurance company; andthat the latter will either approve or reject the same on the basis of whether or not the applicant isinsurable on standard rates.The binding deposit receipt is merely conditional and does not insure outright. Where anagreement is made between the applicant and the agent, no liability shall attach until the principalapproves the risk and a receipt is given by the agent. The acceptance is merely conditional, andis subordinated to the act of the company in approving or rejecting the application. Thus, in lifeinsurance, a binding slip or binding receipt does not insure by itself