Questions and Answers
What is concealment?
A neglect to communicate that which a party knows and ought to communicate; withholding any fact that is material to the risk.
What are the four primary concerns of the parties of an insurance contract?
- The correct estimation of risk 2) The precise delimitation of risk 3) Control of the risk after it is assumed 4) Determining whether a loss occurred and its amount.
What are the devices for ascertaining and controlling risk and loss?
- Concealment 2) Representations 3) Warranties 4) Conditions 5) Exceptions.
What are the devices of concealment and representations established for?
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What are the devices of warranties and conditions established for?
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What is the device of exceptions established for?
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What are executory warranties and conditions for?
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What are conditions precedent?
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What are the requisites of concealment?
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What are the effects of concealment by the insured?
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What is the essence if the concealment is only known to the insured?
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Can the insurer commit concealment?
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What is the essence of Section 27?
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Is it essential to prove fraud in concealment?
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What is violated in the existence of fraud in an insurance contract?
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What is the reason for the rule of non-necessity of proof of fraud in concealment?
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What is the basis and criterion vitiating the contract in cases of concealment?
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What is the rule of proof of fraud in the Philippines?
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What is the duty of each party under Section 28?
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What are examples of matters material to the contract under Section 28?
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What is the test if the applicant is aware of matters material to the contract?
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What is the effect of failure of insurer to verify?
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When would fraudulent intent be necessary under Section 29?
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What is Section 30 of Insurance Law?
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Are matters making the subject of special inquiries material?
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When is the duty of disclosure not essential?
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How is materiality to be determined under Section 31?
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What is the test of materiality?
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What is the test of materiality from the standpoint of the insurer?
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When is concealment regarded as intentional?
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Where is the fact concealed not material?
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Distinguish the time before and after the information is acquired.
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What are matters each party bound to know under Section 32?
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Can the right to information be waived under Section 33?
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Is the disclosure of information of the nature or amount of the insured necessary under Section 34?
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Is it necessary to disclose opinion under Section 35?
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Study Notes
Concealment in Insurance Law
- Concealment is the neglect to disclose material facts relevant to an insurance contract, whether intentional or unintentional.
- A party has a duty to communicate all material facts that could affect the risk.
Primary Concerns in Insurance Contracts
- Accurate risk estimation is critical for determining premium rates and acceptance of the risk.
- Precise definition of risk helps clarify the insurer's obligation to pay in case of a claim.
- Maintaining control over the risk to manage any changes that could affect it post-contract.
- Ability to ascertain whether a loss occurred and its amount.
Devices for Risk Management
- Common devices to manage risk include concealment, representations, warranties, conditions, and exceptions.
Purpose of Warranties and Conditions
- Warranties ensure that conditions affecting the risk are disclosed.
- Exceptions clarify coverage provisions by explicitly defining risks that are not included, such as specific perils.
Conditions Precedent
- Conditions that must be met for coverage, specifically to prevent fraudulent claims through timely notification of loss.
Effects of Concealment
- The insured's failure to disclose known risks can render the insurance contract voidable at the insurer's discretion.
- Insurance contracts are governed by the principle of utmost good faith (uberrimae fidae).
Insurer's Duty of Disclosure
- Insurers also bear a duty to reveal material facts, potentially carrying more responsibility due to their negotiating power.
Section 27 Insights
- Concealment provides grounds for rescission, but fraud does not need to be proven for the insurer to void a contract.
Duty of Truthfulness in Disclosures
- Concealment, even without intent to deceive, violates communication duties critical to the contract's validity.
Materiality of Concealed Facts
- Materiality is gauged by whether knowledge of the fact would influence the insurer's decision to accept a risk or set a premium.
- Examples illustrate situations where undisclosed health conditions lead to claims denial, affirming materiality.
Timeframe of Disclosure Obligations
- Disclosure is mandatory before a contract is in effect; post-contract, no additional facts need to be disclosed.
Waiving Right to Information
- Rights to material facts can be waived through express terms or through implied neglect to inquire about material information.
Nature and Amount of Interest in Insurance
- Disclosure of the interest in property insured is only necessary in response to an inquiry, with specific exceptions for non-absolute ownership situations.
Opinions and Speculation
- Neither party is obligated to disclose personal judgments, feelings, or speculative information, even upon inquiry.
Test of Materiality
- Materiality should consider its probable influence on the insurer's assessment and decisions regarding the risk.
- Knowledge of risks must have substantial potential to affect contract terms or acceptance.
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Description
This quiz covers key concepts from Title 4 of Insurance Law, focusing on the principle of concealment. It explores the definition of concealment and its implications in insurance contracts. Additionally, it discusses the primary concerns of involved parties to enhance understanding of risk management.