~ REPRESENTATION ~

SEC.36
Representation a statement made by the insured at the time of, or prior

SEC.40

to, the issuance of policy.

Representation contains the risk to be insured, statement of previous or
existing facts or a future happening which informs and induces the insurer
to enter into the insurance contract.
FORM AND NATURE OF REPRESENTATION

Effect of representation on express provisions of policy

A representation cannot qualify an express provision or an express warranty
in a contract of insurance because a representation is not a part of the
contract but only a collateral inducement to it.
SEC.41

The person applying for insurance is duty-bound to provide all the pertinent

When representation may be altered or withdrawn

information to enable the insurer to intelligently decide whether or not to

assume the insurance contract whether orally or in writing.

or withdrawn before the contract actually takes effect but not afterwards

SEC.37

since the insurer has already been led by representation in assuming the
This is precisely because the representation is a condition precedent
for the execution of the contract.

A representation, not being part of the contract of insurance, may be altered

risk contemplated in the contract.

SEC.42

The representations made after the execution of the contract could

TIME TO WHICH REPRESENTATION REFERS

not have influenced either party to enter into the contract.

Representation refer only to the time of making the contract.

SEC.38

Representations are liberally construed in favor of the insured, while

warranties under Sec.67 must be literally true otherwise the
contract will fail.

insurer what he knows of a matter of which he has no personal knowledge.

KINDS OF REPRESENTATION
Affirmative representation- is any allegation as to the existence or
non-existence of a fact when the contract begins

EFFECT WHERE INFORMATION OBTAINED FROM THIRD PERSONS

Under this section, the insured is given discretion to communicate to the

SEC.39

SEC.43

Promissory representation- is any promise to be fulfilled after the

contract has come to existence or any statement concerning what is
to happen during the existence of the insurance

SEC.44
WHEN REPRESENTATION DEEMED FALSE
Unlike in the case of warranties (Sec.67), representations are not required to
be literally true; they need only be substantially true.

The insurer generally relies to a large degree on the statements of the

Section 46.

applicant regarding the risk.

Section 45:

The materiality of the representation is to be determined

Effect of Misrepresentation: Insurance maybe avoided where the

NOT by the event, but solely by the probable and reasonable

insured made false statements as to matters that are material to the

influence of the facts upon the party to whom the representation is

risk for the purpose of obtaining the insurance and thereby induce

made, in forming his estimates of the disadvantages of the proposed

the insurance company to issue the policy.

To

constitute

Misrepresentation:

What is the test of materiality?

contract or in making his inquiries.

The

statement

must

be

subtantially untrue. Thus, the policy cannot be avoided where the

Who determines materiality?

statements are substantially true although not strictly and literally

It is a judicial question.

true.It is sufficient if the representation fails to correspond with the

It is NOT left to the insurance

company to say after the loss has occurred that it would or would

facts.

not have issued the policy had an answer been truly given.

Collusion with the insured

-

The

matter misrepresented must be of that character which the court

can say would reasonably affect the insurers judgment.

Collusion between the agent and the insured in

misrepresenting the facts will vitiate the policy even
though the agent is acting within the apparent scope of
his authority.

When there is collusion, the agent thereby ceases to

represent his principal , and represents himself; so the
insurer is not estopped from avoiding the policy.

SEC. 47-48
INCONTESTABLE CLAUSES
Requisites for Incontestability

Principal of Agent
-

Where the insurer required its medical examiner to put

the questions and fill out

1) The policy is a life insurance policy;

the answers in his own

2) It is payable on the death of the insured; and

handwriting, the writer of the application is not the

3) It has been in force during the lifetime of the insured for at least two (2)

agent of the insured.

years from its date of issue or of its last reinstatement.

The insurer is liable when its agent writes a false answer

into the application without the knowledge of the
insured.

EFFECT WHEN POLICY BECOMES INCONTESTABLE

When a policy of life insurance becomes incontestable, the insurer may not
refuse to pay the same by claiming that:

1) The policy is void ab initio; or

2) It is rescissible by reason of the fraudulent concealment of the insured or
his agent, no matter how patent or well-founded;
3) It is rescissible by reason of the fraudulent misrepresentations of the
insured or his agent.
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