Insurance Cases #s 1-4

Transcript

#1 Insular Life Assurance Company vs. Khu FACTS: March 1997, Felipe N. Khu, Sr. (Felipe) (Felipe) applied for a life insurance policy with Insular ife under the latter!s "ia#ond $u%ilee Insurance &lan. Felipe acco#plished the re'uired #edical 'uestionnaire wherein he did not declare any illness or aderse #edical condition. Insular ife thereafter issued hi# &olicy.  $une 1999, Felipe!s policy lapsed due to nonpay#ent of the pre#iu#. Septe#%er 1999 Felipe applied for the reinstate#ent of his p olicy. olicy. *+cept for the chane in his occupation of %ein selfe#ployed to %ein the Municipal Mayor of -inuanan, Misa#is riental, all the other infor#ation su%#itted %y Felipe in his application for reinstate#ent was irtually identical to those #entioned in his oriinal policy. , Septe#%er /001, Felipe died. &a 2. Khu, Felip e 2. Khu, $r. .and Frederi c3 2. 2. Khu (col lectie ly, Felipe! s %ene4ciaries or respondents) 4led with Insular ife a clai# for %ene4t under the reinstated policy. policy. 5his clai# was denied. Instead, Insular ife adised Felipe!s %ene4ciaries that it had decided to rescind the reinstated policy on the rounds of conceal#ent and #isrepresentation %y Felipe. Insular Life6 Life6 Felipe did not disclose the ail#ents ( viz ., ., 5ype / "ia%etes Mellitus, "ia%etes Nephropathy and lcoholic ier 8irrhosis with scites) that he already had prior to his application for reinstate#ent of his insurance policy and that it would not hae reinstated the insurance policy had Felipe disclosed the #aterial infor#ation on his aderse health condition. It contended that when Felipe died, the policy was still contesta%le.  5he :58 :58 also held that the reinstated insurance policy had already %eco#e incontesta%le %y the ti#e of Felipe!s death on Septe#%er //, /001 since #ore than two years had already lapsed fro# the date of the policy!s reinstate#ent on $une //, 1999.  5he :58 :58 noted that! since it was Insular ife itself that supplied all the pertinent for#s relatie to the reinstated policy, then it is %arred fro# ta3in ta3in  ada adant nta ae e of any a#%i a#%iu uit ity; y;o% o%sc scur urit ity y perc percei eie ed d ther therei ein n particularl particularly y as reards reards the date when the reinstated reinstated insurance insurance policy %eca#e e?. =heneer a riht to rescind a contract of insurance is ien to the insurer %y any proision of this chapter, such riht #ust %e e+ercised preious to the co##ence#ent of an action on the contract. fter a policy of life insurance #ade paya%le on the death of the insured shall hae %een in force durin the lifeti#e of the insured for a period of two years fro# the date of its issue or of its last reinstate#ent, the insurer cannot proe that the policy is oid a% initio or is rescindi%le %y reason of the fraudulent conceal#ent or #isrepresentation of the insured or his aent. RTC: In orderin Insular ife to pay Felipe!s %ene4ciaries, the :58 areed with the latter!s clai# that the insurance policy was reinstated on $une //, 1999.  5he :58 :58 cited the rulin in Malayan Malayan Insurance Insurance Corporation v. Court of   Appeals that any a#%iuity in a contract of insurance should %e resoled strictly aainst the insurer upon the principle that an insurance contract is a contract of adhesion.  5he 8ourt therefore arees fully with the appellate court!s pronounce#ent that !5he insurer is dee#ed to hae the necessary facilities to discoer such fraudulent conceal#ent or #isrepresentation within a period of two (/) years. It is not fair for the insurer to collect the pre#iu#s as lon as the insured is still alie, only to raise the issue of fraudulent conceal#ent or #isrepresentation when the insured dies in order to defeat the riht of the %ene4ciary to recoer u nder the policy. t least two (/) years fro# the issuance of the policy or its last reinstate#ent, the %ene4ciary is ien the sta%ility to recoer under the policy when the insured dies. 5he proision also #a3es clear when the twoyear period should co##ence in case the policy should lapse and is reinstated, that is, fro# the date of the last reinstate#ent!. In the instant case, *uloio!s death rendered i#possi%le full co#pliance with the conditions for reinstate#ent of &olicy No. 901 199/. 5rue, *uloio, %efore his death, #anaed to 4le his pplication for :einstate#ent and deposit the a#ount for pay#ent of his oerdue pre#iu#s and interests thereon with Malaluan %ut &olicy No. 901199/ could only %e considered reinstated after the pplication for :einstate#ent had %een processed and approed %y Insular ife durin *uloio!s lifeti#e and ood health.  5hus, it is settled that the reinstate#ent of an insurance policy should %e rec3oned fro# the date when the sa#e was approed %y the insurer. In this case, the parties di.B0 on "ece#%er /7, 1999 in addition to the &/B,0/0.00 he had earlier paid on Septe#%er 7, 1999, Khu had paid for the insurance coerae startin $une //, 1999. t the ery least, this circu#stance has enende red a true lacuna. In the *ndorse#ent, the o%scurity is patent. In the 4rst sentence of the *ndorse#ent, it is not entirely clear whether the phrase Ae> that the ESIS indeed denied its clai# throuh the afore#entioned letter, %ut tarried in co##encin the necessary action in court.  5he sa#e conclusion o%tains for the letter>B dated $une /1, 1990 denyin petitionerJs inde#nity clai# caused %y 5yphoon Salin on a Lno loss %asis due to the nonrenewal of the policies therefor %efore the onset of  the said typhoon. 5he fact that petitioner 4led a letter > of reconsideration therefro# dated pril 1?, 1991, considerin too the inaction of the ESIS on the sa#e si#ilarly shows that the $une /1, 1990 letter was also a 4nal re@ection of petitionerJs inde#nity clai#. s correctly o%sered %y the 8, L4nal re@ection si#ply #eans denial %y the insurer of the clai#s of the insured and not the re@ection or denial %y the insurer of the insuredJs #otion or re'uest for reconsideration. 5he re@ection referred to should %e construed as he re0ecion in he 2rs insance$ as in the two instances a%oediscussed.  5he crucial issue in this case is6 =hen does the cause of action accrue In support of priate respondentJs iew, two rulins of this 8ourt hae %een cited, na#ely, the case of Eagle Star Insurance Co. vs. Chia Yu (supra note !"#$, where the 8ourt held6  5he riht of the insured to the pay#ent of his loss accrues fro# the happenin of the loss. Coweer, the cause of action in an insurance contract does not accrue until the insuredJs clai# is 4nally re@ected %y the insurer. 5his is %ecause %efore such 4nal re@ection there is no real necessity for %rinin suit. and the case of ACCFA vs. Alpha Insurance % Surety Co.& Inc. ('! SCA ")" "*+,#, holdin that6 Since Lcause of action re'uires as essential ele#ents not only a leal riht of the plainti< and a correlated o%liation of the defendant in iolation of the said leal riht, the cause of action does not accrue until the party o%liated (surety) refuses, e+pressly or i#pliedly, to co#ply with its duty (in this case to pay the a#ount of the %ond). Indisputa%ly, the a%oecited pronounce#ents of this 8ourt #ay %e ta3en to #ean that the insuredJs cause of action or his riht to 4le a clai# either in the Insurance 8o##ission or in a court of co#petent @urisdiction Oas in this caseP co##ences fro# the ti#e of the denial of his clai# %y the Insurer, either e+pressly or i#pliedly. *u as poine' ou %y he peiioner insurance company$ he re0ecion referre' o shoul' %e consrue' as he re0ecion$ in he 2rs insance$ for if ha is %ein& referre' o is a reierae' re0ecion conveye' in a resoluion of a peiion for reconsi'eraion$ such shoul' have %een e(pressly sipulae'. In liht of the foreoin, it is thus clear that petitionerJs causes of action for inde#nity respectiely accrued fro# its receipt of the letters dated pril /, 1990 and $une /1, 1990, or the date the ESIS re@ected its clai#s in the 4rst instance. 8onse'uently, ien that it allowed #ore than twele (1/) #onths to lapse %efore 4lin the necessary co#plaint %efore the :58 on Septe#%er /7, 1991, its causes of action had already prescri%ed. #3 Forune /e'icare Inc vs. Amorin FACTS: "aid :o%ert . #orin (#orin) was a cardholder;#e#%er of Fortune Medicare, Inc. (Fortune 8are), a corporation enaed in proidin health #aintenance serices to its #e#%ers. 5he ter#s of #orin!s #edical coerae were proided in a 8orporate Cealth &rora# 8ontract (Cealth 8are 8ontract) which was e+ecuted %y Fortune 8are and the Couse of :epresentaties, where #orin was a per#anent e#ployee. =hile on acation in Conolulu, Cawaii in May 1999, #orin underwent an e#erency surery, speci4cally appendecto#y, causin hi# to incur professional and hospitaliation e+penses of SQ7,/>/.DB and SQ1,777.79, respectiely. Ce atte#pted to recoer fro# Fortune 8are the full a#ount thereof upon his return to Manila, %ut the co#pany #erely approed a rei#%urse#ent of &1/,1B1.D, an a#ount that was %ased on the aerae cost of appendecto#y, net of #edicare deduction, if the procedure were perfor#ed in an accredited hospital in Metro Manila. #orin receied under protest the approed a#ount, %ut as3ed for its ad@ust#ent to coer the total a#ount of professional fees which he had paid, and eihty percent (?0R) of the approed standard chares %ased on L#erican standard, considerin that the e #erency procedure occurred in the .S.. Fortune 8are denied #orinJs re'uest. Fortune 8are arued that the Cealth 8are 8ontract did not coer hosp italiation costs and professional fees incurred in forein countries, as the contractJs operation was con4ned to &hilippine territory. Further, it arued that its lia%ility to #orin was e+tinuished upon the latterJs acceptance fro# the co#pany of the a#ount of &1/,1B1.D. RTC: "is#issed #orinJs co#plaint. 5a3in the contract as a whole, the 8ourt is coninced that the parties intended to use the &hilippine standard as %asis. In the a%sence of eidence to the contrary, the trial court considered the a#ount of &1/,1BO1P.D already paid %y Fortune 8are to #orin as e'uialent to ?0R of the hospitaliation and professional fees paya%le to the latter had he %een treated in an aGliated hospital. CA: :eersed and set aside :58Js decision. 8 pointed out that, 4rst, health care aree#ents such as the su%@ect Cealth 8are 8ontract, %ein li3e insurance contracts, #ust %e li%erally construed in faor of the su%scri%er. Second, the 8 e+plained that there was nothin under rticle  of  the Cealth 8are 8ontract which proided that the &hilippine standard should %e used een in the eent of an e#erency con4ne#ent in a forein territory. ISSUE:  5he 8 raely erred in concludin that the phrase Lapproed standard chares is su%@ect to interpretation, and that it did not auto#atically #ean L&hilippine Standard. ULI!": In &hila#care Cealth Syste#s, Inc. . 8, we ruled that a health care aree#ent is in the nature of a nonlife insurance. It is an esta%lished rule in insurance contracts that when their ter#s contain li#itations on lia%ility, they should %e construed strictly aainst the insurer. 5hese are contracts of adhesion the ter#s of which #ust %e interpreted and enforced strinently aainst the insurer which prepared the contract. 5his doctrine is e'ually applica%le to h ealth care aree#ents. In the instant case, the e+tent of Fortune 8areJs lia%ility to #orin was oerned %y Section D(-), rticle  of the su%@ect Cealth 8are 8ontract, considerin that the appendecto#y which the #e#%er had to undero 'uali4ed as an e#erency care, %ut the treat#ent was perfor#ed at St. Francis Medical 8enter in Conolulu, Cawaii, .S.., a nonaccredited hospital. =e restate the pertinent portions of Section D(-)6 -. *M*:E*N82 8:* IN NN88:*"I5*" CS&I5 1. =hether as an inpatient or outpatient, Fortune8are shall rei#%urse the total hospitaliation cost includin the professional fee (%ased on the total approed chares) to a #e#%er who receies e#erency care in a nonaccredited hospital. 5he a%oe coerae applies only to *#erency con4ne#ent within &hilippine 5erritory. Coweer, if the e#erency con4ne#ent occurs in forein territory, Fortune 8are will %e o%liated to rei#%urse or pay eihty (?0R) percent of the approed standard chares which shall coer the hospitaliation costs and professional fees. + + + (*#phasis supplied)  5he trial court ruled that the phrase Lapproed standard chares, should %e interpreted in liht of the proisions of Section D(), i.e., to the e+tent that #ay %e allowed for treat#ents perfor#ed %y accredited physicians in accredited hospitals. s the appellate court howeer held, this #ust %e interpreted in its literal sense, uided %y the rule that any a#%iuity shall %e strictly construed aainst Fortune 8are, and li%erally in faor of #orin.  5he 8ourt arees with the 8. &lainly, the ter# Lstandard chares could %e read as referrin to the Lhospitaliation costs and professional fees which were speci4cally cited as co#pensa%le een when incurred in a forein country. 8ontrary to Fortune 8areJs aru#ent, fro# nowhere in the Cealth 8are 8ontract could it %e reasona%ly deduced that these Lstandard chares referred to the L&hilippine standard, or that cost which would hae %een incurred if the #edical serices were perfor#ed in an accredited hospital situated in the &hilippines.  5he proper interpretation of the phrase Lstandard chares could instead %e correlated with and reasona%ly inferred fro# the other proisions of Section D(-), considerin that #orinJs case fell under the second case, i.e., e#erency care in a nonaccredited hospital. :ather than a deter#ination of &hilippine or #erican standards, the 4rst part of the proision spea3s of the full rei#%urse#ent of Lthe total hospitaliation cost includin the professional fee (%ased on the total approed chares) to a #e#%er who receies e#erency care in a non accredited hospital within the &hilippines. 5hus, for e#erency care in nonaccredited hospitals, this cited clause declared the standard in the deter#ination of the a#ount to %e paid, without any reference to and reardless of the a#ounts that would hae %een paya%le if the treat#ent was done %y an aGliated physician or in an aGliated hospital. For treat#ents in forein territories, the only 'uali4cation was only as to the percentae, or ?0R of that paya%le for treat#ents perfor#ed in non accredited hospital. ll told, in the a%sence of any 'ualifyin word that clearly li#ited Fortune 8are!s lia%ility to costs that are applica%le in the &hilippines, the a#ount paya%le %y Fortune 8are should not %e li#i ted to the cost of treat#ent in the &hilippines, as to do so would result in the clear disadantae of its #e#%er. If, as Fortune 8are arued, the pre#iu# and other chares in the Cealth 8are 8ontract were #erely co#puted on assu#ption and ris3 under &hilippine cost and, that the #erican cost standard or any forein country!s cost was neer considered, such li#itations should hae %een distinctly speci4ed and clearly reHected in the e+tent of coerae which the co#pany oluntarily assu#ed.