I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Barrister... That's right, Barrister; I graduated from law school and took the Bar Exams, now I'm waiting for the results. I created this blog to make Philippine Law easy to understand for the average person. It's all about free legal advice. There are many law blogs. But the problem is that many of them are written for lawyers and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most human beings because of their knowledge of the law. It bothers me since the law is supposed to serve society. Since the law is meant to serve society as a whole, it is important that is must be understood by everybody.
This does not mean that we should all become lawyers. It means that although law is a highly specialized profession, the first duty of everybody in this profession is to make the law understandable to all; that's why all these articles are free legal advice.
Like I said, this blog is about law -but it's for the ordinary people, not the lawyers. It's for the ordinary folk so they will know what is good and bad for them, and that making them aware of the law will help us all improve society as a whole. This is free legal advice for everybody!
A cover note is a preliminary contract of present insurance. It is a way of getting protection before the insurance contract is perfected (approved.) It is issued by the insurer and is deemed an insurance contract. It's also known as a "binding slip," "binding receipt" or "binder." It is a temporary contract of insurance and usually issued after the applicant pays the first premium. When it is entered into, the insurer is to insure the subject matter at a later time. The insured has the right to demand the delivery of the policy in accordance to the terms that were agreed on, and the insurer is obligated to deliver the policy.
It's a written memo of the most important terms of the preliminary contract of insurance, intended to give temporary protection while the insurer investigates the risk or until the formal policy is issued (provided the applicant was insurable by the time it is given) or if the application is rejected. By nature, it''s subject to all the conditions in the expected policy even if the policy is never issued.
In life insurance, if the agreement is made between the applicant and the insurer's agent, there is no liability until the insurer approves the risk. So in life insurance, a cover note doesn't insure by itself (Grepalife vs. CA, 89 SCRA 543.)
Cover notes serve the needs of commercial convenience and are more definite and reliable than an oral agreement; the issuance of a cover note is conclusive evidence of the making of a contract. However, the insurer can disprove it if he can show that he delivered the cover note with an oral understanding that won't take effect until other insurers had taken part in the risk.
A cover note doesn't need a separate premium. By its nature, it doesn't contain particulars that serve as a basis for the computation of premiums. If treated as a separate policy, it becomes a separate contract (Pacific Timber Export Corp. vs. CA, 112 SCRA 199.)
Remember the following:
1.) Insurance companies doing business in the Philippines can issue cover notes to temporarily bind insurance while the policy hasn't been issued yet.
2.) Cover notes can't be issued or renewed unless they're in the form approved by the Insurance Commission.
3.) Once issued, a cover note has a lifetime of 60 days from its date of issue, regardless of whether or not the premiums have been paid.
4.) Either party can cancel a cover note 7 days after notice to the other party.
5.) The policy must be issued within 60 days after the cover note is issued (this is mandatory.)
6.) The 60-day period can be extended or renewed if there's a written approval from the Insurance Commissioner.
7.) The commissioner's approval can be dispensed with if there is a certification from the president, vice-president or general manager of the insurer that the risks involved, the values of such risks and their premiums haven't been determined/established and the extension/renewal isn't contrary to the Insurance Code of the Philippines or any other law or rule.
8. A deposit premium equal to at least 25% of the estimated premium of the intended insurance coverage may be imposed on cover notes (but the deposit must not be less than Php500.)
It's a written memo of the most important terms of the preliminary contract of insurance, intended to give temporary protection while the insurer investigates the risk or until the formal policy is issued (provided the applicant was insurable by the time it is given) or if the application is rejected. By nature, it''s subject to all the conditions in the expected policy even if the policy is never issued.
In life insurance, if the agreement is made between the applicant and the insurer's agent, there is no liability until the insurer approves the risk. So in life insurance, a cover note doesn't insure by itself (Grepalife vs. CA, 89 SCRA 543.)
Cover notes serve the needs of commercial convenience and are more definite and reliable than an oral agreement; the issuance of a cover note is conclusive evidence of the making of a contract. However, the insurer can disprove it if he can show that he delivered the cover note with an oral understanding that won't take effect until other insurers had taken part in the risk.
A cover note doesn't need a separate premium. By its nature, it doesn't contain particulars that serve as a basis for the computation of premiums. If treated as a separate policy, it becomes a separate contract (Pacific Timber Export Corp. vs. CA, 112 SCRA 199.)
Remember the following:
1.) Insurance companies doing business in the Philippines can issue cover notes to temporarily bind insurance while the policy hasn't been issued yet.
2.) Cover notes can't be issued or renewed unless they're in the form approved by the Insurance Commission.
3.) Once issued, a cover note has a lifetime of 60 days from its date of issue, regardless of whether or not the premiums have been paid.
4.) Either party can cancel a cover note 7 days after notice to the other party.
5.) The policy must be issued within 60 days after the cover note is issued (this is mandatory.)
6.) The 60-day period can be extended or renewed if there's a written approval from the Insurance Commissioner.
7.) The commissioner's approval can be dispensed with if there is a certification from the president, vice-president or general manager of the insurer that the risks involved, the values of such risks and their premiums haven't been determined/established and the extension/renewal isn't contrary to the Insurance Code of the Philippines or any other law or rule.
8. A deposit premium equal to at least 25% of the estimated premium of the intended insurance coverage may be imposed on cover notes (but the deposit must not be less than Php500.)
0 comments:
Post a Comment