INSURANCE - CONCEPTS & PRINCIPLES - Commercial LAW - Dean Joe-Santos B. BISQUERA - RISK Management

INSURANCE - An Integral and Broader Perspective of the Fundamental MECHANISM for RISK Management. Insurance is structure along the 3 Major Components of a CONTRACT - OBJECT or Subject Matter, the Price or Consideration and the CONSENT. The OBJECT of INSURANCE is given a "fresh" perspective - the Insurance Company is "selling" a nebulous and physically Non-Existent Juridical Creation - it is SELLING an OBLIGATION, a future Commitment subject to a Suspensive Condition that ripens only into an Executory Obligation because the Owner of an Asset, a Property or a Privilege suffers LOSS, Damage or incurs Liability arising from an Act of God or Man consisting of an EVENT - Future and Uncertain or a Past Unknown Event. The 2nd Aspect of an Insurance Contract - the full payment of the Insurance Premium is considered as a Condition Sine Quo Non to Contract Completion. The 3rd Component of an Insurance Contract - CONSENT - is extensively covered to highlight the needs for UBERRIMAE FIDEI - the imperative of UTMOST TRUST & UTMOST GOOD FAITH expected of both the Insurance Company and the Insured Party. It is in the element of UTMOST Good Faith in providing CONSENT that the element of CONCEALMENT highlighted. An Insurance Contract is one where the Insurance Company undertakes, for a Consideration, to indemnify the Insured Party, for his Loss, Damage or Liability incurred, arising from an Unknown or Uncertain Event. An Insurance Contract exists when the Insured has an insurable interest, the Insured has a risk of loss by the happening of the designated peril, the Insurance company assumes the risk, the assumption of risk is part of a general scheme to distribute actual losses among a large group of persons bearing a similar risk and in consideration of the Insurer's promise, the insured pays a premium. The Object or Subject Matter of an Insurance Contract an Obligation to PAY, to Indemnify or to Reimburse, on condition that the Insured Party incurs a Loss, Damage or a Liability dependent upon whether or not an unknown or contingent event caused the Loss, Damage or Liability. The Imperative of LOSS, Damage or Liability - the Insurance company will not be liable to pay unless the Insured Party should suffer a loss or damage or incurs an obligation or debt, the Insured Party’s pecuniary Loss can only happen when he owns something of value that gets lost, is damaged or said Insured causes damage to another that leads him to loose something to compensate for said damage which he caused, the presence of THAT something that may be loss is the foundation for establishing an “Interest” that can be “insured”; The Nature of the OBLIGATION in Insurance. The Insurance Company’s OBLIGATION to PAY, to INDEMNIFY or to REIMBURSE is a Conditional Obligation - the Insurance company incurs the liability to pay only when the SUSPENSIVE CONDITION - that the Insured Party suffers loss, damage or becomes liable - should happen, arising from the unknown or contingent event insured against; Executory Obligation - the Insurance Company shall pay the Insured the moment the condition mentioned actually happens; Insurable Interest - an insured party’s pecuniary (monetary) claim arising from a FUTURE and UNCERTAIN Event or an UNKNOWN PAST Event, to a RIGHT, a PRIVILEGE or a Tangible Property which can bring him LOSS, DAMAGE or LIABILITY arising from a FUTURE and UNCERTAIN Event or an UNKNOWN PAST Event; Every person has an insurable interest in the LIFE and Health - Of himself, of his spouse and of his children; Of any person on whom he depends wholly or in part for education or support, or in whom he has a pecuniary interest; Of any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might delay or prevent the performance; and Of any person upon whose life any estate or interest vested in him depends. BENEFICARY in Life Insurance - The insured shall have the right to change the beneficiary he designated in the policy, unless he has expressly waived this right in said policy. The Beneficiary designated in a life insurance contract cannot be changed without his consent because he has a vested interest in the policy; The alleged acquiescence of the six (6) children beneficiaries cannot be effective ratification to the change from irrevocable to revocable. Beneficiaries. As minors, they could not validly give their consent.The insured may not even add another beneficiary because by doing so, he diminishes the amount which the beneficiary may recover and this he cannot do without the beneficiary's consent. Adulterous, Divorced Wife as Beneficiary - When  a policy is taken out upon a husband’s life and the wife is named as beneficiary therein, a subsequent .