THE INSURANCE CODE OF THE PHILIPPINES

GENERAL PROVISIONS
Sec. 1. This Decree shall be known as "The Insurance Code".
Sec. 2. Whenever used in this Code, the following terms shall have the respective meanings
hereinafter set forth or indicated, unless the context otherwise requires:
(1) A "contract of insurance" is an agreement whereby one undertakes for a consideration
to indemnify another against loss, damage or liability arising from an unknown or
contingent event.
A contract of suretyship shall be deemed to be an insurance contract, within the meaning
of this Code, only if made by a surety who or which, as such, is doing an insurance business
as hereinafter provided.
(2) The term "doing an insurance business" or "transacting an insurance business", within
the meaning of this Code, shall include:
(a) making or proposing to make, as insurer, any insurance contract;
(b) making or proposing to make, as surety, any contract of suretyship as a vocation and not
as merely incidental to any other legitimate business or activity of the surety;
(c) doing any kind of business, including a reinsurance business, specifically recognized as
constituting the doing of an insurance business within the meaning of this Code;
(d) doing or proposing to do any business in substance equivalent to any of the foregoing in
a manner designed to evade the provisions of this Code.
In the application of the provisions of this Code the fact that no profit is derived from the
making of insurance contracts, agreements or transactions or that no separate or direct
consideration is received therefor, shall not be deemed conclusive to show that the making
thereof does not constitute the doing or transacting of an insurance business.
(3) As used in this code, the term "Commissioner" means the "Insurance Commissioner".

Chapter 1
THE CONTRACT OF INSURANCE
Title 1
WHAT MAY BE INSURED
Sec. 3. Any contingent or unknown event, whether past or future, which may damnify a
person having an insurable interest, or create a liability against him, may be insured against,
subject to the provisions of this chapter.
The consent of the husband is not necessary for the validity of an insurance policy taken
out by a married woman on her life or that of her children.
Any minor of the age of eighteen years or more, may, notwithstanding such minority,
contract for life, health and accident insurance, with any insurance company duly
authorized to do business in the Philippines, provided the insurance is taken on his own life
and the beneficiary appointed is the minor's estate or the minor's father, mother, husband,
wife, child, brother or sister.
The married woman or the minor herein allowed to take out an insurance policy may
exercise all the rights and privileges of an owner under a policy.
All rights, title and interest in the policy of insurance taken out by an original owner on the
life or health of a minor shall automatically vest in the minor upon the death of the original
owner, unless otherwise provided for in the policy.
Sec. 4. The preceding section does not authorize an insurance for or against the drawing of
any lottery, or for or against any chance or ticket in a lottery drawing a prize.
Sec. 5. All kinds of insurance are subject to the provisions of this chapter so far as the
provisions can apply.

Title 2
PARTIES TO THE CONTRACT
Sec. 6. Every person, partnership, association, or corporation duly authorized to transact
insurance business as elsewhere provided in this code, may be an insurer.
Sec. 7. Anyone except a public enemy may be insured.
Sec. 8. Unless the policy otherwise provides, where a mortgagor of property effects
insurance in his own name providing that the loss shall be payable to the mortgagee, or
assigns a policy of insurance to a mortgagee, the insurance is deemed to be upon the
interest of the mortgagor, who does not cease to be a party to the original contract, and
any act of his, prior to the loss, which would otherwise avoid the insurance, will have the
same effect, although the property is in the hands of the mortgagee, but any act which,
under the contract of insurance, is to be performed by the mortgagor, may be performed
by the mortgagee therein named, with the same effect as if it had been performed by the
mortgagor.
Sec. 9. If an insurer assents to the transfer of an insurance from a mortgagor to a mortgagee,
and, at the time of his assent, imposes further obligation on the assignee, making a new
contract with him, the act of the mortgagor cannot affect the rights of said assignee.

Title 3
INSURABLE INTEREST
Sec. 10. Every person has an insurable interest in the life and health:
(a) Of himself, of his spouse and of his children;
(b) Of any person on whom he depends wholly or in part for education or support, or in
whom he has a pecuniary interest;
(c) 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
(d) Of any person upon whose life any estate or interest vested in him depends.
Sec. 11. 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.
Sec. 12. The interest of a beneficiary in a life insurance policy shall be forfeited when the
beneficiary is the principal, accomplice, or accessory in willfully bringing about the death of
the insured; in which event, the nearest relative of the insured shall receive the proceeds
of said insurance if not otherwise disqualified.
Sec. 13. Every interest in property, whether real or personal, or any relation thereto, or
liability in respect thereof, of such nature that a contemplated peril might directly damnify
the insured, is an insurable interest.
Sec. 14. An insurable interest in property may consist in:
(a) An existing interest;
(b) An inchoate interest founded on an existing interest; or
(c) An expectancy, coupled with an existing interest in that out of which the expectancy
arises.
Sec. 15. A carrier or depository of any kind has an insurable interest in a thing held by him
as such, to the extent of his liability but not to exceed the value thereof.
Sec. 16. A mere contingent or expectant interest in anything, not founded on an actual right
to the thing, nor upon any valid contract for it, is not insurable.
Sec. 17. The measure of an insurable interest in property is the extent to which the insured
might be damnified by loss or injury thereof.
Sec. 18. No contract or policy of insurance on property shall be enforceable except for the
benefit of some person having an insurable interest in the property insured.
Sec. 19. An interest in property insured must exist when the insurance takes effect, and
when the loss occurs, but not exist in the meantime; and interest in the life or health of a
person insured must exist when the insurance takes effect, but need not exist thereafter or
when the loss occurs.
Sec. 20. Except in the cases specified in the next four sections, and in the cases of life,
accident, and health insurance, a change of interest in any part of a thing insured
unaccompanied by a corresponding change in interest in the insurance, suspends the
insurance to an equivalent extent, until the interest in the thing and the interest in the
insurance are vested in the same person.
Sec. 21. A change in interest in a thing insured, after the occurrence of an injury which
results in a loss, does not affect the right of the insured to indemnity for the loss.
Sec. 22. A change of interest in one or more several distinct things, separately insured by
one policy, does not avoid the insurance as to the others.
Sec. 23. A change on interest, by will or succession, on the death of the insured, does not
avoid an insurance; and his interest in the insurance passes to the person taking his interest
in the thing insured.
Sec. 24. A transfer of interest by one of several partners, joint owners, or owners in
common, who are jointly insured, to the others, does not avoid an insurance even though
it has been agreed that the insurance shall cease upon an alienation of the thing insured.
Sec. 25. Every stipulation in a policy of insurance for the payment of loss whether the person
insured has or has not any interest in the property insured, or that the policy shall be
received as proof of such interest, and every policy executed by way of gaming or wagering,
is void.