"TITLE 6

"THE POLICY

"Section 49. The written instrument in which a contract of insurance is set forth, is called a policy of
insurance.

"Section 50. The policy shall be in printed form which may contain blank spaces; and any word,
phrase, clause, mark, sign, symbol, signature, number, or word necessary to complete the contract
of insurance shall be written on the blank spaces provided therein.

"Any rider, clause, warranty or endorsement purporting to be part of the contract of insurance and
which is pasted or attached to said policy is not binding on the insured, unless the descriptive title or
name of the rider, clause, warranty or endorsement is also mentioned and written on the blank
spaces provided in the policy.

"Unless applied for by the insured or owner, any rider, clause, warranty or endorsement issued after
the original policy shall be countersigned by the insured or owner, which countersignature shall be
taken as his agreement to the contents of such rider, clause, warranty or endorsement.

"Notwithstanding the foregoing, the policy may be in electronic form subject to the pertinent
provisions of Republic Act No. 8792, otherwise known as the ‘Electronic Commerce Act’ and to such
rules and regulations as may be prescribed by the Commissioner.

"Section 51. A policy of insurance must specify:

"(a) The parties between whom the contract is made;

"(b) The amount to be insured except in the cases of open or running policies;

"(c) The premium, or if the insurance is of a character where the exact premium is only
determinable upon the termination of the contract, a statement of the basis and rates upon
which the final premium is to be determined;

"(d) The property or life insured;

"(e) The interest of the insured in property insured, if he is not the absolute owner thereof;

"(f) The risks insured against; and

"(g) The period during which the insurance is to continue.

"Section 52. Cover notes may be issued to bind insurance temporarily pending the issuance of the
policy. Within sixty (60) days after issue of a cover note, a policy shall be issued in lieu thereof,
including within its terms the identical insurance bound under the cover note and the premium
therefor.

"Cover notes may be extended or renewed beyond such sixty (60) days with the written approval of
the Commissioner if he determines that such extension is not contrary to and is not for the purpose
of violating any provisions of this Code. The Commissioner may promulgate rules and regulations
governing such extensions for the purpose of preventing such violations and may by such rules and
regulations dispense with the requirement of written approval by him in the case of extension in
compliance with such rules and regulations.

"Section 53. The insurance proceeds shall be applied exclusively to the proper interest of the person
in whose name or for whose benefit it is made unless otherwise specified in the policy.

"Section 54. When an insurance contract is executed with an agent or trustee as the insured, the fact
that his principal or beneficiary is the real party in interest may be indicated by describing the insured
as agent or trustee, or by other general words in the policy.

"Section 55. To render an insurance effected by one partner or part-owner, applicable to the interest
of his co-partners or other part-owners, it is necessary that the terms of the policy should be such as
are applicable to the joint or common interest.

"Section 56. When the description of the insured in a policy is so general that it may comprehend
any person or any class of persons, only he who can show that it was intended to include him, can
claim the benefit of the policy.

"Section 57. A policy may be so framed that it will inure to the benefit of whomsoever, during the
continuance of the risk, may become the owner of the interest insured.

"Section 58. The mere transfer of a thing insured does not transfer the policy, but suspends it until
the same person becomes the owner of both the policy and the thing insured.

"Section 59. A policy is either open, valued or running.

"Section 60. An open policy is one in which the value of the thing insured is not agreed upon, and
the amount of the insurance merely represents the insurer’s maximum liability. The value of such
thing insured shall be ascertained at the time of the loss.

"Section 61. A valued policy is one which expresses on its face an agreement that the thing insured
shall be valued at a specific sum.

"Section 62. A running policy is one which contemplates successive insurances, and which provides
that the object of the policy may be from time to time defined, especially as to the subjects of
insurance, by additional statements or indorsements. 1âwphi1

"Section 63. A condition, stipulation, or agreement in any policy of insurance, limiting the time for
commencing an action thereunder to a period of less than one (1) year from the time when the
cause of action accrues, is void.

"Section 64. No policy of insurance other than life shall be cancelled by the insurer except upon prior
notice thereof to the insured, and no notice of cancellation shall be effective unless it is based on the
occurrence, after the effective date of the policy, of one or more of the following:

"(a) Nonpayment of premium;

"(b) Conviction of a crime arising out of acts increasing the hazard insured against;

"(c) Discovery of fraud or material misrepresentation;

"(e) Physical changes in the property insured which result in the property becoming
uninsurable;

"(f) Discovery of other insurance coverage that makes the total insurance in excess of the
value of the property insured; or

"(g) A determination by the Commissioner that the continuation of the policy would violate or
would place the insurer in violation of this Code.