View full case

THELMA VDA. DE CANILANG v. CA

FACTS:

Jaime Canilang consulted Dr. Wilfredo B. Claudio on June 18, 1982, and was diagnosed with "sinus tachycardia." He was prescribed Trazepam and Aptin. On August 3, 1982, he consulted the same doctor and was diagnosed with "acute bronchitis." The next day, on August 4, 1982, he applied for a "non-medical" insurance policy with Great Pacific Life Assurance Company, naming his wife, Thelma Canilang, as the beneficiary. He was issued a life insurance policy effective August 9, 1982. Jaime Canilang died on August 5, 1983, from "congestive heart failure," "anemia," and "chronic anemia." Thelma Canilang filed a claim with Great Pacific, but it was denied on December 5, 1983, due to alleged concealment of information by the insured. Thelma Canilang filed a complaint with the Insurance Commission, and the Commission ordered Great Pacific to pay the insurance proceeds. Great Pacific appealed to the Court of Appeals, which reversed the decision of the Insurance Commission and dismissed Thelma Canilang's complaint. Thelma Canilang filed a Petition for Review on Certiorari before the Supreme Court.

ISSUES:

  1. Whether there was material concealment made by the insured in his application for insurance coverage.

  2. Whether the insurer waived its right to inquire into the health condition of the insured.

RULING:

  1. The Court of Appeals held that the insured made a material concealment by failing to disclose his previous medical consultation and treatment, which constituted material information that should have been communicated to the insurer. Therefore, the denial of the claim by the insurer was justified.

  2. The Court of Appeals found that the insurer did not waive its right to inquire into the health condition of the insured as the issuance of the policy despite the lack of answers to some pertinent questions in the insurance application did not constitute a waiver.

PRINCIPLES:

  • A failure to disclose material information in an insurance application constitutes concealment and may justify the denial of the claim (Insurance Code of 1978).

  • The insurer has the right to inquire into the health condition of the insured, and the issuance of the policy without complete answers to pertinent questions does not constitute a waiver of this right.