What is the effect of war on the existing insurance contracts between the Philippines and a citizen or subject of a public enemy, with respect to property insurance?

With respect to property insurance, the rule adopted in the Phil is that an insurance policy ceases to be valid and enforceable as soon as the insured becomes a public enemy.

What is a public enemy?

It is a nation with whom the Philippines is at war, and it includes every citizen or subject of such nation.

What is the effect of war on the existing insurance contracts between the Philippines and a citizen or subject of a public enemy, with respect to life insurance?

Three doctrines have arisen.

(1)     Connecticut Rule – there are two elements in the consideration for which the annual premium is paid:

a.       The mere protection for the year; and

b.       The privilege of renewing the contract for each succeeding year by paying the premium for that year at the time agreed upon.

(2)     New York Rule – apparently followed by the number of decisions.  War between the states in which the parties reside merely suspends the contracts of life insurance and that upon the tender of premiums due by the insured or his representatives after the war has terminated revives the contract which becomes fully operative.

(3)     US Rule – declared the contract not merely suspended but is abrogated by reason of non-payment of premiums, since the time of the payment is peculiarly of the essence of the contract.  However, the insured is entitled to the cash or reserve value of the policy (if any) which is the excess of the premiums paid over the actual risk carried during the years when the policy had been in force.

We follow the US Rule.

Problem.

B is sideswiped by a balut vendor.  Because he was previously indicted for many other crimes including illegal possession of balisongs, he was declared Metro Manila’s Public Enemy No.1.  If A wants to secure insurance on the life of B, may the insurer refuse on the grounds that B is a public enemy and therefore may not be insured under Sec. 7 of the IC?

NO.  Sec. 7 speaks of a public enemy only in reference to a nation with whom the Phil is at war and every citizen and or subject thereof.