RESCISSION OF INSURANCE CONTRACTS: CONCEALMENTS, MISREPRESENTATION & BREACH OF WARRANTIES Concealment Definition

IC. 26: A neglect to communicate that which a party knows and ought to communicate, is called a concealment. IC. 27. A concealment whether intentional or unintentional entitles the injured party to rescind a contract of insurance. Sec. 28. Each party to a contract of insurance must communicated to the other, in good faith, all facts within his knowledge which are material to the contract and as to which he makes no warranty, and which the other has not the means of ascertaining. Sec. 29. An intentional and fraudulent omission, on the part of one insured, to communicate information of matters proving or tending to prove the falsity of a warranty, entitles the insurer to rescind. 4 primary concerns of the parties to an insurance contract: 1. Correct estimation of risk 2. Precise delimitation of risk. 3. Control of risk after it is assumed. 4. Determining whether a loss occurred, and the value of such loss. Devices for ascertaining and controlling risk and loss: 1. Concealment and representations Enabling insurer to secure same information with respect to risk possessed by the applicant. 2. Warranties, conditions and exceptions Warranties/Conditions: dealing with conditions existing at the inception of the contract. 2 parts of general description of risk: a. Designation of specific property interest

b. Specification of such perils. Ex. that insured had not been subject to a major operation. 3. Exceptions: making more definite certain general words used to describe the risk the insurer undertook to bear. Ex. policy shall not cover loss of bills/securities. 4. Executory warranties and conditions. Undertakings that certain conditions should or shouldnt exist in the future, to enable he insurer to rescind the contract in case subsequent events increased the risk. Ex. Watchman shall be kept; no repairs shall be made. 5. Conditions precedent To protect against fraudulent claims of loss. Ex. immediate notice of loss, at limited time. Concealment: neglect to communicate that which a party knows and ought to communicate. Requisites of concealment: 1. Party knows that fact which he neglects to communicate. 2. He is duty bound to disclose such facts. 3. Party concealing makes no warranty* 4. Other party has not the means of ascertaining the fact concealed. *if party made warranty, it is a violation of warranty, and NOT concealment. Effect of concealment: 1. By insured: makes the contract voidable at insurers option (utmost good faith. 2. By insurer (also applies). Fraud is immaterial: it is violated by the fact of concealment, even when there is no fraud or intent to deceive. Principal question: was the insurer misled into entering in the contract or fixing the premium by withholding of material information or facts within the assureds knowledge or presumed knowledge?

Material facts: If immaterial, failure to disclose it is not concealment, even if its intentional. Concealment: not limited to material facts which the applicant knows, but extends to those which he ought to know; mistake/forgetfulness is no defense. Matters that must be communicated, even in the absence of inquiry (IC 28): 1. Material to the contract. 2. Other has no means of ascertaining the facts. 3. Party with duty to communicate makes no warranty. TEST: if the applicant is aware of the existence of some circumstances which he knows would influence the insurer in acting upon his application, good faith required him to disclose that circumstance, though unasked. Failure of insurer to verify such facts: does not defeat the fact of concealment; insurer has the right to rely on statements of the insured as to material facts. When fraudulent intent is necessary in order that the insurer may rescind the contract: falsity of warranty (IC 29) IC 29 relates specifically to falsity of warranty and not ordinary concealment under IC 27. Omission on the part of the insured. Example: seaworthiness of ship in marine insurance.

warranty, and which are not otherwise material; and e. Those which relate to a risk excepted from the policy and which are not otherwise material. General rule: Matters made subject of inquiry must be deemed material and insured is required to make full and true disclosure of the questions asked. 1. Failure of a complete answer to make full disclosure: insurer not liable. Ex. property has only 1 encumbrance (not disclosing that there are actually 2 mortgages) 2. Incomplete answer: insurer still liable (unless theres bad faith) Ex. that property is encumbered (not disclosing that there are actually 2 mortgages) When there is no duty to make disclosure: 1. Matters known to, or right to be known by insurer, or which he waives disclosure. 2. Risks excepted from the policy. Ex. No need to inform of danger of flood, when insurance is for fire. 3. Nature of amount of insureds interest. (unless hes not the absolute owner, in which case he must state that hes a mortgagee or something -IC 51) IC. 32. Each party to a contract of insurance is bound to know all the general causes which are open to his inquiry, equally with that of the other, and which may affect the political or material perils contemplated; and all general usages of trade. Simple rule: They dont need to communicate things that they both ought to know (ex. public event) as the information is equally open to them. IC. 33. The right to information of material facts may be waived, either by the terms of the insurance or by neglect to make inquiry as to such facts, where they are distinctly implied in other facts of which information is communicated.

Matters which need not be disclosed

IC. 30: Neither party to a contract of insurance is bound to communicate information of the matters following, except in answer to the inquiries of the other: a. Those which the other knows; b. Those which, in the exercise of ordinary care, the other ought to know, and of which the former has no reason to suppose him ignorant; c. Those of which the other waives communication; d. Those which prove or tend to prove the existence of a risk excluded by a

Right to information of material facts may be waived: 1. Expressly: terms of insurance 2. Impliedly: neglect to make inquiry If insured had answered all questions in the application, he is justified in assuming that no further information is desired. But there is no waiver if the failure of insurer to inquire is due to concealment of the insured. IC. 34. Information of the nature or amount of the interest of one insured need not be communicated unless in answer to an inquiry, except as prescribed by section 51. Simple rule: duty to disclose the interest in the property of the insured arises ONLY when he is not the absolute owner (ex. mortgagee, lessee, etc.) IC. 35. Neither party to a contract of insurance is bound to communicate, even upon inquiry, information of his own judgment upon the matters in question. Simple rule: duty to disclose is confined only to facts, there is no duty to disclose mere opinion, speculation, intention or expectation. Ex. How long do you think will you live?

No more concealment, because concealment must take place at the time the contract is entered into. 2. Before effectivity of contract: Insured is under duty to rectify the facts after the application, but before the policy is delivered (if contract is to be effective only upon delivery).

Misrepresentation Form and When Made

IC. 36. A representation may be oral or written. Representation: statement made by the insured at the time of/prior to issuance of policy to an existing or past fact or state of facts, or concerning a future happening, to give information to the insurer and otherwise induce him to enter into contract of insurance. Requisites of a Statement of Misrepresentation: 1. Fact of something which is not true. 2. Insured stated: a. with knowledge that it is untrue and with intent to deceive OR b. without knowing it to be true and which has a tendency to mislead. 3. Fact is material to the risk Effect: voidable at the option of insurer, regardless of existence of intent on the part of the insured. Aka. Active concealment. Form and nature of representation: 1. Information given concerning risk which will be of use to the insurer in estimating its character and in determining whether or not to assume it. 2. Forms the basis of the contract; it describes, marks out and defines the risk assumed. 3. Intended as collateral inducement made to influence insurer to accept risk (not part of the contract unless expressly made so).

Test of Materiality
IC. 31: Materiality is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inquiries. Test of materiality: in the effect which the knowledge of the fact in question would have on the making on the contract. Material facts: need not increase the risk; it is sufficient that knowledge would influence the parties in making the contract. Court: determined materiality. Time when information required: 1. After effectivity of contract:

IC. 37. A representation may be made at the time of, or before, issuance of the policy. Representation must precede the execution of the contract. Insurer must be induced to issue the policy at a specified premium due to the representation. Promissory Representation (IC 39): representation may be performed after issuance of policy. IC. 41. A representation may be altered or withdrawn before the insurance is effected, but not afterwards. Representation is not part of contract of insurance. It cannot be altered/withdrawn after insurance has become effective because the insurer had already been led by the representation in assuming the risk contemplated. IC. 42. A representation must be presumed to refer to the date on which the contract goes into effect. Representation refers to the time of effectivity of the contract, not to the time of its making. True representation: true at time of effectivity, false at time of making. False representation: true at time it is made, false at the time it takes effect. Ex. policy states that vessel in Tokyo (but in HK during application). Policy is avoided if it is not in Tokyo at time of effectivity (regardless of where it was during the making). Conditions/warranties IC 39 (not representation): statements promissory of conditions which exist subsequent to the completion of the contract,

into existence; substantially a condition/warranty. 2 senses: 1. Oral promise not incorporated in the policy, hence, will not defeat the policy, unless made with fraudulent intent. 2. Undertaking by insured inserted in policy, but not specifically made a warranty. Kinds of representations: 1. Oral/Written. 2. Before/During issuance of policy. 3. Affirmative/Promissory Affirmative: existence/non-existence of fact when contract begins. Promissory: promise to be fulfilled after the contract has come into existence; substantially a condition/warranty Opinion/expectation: oral representation as to a future event/condition over which insured has no control; will avoid contract only if made in bad faith (Ex. promise that the building will be occupied). Effect on policy of representations of opinion/expectation: 1. Will not void policy unless there is fraud in inducing acceptance of risk. 2. To avoid liability, insurer must prove both (a) materiality of opinion and (b) intent to deceive. Effect on policy of representation of fact: To avoid liability, insurer must prove (a) falsity and (b) materiality. Intent to deceive is presumed.

Representation as to information
IC. 43: When a person insured has no personal knowledge of a fact, he may nevertheless repeat information which he has upon the subject, and which he believes to be true, with the explanation that he does so on the information of others; or he may submit the information, in its whole extent, to the insurer; and in neither case is he responsible for its truth, unless it proceeds from an agent

Representation as to future
IC. 39: A representation as to the future is to be deemed a promise, unless it appears that it was merely a statement of belief or expectation. Promissory Representation: promise to be fulfilled after the contract has come

of the insured, whose duty it is to give the information. When information is obtained from third persons: if it turns out to be false, the insured is not responsible therefore, provided he gives and explanation that he communicates on the information of others. Ex. unknown cause of death of parents he said, she said. When information is obtained from agent of insured/insurer: insured/insurer will be liable for the truth (although cases in which insurer is liable does not occur frequently).

1. Collusion with insured: insurer not anymore liable 2. Collusion with principal of agent: insurer still liable.

Misrepresentation as to Age
IC. 227: In the case of individual life or endowment insurance, the policy shall contain in substance the following conditions: (d) A provision that if the age of the insured is considered in determining the premium and the benefits accruing under the policy, and the age of the insured has been misstated, the amount payable under the policy shall be such as the premium would have purchased at the correct age
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Representation as to information
IC. 44: A representation is to be deemed false when the facts fail to correspond with its assertions or stipulations. Representations need only to be SUBSTANTIALLY TRUE (meaning, true in every particular material to the risk, or is so far true that the conduct of the insurer would not have been different if the exact truth had been alleged). Ex. In good health need not be perfect health. Exception: Marine insurance substantial truth is not sufficient. In order to have the policy avoided: 1. Substantially false. 2. Materially false. IC 45: If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time when the representation becomes false. The right to rescind granted by this Code to the insurer is waived by the acceptance of premium payments despite knowledge of the ground for rescission. Mere falsity is enough, fraud/intent in not necessary to rescind the contract. FALSE: representation fails to correspond with facts in a material point. Effect of collusion of agent of insurer:

Clause is equitable both to insurer and insured. In such a case, apply simple proportion.

proper premium : premium paid = alleged policy : x

Test of Materiality
IC. 46: The materiality of a representation is determined by the same rules as the materiality of a concealment. Test of Materiality: not by event, but by probable and reasonable influence of the facts upon the party to whom the representation is made, in forming his estimates of the disadvantages of the proposed contract or in making his inquiries. Determined by the Court. Concealment VS Misrepresentation Concealment Misrepresentation Insured withholds Insured makes information of erroneous statements material facts of facts with intent of inducing the insurer to enter into the insurance contract. Same rules of materiality. Same effect: right to rescind Regardless of intent Both likewise applicable to the insurer.

Incontestable Clause
IC. 48: Whenever a right to rescind a contract

of insurance is given to the insurer by any provision of this chapter, such right must be exercised previous to the commencement of an action on the contract. After a policy of life insurance made payable on the death of the insured shall have been in force during the lifetime of the insured for a period of two years from the date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured or his agent. Par 1: all insurance policies. Par 2: life insurance only. Incontestability: insurer is estopped from contesting the policy OR setting up defense, except on the ground of public policy. Rationale: 1. For insurer: reasonable time to investigate. 2. For insured: protect policy/beneficiary. Requisites: 1. Life insurance policy. 2. Payable on death of insured. -if payable upon certain maturity, insurer can still ask for annulment. 3. In force during the lifetime of insured for at least 2 years from date of issue/last reinstatement. Effect when policy becomes incontestable: Insurer cannot refuse to pay by reason of concealment/misrepresentation, not matter how patent or well-founded. Defenses not barred by Incontestable Clause 1. Lack of insurable interst. 2. Case of death is excepted risk. 3. Premiums have not been paid. 4. Condition relating to military/naval service had been violated. 5. Fraud of vicious type (ex. in furtherance of scheme to murder the insured, substitute another for medical examination, beneficiary killed insured) 6. Beneficiary failed to comply with conditions after loss (ie. Failed to furnish proof of death). 7. Action was not brought within the time specificd.

2 year period: can be shortened, but not extended. Action to rescind contract (time limit) Defense of an action to recover insurance (no time limit). Non-life policy Right must be exercised prior to commencement of an action to collect proceeds of policy. UNLESS there is material representations, and notice of cancellation is made before commencement of the suit. Life policy Defense in par 2 (fraudulent concealment/misrepresentation of insured/agent) is available only during first 2 years of insurance policy. But note that there are other defenses available. IC. 227: In the case of individual life or endowment insurance, the policy shall contain in substance the following conditions: (b) A provision that the policy shall be incontestable after it shall have been in force during the lifetime of the insured for a period of two years from its date of issue as shown in the policy, or date of approval of last reinstatement, except for non-payment of premium and except for violation of the conditions of the policy relating to military or naval service in time of war.

Warranties
IC. 67: A warranty is either expressed or implied. Warranty: statement/promise by the insured set forth in the insurance policy itself or incorporated in it by proper reference; the untruth or nonfulfillment of which in any respect and without reference to whether the insurer was in fact prejudiced by such, renders the policy voidable. KINDS OF WARRANTIES 1. Affirmative/Promissory

a. Affirmative: asserts the existence of a fact/condition at the time it is made. Continuing affirmative warranty: must be satisfied during the entire coverage of the period of insurance. b. Promissory/Executory: insured stipulates that certain facts/conditions pertaining to the risk shall exist or certain things with reference thereto shall be done/omitted; in the nature of condition subsequent. 2. Express/Implied a. Express: contained OR clearly incorporated in the policy whereby insured stipulated that certain facts relating to the risk are or shall be true or certain acts have been or shall be done. b. Implied: warranty from which the very nature of the contract OR from general tenor of the words, although no express warranty is mentioned, necessarily embodied in the policy as a part thereof, and binds the insured as though it was expressed. Law provides it only in MARINE INSURANCE: implied warranty that ship is seaworthy when the policy attaches (although may be found in other policies). Presumption: It is affirmative. Sec. 68. A warranty may relate to the past, the present, the future, or to any or all of these. Wrt Promissory Warranty: it only refers to future events. Sec. 69. No particular form of words is necessary to create a warranty. Intention of the parties governs; regardless of whether the term warranty is used. In case of doubt: presumed REPRESENTATION, not WARRANTY

(especially if contained in another instrument apart from policy, like application).

Warranty VS Representation Warranty Representation Part of contract? Yes, part of the No, merely collateral contract. inducements to it. Whether written on contract. Always written on face May be totally of policy, or by disconnected from reference. contract, and may be oral. Effect of falsity. Breach of contract. Void the policy on the ground of fraud. Presumption of materiality. Presumed material. Insurer must show materiality. Warranty: a representation that is expressly included OR incorporated by clear reference to the policy; and is shown that the parties intended the right of the insured would depend on the truth/fulfillment of the warranty. When TRUE, immaterial whether its a warranty or representation. Warranties are strictly construed against the insurer, and must be reasonably interpreted. Sec. 70. Without prejudice to section 51, every express warranty, made at or before the execution of a policy, must be contained in the policy itself, or in another instrument signed by the insured and referred to in the policy as making a part of it. Where express warranty is contained: 1. Policy itself. 2. Another instrument (must be signed by the insured and referred to in the policy; mere reference alone is not sufficient). Wrt. Rider: riders attached to the policy is considered part of the contract, therefore, warranty in riders need not be signed (but see

dissent). Sec. 71. A statement in a policy of matter relating to the person or thing insured, or to the risk, as a fact, is an express warranty thereof. To constitute a warranty, statement must refer to a fact, not opinion/belief. Where statement is in the nature of an opinion, such a statement, if deemed as warranty at all, is merely limited warranty as to the honesty and good faith of the insured. Sec. 72. A statement in a policy, which imparts that it is intended to do or not to do a thing which materially affects the risk, is a warranty that such act or omission shall take place. Refers to PROMISSORY WARRANTY. Breach of promise will only avoid the policy IF promises are material to the risk. Material to risk: increases the risk (substantial increase). Ex. House shall not be occupied by a tenant; no storage of flammable materials. Sec. 73. When, before the time arrives for the performance of a warranty relating to the future, a loss insured against happens, or performance becomes unlawful at the place of the contract, or impossible, the omission to fulfill the warranty does not avoid the policy. General Rule: violation of warranty avoids insurance Exceptions: 1. Loss occurs before performance Ex. Install fire extinguisher within 5 days; fire occurs at day 2. 2. Legal impossibility of performance. Ex. No more tenant in 3 months; law passed prohibiting ejectment of tenants. 3. Physical impossibility of performance. Ex. Lose 10lbs in 3 days.(CMM) Although policy may still be in force if insurer is barred by WAIVER/ESTOPPEL. 1. Waiver: express/implied intentional relinquishment of a known right. Knowing that the insured has

violated the policy, insurer preferred to continue by demanding the premiums. 2. Estoppel: action/inaction on the part of the insurer precludes him from relying on an otherwise valid defense against the insured who has been induced to enter into the contract by the insurers representation/conduct. Ex. Insurer discounted the fears of the insured by assuring the latter that his vehicle is covered by the terms of the policy. Sec. 74. The violation of a material warranty, or other material provision of a policy, on the part of either party thereto, entitles the other to rescind. Right to rescind for violation of material warranty: 1. By insured For refusal of the insurer to grant a loan which falls within the terms of the policy. 2. By insurer For violation of material warranty, eventhough the violation was not the direct cause of the loss. (Ex. fire insurance; warranty breached -did not inform the insurer of existence of other policies.) (CMM: Is this really a material breach? Does it increase the risk?) Sec. 75. A policy may declare that a violation of specified provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy. GENERAL RULE: Only material breaches will avoid the policy. EXCEPTION: Policy expressly stipulates that violation of certain provision (although immaterial) will avoid the policy. Sec. 76. A breach of warranty without fraud merely exonerates an insurer from the time that it occurs, or where it is broken in its inception, prevents the policy from attaching to the risk.

and void) Fraud is not essential for the insurer to rescind the contract. Nonetheless, fraud may have effects wrt the return of premiums. 1. Without Fraud Warranty broken during the inception of the contract: -return all premiums paid. (policy never became binding) Warranty broken after the inception of the contract: -return premium on pro rata rate (premium paid after the warranty has been broken shall be returned). 2. With Fraud Policy void ab initio; insured is not entitled to return of premium. Condition: event signifying either an occurrence/non-occurrence that alters the previously existing legal relations of the parties to the contract. 2 kinds: 1. Conditions precedent: some act after the contract has been agreed upon, but before the contract becomes binding (ex. until delivery and premium has been paid) 2. Conditions Subsequent: act after the risk has attached and during the existence thereof (Ex. condition requiring notice and proof of loss in case of loss upon an insurance against fire) Warranty VS Condition Warranty Condition Effect Warranty does not Without its suspend/defeat the performance, contract operation of the does not spring to life. contract, but breach thereof entitles party to remedies. No such effect. Limitation to the attachment of risk. Nature Nature of defeasance (non-performance will make the contract null Exceptions: clauses inserted in the contract for purpose of withdrawing from the coverage some specific risks the insurer is not willing to undertake. Condition: policy shall be void if the building becomes vacant for 10 days. Warranty: building is occupied. Exception: insurer shall not be liable if building becomes vacant. Effect of breach of Warranty, Condition and Exception. 1. On binding force. Warranty/Condition: renders the entire contract voidable. Exception: does not affect binding force of contract. 2. On waiver. Warranty/Condition: may be waived. Exception: no such thing as waiver unless waiver amounts to new contract on valuable consideration.

Warranties in Fire Insurance Policy; Standard Clauses

IC 168. An alteration in the use or condition of a thing insured from that to which it is limited by the policy made without the consent of the insurer, by means within the control of the insured, and increasing the risks, entitles an insurer to rescind a contract of fire insurance. Sec. 169. An alteration in the use or condition of a thing insured from that to which it is limited by the policy, which does not increase the risk, does not affect a contract of fire insurance. Requisites for the insurer to rescind the contract: 1. Use/condition of the thing is specifically limited/stipulated in the policy. 2. Use/condition is altered. 3. Alteration is without the consent of the insurer. 4. Alteration increases the risk.

(but note exception in IC 170). Ex. character of business carried in there. Increase of risk must be SUBSTANTIAL: mere negligent acts temporarily endangering policy (ex. smoking on bed) will not violate the policy. Policy is avoided. 1. Risk of loss is increased (ex. firecrackers stored in bldg). 2. Increase no longer exists at time of loss: Insurer will still be liable UNLESS it is a breach of warranty. Policy is not avoided. 1. Risk of loss not increased. 2. Questioned articles required by insureds business (Ex. Benzine kept in furniture factory) 3. Insureds property would be useless if questioned acts were prohibited. (Ex. gasoline needed for removing old paint during repairs) When insured has no control/knowledge of alteration: Insurers liability is not affected, although the presumption is that it was known to the insured. Sec 75 and Sec 169 Consistent: breach of immaterial provision does not avoid policy. Difference: IC 75 gives insurer right to insert provision that policy is avoided in terms of violation. Hence, IC 169 applies to policies silent upon the subject. Sec. 170. A contract of fire insurance is not affected by any act of the insured subsequent to the execution of the policy, which does not violate its provisions, even though it increases the risk and is the cause of the loss. If policy does not contain prohibition, alteration does not constitute violation even though it increases risk, and is actually the cause! Sec 170 is an exception to Sec 168. However, provision is of little importance. Insured usually adds stipulations.

Grounds & exercise if rights of rescission

IC 48. Whenever a right to rescind a contract of insurance is given to the insurer by any provision of this chapter, such right must be exercised previous to the commencement of an action on the contract. After a policy of life insurance made payable on the death of the insured shall have been in force during the lifetime of the insured for a period of two years from the date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab initio or is rescindible by reason of the fraudulent concealment or misrepresentation of the insured or his agent. (see supra) IC 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 year from the time when the cause of action accrues, is void. General rule: clause to the effect that an action upon the policy by the insured must be brought within a certain period is VALID. Exception: when the period provided is less than 1 year (but for industrial life: 6 years after the cause of action accrues) When action is brought against the agent, it cannot have any legal effect except of notifying the agent of the claim. When does the cause of action accrue? WHEN INSUREDS CLAIM IS REJECTED BY THE INSURER. Differentiated with Right of insured to payment of his loss: accrues from happening of loss.

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 Hence, period for commencing an action under IC 63 is computed from the time when insureds claim is finally rejected by insurer, not when loss actually occurred. Action: complaint/claim filed by insured with the Office of Insurance Commissioner.

Sec. 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) non-payment of premium; (b) conviction of a crime arising out of acts increasing the hazard insured against; (c) discovery of fraud or material misrepresentation; (d) discovery of willful or reckless acts or omissions increasing the hazard insured against; (e) physical changes in the property insured which result in the property becoming uninsurable; or (f) a determination by the Commissioner that the continuation of the policy would violate or would place the insurer in violation of this Code. *subsequent to the first premium (it wont be binding if the first hasnt been paid yet IC 77) Sec. 65. All notices of cancellation mentioned in the preceding section shall be in writing, mailed or delivered to the named insured at the address shown in the policy, and shall state (a) which of the grounds set forth in section 64 is relied upon and (b) that, upon written request of the named insured, the insurer will furnish the facts on which the cancellation is based. Cancellation: right to rescind, abandon, or cancel a contract of insurance; termination before its expiration. 1. Insurer: IC 64-65. 2. Insured: at his own discretion (with return of premiums).

Form and sufficiency of notice of cancellation by insurer: 1. Prior notice. 2. Must be based on the enumerated grounds. 3. In writing, mailed and delivered to the named insured in the address shown in the policy. 4. Must state the grounds. Purpose of notice to insured: to allow the insured ample time to negotiate for other insurance in its stead for his own protection. Notice must be to insured himself (not effective if notice is to other people, unless with prior authority of the insured). Notice may be sent by mail. IC 179. Life insurance is insurance on human lives and insurance appertaining thereto or connected therewith. (see supra on other notes) IC 227: In the case of individual life or endowment insurance, the policy shall contain in substance the following conditions: (b) A provision that the policy shall be incontestable after it shall have been in force during the lifetime of the insured for a period of two years from its date of issue as shown in the policy, or date of approval of last reinstatement, except for non-payment of premium and except for violation of the conditions of the policy relating to military or naval service in time of war; Incontestable clause see IC 48 above IC 380. No cancellation of the policy shall be valid unless written notice thereof is given to the land transportation operator or owner of the vehicle and to the Land Transportation Commission at least fifteen days prior to the intended effective date thereof. Upon receipt of such notice, the Land Transportation Commission, unless it receives evidence of a new valid insurance or guaranty in cash or surety bond as prescribed in this chapter, or an endorsement of revival of the cancelled one,

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shall order the immediate confiscation of the plates of the motor vehicle covered by such cancelled policy. The same may be re-issued only upon presentation of a new insurance policy or that a guaranty in cash or surety band has been made or posted with the Commissioner and which meets the requirements of this chapter, or an endorsement or revival of the cancelled one. Compulsory vehicle liability insurance.

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