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All Jurisprudence based

0 tracked cards Commercial and Taxation Laws

A 9-month marine cargo policy is issued on January 1 for PHP 540,000 premium, paid in full. Policy period: January 1 to September 30. On April 1, the insured cancels the policy due to a misstatement in risk in the application. The insurer refuses any refund, contending that the premium was earned at inception. Under PD No. 612, as amended by RA No. 10607, which statement correctly describes the rule on when premium is earned and the correct unearned premium refund as of April 1?

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Premium is earned pro rata temporis; the unearned premium as of April 1 is PHP 360,000, which must be refunded to the insured. Premium is earned monthly; the unearned premium as of April 1 is PHP 420,000. Refund equals PHP 540,000 (full refund despite misstatement). Premium is earned on a risk-attaching basis with daily pro rata; the unearned premium as of April 1 is PHP 315,000.

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