Flashcards Studio

A mid-sized manufacturing plant applies for property and business interruption insurance with Insurer Co. The applicant fails to disclose that within the last year a regulatory fire-safety audit flagged significant deficiencies in the plant’s fire prevention systems and recommended retrofitting work, which the applicant did not implement. The policy is issued and premiums are paid. After a major fire damages the plant, Insurer Co. denies the claim on the ground of concealment.   (a)State the controlling doctrine of concealment under the Insurance Code (PD 612, as amended by RA 10607) and list its essential elements. (b)Apply those elements to the facts: was there concealment? was the concealed fact material to the risk or to pricing? was there intent to defraud? (c)What is the permissible remedy for the insurer (e.g., rescission ab initio vs denial of the claim).