Insurance Premium

Insurance

University of San Agustin

Atty. Nelita Jesusa A. Bacaling

“TITLE 8

“PREMIUM

“SEC. 77. An insurer is entitled to payment of the premium as soon as the thing insured is exposed to the peril insured against. Notwithstanding any agreement to the contrary, no policy or contract of insurance issued by an insurance company is valid and binding unless and until the premium thereof has been paid, except in the case of a life or an industrial life policy whenever the grace period provision applies, or whenever under the broker and agency agreements with duly licensed intermediaries, a ninety (90)-day credit extension is given. No credit extension to a duly licensed intermediary should exceed ninety (90) days from date of issuance of the policy.

1.     What is the concept of premium in insurance contracts? The premium is the consideration to be paid by the insured to the insurer who charges him for undertaking to assume the risk of indemnifying the insured against a specified peril.

2.     In fire, casualty, and marine insurance – The premium payable becomes a debt as soon as the risk attaches   (Gulf Resort, citing De Leon, Hector, Insurance Code of the Philippines).

a.     What if the insured does not pay the premium, is the contract cancelled? It does not totally cancel the contract. It is cancelled as far as the obligation of the insurer to indemnify the insured is concerned but as a source of obligation of the insured, the contract remains enforceable. To Adopt a contrary ruling would be to place in the hands of one party the right to decide whether a contract remains effective or not.

-        The insured will still be liable for the balance of his premium under the contract. Phil Phoenix Surety& Ins. Co v. Woodworks, Inc. 92 SCRA 419

-        Unless: no premium was ever paid which means the contract never became effective.

b.      Non-Payment of Premium- policy does not become effective

“Sec. 77 says notwithstanding any agreement to the contrary”

EXCEPT:

1.      Life or Industrial life policy provision on grace periods;

2.      Policy is under broker and agency agreements with duly licensed intermediaries

3.      Acknowledgment in the policy itself that premium was already paid, even if there is a stipulation that effectivity of policy shall only be upon actual payment of premium; Se. 79.

4.      When there is an agreement allowing payment of premium by installment and partial payment has already been made;

5.      When there is an agreement to grant the insured credit extension for the payment of premium an loss occurs upon the expiration of the credit term;

6.      Estoppel – receipt of payment by the insurer despite the lapse of the credit term will render the policy valid and binding.

Ø  UCPB General Insurance Co. INc. versus Masagana Telemart, Inc. 356 SCRA 307

Ø  Tibay versus Court of Appeals 257SCRA 126

Ø  Makati Tuscany Condominium Corp. Versus Court of Appeals 215 SCRA 462

3.     In life insurance – Unpaid premiums are not considered debt by the insured to the insurer, unlike in the case of non-life insurance.

A.     Effect of non-payment –

a.1 the non-payment of the 1^st premium prevents the contract from becoming binding.

a.2 non payment of the first premium shall render the policy lapsed subject to a grace period of thirty (30) days, (Sec 233 (a) and 234 (a); In case of industrial life the grace period or 4 weeks.

 “SEC. 78. Employees of the Republic of the Philippines, including its political subdivisions and instrumentalities, and government-owned or -controlled corporations, may pay their insurance premiums and loan obligations through salary deduction: Provided, That the treasurer, cashier, paymaster or official of the entity employing the government employee is authorized, notwithstanding the provisions of any existing law, rules and regulations to the contrary, to make deductions from the salary, wage or income of the latter pursuant to the agreement between the insurer and the government employee and to remit such deductions to the insurer concerned, and collect such reasonable fee for its services.

“SEC. 79. An acknowledgment in a policy or contract of insurance or the receipt of premium is conclusive evidence of its payment, so far as to make the policy binding, notwithstanding any stipulation therein that it shall not be binding until the premium is actually paid.

1.     An acknowledgment of receipt of premium is conclusive evidence of its payment. Consequence the policy becomes binding.

-American Home Assurance Company versus Chua. 309 SCRA 250.

The insurer accepted the mode of payment 30 days after issuance of policy. Not only was the payment made thru check, the check also bounced. SC ruled in favor of the insured. “Insurer implicitly agreed to waive the provision that it would only pay for the loss if there is payment of the premium.”

-SC gave effect to Sec. 79, instead of imposing the strict requirements of Sec 77.

“SEC. 80. A person insured is entitled to a return of premium, as follows:

“(a) To the whole premium if no part of his interest in the thing insured be exposed to any of the perils insured against;

“(b) Where the insurance is made for a definite period of time and the insured surrenders his policy, to such portion of the premium as corresponds with the unexpired time, at a pro rata rate, unless a short period rate has been agreed upon and appears on the face of the policy, after deducting from the whole premium any claim for loss or damage under the policy which has previously accrued: Provided, That no holder of a life insurance policy may avail himself of the privileges of this paragraph without sufficient cause as otherwise provided by law.

1.     When no part of the thing insured become exposed to any of the perils insured against.

2.     When the insurance is for a definite period and the insured surrenders his policy before the termination thereof

3.     When the contract is voidable and consequently annulled because of the fraud or misrep of the insurer or his rep. Sec 82

4.     When the contract is voidable because of the existence of facts of which the insured was ignorant without his fault. Sec 82

5.     When the insurer never incurred any liability under the policy because of the default of the insured other than fraud. – (a brand new motor vehicle that was never used and the purchase thereof was cancelled. No fraud but default is on the part of the insured.)

6.     When there is over-insurance. (Sec. 83)

“SEC. 81. If a peril insured against has existed, and the insurer has been liable for any period, however short, the insured is not entitled to return of premiums, so far as that particular risk is concerned.

“SEC. 82. A person insured is entitled to a return of the premium when the contract is voidable, and subsequently annulled under the provisions of the Civil Code; or on account of the fraud or misrepresentation of the insurer, or of his agent, or on account of facts, or the existence of which the insured was ignorant of without his fault; or when by any default of the insured other than actual fraud, the insurer never incurred any liability under the policy.

“A person insured is not entitled to a return of premium if the policy is annulled, rescinded or if a claim is denied by reason of fraud.

“SEC. 83. In case of an over insurance by several insurers other than life, the insured is entitled to a ratable return of the premium, proportioned to the amount by which the aggregate sum insured in all the policies exceeds the insurable value of the thing at risk.

“SEC. 84. An insurer may contract and accept payments, in addition to regular premium, for the purpose of paying future premiums on the policy or to increase the benefits thereof.

>>>> This is common when regular insurance contracts have "riders" which are expanded services or risks covered upon payment of additional premiums.

Insurance Policy and Warranties (Revised and Edited)

Atty. Nelita Jesusa A. Bacaling

Insurance 

Title 6- THE POLICY

I.                 THE WRITTEN POLICY

“SEC. 49. The written instrument in which a contract of insurance is set forth, is called a policy of insurance.

“SEC. 50. The policy shall be in printed form which may contain blank spaces; and any word, phrase, clause, mark, sign, symbol, signature, number, or word necessary to complete the contract of insurance shall be written on the blank spaces provided therein.

“Any rider, clause, warranty or endorsement purporting to be part of the contract of insurance and which is pasted or attached to said policy is not binding on the insured, unless the descriptive title or name of the rider, clause, warranty or endorsement is also mentioned and written on the blank spaces provided in the policy.

“Unless applied for by the insured or owner, any rider, clause, warranty or endorsement issued after the original policy shall be countersigned by the insured or owner, which countersignature shall be taken as his agreement to the contents of such rider, clause, warranty or endorsement.

“Notwithstanding the foregoing, the policy may be in electronic form subject to the pertinent provisions of Republic Act No. 8792, otherwise known as the ‘Electronic Commerce Act’ and to such rules and regulations as may be prescribed by the Commissioner.”

Notes:

>Sec. 49 Defines the Policy of Insurance. 
>It is the written embodiment of the contract of insurance between the insured and the insurer. It is signed only by the insurer or his agent, but the law itself says that when there is a rider, clause warranty or endorsement, the insured must also sign.

> the usual practice is for the insured to fill out an application, the terms of which clearly appears that the applicant accepts the terms of the policy and even makes an offer to the insurer to insure him or her. Why? Because the terms and conditions of  insurance policies usually pertains to the benefits that may be claimed by the insured, hence it is the insurer, making such assurances who needs to sign. The reverse is true when there are warranties made by the insured. He is now required to sign or countersign such statements where he is the one guaranteeing to the insurer, a fact or the non-existence of a fact material to the risk.
>>>> In actual practice, because of the number of provisions that pertain to the obligations of both parties, insurance companies require that both parties sign the contract to be binding.

> Insurance contracts are perfect examples of contracts of adhesion. In Philippine jurisprudence, there is a wealth of decisions that find in favor of the insured in order that the insurance policy may be given effect and not avoided. Aside from other factors, the usual reason is that the policy in question is a contract of adhesion and the insured had no hand whatsoever in preparing the same.

>Gulf Resort, Inc. vs. Philippines Charter Insurance Corporation, 458 SCRA 550 (2005)

>Western Guaranty Corp. versus the Court of Appeals, 187 SCRA 652 (1990)

>Finman General Assurance Corp., 213 SCRA 493 (1992)

Ø  However, there is no necessity to interpret the contract if the terms are clear and unambiguous. 

Ø  Fortune Insurance & Surety Co., Inc. vs. Court of Appeals. 244 SCRA 308 (1995)

>Is there insurance coverage upon the mere submission of the application?

>>>>No. it is still subject to approval by the insurer.

> What if the premium is already paid along with the submission of the application? 
        Even so. The answer is the same, there must be approval first before a policy may be issued. There is no meeting of the minds if the application is not yet approved.

A.    Delivery of the Policy

1.     There is no binding policy if there is no acceptance.

2.     Non- compliance of conditions- policy not considered executed. 
    Example: Condition on personal delivery of the policy to the insured and payment of premium.

3.     Cover Notes.

“SEC. 52. Cover notes may be issued to bind insurance temporarily pending the issuance of the policy. Within sixty (60) days after issue of a cover note, a policy shall be issued in lieu thereof, including within its terms the identical insurance bound under the cover note and the premium therefor.

“Cover notes may be extended or renewed beyond such sixty (60) days with the written approval of the Commissioner if he determines that such extension is not contrary to and is not for the purpose of violating any provisions of this Code. The Commissioner may promulgate rules and regulations governing such extensions for the purpose of preventing such violations and may by such rules and regulations dispense with the requirement of written approval by him in the case of extension in compliance with such rules and regulations.

4.     The Court may treat each situation in a case to case basis because it may also look into the intention of the parties as to when they did intend for the policy to take effect. For example did the parties intend for the policy to take effect upon the physical possession by the insured of such policy, or by electronic delivery? Or even if the delivery of the policy and receipt is made thru an agent, the parties already deemed it effective? 

  5. When the issue raised is on the effectivity of the policy, and the fact states that there was a cover note issued, the general rule is that the effectivity thereof is only up to 60 days unless renewed with approval of the Insurance commission. If the facts show that the parties intended for a different date of effectivty, that may be considered by the court in deciding the effectivity of the policy. This is also how one should answer those cases where there are conflicting jurisprudence that exists.

II.               Contents of the Policy

“SEC. 51. A policy of insurance must specify:

“(a) The parties between whom the contract is made;

“(b) The amount to be insured except in the cases of open or running policies;

“(c) The premium, or if the insurance is of a character where the exact premium is only determinable upon the termination of the contract, a statement of the basis and rates upon which the final premium is to be determined;

“(d) The property or life insured;

“(e) The interest of the insured in property insured, if he is not the absolute owner thereof;

“(f) The risks insured against; and

“(g) The period during which the insurance is to continue.

 “SEC. 53. The insurance proceeds shall be applied exclusively to the proper interest of the person in whose name or for whose benefit it is made unless otherwise specified in the policy. 

Note:

>>>Only the beneficiary shall have the right to claim the insurance proceeds. In property insurance, it should be the owner who may claim or another person for whose interest the insurance was taken, like a mortgagee or a creditor.

SEC. 54. When an insurance contract is executed with an agent or trustee as the insured, the fact that his principal or beneficiary is the real party in interest may be indicated by describing the insured as agent or trustee, or by other general words in the policy.

>>>The principal and real party -in-interest must be indicated. Otherwise, the agent or trustee will be considered as the party insured.

SEC. 55. To render an insurance effected by one partner or part-owner, applicable to the interest of his co-partners or other part-owners, it is necessary that the terms of the policy should be such as are applicable to the joint or common interest.    

>>>The same is true as regards partners or part-owners. It must be indicated in the policy that the same is for the benefit of the common interest and not only of the partner who took out or signed the policy.

SEC. 56. When the description of the insured in a policy is so general that it may comprehend any person or any class of persons, only he who can show that it was intended to include him, can claim the benefit of the policy.    
             

>>>The insured bears the burden of proving that he is one of the persons named to benefit from the policy, only in cases when the description is general. This may be true in group insurance, however, in view of the advancement in technology, from the application stage alone, insurers are now exercising more care in identifying the insured.

III.             Transfer of Interest

Note: Notice that the exception is stated first before the General Rule. We therefore read Section 58 first, thus:

General Rule:

SEC. 58. The mere transfer of a thing insured does not transfer the policy, but suspends it until the same person becomes the owner of both the policy and the thing insured.

Note: 
1.  The transfer mentioned is here is about the transfer of rights or ownership of the thing insured. The law says that the mere transfer of rights or ownership of the thing does not carry with it the transfer of the coverage of the risk or benefits of the policy to the new owner or holder of rights over the thing. Without a corresponding transfer of the policy to the new owner, the original policy is suspended. Meaning, there is no coverage from risks that inures to the benefit of the new owner.

Exception:

SEC. 57. A policy may be so framed that it will inure to the benefit of whomsoever, during the continuance of the risk, may become the owner of the interest insured.          

 

IV.              Classification of Policies

“SEC. 59. A policy is either open, valued or running.

“SEC. 60. An open policy is one in which the value of the thing insured is not agreed upon, and the amount of the insurance merely represents the insurer’s maximum liability. The value of such thing insured shall be ascertained at the time of the loss.

“SEC. 61. A valued policy is one which expresses on its face an agreement that the thing insured shall be valued at a specific sum.

“SEC. 62. A running policy is one which contemplates successive insurances, and which provides that the object of the policy may be from time to time defined, especially as to the subjects of insurance, by additional statements or indorsements.

>>>>> A multi-storey building that is still under construction may be a covered by a running policy because its value at different stages of construction increases or varies.

V.              Period to File Claim

“SEC. 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 (1) year from the time when the cause of action accrues, is void.

VI.             Cancellation of Policies

“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) Nonpayment 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;

“(f) Discovery of other insurance coverage that makes the total insurance in excess of the value of the property insured; or

“(g) A determination by the Commissioner that the continuation of the policy would violate or would place the insurer in violation of this Code.

“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, or to his broker provided the broker is authorized in writing by the policy owner to receive the notice of cancellation on his behalf, 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.

“SEC. 66. In case of insurance other than life, unless the insurer at least forty-five (45) days in advance of the end of the policy period mails or delivers to the named insured at the address shown in the policy notice of its intention not to renew the policy or to condition its renewal upon reduction of limits or elimination of coverages, the named insured shall be entitled to renew the policy upon payment of the premium due on the effective date of the renewal. Any policy written for a term of less than one (1) year shall be considered as if written for a term of one (1) year. Any policy written for a term longer than one (1) year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one (1) year.

Ø  Malayan Insurance Co. Inc, v. Cruz-Arnaldo, 154 SCRA 672 (1987)

TITLE 7- WARRANTIES

“SEC. 67. A warranty is either expressed or implied.

           

Warranty- a warranty is a statement or promise by the insured, contained in the policy itself or incorporated in or attached to it by proper reference, the falsity or non-fulfillment of which, regardless of whether or not the insurer has suffered loss or prejudice as a result, renders the policy voidable at the option of the insurer.

“SEC. 68. A warranty may relate to the past, the present, the future, or to any or all of these.  
 

>>>This refers to affirmative warranty. It asserts the existence of a fact or condition at the time it is made.

“SEC. 69. No particular form of words is necessary to create a warranty.

“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.

“SEC. 71. A statement in a policy, of a matter relating to the person or thing insured, or to the risk, as fact, is an express warranty thereof.  

>>>          This is Express Warranty. – Anything expressed as a fact or one plainly stated in the policy which affects the risk is an express warranty.

            Implied warranties are mostly found in Marine Insurance. The best example is the seaworthiness of the ship even without any express statement relating thereto. The risk involved is against any peril of the sea, thus, if the ship is insured against such risk, it is assumed that it is seaworthy and such fact is an implied warranty on the part of the owner.

“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.  
                

>>>This is a Promissory Warranty. – A statement that promises to do something or not to do it, which is material to the risk covered.

“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.

>>>The insured is excused from executing a promised warranty, when the performance of which he is forced to perform due to causes beyond his control. For example, he has to perform service which he has warranted not to perform under the policy, but which under the circumstances such as emergency situations, forces him to do in order to save lives or property. The insurer must still pay for the loss, if any, and cannot use the fact that a promised warranty was not complied with.

           

“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.     
              

>>>>Breach of warranty entitles the other party to rescind. Indeed we have said that any breach renders the contract or policy voidable.

“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.

>>>>There must be an express provision regarding a breach that would render the policy void. Otherwise, the policy will not be avoided especially if the breach is immaterial or considered very minimal.

“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.  

>>> This section contemplates of a breach but without fraud in two (2) possible scenarios. First, there is breach while the policy was still in effect. The second is there is breach from the inception of the policy. 

>>>>>> It is humbly opined that the use and placement of the word "merely" is misplaced. 

Another phrasing is suggested, thus:
>>>> "A breach of warranty without fraud exonerates an insurer ONLY from the time that THE BREACH occurs, or where it is present in its inception, prevents the policy from attaching to the risk."

Stated differently (and less melodramatically,) if a warranty is breached, but such breach appears to be committed without fraud, the insurance policy will be valid and effective up to such time that the breach was committed.

However, if the breach of warranty is made from the time that the policy was executed, then the policy will have no effect and is deemed not to have covered the risk insured against from the very start.

Return of premium and liability in case of loss

>>>> Because of the absence of fraud in both instances, the insured shall return the premium if any is paid, from the time the contract is invalidated due to the breach. Should any loss occur before the breach, the insured shall be liable. 

In the second case, the breach exists from the very inception of the policy, thus the contract shall not bind the insurer, and the latter shall not be liable for any loss that may occur. However because there is no FRAUD, the insured is entitled to the return of premiums if the same is paid.

Representation

INSURANCE

Atty. Nelita Jesusa A. Bacaling

TITLE 5 Insurance Code:       REPRESENTATION

Sec. 36 A representation may be Oral or Written

Sec 36 merely states the form by which a representation may be made.

What is representation?

“It is a statement made by the insured at the time of or before the issuance of a policy, relative to the risk to be insured, as to an existing or past fact or concerning a future event, that in either case would induce the insurer to enter into a contract of insurance.”

What is misrepresentation?

“it is a statement

1) of a fact which is untrue

2) which the insured stated with the knowledge that it is untrue with the intention to deceive or without knowing it to be true which has the tendency to deceive;

3) In either case is material to the risk.

Sec. 37. A representation may be made at the time of, or before, issuance of the policy.

Sec. 38. The language of a representation is to be interpreted by the same rules as the language of contracts in general.

Sec. 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.

            A promissory representation – is representation as to a fact that will be fulfilled or will exist in the future.

            Examples. 1. The insured submits himself to annual physical examination and is willing to submit results while this policy is in effect.

                               2. The property insured will be free from all hazardous substances while the contract is in effect.

            -“unless it appears that it was merely a statement of belief or expectation.”

            Example:        1. The property insured is in an area observed to be flood-free;

                                    2. State the state of your health within the next few years:

“I will most likely remain healthy within the next five to ten years.”

Sec. 40. A representation cannot qualify an express provision in a contract of insurance, but it may qualify an implied warranty.

            Example: 1. A) Contract provision: the insured hereby undertakes not to engage in any extreme sports activities while this policy is in effect.

                                 B) Representation:       “The insured has never engaged and will not engage in any extreme sport activities, unless his present engagement as a dragon boat team member will be classified as an extreme sport in the future.”

                                    -the qualification in “B” will not qualify “A”

                        2. A) Implied Warranty:        General good health of the person insured.

                            B) Have you been suffering from any lingering ailment for the past 5 years”” ANS: No, except for allergic reactions to some kind of food suffered since childhood.”

                                    - This statement in “B” will qualify the general warranty in “A.”

Sec. 41. A representation may be altered or withdrawn before the insurance is effected but not afterwards.

Sec. 42. A representation must be presumed to refer to the date on which the contract goes in effect.

            Even if not true when a statement was made, but true when the contract becomes effective, there is no misrepresentation.

There is misrepresentation if the statement was true when it was uttered but untrue when the contract takes into effect.

Sec. 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 of the insured whose duty it is to give the information.

1.     3^rd-hand information may be given with a qualification that the same is only gathered from 3^rd parties, because he does not have personal knowledge, but which he believes is true.

2.     The provision specifically states that the insurer cannot use this as an excuse when the information proceeds from his own agent who is expected to have first hand knowledge over the veracity or truthfulness of the information given.

           

Sec. 44. A representation is to be deemed false when the facts fail to correspond with its assertions or stipulations.

            This is the definition of a misrepresentation.

            Unlike in warranties, representations are not required to be literally true or true in all material respects. It is required only that it be substantially true. Except in marine insurance because in marine insurance, representations of parties are the declarations relied upon by the insurer whether to enter into an insurance contract or not.

            The test whether a representation is substantially true is whether or not the insurer would not have changed its decision had the exact truth been revealed.

Examples:

1)     have you been confined due to personal ailment for the past 7 years? If the answer is no despite confinement due to childbirth, there is no misrepresentation because this is substantially true given that this kind of confinement is not due to “personal ailment”

2)     If the applicant is asked, are you in good health?         If the answer is yes, there is no misrepresentation even if the applicant is found out to be suffering from an illness he does not know of at the time when the questions was asked.

Sec. 45. 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.

Sec. 46. The materiality of a representation is determined by the same rules as materiality of concealment.

Sec. 47. The provisions of this chapter apply as well to modification of a contract of insurance as to its original formation.

Sec. 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 (2) years from the date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab inito or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured or his agent.