MANILA, Philippines — The Supreme Court has reiterated that withholding critical health information on an insurance application is legally fraudulent, allowing insurers to void policies even without proof of explicit intent to deceive.
In an en banc decision authored by Associate Justice Japar Dimaampao, the high court rejected a petition filed by the heirs of the late Indalicio Monera, dismissing their complaint against Manila Bankers Life Insurance Corporation (MB Life) and Meycauayan Rural Bank, Inc.
The ruling affirmed previous decisions by the Regional Trial Court and the Court of Appeals (CA), which consistently held that concealing significant health details entitles an insurer to rescind a contract.
According to court records, Monera secured loans from Meycauayan Rural Bank using real estate and a group credit life insurance policy with MB Life as collateral. Under the agreement, insurance payouts would settle the outstanding balance with the bank upon Monera’s death.
While applying for an additional credit life insurance policy, Monera signed a health declaration certifying that he had not been ill for seven or more consecutive days nor consulted a physician for any ailment in the preceding five years.
Monera passed away less than a month after the second policy was issued. Following his death, Meycauayan Rural Bank filed a claim with MB Life to cover the matured loans.
MB Life denied the claim after an investigation revealed that prior to submitting his application, Monera had undergone a surgical procedure to excise a mass and had been diagnosed with metastatic cancer near his right collarbone.
The heirs challenged the insurer’s denial in court. However, lower courts determined that Monera failed to disclose at least six medical procedures and a terminal diagnosis—information vital to the insurer’s decision to grant coverage.
In their appeal to the Supreme Court, Monera’s heirs argued that MB Life failed to demonstrate that their father actively intended to defraud the company.
The high tribunal dismissed the argument, clarifying that under the Insurance Code, an insurer may cancel a policy if an applicant fails to disclose material facts, whether the omission was intentional or unintentional.
The court emphasized that information is considered material if it would directly influence an insurer’s decision to accept the risk or determine the terms of the policy. Because Monera withheld his true medical history, MB Life was legally justified in revoking the contract.