SECTION 1.

This Decree shall be known as “(c) As used in this Code, the

‘The Insurance Code’. term Commissioner means the Insurance
Commissioner.
“SEC. 2. Whenever used in this Code, the
following terms shall have the respective “CHAPTER I
meanings hereinafter set forth or indicated,
unless the context otherwise requires: “THE CONTRACT OF INSURANCE

“(a) A contract of insurance is an agreement “TITLE 1

whereby one undertakes for a consideration to
indemnify another against loss, damage or “WHAT MAY BE INSURED
liability arising from an unknown or contingent
event. “SEC. 3. Any contingent or unknown event,
whether past or future, which may damnify a
“A contract of suretyship shall be deemed to be person having an insurable interest, or create a
an insurance contract, within the meaning of this liability against him, may be insured against,
Code, only if made by a surety who or which, as subject to the provisions of this chapter.
such, is doing an insurance business as
hereinafter provided. “The consent of the spouse is not necessary for
the validity of an insurance policy taken out by a
“(b) The term doing an insurance married person on his or her life or that of his or
business or transacting an insurance business, her children.
within the meaning of this Code, shall include:
“All rights, title and interest in the policy of
“(1) Making or proposing to make, as insurer, insurance taken out by an original owner on the
any insurance contract; life or health of the person insured shall
automatically vest in the latter upon the death of
“(2) Making or proposing to make, as surety, any the original owner, unless otherwise provided
contract of suretyship as a vocation and not as for in the policy.
merely incidental to any other legitimate
business or activity of the surety; “SEC. 4. The preceding section does not
authorize an insurance for or against the
“(3) Doing any kind of business, including a drawing of any lottery, or for or against any
reinsurance business, specifically recognized chance or ticket in a lottery drawing a prize.
as constituting the doing of an insurance
business within the meaning of this Code; “SEC. 5. All kinds of insurance are subject to the
provisions of this chapter so far as the
“(4) Doing or proposing to do any business in provisions can apply.
substance equivalent to any of the foregoing in
a manner designed to evade the provisions of “TITLE 2
this Code.
“PARTIES TO THE CONTRACT
“In the application of the provisions of this Code,
the fact that no profit is derived from the making “SEC. 6. Every corporation, partnership, or
of insurance contracts, agreements or association, duly authorized to transact
transactions or that no separate or direct insurance business as elsewhere provided in
consideration is received therefor, shall not be this Code, may be an insurer.
deemed conclusive to show that the making
thereof does not constitute the doing or “SEC. 7. Anyone except a public enemy may be
transacting of an insurance business. insured.
“SEC. 8. Unless the policy otherwise provides, “SEC. 12. The interest of a beneficiary in a life
where a mortgagor of property effects insurance insurance policy shall be forfeited when the
in his own name providing that the loss shall be beneficiary is the principal, accomplice, or
payable to the mortgagee, or assigns a policy of accessory in willfully bringing about the death of
insurance to a mortgagee, the insurance is the insured. In such a case, the share forfeited
deemed to be upon the interest of the shall pass on to the other beneficiaries, unless
mortgagor, who does not cease to be a party to otherwise disqualified. In the absence of other
the original contract, and any act of his, prior to beneficiaries, the proceeds shall be paid in
the loss, which would otherwise avoid the accordance with the policy contract. If the policy
insurance, will have the same effect, although contract is silent, the proceeds shall be paid to
the property is in the hands of the mortgagee, the estate of the insured.
but any act which, under the contract of
insurance, is to be performed by the mortgagor, “SEC. 13. Every interest in property, whether
may be performed by the mortgagee therein real or personal, or any relation thereto, or
named, with the same effect as if it had been liability in respect thereof, of such nature that a
performed by the mortgagor. contemplated peril might directly damnify the
insured, is an insurable interest.
“SEC. 9. If an insurer assents to the transfer of
an insurance from a mortgagor to a mortgagee, “SEC. 14. An insurable interest in property may
and, at the time of his assent, imposes further consist in:
obligations on the assignee, making a new
contract with him, the acts of the mortgagor “(a) An existing interest;
cannot affect the rights of said assignee.
“(b) An inchoate interest founded on an existing
“TITLE 3 interest; or

“INSURABLE INTEREST “(c) An expectancy, coupled with an existing

interest in that out of which the expectancy
“SEC. 10. Every person has an insurable arises.
interest in the life and health:
“SEC. 15. A carrier or depository of any kind has
“(a) Of himself, of his spouse and of his children; an insurable interest in a thing held by him as
such, to the extent of his liability but not to
“(b) Of any person on whom he depends wholly exceed the value thereof.
or in part for education or support, or in whom
he has a pecuniary interest; “SEC. 16. A mere contingent or expectant
interest in any thing, not founded on an actual
“(c) Of any person under a legal obligation to right to the thing, nor upon any valid contract for
him for the payment of money, or respecting it, is not insurable.
property or services, of which death or illness
might delay or prevent the performance; and “SEC. 17. The measure of an insurable interest
in property is the extent to which the insured
“(d) Of any person upon whose life any estate or might be damnified by loss or injury thereof.
interest vested in him depends.
“SEC. 18. No contract or policy of insurance on
“SEC. 11. The insured shall have the right to property shall be enforceable except for the
change the beneficiary he designated in the benefit of some person having an insurable
policy, unless he has expressly waived this right interest in the property insured.
in said policy. Notwithstanding the foregoing, in
the event the insured does not change the “SEC. 19. An interest in property insured must
beneficiary during his lifetime, the designation exist when the insurance takes effect, and when
shall be deemed irrevocable. the loss occurs, but need not exist in the
meantime; and interest in the life or health of a
person insured must exist when the insurance
takes effect, but need not exist thereafter or
when the loss occurs.

“SEC. 20. Except in the cases specified in the

next four sections, and in the cases of life,
accident, and health insurance, a change of
interest in any part of a thing insured
unaccompanied by a corresponding change of
interest in the insurance, suspends the
insurance to an equivalent extent, until the
interest in the thing and the interest in the
insurance are vested in the same person.

“SEC. 21. A change of interest in a thing

insured, after the occurrence of an injury which
results in a loss, does not affect the right of the
insured to indemnity for the loss.

“SEC. 22. A change of interest in one or more of

several distinct things, separately insured by
one policy, does not avoid the insurance as to
the others.

“SEC. 23. A change of interest, by will or

succession, on the death of the insured, does
not avoid an insurance; and his interest in the
insurance passes to the person taking his
interest in the thing insured.

“SEC. 24. A transfer of interest by one of several

partners, joint owners, or owners in common,
who are jointly insured, to the others, does not
avoid an insurance even though it has been
agreed that the insurance shall cease upon an
alienation of the thing insured.

“SEC. 25. Every stipulation in a policy of

insurance for the payment of loss whether the
person insured has or has not any interest in the
property insured, or that the policy shall be
received as proof of such interest, and every
policy executed by way of gaming or wagering,
is void.