Practice question
Assume an original insured has a validly established direct benefit under a particular reinsurance contract. The direct insurer claims that even this necessarily cancels its own policy obligation, although no release or novation occurred. Which Artex principle is relevant?
- Every third-party benefit automatically releases all other debtors
- No reinsurance clause can ever matter
- Direct recovery always permits double indemnity
- A possible direct claim against the reinsurer does not by itself cancel the original insurer’s direct contractual responsibility.
- The original policy disappears automatically
Legal references
- Artex Development Co. v. Wellington Insurance Co., G.R. No. L-29508, June 27, 1973, main decision: https://lawphil.net/judjuris/juri1973/jun1973/gr_29508_1973.html
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