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General Principles of Insurance Law

1. Definition of insurance
2. The parties to the contract
The Insured
The Insurers
Insurance Companies
3. Classification of contracts of insurance
According to the nature of the event
According to the nature of the interest affected
According to the nature of the insurance
4. The nature of the contract of insurance
The su!ect"matter of the contract of insurance
The su!ect"matter of insurance
A ph#sical o!ect
A chose"in"action
A liailit# imposed upon the assured
The description of su!ect"matter
To identif# the su!ect"matter
The $inds of description
%pecific descriptions
Description of the localit# of the su!ect"matter
Description of other circumstances
To show the nature of the ris$
To define the ris$
&. Insurale interest
'hat constitutes an insurale interest
The necessit# for an insurale interest
Description of interest
The general rule
()press condition
*rospective profits and conse+uential loss
*recarious nature of the interest
The time for insurale interest
Interest at the time of the loss sometimes essential
,etrospective insurance
-. The Insurance Companies Act 1./2
0. Introduction
/. The offer
'hat constitutes an offer
1# whom the offer is made
The proposal form
The usual contents of proposal forms
Description of proposed assured
Description of the ris$
Description of circumstances affecting the ris$
*revious histor# of the proposed assured
The +uestions as$ed in various t#pes of insurance
2ife insurance
*ersonal accident insurance
3ire insurance
1urglar# insurance
4otor insurance
The effect of the proposal form
%tatement # 1.I.A. and 2lo#d5s
%tatement of 2ife 6ffices5 Association
.. The cover note
The purpose of the cover note
The form of the cover note and its issue
The duration of the cover note
The effect of the cover note
The incorporation of the terms of the polic#
,eplacement of the cover note # a polic#
1ro$er5s cover note
17. The acceptance
'hat constitutes an acceptance
The methods of acceptance
'here the offer is made # the proposer
'here the offer is made # the insurers
The effect of acceptance
11. The principle of good faith
12. 8on"disclosure
The e)tent of the assured5s dut#
Actual $nowledge
*resumed $nowledge
Is the dut# of disclosure an implied term9
Te tests of materialit#
The test of the :prudent insurer5
The :reasonale assured5 test
'hether the non"disclosure would influence the particular insurer is irrelevant
Assured5s opinion as to whether the fact is material is irrelevant
3ifth ,eport of 2aw ,eform Committee
2aw commission5s proposal
4aterialit# is a +uestion of fact
The time when materialit# is to e !udged
The classification of material facts
3acts normall# material
3acts not normall# material
3acts which need not e disclosed
3acts within actual or presumed $nowledge of insurer
3acts within constructive $nowledge of insurer
3acts as to which information is waived
3acts tending to lessen the ris$
3acts the disclosure of which is unnecessar# # reason of a condition
3acts relating to :spent5 convictions
%ome e)amples of material and immaterial facts
3ire insurance
1urglar# insurance
*ersonal accident insurance
;uarantee insurance
2ife insurance
4otor insurance
*roof of the materialit# of facts not disclosed
The duration of the dut# of disclosure
The effect of non"disclosure
13. 4isrepresentation
4odification of the dut# # contract
<uestion and answers
The effect of the +uestions
The effect of the answers
'here there is a :asis5 clause
'here there is no :asis5 clause
The t#pes of inaccurac#
The interpretation of the +uestions and answers
The statement must e considered as a whole
A fair and reasonale construction must e adopted
The whole truth must e told
6ther information in the possession of the insurers
Inconsistent or unsatisfactor# answers
'here the space for the answer is left lan$
The onus of proof
'hat must e proved
%ome e)amples of the evidence re+uired
14. The premium
The amount of the premium
The pa#ment of the premium
4ode of pa#ment
Time for pa#ment
(ffect of pa#ment
*a#ment to the agent of the insurers
The authorit# to receive pa#ment
The form of pa#ment
,ight to claim a return of premium
,ight to a return of part of the premium
'here there is no right to a return of premium
1&. Introduction
1-. Classification of policies
According to the description of the su!ect"matter
According to the amount recoverale
:Unvalued5 policies
:=alued5 policies
10. The form and contents of the polic#
Insurance companies5 policies
The contents of the polic#
The heading
The od# of the polic#
The ac$ of the polic#
The doc$et
2lo#d5s policies
The form of the polic#
The contents of the polic#
The premium
The liailit# of the underwriters
The incorporation of other policies
1/. The effect of other documents on the polic#
(ffect where the other document is not incorporated
(ffect where the other document is incorporated
2oo$ing at other documents to resolve amiguities
1.. *arol evidence in relation to the polic#
The general rule
()ceptions to the general rule
To prove that the polic# is void
To prove that the polic# does not contain the correct terms
To prove a parol condition
To add collateral terms
To identif# the su!ect"matter of insurance
To show that a word is used in a peculiar sense
The effect of the admission of parol evidence
27. The commencement and duration of the polic#
The commencement of the polic#
The duration of the polic#
Determination # pa#ment
Determination # consent
Determination # assured
Determination # statue
Determination # reach of condition
21. The cancellation of the polic#
22. The alteration of the polic#
4ethods of alteration
The right of the insurer to avoid the contract
23. The rectification of the polic#
(ffect of deliver# of polic# containing wrong terms
The advisailit# of rectification
The methods of rectification
1# the act of the parties
1# an order of the court
24. The renewal of the polic#
%tipulations as to renewal
'here the polic# is renewale # mutual consent
'here the polic# is renewale at the option of the assured
'here oth parties must renew the polic# in the asence of notice
The practice as to renewal
%tatement # 1.I.A. and 2lo#d5s
The effect of renewal
The situations to e considered
%ome e)press terms as to whether renewal is as new contract
Da#s of grace
The classes of stipulation
2&. 2apse and revival of polic#
2-. The perils insured against in the polic#
20. The e)ceptions in the polic#
The variet# of e)ceptions used
The e)ceptions to e found in most t#pes of polic#
The construction of e)ceptions
2/. The conduct of the assured
8egligent acts
'illful acts
()press stipulations in the polic#
2.. The conditions of the polic#
The classification of conditions
Implied and e)press conditions
()press conditions
Classification of conditions with reference to time of operation
Conditions precedent to validit# of the polic#
Conditions suse+uent of the polic#
Conditions precedent to the liailit# of the insurers
'hat constitutes a condition
'hether personal fulfillment of the condition # the assured is necessar#
1reach of condition
'hat constitutes a reach
1urden of proving a reach
The effect of a reach
The usual effect
'here a particular penalt# is provided
'aiver of reach of condition
'aiver # the insurers> what constitutes a waiver
'aiver of reach alread# committed
'aiver of future performance of condition
'aiver must e pleaded
'aiver # agent of insurers
%tatement # 1.I.A. and 2lo#d5s
37. The alteration of the ris$ under the polic#
The effect of an alteration
'here the polic# ceases to appl#
'here the alteration merel# suspends the operation of the polic#
Implied conditions as to ma$ing alterations
'here the polic# contains an e)press condition against alterations
'here there is no e)press condition against alterations
()press conditions as to ma$ing alterations
The t#pes of prohiition or restriction
Conditions prohiiting alterations asolutel#
Conditions prohiiting increase or ris$
Conditions prohiiting alterations without notice
Conditions prohiiting increase of ris$ without sanction
31. The assignment of the su!ect"matter insured under the polic#
()press conditions against assignment
Assignment # operation of law
%ale or gift of su!ect"matter
Creation of a trust mortgage
Change in a partnership
32. 6ther insurance
()press conditions relating to :other insurance5
'hat constitutes :other insurance5
33. The assignment of the polic#
'hat constitutes a valid assignment
Consent of the insurers
Contemporaneit# of assignment of the polic# and the su!ect"matter
The form of the assignment
Assignment # operation of law
The effect of the assignment of the polic#
34. The construction of the polic#
Construction and the doctrine of precedent
The principal rules of construction
The intention of the parties must prevail
The whole of the polic# must e loo$ed at
The written words will e given more effect than the printed words
The grammatical construction will e adopted
The words are to e construed in their ordinar# meaning
The meaning ma# e limited # the conte)t
The words mean what the# sa#
The words must e construed lierall#
A reasonale construction will e preferred
The :contra proferentem5 rule
The court will tr# to reconcile the inconsistencies
()press terms override implied terms
%use+uent ascertainment of matters originall# uncertain
The si?e of print in insurance policies
3&. Introduction
3-. The time of the loss
8o e)press terms
()press terms
30. The doctrine of pro)imate cause
The meaning of :pro)imate cause5
'as the loss caused # a peril insured against9
'here the last cause is the peril insured against
'here the peril insured against is not the last cause
'here there is no rea$ in the se+uence of causes
'here the se+uence of causes is interrupted
'here the causes are concurrent
'as the loss caused # an e)cepted cause9
'here the peril insured against is preceded # an e)cepted cause
'here the peril insured against precedes an e)cepted cause
'here the loss is caused # the action of two concurrent and independent causes
4odification or e)clusion of the doctrine of pro)imate cause
3/. The ma$ing of a claim
8otice of loss
The notice need not e in writing
The notice need not e given # the assured himself
The notice need not e given to the insurers personall#
The notice should e given within the prescried time
*articulars of loss
Deliver# of the particulars of the loss
%ufficient details must e given
The particulars of the loss
%ufficient details must e given
The particulars should e delivered within the prescried time
The methods of proving the loss
3raudulent claims
The Insurance 6mudsman 1ureau
3.. 1urden of proof
*roof of loss
6n whom the urden lies
Degree of proof re+uired
*roof that the loss falls within an e)ception
6n whom the urden lies
The general rule
4odification # the terms of the polic#
Degree of proof re+uired
'here the underta$ing of the insurer is +ualified
The principles to e applied
*romise with an e)ception
<ualified promise
47. Introduction
41. *a#ment of the loss
The calculation of the amount recoverale
=alued policies
Unvalued policies
%uccessive losses
%imultaneous losses
2imitation on the amount recoverale
Contriution clause
Average clause
()cess clause
Clause specif#ing smaller sum pa#ale
2imitation # statute
3ranchise clauses
To whom pa#ment is to e made
The form of pa#ment
The pa#ment of interest
*a#ment # mista$e
4ista$e of law
4ista$e of fact
%ome e)amples of mista$es of fact
()ceptions to the general rule
() gratia pa#ments
42. The application of the proceeds of the polic#
The general rule
()ceptions to the general rule
,ight conferred # statute
Contract for the sale or e)change of propert#
4ortgage # deed
*ropert# su!ect to a trust or settlement
,ight conferred # contract
43. The assignment of the proceeds of the polic#
'here the loss has alread# ta$en place
'here the loss has not #et ta$en place
The form of the assignment
44. ,einstatement
,einstatement # the insurers
,einstatement clause
Time within which election is to e made
The mode of election
The effect of the election
The duties of the assured
,einstatement under the 3ires *revention @4etropolisA Act 1004
,einstatement # assured
Dut# imposed # contract
Dut# imposed # statute
4&. %urogation
The nature of surogation
The t#pes of policies to which surogation applies
The histor# of the doctrine
The principle of indemnit#
'hen surogation arises
The rights in respect of which surogation arises
,ights arising out of tort
,ights arising out of contract
,ights under statue
,ights over the su!ect"matter
The e)ercise of the right of surogation
The duties of the assured
Dut# to give assistance to the insurers
Dut# not to pre!udice the insurer5s position
The defences availale to the part# sued
The effect of surogation
4-. Indemnification aliunde
Indemnification efore pa#ment
Indemnification after pa#ment
The insurers5 right to enefit
The cases in which the right arises
'here the pa#ment is made # a tortfeasor
'here the pa#ment is made under a contract
'here the pa#ment is made as a gift
40. Contriution
The meaning of contriution
'hen the right of contriution arises
%ame su!ect"matter
%ame peril
%ame assured
*olicies in force
=alid and effective contracts
Contriution not e)cluded # terms of policies
The enforcement of the right of contriution
The apportionment of the loss
%pecific policies
'here the policies are concurrent
'here the policies are non"concurrent
'here the loss affects the common propert# not covered # oth policies
Average policies
The two conditions of average
The application of the two average conditions
The apportionment of the loss
4/. Introduction
4.. The relationship etween the principal and the agent
The rights of the agent
The duties of the agent
Dut# to carr# out the transaction
Dut# to oe# his instructions
Dut# to use proper s$ill
Dut# to account
Dut# to act honestl#
The conse+uences of a reach of dut#
3orfeiture of all his rights
2iailit# for all loss sustained
Criminal liailit#
&7. The relation etween the principal and third parties
The authorit# of the agent
The t#pes of authorit#
()press and implied authorit#
Usual authorit#
Apparent authorit#
The termination of the agent5s authorit#
'here the act of the agent
&1. The relation etween the principal and third parties
The authorit# of the agent
The t#pes of authorit#
()press and implied authorit#
Usual authorit#
Apparent authorit#
The termination of the agent5s authorit#
'here the act of the agent does not ind the principal
The effect of the agent5s fraud
Conditions necessar# for a valid ratification
The effect of ratification
,atification after loss
4arine insurance
8on"marine insurance
Insurances # persons interested
Insurances # persons having no interest
'here the polic# covers persons other than the assured
Bnowledge of the principal or of the agent
Imputed $nowledge in general
*rincipal5s $nowledge imputed to agent
Agent5s $nowledge imputed to principal
Imputed $nowledge in insurance transactions
In relation to the assured and his agent
Dut# of disclosure
Bnowledge at other stages of the insurance
In relation to the insurers and their agent
Dut# of disclosure
'here the proposal form in filled in # the agent and third parties
&2. The relationship etween the agent and third parties
,ights and liailities under the contract
'here he acts for a named or unnamed principal
'here he acts for an undisclosed principal
2iailit# for reach of warrant# of authorit#
2iailit# in tort
&3. Conflict of laws
The !urisdiction of the (nglish courts
The :proper law5 of the contract
'here there is an e)press provision in the polic#
'here there is no provision in the contract
The :presumptions5
The place where the contract is made
Contracts made through agents
The place of pa#ment
The form in which the polic# is framed
Terms valid in one countr# onl#
Immaterialit# of localit# of su!ect"matter
'hen the law of (ngland must alwa#s e applied
&4. The effect of war upon the contract
&&. The protection of polic# holders
The *olic#holders5 *rotection 1oard
Appointment and tenure of memers
,emuneration and compensation
*owers and procedure
*erformance of functions
Instruments and contracts
AccountsC audit and annual report
;uidance # the %ecretar# of %tate
The general scope of the 1oard5s function
The 1oard5s duties in case of companies in li+uidation
Compulsor# insurance
Third"part# ris$ against insurance companies in road traffic cases
;eneral policies other than insurance policies
2imits on the 1oard5s duties
2ong term policies
3uture enefits under long term usiness
Disproportionate enefits under long term policies
;eneral provisions with respect to 1oard5s duties
*erformance of duties
()clusion and modification of 1oard5s duties
The 1oard5s powers to assist polic#holders of companies in li+uidation
The 1oard5s powers to protect polic#holders of companies in financial difficulties
Transfer of usiness etc.
2ong term usiness
2evies on intermediaries
Accountale intermediar#
Income liale to lev#
()empt income lev#
,estriction on the imposition of the lev#
,ate of the lev#
%tatement for the purposes of s 27
Declaration and enforcement of the lev#
Distriution of e)cess proceeds of lev#
2evies on authori?ed insurance companies
8et premium income
Application of proceeds
,estriction on the imposition of the levies
%tatements of premium income
Declaration and enforcement of levies
*rovisions for persons insured under contracts of insurance and evidenced #
Application of general receipts # the 1oard
Application of surplus funds # the 1oard
6versea companies
Disclosure of documents and information to the 1oard
%tatement # the %ecretar# of %tate in respect of the e)ercise of his powers
,eport # %ecretar# of %tate with to the operation of the Act