UNIVERSITY OF NAIROBI

SCHOOL OF LAW
COURSE OUTLINE AND READING GUIDE
2020/2021
GPR 424: LAW OF INSURANCE
PROF: WAMBUA MUSILI

ESTIMATED CONTACT HOURS:

45 HOURS

PRE-REQUISTE:
A good understanding of the law of contracts and law of tort is essential.

TEACHING MISSION STATEMENT

The mission of the University of Nairobi is to educate students in and about the law.
We seek to assist you to think critically about the law and to investigate its
structures, principles, policies, and values. This is achieved by engaging with you as
fellow investigators in a range of critical and intellectual conversations about the law
and its place in society. Our role is thus to guide you in your own intellectual
journey in the law and to equip you with the necessary skills that will enable you to
continue that journey long after you have left the School.
THE COURSE

Lord Radcliffe in LISTER v. ROMFORD ICE & COLD STORAGE CO.LTD (1957) AC
555, 591, aptly stated “We live in a society which has been almost revolutionised by
growth of all forms of insurance.”

This course is about insurance law and practice in Kenya. It purposes to introduce
students to the principles of insurance law, and how these principles have been
applied in Kenyan law; introduce the student to the law regulating the business of
insurance in Kenya. The course will provide a rich treasure of both, academic,
judicial and practical aspects of insurance law and practice, the course will also
authoritatively examine the legal framework governing Kenya’s insurance industry
against the backdrop of the common law principles applicable in Kenya.
Finally the student will examine the key challenges facing the growth of insurance
industry and some new trends in Insurance such as micro-insurance and use of
technology in insurance practice.
COURSE AIMS
The aim of the course is to provide a clear understanding of the basic principles of
Insurance Law to students. Students should at the end of the course be able to
identify and analyse the relevant principles of insurance law, case law and statutory
provisions to the issues at hand. In seeking to inculcate an understanding and
appreciation of the principles, policy coverage, exclusions, the interpretation of
insurance contracts and the claims processes, students are being geared towards
developing the capability and confidence to render legal advice in a professional or
financial services setting as they pertain to insurance law.
LEARNING OBJECTIVES
After successfully completing this course you should be able to:
1. Explain the role played by the insurance sector in the economy.
2. Explain the origin and nature of insurance law.
3. Apply the Kenyan legal regime that governs the insurance sector.
4. Interpret types and categories of insurance covers.
5. Apply concepts and principles of insurance.
6. Explain the new developments in insurance law.
7. Demonstrate an understanding of Insurance Law in a practical setting.
8. Demonstrate research skills that will allow you to look up various aspects of
the law and formulate coherent opinions and arguments.
9. Demonstrate sufficient knowledge in the relevant field of Insurance Law to be
equipped as legal practitioners or persons working within the Insurance
industry.
10. Communicate knowledge acquired in the areas of the course and at all
material times have the ability to apply such knowledge in practical real life
situations.
11. Approach the study of Insurance Law with an actively enquiring mind with a
view to maintaining a long term interest in its operation and development in
practical settings in Kenya and elsewhere in the Common Law world.
12. Develop an understanding of the manner in which Insurance Law principles
operate within a legal and ethical framework.
13. To place and relate to Insurance Law concepts in the broader context of
Common Law and equitable principles.
MODE OF DELIVERY:

Lectures; Tutorials; Case Method; Seminar discussions; Individual Student and

Group Presentations; Problem based learning

INSTRUCTIONAL MATERIALS AND/OR EQUIPMENT:

Computers; Internet; Laws; Law Reports; Discussion Aids; Chalk/white boards and
necessary accompaniments; Library; DVDs; DVDS; CD-ROM; Business Source
Premier; E-Journals: Lexis-Nexis; HeinOnline; JSTOR

Assessment:
Type Weighting (%)
Examination 70
Continuous Assessment 30
Total 100

OTHER TEACHING AND LEARNING ACTIVITIES INFORMATION

The Function of Lectures

Lectures are a forum where, within an analytical framework offered by the lecturer,
students and lecturer can:

 Explore concepts of law relevant to the topic,

 Explore how the particular concepts of law work, and relate to other concepts
learned,
 Identify the central conceptual, intellectual, and doctrinal questions raised by
the material under consideration.

NB: Students will be awarded a grade for participation in lectures.

In a negative sense, lectures are not for:

 Delivering an exclusive and exhaustive account of the material that the

student needs to learn,
 Reading material that students can read for themselves.

CORE READING MATERIALS:

1. Ashiq Hussein, A Textbook of General Principles and Commercial Law of Kenya

(East African Educational Publishers, 2003).
2. Avtar Singh, Law of Contract and Specific Relief (Eastern Book Company, 9th
edition, 2005).
3. Birds John, Modern Insurance Law (Sweet & Maxwell, 8th edition, 2010).
4. E.R.Hardy-Ivamy, General Principles of Insurance Law (Butterworths, 6th
edition, 1993).
5. E.R.Hardy-Ivamy, Casebook on Insurance Law (Butterworths, 4th edition,
1984).
6. Encyclopaedia Britannica, 11th edition, Vol. 12 (1910–1911).
 7. Geoffrey Njenga, Thriving on Borrowed Time - Reviving Invesco Insurance:
Case for Reforming the Insurance Industry (Hope Centre International, 1st
edition,2011).
8. Joseph B. Byamugisha, Insurance Law in East Africa (East Africa Literature
Bureau,1973).
9. Josh Joseph Ogola, Business Law (Focus Publications Ltd,2005).
10. KibayaImaana Laibuta, Principles of Commercial Law (Law Africa, 2006).
11. Marsh & Souls by, Business Law (Nelson Thornes Ltd, 8th edition,2002).
12. Tudor Jackson, The Law of Kenya, (Kenya Literature Bureau Publishers, 3rd
edition, 1992).

NOTE: Other reading materials such as Articles and case law will be provided as per
the topics

KEY STATUTES
Kenyan
1. Fatal Accident Act, CAP 32 Laws of Kenya.
2. Insurance Act, Cap 487 Laws of Kenya
3. Insurance (Motor Vehicle Third Party Risks) Act, Cap 405 Laws of Kenya.
4. Marine Insurance Act,1963
5. Marine Insurance Act, Cap 390 Laws of Kenya
6. Merchant Shipping (Safety and Load Line Conventions) Act,1932
7. Misrepresentation Act,1967
8. National Hospital Insurance Fund Act, Cap 255 Laws of Kenya.
9. Stamp Duty Act
10. Work Injury Benefits Act, Cap 236 Laws of Kenya
11. Insurance (Insurance Appeals Tribunal) Rules,2013
12. The Arbitration Act, Chapter 49, Laws of Kenya
13. The Workmen’s Compensation Act, Chapter 36, Laws of Kenya
14. The National Social Security Fund Act, Chapter 258, Laws of Kenya

English (Important From a Historical Perspective)

1. English Insurance Companies Act, 1982
2. English Marine Insurance Act,1906
3. English Life Assurance Act,1877
4. Life Insurance Act,1774
5. Marine Insurance Act,1745
6. African Life Assurance (Control) Ordinance.

COURSE CONTENT AND OUTLINE

A. Concept of Insurance (Week 1)
 Definition of Insurance
 Mechanism of Insurance
 Nature, Function and Role of Insurance
 Terminologies used in insurance (Policy of
Insurance,Loss,Risk,Peril,Hazard, Sum Insured, Under-Insurance,
Double Insurance etc.

B. History of Insurance and Trends in Insurance in Kenya (Week 2)

 General History
 Roots from England
 Roots in Kenya
 Sources of Insurance Law in Kenya.
 Key Players in the Insurance Industry (Role of Intermediaries)
 Attributes and Trends of Insurance in Kenya
 Challenges facing Insurance Industry in Kenya
 The Future of Insurance

C. The Insurance Contract ( Nature and Formation of Insurance Contract)

(Week 3-7)
 Nature of Insurance Contract
 Essentials for a valid Insurance Contract
 Features of an Insurance Contract
 Classification/Categories of Insurance Contracts.
 Parties to an Insurance Contract (Actors and their Obligation in
Insurance Transactions
 Differentiation of Insurance with e.g. gurantee and wager
 Formation of Insurance Contract (Commencement, Operation and
Termination of an Insurance Cover)
 Settlement of claims
 Agency principles as they apply to insurance contract
 Return of premiums; effect of non-payment of premiums
 Interpretation of Insurance Contract
i. Insurance as an integrated contract
ii. Doctrine of precedence
iii. Rules of Interpretation (Intention of parties, holistic rule,
ordinary meaning rule, technical words, ejusdem generis, contra
proferentem rule etc.)

D. Key Principles of Insurance Contract

i. Insurable interest
ii. Utmost good faith
iii. Warranties and Disclosures
 iv. Indemnity, Subrogation ,Reinstatement, apportionment,
salvage, Contribution,co-insurance/double insurance and
causation issues and how they affect indemnity
v. Causa Proxima

E. Regulatory Framework of Insurance Industry in Kenya (Week 8-9)

 Reasons for regulation
 Regulation models
 History of regulation in Kenya (Past Challenges and Present Solution)
 Regulatory and Oversight Bodies
 Regulatory Requirements on Insurance Business
 Protection of Policy Holders
 Intervention in Management of Insurance Companies in Certain Cases
 Case for a unified financial regulator

F. Special Forms of Insurance (Week 10-11)

 Life Insurance
 Liability Insurance
 Reinsurance
 Marine Insurance
 Social Protection -Universal Health Insurance (NHIF) ETC

G. Revision and Examination (Week 12-13)