Chapter 5 - Good Faith Flashcards
What sort of product is insurance? Tangible or Intangible?
Intangible
What duty do consumers have under the Consumer Insurance Disclosure & Representations Act 2012
Duty to take reasonable care not to make a misrepresentation
What did the Insurance Act 2015 introduce?
Duty to make fair presentation of a risk for a non-consumer contracts
Who does the duty of good faith apply too?
Both insured and insurer
What must the insurer disclose as an act of good faith?
Only taking on risks which the insurer is registered to accept
Ensuring statements are true and not misleading
Entitlement to discounts etc.
What is the duty of disclosure?
In all insurance negotiations there is a duty to disclose material circumstances, particularly at the proposal stage.
When is the duty of disclosure revived?
At each renewal date unless it is a continuing one.
If there is an alteration to the policy
Who does the Consumer Insurance Disclosure &Representations Act 2012 apply to?
Consumers not commercial customers
What defines a consumer under the act?
Someone who takes out insurance wholly unrelated to the individuals trade.
Who does the Insurance act 2015 apply to?
Non-consumer i.e. commercial customers
What must the insured disclose under the insurance act?
Material circumstances the insured knows or ought to know
Disclosure in a manner which could be reasonably clear and accessible to insurers
Facts substantially correct, representations of belief made in good faith
What is a measure of the insured’s knowledge if they are an individual?
What is known to them as an individual
What individuals responsible for insurance know
What is a measure of the insurers’ knowledge?
If the employee or agent of the insurer knows it and ought to have passed it on
The relevant information is held by the insurer and is readily available.
Common knowledge
What insurer of that class of insurance reasonably expected to know
What was outlawed in the Insurance act 2015?
The basis of contract clauses
What do you have to do to contract out under the Insurance Act 2015?
Take sufficient steps to draw the disadvantageous term to the insured’s attention
Clear and unambiguous
What policies have a duty of disclosure start at renewal?
General (non-life) policies
What are the duty of disclosure rules in regards to life and pension policies?
The duty of disclosure ceases once the policy is in force, even if a material fact were to change it does not need to be declared.
What policies generally have a continuing requirement of duty of disclosure?
Commercial property
Motor insurances
Public liability insurances.
Does the duty of disclosure revive on alteration of a policy?
Yes if there is a need for an endorsement to the policy.
What happens if the consumer does not provide material circumstance or a question asked by the insurer does not follow it up?
The Insurer has waived its right to the information and cannot claim there has been a breach of duty of disclosure.
What is meant by the term Ab Initio?
From the beginning
What is Estoppel?
This is a bar or impediment that precludes a person from asserting a fact or right eg an insurer being estopped from avoiding a contract for breach of good faith if they have acted on the basis that the contract is valid,
What are some examples of physical hazards?
Construction, nature of use, heating, electrical systems
What are some examples of moral hazards?
Criminal convictions, lack of good management, excessive, willful carelessness
