Duties on Disclosure Flashcards
Risk determines
Whether an insurer will offer cover at all
What the terms of the cover/policy offered will be
The cost of the cover/premiums paid by the insured
Good faith - why?
Insurer relies on the information supplied by the proposer to assess the risk, the proposer usually under duty of utmost good faith as concerns the information that he must provide to the insurer.
Carter v Boehm - Fort withheld natives, but not French, this wasn’t disclosed, and insurance company didn’t want to pay out, which they were successful with.
Two aspects:
Duty on the proposer to be truthful and honest in relation to any statements made or answers to questions asked by the insurer
Positive duty of disclosure on the proposer concerning any material which is known to him even if not asked by the insurer
If failure in utmost good faith?
Insurer could avoid the policy
Why does the past matter?
Cannot understand new law without understanding the mischiefs it sought to overcome
Although traditional law won’t have much relevance to consumer indemnity contracts, it will still have some relevance to consumer life policies
Non-consumer contracts the traditional law is still useful.
Misrepresentation
It can lead to reduction of contract, wasn’t that relevant in old law
Old law
Used to tell them what ought to know as well.
Material circumstance as every circumstance which would influence the judgement of a prudent insurer in fixing the premium or determine whether he will take the risk.
If they got this wrong then it could lead to avoidance of contract.
Burden on proof on insurer and they had to prove they wouldnt have entered into it.
Law Commission
Thought it overprotected the insurer, so split the new law between consumer and non-consumer. Didn’t want to overcorrect the law. Reforms are not retrospective.
Tesco Underwriting v Achunche
Insurer can avoid policy when they recklessly don’t give application of motor insurance
3 elements
Clear and accessible disclosure
Disclosing all material circumstances she knows or ought to know
Ensuring every material circumstances is substaintly correct or made in good faith
Careless misrepresentation
Was the QM still induced to enter into the contract, get premimums back but no pay out.
If get qualifying misrepresentation that you imply something else then you were still given a policy but different terms than normal due to careless misrepresentation. Terms can be swapped to what should have happened. If then should have been higher premium then it is pro rated, you don’t get windfall as haven’t been paying enough
