Impact of legislation on insurance - concerning third parties Flashcards
What does “privity of contract” mean?
A person can only enforce a contract if they are party to it, therefore a third party (i.e. someone not involved in the contract) cannot sue for breach of contract).
What rule did the Contract (rights of third parties) act reform?
Privity of contract - the act set out circumstances in which a TP would have the right to enforce a term of the contract.
What does the Contract (rights of third parties) act state in order for a TP to enforce a term of the contract?
The contract itself must express that the TP can enforce a term OR the TP must be identified in the contract by name, class or description.
Because insurers do not wish to extend their liability regarding the contract (rights of third parties) act, what is a common policy exclusion (particularly with motor policies)?
Normally there is a general exclusion stating that the terms of legislation (contract rights of third parties act) does not apply.
What did the EU Gender Directive state?
Insurers cannot use gender as a factor in pricing or benefits
What legal right does the Enterprise Act give to policy holders?
Under the act policy holders have a legal right to claim damages in the event of a late payment. Act amended IA 2015 stating that nsurers must pay any sums due to the insured within a “reasonable time”.
What tax is imposed by the government on general insurance premiums in the UK?
Insurance premium tax - there are 2 main rates;
1) Standard rate of 12%
2) Higher rate of 20% for travel, some vehicles and domestic/electrical appliances
Most long-term insurances along with reinsurance and insurance on ships, aircraft, goods in transit and risks located outside of the UK are exempt from IPT - true or false?
True - risks located outside of the UK may still be liable to similar taxes imposed by other countries
How does the Third Parties (rights against insurers) act impact third parties rights?
Act protects insurance proceeds from effects of insolvency.
Third parties have the right to claim on the policy holders insurance themselves if the company has gone bust.
