insurance

Question 1

scottish amicable heritable ltd v northern assurance co

Answer 1

definition of insurance- LJ moncreiff- contract which insurer undertakes in liue of paymenr an estimated amount to make up to the insured if he suffers loss by an UNCERTAIN CONTINGENCY. (event certain but timing not)

Question 2

deoartment of trade and industry v st christophers motorist association

Answer 2

paid supscription to club meaning if got drunk and in an accident as result, be provided with chaffeur- deemed contract insurance as on a certain event a benefit would occur- timing uncertain.

Question 3

medical defence union ltd v department of trade

test for what needs to be present in insurance contract

Answer 3

act on own discretion- this not deemed as insurance as no requirement to give award only to consider application.

1. assured becoem entitled to something on occurrance of event
2. event must involve some uncertainty.
3. assured must have some form of insurable interest

Question 4

types of insurance

Answer 4

indemnity

non indemnity

Question 5

indemnoty

Answer 5

compensate to extent of financial loss i.e motor, fire and theft

Question 6

non- indemnity

Answer 6

payment of specific amount at certain event i..e life

Question 7

first and third party

Answer 7

first if loss happens to insured, third if dame done by insured to third party

Question 8

compulsory

Answer 8

vehicel and employers- road traffic act 1988

Question 9

finaincail conduct authority

Answer 9

must authoirse companies before they do business i.e. must be managed by sound and proper persons

Question 10

finaicnal services and markest act 2000

Answer 10

specific dispute resolution under the financial services ombusman

Question 11

insurable interest

Answer 11

LIFE ASSURANCE ACT 1774-section 1- makes interest necessary- if not included then contract null and void- must be those who have a finiancial interest in the occurance of an insured event

Question 12

what do you need to prove interest according to the 1774 assurance act- first introduced idea of insurable interest

Answer 12

• direct finaicl loss at death of insured

- policy must not exceed the insured pecuniary interest in the continuation of life of the accused.

Question 13

Macura v northern asssurance co

Answer 13

insured was unsecured and sole creditor of a ltd company company owned timber on land owned by insured as shareholder. the logs destroyed by fire and the claim refused as no insurable interets- it was not personally a direct loss. \lord summer
‘He stood in no ‘legal or equitable relation to’ the timber at all. He had no ‘concern in’ the subject insured. His relation was to the company, not its goods’

Question 14

cowan v jeffery associates

Answer 14

macura held as binding in this case- so no insurable interetst as the insurance in own name not copany name and the premises owned by compnay.

Question 15

turnball v scottish parliament institution

Answer 15

insured life of agent in iceland- responsible for a lucrative money stream- company deemed to have an insurable interets in his life as he borught in sugh a large amount of business- large financial impact so insurable interst

Question 16

dalby v india and london life assuance- II for non indemnity must exist at time insurance taken out

Answer 16

in life assurance, requirement is that interest must exist at the TIME WHEN THE INSURANCE MADE and no need to exist at the time of the loss.

Question 17

Godsall v Boldero

Answer 17

in INDEMNITY insurance- i.e. for extent of financial loss. insurancble interest must exist at the time of loss. common law

Question 18

Fesay v Sun life assurance co of canada- defintiion of life insurance also

Answer 18

court will try and find an insuarble interest where possible must look at the
- circumstances of the case
- type of insurance and policy
in fesay they discussed catorgories of interest

• natural affection - means can insure yourself or spouse- no right for cohab. no right fro child i.e. in leading englsih case of HALFORD v KYMER- father not able to insure son, no interest. however may be able child to insure parent insome circumstances due to necessity of aliment- but interst only exist until over 25- carmichael v carmichaels exrs.
• potential finaicial loss recignised by law and can be shown at the time of the contract
• . other statutory proivisions

Question 19

indemnity principle

Answer 19

must prove occurance of event and that you ahve sufferd a PECUNIARY LOSS over and above any excess.
sum insured- max amount can recover

Question 20

when does insurable interets pass in relation to sale of goods

Answer 20

passes at the conclusion of the contract not when ownerhsip or risk actually passes

Question 21

selling heritable property

Answer 21

interest passes on CONCLUSION OF THE CONTRACT before the recording of the disposition

Question 22

bells principles

detail the common law on insurable interest

Answer 22

common law requires an insurable interets for the policy holder to have a valid policy. there must be a ‘subject in which the insured has an interest’

Question 23

application of the 1774 life assurance act

Answer 23

before the marine insurance act- it applied to other events not just lives;

Question 24

marine insurance act 1906

Answer 24

only statory definition of insurable interest 
section 5 (1) 'every person has an insurable interest who is interested in a marine adventure'

Question 25

cowan v jeffery's per lord hamilton

Answer 25

he used english law to interpert the meaning of insurable interest said that there si a 'requiremnt for a close legal relationahip between the person insuring and the party insured.

Question 26

interest arising out of finainci loss i.e. turnball v scottish parliament association

Answer 26

must show an interst which is pecuniary and recognised by law- meaning it is able to be valued and ust replresent a legal obligation.

Question 27

contrast to USA whre it is sufficient that a beneficary has a

Answer 27

'reasoonable expectation of benefit or loss dependent on the duration of a human life- MA clark the law of insurance contracts.

Question 28

macgillvery on insurance law, 2008

Answer 28

a mere expecattion or hope of future pecuniary benefit from the prolonagtion of the life insured or of the fufillment of him of moral obligations owed to the assured is INSUFFICIENT to sustain an insurable interest.

Question 29

interest arising from statory provisions

Answer 29

local governemnt act 1972- giving authoirty interent and right to insure members of the authority or the council while engaged on business of the council.

Question 30

tests stated by LORD JUSTICE WALKER in feasy v sun life assurance co

Answer 30

group 1- item of property- insurance is to recover the value- must be legal or equitable interest in the property group 2- life assurance- legal or pecuniary interest lord justice ward dissented saying that was no insurable interest on life- there must be an equitable or legal relationship

Question 31

is writing required

Answer 31

not required for insurance contract but according to marine insurance act 1906- insurance policy for marine is inadmissable in evidence unless in writing.

Question 32

formation of cotract

Answer 32

created by offer and acceptance, stament that are applying on insurer's general standerd terms- if they have given info on IMPLIED AUTHORITY then are liable to be replied upon

Question 33

duties of insured

Answer 33

duty of disclosure not to misrepresent no fraudulent claim i.e. to over insure

Question 34

duty of disclsoure of insured

Answer 34

exists- a. negotiation stage b until contract is formed c. when policy comes up for renewal

Question 35

non consumer insurance- commercial

Answer 35

insured must make a FAIR PRESENTATION of risk | disclose in clear manner

Question 36

s.18(1) 1906 act

Answer 36

make insurer aware of every material knowwn to him that a prudent underwriter would wish to know when deciding wether to insure or not and which in the ORDINARY course of business ought to have beeen made knwon to him

Question 37

Carter v Bohem per lord mansfield

Answer 37

' insurer must not keep back any knowledge which leads to the misleading of an insurer- HIGH LEVEL OF RELIANCE on insured

Question 38

s.3(3) and 4 of insurance act 2015

Answer 38

every material represenantaion must be substantailly correct and any which is a beleif should be done in good faith.

Question 39

s. 3(5) insurance act 2015

Answer 39

unless the insurer enquires the insured must infrom the company of circumstances which the insurer OUGHT to knwo or of circumsatnces that may DIMINISH the risk

Question 40

what does material mean

Answer 40

if it would influence the judgement of a prudent insurer- wether it would have a decisive influence or wether it could have had effect on the insurers mind. this was changed by the pan atlanti case see below

Question 41

pan atlantic v pine top industries co re DECISIVE test

Answer 41

deceisive test rejected- must be one that prudent insurer would have taken into account in decsion and prove that the failure by the insured to disclose the fact tot the insurer INDUCED him to enter into insurance contract and accept risk

Question 42

Carter v Bohem cont important

Answer 42

Lord Mansfield held that Mr Carter, as the proposer owed a duty of utmost good faith (uberrimae fidei) to the insurer, he was required to disclose all facts material to the risk: “Insurance is a contract based upon speculation. special facts... lie most commonly in the knowledge of the insured only; the underwriter trusts to his representation and proceeds upon the confidence that he does not keep back any circumstance in his knowledge, to mislead the underwriter into a belief that the circumstance does not exist,

Question 43

what are the insurers expected to know

Answer 43

commercial individual- s.4(2) what is known to him | company- s.4(3 and *) what senior management know- these are the people making significant company decisions

Question 44

standered expected of the insured when making a representation Economides v commercial union assurance Co plc

Answer 44

made over exageration on value of proeprty but this was based on info fatehr had told him- make initimations based on actual knowledge so this was ok

Question 45

mcphee v royal assurance

Answer 45

dimensions of boat significantly larger than claimed on value. as a commercial insured it is not a defence to say acted in good faith level of dilligence required is much higher in commercial insurance contracts rather than consumer. must take reasonable steps to ensure the insurer know information- not just to make one phone call to chack fact re the length of the boat-t this was a breach of opinion warrenty- see s.4 - not defence to ahve just acted in good faith, must show higher level of dilligence. - carter v bohem- utmost good faith' underwriter trusts his representation'

Question 46

st pauls fire and marine insurance co ltd v mcdonnal dowal constructors

Answer 46

there is a presumption of inducment unless the insured can show that it was not the non disclosure of a fact that made the insurer enter into contract- if so is a Qualifying breahc ratehr than a material breach on the insured

Question 47

remedies

Answer 47

is it DELIBERATE or RECKLESS? did the insured knwo was breaching duty of fair representation and onus of proof on the (made reaodnable effort - macphee v roayal assurance re boat measure ments not just duty of good faith. s. 8 Insurance act

Question 48

schedule 1 IA

Answer 48

remedies

Question 49

deleiberate or reckless?

Answer 49

if it is then insurer can avoid contract and not return premiums

Question 50

if innnocent

Answer 50

look at whayt te proper facts were if thaty ahd been avaliable if different terms then contract treated as contining these terms

Question 51

what insurer should know- does not need to be told by insured s.5I nsurance act

Answer 51

things in common knowledge within theat feild | things that agent/employer knows

Question 52

consumer contract

Answer 52

when not to do with the individual's trade- less level of dilligence required

Question 53

for consumer

Answer 53

standard is that of what a reaosnable insured ought to know/disclose

Question 54

section 3 of the 2002 act

Answer 54

counsumer situations

Question 55

common law duties

Answer 55

disclosure and not to misrepresent- 1906 act are replaced by single duty obliging reasonable care not to makemisrepresentation- section 3(1) and (2) of the 2012 act- lower standard of commercial - wether it would influence the decision of a prudent insurer

Question 56

breach can be

Answer 56

reckless or deliberate- if knew is untrue or misleading and dint care and it was rleevent to the insurer or didn;t care if relevent or not. if so the company can avoid contract and refuse premiums

Question 57

schedule 1 para 2 2012 act

Answer 57

can retain payment to extent it is not unfair on the consumer !!!!!!!!

Question 58

careless

Answer 58

if it is not deliberate or reckless- section 5 2012 then the burden is one prove was reckless or deleiberate is on the insurer, same as in commercial- wether would have induced them to enter into contract- terms can be changed to accomodate- schedule 5

Question 59

continuing duty of good faith- lord mansfield in boham v carter

Answer 59

should make known any risks with reduce or increase the risk i.e. in this case the ship had alreadya rrived in the port- risk was larger than what insurer told.

Question 60

duty of good faith exists throughout the contract

Answer 60

only fro material facts which are in relation to the risk insured insured has no duty of disclosre DUring the contract as opposed to beforehand when making the contract, yet usually is a term to do this expressly written into the contract

Question 61

cannot make double recovery

Answer 61

can insure with two insurer but if they contain a RATEABLE CONTRIBUTION CLAUSE means one can claim a contribution from the other- with life assurance can double insure- insurer only need replace to standard before accident, not new

Question 62

leppardv v excess insurance co

Answer 62

english case so only pursuasive. re OVER INSURANCE insured for £14,000 even though market vale only £3,000- as otherwise would have made a profit so not bale be insured at vast excess amounts

Question 63

scott lithgow v sec of state for defence

Answer 63

if insurer you are laible to indemnify the insured- claim is a contractual obliagtion to pay rather than an obligation to pay damages. if you alter paymetn then this is damages- this can be contrasted with england where it is treated as a breach of contract when the payout so is technicall damages therfroe in england if late patyment then the only remedy is the judicial interest rate

Question 64

subrogation

Answer 64

when the insurer stands int he shoes of the insured in order to recover finaincal loss ie. driving claims. this does not transfer the rights of the insured however they must raise the action in the name of the insured- Caladonia north sea v london bridge engineering

Question 65

JJ Lloyd instruments ltd v northern star insurance

Answer 65

vessel lost at sea for a number of reasons. if are btwo independent causes and neither can be proved, insurer still needs to pay

Question 66

Syarikat Takaful Malaysia Berhad v Flobal process systems

Answer 66

court will try their hardes to find a dominant clause so sit in jj lloyde doesn't occu but if simply impssoble and has not been expressly excluded as a casue then the insurer needs to pay- it would then be up to the insured to show that the dominant cause was covered

Question 67

wayne tank and pump co ltd v employers liability assurance corp

Answer 67

if one of the domiannt perils is expressly excluded then the insusrer will not need to pay

Question 68

warrenties

Answer 68

a fundemental term of insurance- a promise by the insured and must eb adhered to

Question 69

warrenty of fact

Answer 69

statement of fact by insured that a certain satte of affairs will prevail throughout the duration of the policy- it is a continuing warrenty and must be expressly compiled with

Question 70

warrenty of opinion

Answer 70

macphee v royal assurance

Question 71

hussain v brown

Answer 71

insurer asked if the premise was fitted with working fire alarms insured said yes- this was held to be a present sattement of fact not a continuing warrenty as didn't say mmake sure the building alwasy has working frie alarsm

Question 72

ansari v new india assurance

Answer 72

re frie spriklers- again in present tense- distinguished from hussain as insurers did not have ot pay not because the sprinkers weren't inoperation at the time but becasue they were an INTEGRAL part of the building as opposed to fire alarms which you have to instal- sprinklers should be in working order all the time- implied

Question 73

breach of warrenty

Answer 73

continuing warrenty- cannot recind contract but are discharged from responsibility when the breach occurs- Bank of nova scotia v hellenic mutual was risks association- insurer in breach as did not inform the insured that on their breach of continuing warrenty their cover would cease.

Question 74

non- complience

Answer 74

insurer cannot use non complience as a way of excluding liability if insured can show that if they had complet the risk of losss would NOT HAVE INCREASED.

Question 75

section 10 and 11 A 2015 act

Answer 75

you can contract out of the not being able to use non complience as a way of excluding liability if insured can show that the risk of loss would not have increased- can do this on commercial but not consumer must comply wiht section 17 so as not to be disadvantageous.

Question 76

section 17

Answer 76

a term in the contract cannot put the insured at a disadvantageous position unless expressly brought to their attaention

Question 77

beresford v royal insurance co

Answer 77

insured cannot cause the event- life insured himself 5 times then killed himself

Question 78

average principle

Answer 78

in have under insured then there is usually a claim saying the insured can claime the average price

Question 79

part XV finaincail services and markets act 2000

Answer 79

protection on insolvency insured can apply to the finaincial sevrices ombusmend regarding insurer's resolution of a dispute- ombusmen onlt relates to PRIVATE individuals and to businesses with fewer than 10 employees or income not exceeding 2 mil.

Question 80

independent intermediary broker

Answer 80

acts for the insured

Question 81

tied agent

Answer 81

acts for the insurer

Question 82

obligations of the insurance broker

Answer 82

satisfied as to nature and value of the risk proposed advise clients on apprpriate coverage to secure best terms assist with claims

Question 83

stockton v mason and the behicle and geneeral insurance co ltd

Answer 83

insured covered even though no cover and when he had had car crash the broekr told him he would 'see to it' insurer having organised the broker was entitled to pay. he is making the insured rely on a statement

Question 84

newsolholme bros v road and trasnport and general insurance

Answer 84

unlike the stockton v moasona nd vehicla dn general insurance case- the broker was held to be an agent for the insured ratehr than insurer as he has acted outwith his position and powers by incorrectly issuing a warrenty with false info

Question 85

schedule 2 section 9

Answer 85

are they and agent for the insured or insurer