Insurance Law (TB)

Question 1

Why do alternative method to insurance not offer adequate protection? (3)

Answer 1

1. Preventative measures cannot always be taken
2. A fund may not always be sufficient
3. Damages incurred by 1 legal subject could be too high (cannot bear it)

Question 2

Was formal insurance recognised in Roman Law?

Answer 2

No.

Question 3

In modern day, what are insurers generally?

Answer 3

A trade practiced by certain institutions who, for profit, are prepared to bear the risks for and obo individuals, who then in exchange pay the insurer a monetary premium

Question 4

Name 4 points related to the history of insurance

Answer 4

1. Hammurabi proclaimed that all caravan merchants had to contribute towards payment of damages caused by theft of property
2. Greek & Roman law had insurance in their maritime law of contract
3. The precursors of modern day insurance were the guilds and associations that appeared in Europe and England during Middle Ages
4. Life insurance developed at a much later stage, and was only entrenched during 19th C.

Question 5

Discuss the sources of insurance law (8)

Answer 5

• Both Roman-Dutch and English law were, until recently, deemed to be the primary sources
• In 1985, Appellate Div. decided that only Roman-Dutch law was to be applied
• Due to international nature of insurance, comparative legal studies play a major role in solving insurance problems
• Statutory regulation falls under Financial Services Board
• Short Term and Long Term Insurance acts (1998)
• PEPUDA regulates the prevention of discrimination in the insurance industry
• PPR
• Code of Conduct

Question 6

Does the CPA apply to insurances?

Answer 6

No, it is exempted by the Financial Services Laws Amendment At 2013

Question 7

Where are consumer protection measures found for the insurance industry?

Answer 7

In the Policyholder Protection Rules (both short- and long-term)
There are also Codes of Conduct for insurance intermediaries

Question 8

Define an insurance contract (7)

Answer 8

A reciprocal contract
between an insurer and an insured
ito which the insurer undertakes to pay the insured an amount of money or its equivalent,
in exchange for payment of a price or premium,
should the risk, borne by the insurer obo the insured,
materialise by the happening of a specified uncertain event
in which the insured has an interest.

Question 9

Name the two main types of insurances

Answer 9

1. Indemnity (aka short-term insurance)

2. Non-indemnity (aka long-term insurance)

Question 10

What is the main difference between indemnity and non-indemnity insurance?

Answer 10

With indemnity insurance the amount of damages claimed is directly proportional to the patrimonial loss or damage suffered, or the amount of the insurance where it is less than the loss suffered.
The nature of the interest insured is patrimonial.
The amount which the insured can receive from the insurer cannot exceed the amount of actual loss or damage incurred.
In the case of non-indemnity insurance (aka as capital insurance), the loss suffered and the amount paid by the insurer are not necessarily proportionate.
The nature of the interest insured is non-patrimonial.

Question 11

What are 3 practical differences between indemnity and non-indemnity insurance?

Answer 11

1. With indemnity insurance the insurable interest has to exist at the time of loss or damage, but with non-indemnity it must already exist at the time of conclusion of the insurance contract;
2. The rules of proportionate contribution and subrogation apply to indemnity insurance, and not to -non-indemnity;
3. The insurer’s liability in case of indemnity insurance is limited to the amount of damages actually incurred, while this is not true for non-indemnity insurance.

Question 12

What is a Long-Term Insurance policy?

Answer 12

Ito sec 1 of LTIA it is ‘an assistance policy, a disability policy, fund policy, health policy, life policy or sinking fund policy, or a contract comprising a combination of these policies; and includes a contract whereby any such contract is varied’.
These long-term contracts provide policy benefits for defined longer time periods - usually exceeding 1 year.

Question 13

What does the LTIA cover?

Answer 13

It is of a regulatory nature, and so prescribes rules for -
- Registration of insurers, business and admin practices;
- Financial arrangements;
- Judicial management;
- Final winding-up of insurers.
The Act also creates punishable offences and prescribes penalties for misconduct or non-compliance

Question 14

What are the Policyholder Protection Rules (PPR)?

Answer 14

These rules deal with obligatory and standardised disclosures, consequences of failure to pay premiums and non-compliance, cancellation of policies, cooling-off periods, the prescribed contents of insurance agreements, etc.

Question 15

What is a Short-term Insurance policy?

Answer 15

Ito sec1 of STIA it is ‘an engineering policy, guarantee policy, liability policy, miscellaneous policy, motor policy, accident and health policy, property policy or transportation policy or a contract comprising a combination of these policies; and includes a policy whereby any such contract is varied’
These policies provide benefits for only a defined short term, usually for 1 year or less, and are usually renewable.

Question 16

What does the STIA cover?

Answer 16

• Registration of short-term insurers
• The control of certain activities of s-t insurers and intermediaries
• Business and admin practices
• Financial arrangements
• Judicial management
• Winding-up of insurers
• Prescribes specific fee structures

Question 17

What is Property Insurance?

Answer 17

Concerns itself with the assets or positive elements of a person’s patrimony (i.e. car or house contents)

Question 18

What is Liability Insurance?

Answer 18

Concerns itself with the negative elements of a person’s patrimony, namely his duties or liabilities, and is in its nature indemnity insurance (i.e. professional liability insurance)

Question 19

What is Personal Insurance?

Answer 19

Concerns itself with aspects relating to the body and the mind of the insured or another 3rd person (i.e. life insurance)

Question 20

What is the difference between valued and unvalued policies?

Answer 20

Valued policies specify the value of the interest that is insured, whereas unvalued policies contain no such allocated value and the insured must prove the extent of his loss.
The purpose of a valued policy is to avoid the practical difficulty of proving the extent of the loss suffered - but the insured must still prove that he suffered the loss.

Question 21

What is SA’s position on Mutual Insurance?

Answer 21

It is not recognised in SA any longer.

All insurance are premium insurance.

Question 22

What is profit insurance?

Answer 22

Aimed at generating a profit for the insurer that is distributed between its shareholders

Question 23

What is the difference between private and social insurance?

Answer 23

Private insurance deals with the interests if the individual, whereas social insurance is mandatory insurance implemented by the government (i.e. UIF)

Question 24

Discuss re-insurance

Answer 24

When an insurer takes out insurance with another insurer to make good the claims which the former had to pay out to his insureds.
It is liability insurance because the insurer reinsures his liabilities towards his clients with another insurance company.
No legal tie or obligation exists between an original insured and a reinsurer.
[ABC is insurer for X, but takes out insurance with XYZ for ABC’s liabilities]

Question 25

What is captive insurance?

Answer 25

An insurer is established (e.g. a company is floated) by an enterprise or a group of enterprises solely for the insurance of the interests of the enterprise or members of the group of enterprises.
There is pure captives (where only the interests of the group are insured) and broad captives (which extends its business to the extent that insurance cover can also be obtained by non-members).

Question 26

What is pool insurance?

Answer 26

A number of participating insurers pool their interests and share the results.
The insurers merely conclude a co-operation agreement and do not merge their various companies.
This is direct insurance and not re-insurance.

Question 27

Discuss Lloyd’s of London (4)

Answer 27

1. A type of insurance market or exchange, where supply and demand meet
2. The insurers, who back the policies written by Lloyds, consolidate in syndicates on an ad hoc basis
3. These syndicates take up the risks, and every member remains liable for specific share of the risk
4. The STIA contains specific provisions that regulate Lloyd’s underwriting and representatives in SA.

Question 28

What are the requirements for the conclusion of a valid insurance contract?

Answer 28

1. Requirements for contract (i.e. consensus, capacity, certainty, legality, possibility, and formality)
2. Consensus through a process of offer and acceptance must be reached on the required essentialia

Question 29

How is consensus reached? (6)

Answer 29

• Insurers mostly issue invitations in the form of advertising to potential insureds
• The offer for insurance is usually made by the insured, who completes a standard application form in hard copy or electronically
• The parties can make counteroffers
• Who the offeror is and who the offeree is will depend on the facts and circumstances of each case
• The contract between them only exists once they have reached consensus on the terms and conditions of their agreement
• Direct marketing is relevant here - Rule 11 and 4 of PPR

Question 30

Is there a cooling-off period for LTI?

Answer 30

No longer relevant, Rule 4 of LTPPR applies.

Question 31

Discuss the renewal of a contract

Answer 31

Each renewal or reinstatement of a contract is a new contract of insurance.
If the insurer sends a renewal notice to the insured, this usually constitutes a new offer for insurance.
Should the insurer accept this renewal offer, a new insurance contract comes into existence as soon as the term of the previous contract comes to an end.
Acceptance can be orally or through conduct.
The terms of the new contract are by implication the same as those of the previous one.
It is nit ab extension of the previous contract, but a totally new one which immediately supervenes the previous contract.

Question 32

When does reinstatement occur?

Answer 32

When the insured lapses in paying premiums and he elects to continue with the insurance

Question 33

Discuss contractual capacity

Answer 33

The parties must possess the required contractual capacity to be able to conclude a valid contract of insurance.
Persons married inCOP require their spouse’s consent.

Question 34

Discuss legality (as a contractual requirement)

Answer 34

The insurance contract must be legal.
The conclusion, purpose as well as the performance due may not be contrary to statute, good morals or public policy.
Legality is usually determined at the time of conclusion of the contract.
Where provision is unlawful and severable, will be deemed pro non scripto.

Question 35

Ito PEPUDA an insurance contract may not unfairly discriminate against a person by -

Answer 35

1. Unfairly refusing on one or more of the prohibited grounds to provide an insurance policy to any person;
2. Unfairly discriminating in the provision of benefits, facilities and related insurance services; and
3. Unfairly disadvantaging a person or persons including refusing to grant insurance and related services to persons on the basis of their HIV/Aids status

Question 36

What does both the STIA and LTIA state regarding non-compliance with a statutory provision?

Answer 36

No contract will be invalid merely because a statutory provision regarding such a contract has not been complied with, except if a PPR rule relating to contents of insurance contracts (if such rule states it would be null and void).

Question 37

What do both STPPR and LTPPR prohibit ito prescription?

Answer 37

Parties are prohibited from agreeing to a prescription period of less than 6 months.
Prescription may also only start running once the 90 day time limitation for representations are prescribed for a disputed or rejected claim to have passed. - Rule 17

Question 38

Name 3 prohibitory clauses found in the STPPR’s

Answer 38

1. It prohibits polygraph tests, lie detector or truth verification procedures
2. Prohibits a clause that any dispute under the policy can only be resolved by arbitration
3. Prohibits a clause which entitled a insurer to reject a claim where the premium was not paid on time - Rule 7.1 of STPPR

Question 39

Discuss the distinction between insurance and wagering or gambling contracts (6)

Answer 39

1. With insurance, interests are insured against everyday risks which take place inevitably.
2. The purpose of insurance is indemnity.
3. With a wager/gamble, the parties lack an interest and create their own risk (in a so-called contract of chance)
4. The wager remains a natural obligation and is unenforceable irrespective of any loss suffered, whereas an insurance contract creates a civil obligation that is enforceable
5. With an insurance contract, the risk is passed from the insured to the insurer, but with wagering no risk is passed from one party to another.
6. Gambling is, with certain exceptions, illegal and such contract are void. This is not so for insurance contracts.

Question 40

Discuss possibility and certainty

Answer 40

The performance which has to be delivered ito the contract has to be determined or at least determinable with some degree of certainty.
It must also be objectively possible to perform.
An insurable interest which has ceased to exist at the time of conclusion of the contract, cannot be insured in future. No contract can be concluded as no transfer of risk can take place.

Question 41

Discuss formalities

Answer 41

No general statutory formalities are prescribed.
PPR require contracts, whether verbal or in writing, to be in plain language.
Rule 11 of STPPR states that an insurer must ensure that a policy is only issued to a policyholder concerned if the provisions of the policy are recorded, as regards layout, letter types and spacing, in an easily readable manner and if the wording of every provision of the policy has a reasonably precise ascertainable meaning.
Insurers must within a reasonable time inform a policyholder IN WRITING of details of any internal complaint resolution systems, as well as full particulars relating to the STI Ombud.

Question 42

Is an email/fax “in writing”?

Answer 42

Ito the PPR and ECTA “writing” includes communication by fax or electronic medium that can be reduced to written or printed form.

Question 43

What are the essentialia for insurance contracts?

Answer 43

1. The insurer will compensate the insured for his loss
2. The insured will pay a premium
3. The insurer’s obligation is dependent on the occurrence of an uncertain event

Question 44

Discuss ‘insurable interest and the principle of indemnity’

Answer 44

• The focus of the insurance must be the principle of indemnity
• An insurable interest is not an essential element for the conclusion of an insurance contract
• The intention of the parties will indicate whether their contract is one of insurance or wager
• The object of insurance is that the insurable interest must exist only at the time of materialisation of the risk insured against
• The insured must have a proprietary interest in order to have a claim for compensation - thus of an economic value to him
• The continued existence must offer an economical benefit, or the loss/damage must cause an economic loss

Question 45

When must the insurable interest exist?

Answer 45

With indemnity insurance the insurable interest must exist at the time loss or damage occurs, whereas with non-indemnity insurance, it must exist at the time of conclusion of the contract

Question 46

What is risk?

Answer 46

The possibility of the occurrence of an uncertain event leading to an undesirable consequence, such as damage or harm, whether patrimonial or not, to which the insured himself, his property or even his interests are exposed.

Question 47

Discuss ‘risk’

Answer 47

• Risk is usually described with reference to the specific dangers to which the insurable interests are exposed.
• The possibility of damage is endless, which is why the scope thereof must be limited contractually.
• Only the specific risks passed onto the insurer are therefore specified in the contract.
• The parties must agree that the risk passes from the insured to the insurer
• Risk must materialise due to an uncertain future event.
• Certain perils are excluded by law (i.e. wear and tear) and will only be included if expressly agreed

Question 48

Are specific risks stated in all risk insurance?

Answer 48

In the case of all risks cover, the risks do not have to be specified, yet include only risks and not certainties.

Question 49

Distinguish between contracts of insurance and suretyship

Answer 49

• Both provide indemnity
• Different legal rules apply to each of them
• A suretyship must be in writing and signed to be valid, while an insurance contract does not.
• Insurance contracts form the principal obligation between the parties, whereas a suretyship is accessory in nature and concluded to secure a main debt

Question 50

Discuss the causal link and its test

Answer 50

• There must be a causal link between the peril insured against and the loss or occurrence insured against - this is a factual issue
• The insurer’s duty to perform is conditional upon the existence of such a link.
• The test that is applied is the Proximate Cause Test

Question 51

How is the size of the premium and the extent of cover determined?

Answer 51

By the size of the risk

Question 52

When does the insurer’s duty to perform arise?

Answer 52

When the risk passed on to him is realised.

The insured has to prove that the risk has materialised.

Question 53

How is ‘premium’ defined in the LTIA and STIA?

Answer 53

The consideration given or to be given in return for an undertaking to provide policy benefits.

Question 54

When would risk pass to the insurer?

Answer 54

As soon as the insured pas his first premium to the insurer.
It is possible for the contract to include a suspensive condition that cover is only afforded once every premium payment that is due, is met.

Question 55

Discuss payment to agent/intermediary

Answer 55

• Ito the LTIA payment of a premium to an AGENT of the insurer is deemed to be payment to the insurer
• Ito the STIA no independent intermediary may accept or receive, hold or deal with any premium payments obo a s-t insurer unless proper authorisation as required in the regulations to the Act, is obtained.

Question 56

Which rule applies to review of a premium?

Answer 56

Rule 15

Question 57

Define ‘cover’

Answer 57

The extent of the insurer’s liability to accept the loss which the insured would have suffered, had the insurer not accepted the risk as contractually agreed upon, to the extent to which the risk materialised.

• In the case of non-indemnity insurance, the cover is a contractually agreed amount
• For indemnity insurance the cover is either determined with reference to the loss or damage suffered, or a contractually agreed amount which is less than the loss or damage

Question 58

If there is only partial loss (indemnity insurance), what may the insurer do?

Answer 58

He has the choice between either paying an amount of quantified damages or to repair the damaged property. He can only exercise his right of choice once - it is once-off and final.

Question 59

If there is total loss, what may the insurer do?

Answer 59

Has the choice to substitute the property or pay out an amount of quantified damages

Question 60

Discuss ‘period of cover’

Answer 60

• The period of cover must be determined or determinable
• A contract through which interim insurance cover is obtained, it considered a normal independent insurance contract
• Where the period is determined by referring to specific fates, the civil method of calculation applies (includes first day, excludes last), unless otherwise agreed

Question 61

Ito the LTIA, when is the insurer’s undertaking to delivery policy benefits suspended?

Answer 61

It is suspended until the premium is paid, or where more than 1 premium is payable, the first premium is paid.

Question 62

Discuss ‘parties to insurance contracts’

Answer 62

• At least 2 parties are required
• More than 1 insurer and more than 1 insured can participate in an insurance contract
• Other parties can act as intermediaries
• Other 3rd parties who are not te insurer or policyholder might be involved (i.e. the person whose life is insured)
• Stipulatio alteri

Question 63

What is required for a party to be an ‘insurer’?

Answer 63

Insurance business may only be conducted by a company that is duly registered and incorporated

Question 64

May several insurers underwrite a single risk?

Answer 64

Yes, this called a multiplicity of insurers, and each of them is liable for his pro rata share, unless differently agreed.

Question 65

Who may take out insurance?

Answer 65

Any person, both natural and juristic can take out insurance, in principle.

Question 66

Who is the insured?

Answer 66

The person who can claim from the insurer, and is the first HOLDER on the policy.
Subsequent holders are cessionaries to whom the policy has been ceded.
Where the contract is concluded for the benefit of a 3rd party, this party is a ‘beneficiary’.
In life insured, the person whose life is insured is known as the ‘life insured’.

Question 67

May there be a multiplicity of insureds?

Answer 67

Yes, where more than 1 person has the same insurable interest and there is only 1 performance due by the insurer to all of them. They are called co-creditors.

Question 68

When does the 3rd party obtain rights ito the contract?

Answer 68

Once he accepts the benefit.

Question 69

Which (limited) protection does a benefited 3rd party enjoy?

Answer 69

1. The person who has to benefit the 3rd party, may not be unilaterally discharged from the agreement by the other unless the contract specifically provides for a unilateral discharge.
2. Where the 3rd party dies before accepting the benefit, the executor of his estate may still within a reasonable time accept the benefit.
3. Where the 3rd party is nominated to receive the proceeds of a life insurance contract, his interest is protected from seizure by the insured’s creditors- section64.
4. Where the insured nominates a 3rd party for certain life insurance benefits, and the insured then marries the 3rd party inCOP, the proceeds of the life insurance accrue to the 3rd party and do not fall within the joint estate of the spouses.

Question 70

Discuss ‘noting the interests of a third party’

Answer 70

• It is possible to note the interests of a 3rd party on a policy
• This means that where the risk realises, the insurer fist pays out to the 3rd party ito the 3rd party’s interest, before paying out to the insured
• Due to certain risks parties are advised to rather conclude a tripartite agreement between the insurer, insured and the 3rd party whose interest are so noted.

Question 71

What are ‘extension clauses’

Answer 71

It is possible for a person procuring insurance to obtain cover for others also under the same policy.

Question 72

What is the parol evidence-rule?

Answer 72

Where the contract states that it is the sole source of the agreement between the parties, no extrinsic evidence beyond the contract itself may be presented to prove the content of the contract.

Question 73

Do the ordinary rules of interpretation of contract apply to the interpretation of insurance contracts?

Answer 73

Yes.

Question 74

When do the ordinary rules of interp. apply?

Answer 74

Only when the wording of a contract is vague, uncertain, or ambiguous. These rules do NOT apply where the contract contains a provision which is strict or unfair.

Question 75

What are the primary rules of interpretation?

Answer 75

The true intention of the parties has to be determined.

• By giving to words their general, grammatical meaning
• Every word must be given a meaning
• The contract must be interpreted as a whole

Question 76

What are the secondary rules of interpretation?

Answer 76

1. The immediate language of the parties prevails. Written words enjoy preference over typed words, which enjoy preference over printed words;
2. Wording or clauses must be interpreted according to the nature and purpose of the contract;
3. The conduct of the parties after conclusion of the contract could shed some light on their intention regarding the problematic wording or clause;
4. General words, used in conjunction with specific words, are limited in their meaning according to the meaning of the specific words (the eiusdem generis rule);
5. Where the document refers to a particular ting, it is presumed that everything else that is not specifically mentioned is excluded;
6. The court should choose the meaning which would render the contract valid and enforceable, rather than null and void (rebuttable presumption of validity)
7. Any provision that limits indemnification (of the insured by the insurer) has to be interpreted restrictively, and penalty clauses need to be interpreted strictly;
8. Where words used are doubtful, they must be interpreted to place the least possible burden on the debtor or promissor (quod minimum rule);
9. The courts should choose the most equitable interpretation of the clause or words in question; and
10. As a last resort, the contra preferentem rule may be applied.

Question 77

When will rectification of a clause be allowed?

Answer 77

Where the contract document does not reflect the true intentions of the parties. The party claiming rectification must prove the true intentions.

Question 78

When does an indemnity insurance claim vest? (4)

Answer 78

1. If a valid insurance contract exists;
2. If all suspensive conditions have been fulfilled;
3. If the risk insured against occurred; and
4. If the insured suffered a loss as a result of the peril or risk insured against.
   In the case of capital insurance the sum insured becomes payable once the event insured against occurs.

Question 79

When does a non-indemnity claim vest?

Answer 79

1. If a valid insurance contract exists;
2. If all suspensive conditions have been fulfilled;
3. If the risk insured against occurred; and

Question 80

What are time-bar clauses?

Answer 80

They state that the insured only has a specific time after the risk event or the occurrence of the loss, within which he may lodge an insurance claim with the insurer.
And, should the insurer repudiate the insured’s claim, that the insured does not institute his claim be serving summons against the insurer within a set time, his claim becomes unenforceable.

Question 81

What are the regulated time period (ito LTIA an STIA) on time bar clauses?

Answer 81

1. An insurer must accept, reject or dispute a claim within a reasonable period after receiving the claim, and the notify the policyholder in writing of his decision within 10 days of taking the decision;
2. Where an insurer rejects a claim or disputes the quantum of the benefit claimed, he must inform the policyholder in the written notification of
   a. Reasons for decision;
   b. That the PH has a period of not less than 90 days to make representations to insurer;
   c. The right of the PH to lodge a complaint ito the Financial Services Ombud Schemes Act;
   d. Any time limitation provision for instituting legal action and the implications thereof
   e. Where the policy does not contain a time limit, the prescription period that will apply ito the Prescription Act.
3. The insurer must then, within 45 days, notify the PH in writing of his decision to accept, reject or dispute the claim.
4. Any time limit provisions of the institution of legal action in policies concluded before 1 Jan ‘11 may not include the time limits mentioned above
5. Policies concluded from 1 Jan. ‘11 onwards, may not include the time periods mentioned in 1 - 3, and must provide for a period of not less than 6 months after the expiry of the 90-day period mentioned in 2.
6. Despite any agreement on a time limitation, a PH may request the court to condone the non-compliance where good cause exists.

Question 82

How may insurance disputes be solved?

Answer 82

By internal complaint resolution systems - as agreed

Thereafter may be referred to the Financial Services Ombud, arbitration (if agreed) or approach a court.

Question 83

Name 6 ways to terminate an insurance contract

Answer 83

1. Performance
2. Resolutive term
3. Resolutive condition
4. By choice of the parties
5. Voluntary loss of insurable interest
6. Other methods

Question 84

Discuss termination by performance

Answer 84

• Insurance contracts are usually terminate if the risk materialises, and the insurer makes good his cover to the insured.
• In some cases a plurality of claims may be paid by the insurere (i.e. home owner’s insurance) during the period of cover, without the contract being terminated. Such contract is of a continuous nature.

Question 85

Discuss termination by resolutive term

Answer 85

• Insurance contracts, especially indemnity contracts, are usually valid for a certain term.
• Therefore, the contract is subject to a resolutive term.
• Should the term come to an end, the contract is automatically terminated.

Question 86

Discuss termination by resolutive condition

Answer 86

• Where the contract is subject to a resolutive condition, the contract is terminated automatically when the condition is fulfilled (i.e. clause states that contract terminated if X immigrates)
• It is also possible to have clause which requires the insured to institute a claim against the insurer within a certain time after the damage or loss has been incurred. If the insured does not comply with this requirement, the insurer cannot be held liable for payment.
• He is then freed from his contractual obligation towards the insured.
• The result is that the contract remains in force, but that the specific claim cannot be instituted ito the contract.
• If the parties do not agree on a time period, the normal prescription period of 3 years will apply.

Question 87

Discuss termination by choice of the parties

Answer 87

• Contracts usually contain a clause stating that any party to the contract may cancel the contract by giving a unilateral notice of cancellation.
• The LRPPR states that a PH may by written notice cancel a policy that is for longer than 30 days, within 30 days from date of receipt of the summary of the policy. The insurer has to refund all premiums or moneys paid, except for the risk cover actually enjoyed, and any market loss where the market value of the investments mad has decreased due to prevailing market conditions.
• Rule 7.4 of STPPR, a s-t insurer may only terminate a contract by giving 30 days’ notice to the PH, his independent intermediary, or where not possible, by publication in 2 editions of local newspapers.

Question 88

Discuss termination by voluntary loss of insurable interest

Answer 88

Where the insured voluntarily waives the interest insured, the insurance contract is automatically terminated.
As existence of an insurable interest is one of the essentialia of an insurance contract, it follows naturally that an insurance contract cannot continue to exist without an insurable interest.

Question 89

Name 3 other methods of termination of insurance contracts

Answer 89

1. Breach of contract
2. By concluding a subsequent contract. This can by by compromise, novation (renewal), or discharge. It does not include reinstatement of a policy.
3. By an insured waiving his rights to claim under a policy