Reinsurance and claims

Question 1

Reinsurance

Answer 1

insurer transfer risk to another insurer

Question 2

Privity of contract

Answer 2

relation existing between parties to same contract
A cannot claim against C if there is no contract

Question 3

Proportional Reinsurance

Answer 3

reinsurer receives stated percentage of each dollar of premiun and pay that percentage of dollar of losses
for sufficient captial to retain all exposure it is capable of producing

Question 4

Non proportional insurance

Answer 4

responds if loss suffered by insurer exceeds a certain amount
known as retetion or priorirty

Question 5

All risk

Answer 5

have exclusions
insurer burden to prove claim not covered by exclusion, condition or breach of warranty
ICC (A)

Question 6

Specific perils polcy

Answer 6

Cargo: insured to prove resonably attritutable
Hull: insured to prove it is resonably proximately caused

Question 7

Proxmate cause

Answer 7

causa proxima non remota spectatur: immediate not remote cause regarded
immediate means closest in efficiency, not necessarily closest in time

Question 8

Willful misconduct

Answer 8

assured cannot profit by own delibrate misdeed
Samuel v Dumas (1926) vessel scuttle by crew with connivance of owner)

Question 9

Wear and tear

Answer 9

Some trade risk inevitable as they are foreseeable not fortitious
ordinary wear and tear, leakage and breakage, inherent vice or nature of subject matter, lost proximately caused by rats or vermin
injury to machinery not proximately caused by maritime peril
loss of other parts due to wear and tear of machine recoverable

Question 10

Fradulent claims

Answer 10

wilfull falshood and fraud
insured forfeit all claim upon policy
breach of section 17 duty of utmost good faith

Question 11

Hull claims

Answer 11

deductable/excess applied to aggregate of all claims arising from event (once)
1. if vessel not repairable with insured value, choice of constructive total lost or 100 % partial loss lies with insured
2. if insured offer ship to insurer, insurer can accept : insurer property, reject= insured property. deductable not applicable if offered
3. if insured never offer, 100 % total loss, ship belong to insured, deductible applied

Question 12

Underinsurance

Answer 12

inadequate insurance coverage by insured
economic loss to holder
lower premium but loss arising far exceed marginal savings