Study 2 - Legislation and General Principles: Key Terms Flashcards
Common law
A system of laws originating and developed in England by judges based on court decisions and similar tribunals. Also known as case law or the law of precedent.
Civil Code of Quebec (Code civil du Quebec)
The civil code in force in the province of Quebec
Precedent
A legal decision that serves as a basis to resolve subsequent disputes in similar cases.
Case law
The body of previously decided cases that courts review for guidance on cases currently in dispute.
Statute law
A law set down in a government act and passed by legislature
Contra proferentem
A legal term that provides that any ambiguity in a contract must be interpreted against the person who drew the contract because that person had the opportunity to make it clear.
Material fact
A fact that would affect a contract of insurance enough to influence an insurer’s decision regarding whether to accept or reject the risk or the premium to be set. Material facts must be disclosed by the applicant if asked about.
Ab initio
A Latin term meaning “to go back to the beginning.” When a policy is rejected or made void ab initio, premium is refunded entirely, and the contract is treated as though it never existed.
Privity of contract
Relationship that exists between two parties or more by virtue of their having entered into a contract.
Short-rate cancellation
The cancellation by the insured of a policy before its natural expiration; the insurer pays a return premium that is less than the proportionate part that remains unearned.
Minimum retained premium
A premium specified on an individual policy that is the minimum amount retained by the insurer in the event that the policy is cancelled midterm by the insured.
Proof of loss
A formal statement of facts about a loss, attested to by the claimant, in a form specified by the insurer. A proof of loss may need to be notarized. An insurer must respond to a proof of loss after a specified time period with a formal disposition of the claim (approved or denied).
Subrogation
Legal process by which an insurance company, after the payment of a loss, is assigned the rights of the insured to recover the amount of the loss from those who are legally liable for it.
Personal Information Protection and Electronic Documents Act (PIPEDA)
A federal statute that governs the collection and use of personal information. It states that personal information to be collected must be relevant, and that all information that has been collected, is being collected, or will be collected, must be held in the strictest of confidence.
