Study 2 - Legislation and General Principles

Question 1

Precedent

Answer 1

A legal decision that serves as a basis to resolve subsequent disputes in similar cases

Question 2

Case Law

Answer 2

The body of previously decided cases that courts review for guidance on cases currently in dispute

Question 3

Statute Law

Answer 3

A law set down in a government act and passed by legislature

Question 4

Contra Proferentem

Answer 4

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

Question 5

Relief from Forfeiture

Answer 5

When an insured argues that a policy condition is unjust or unreasonable. If the court agrees, the insured may be excused in whole or in part - that is, relieved - from perfect compliance with that particular condition. Example is Marche v. Halifax Insurance Co.

Question 6

Material Fact

Answer 6

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

Question 7

ab initio

Answer 7

When a policy is rejected or made void ab initio, premium is refunded entirely, and the contract is treated as though it never existed

Question 8

Privity of Contract

Answer 8

Relationship that exists between two parties or more by virtue of them having entered into a contract

Question 9

Short-rate cancellation

Answer 9

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

Question 10

Proof of Loss

Answer 10

A formal statement of facts about a loss, attested to by the claimant.

Question 11

Subrogation

Answer 11

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

Question 12

Personal Information Protection and Electronic Documents Act (PIPEDA)

Answer 12

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