Study 4: Risk and Governance - Key terms

Question 1

Personal Information Protection and Electronic Documents Act (PIPEDA)

Answer 1

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.

Question 2

Estoppel

Answer 2

A bar created when someone by his action, or lack of it, indicates that he will not exercise a right he has. He stops himself from exercising his right later. For example, if A owns a pen and stands by and watches B sell the pen to C, as if the pen belonged to B, then A cannot later reclaim the pen, arguing that it was his.

Question 3

Waiver

Answer 3

The intentional and voluntary relinquishment of a known right. A wavier under a policy is required to be clearly expressed and in writing.

Question 4

Non-waiver agreement

Answer 4

An agreement signed by the policyholder after a loss, agreeing that the investigation and determination of the amount of damage by the insurance company shall not be construed as an admission of liability. It is used when the insured is in violation of a policy condition and there is a question as to whether or not the company is liable for a loss but it wishes to investigate the loss and determine the amount of damage.

Question 5

Reservation of rights letter

Answer 5

An insurer’s notification to an insured that coverage for a claim may not apply. Such notification allows an insurer to investigate (or even defend) a claim to determine whether coverage applies (in whole or in part) without waiving its right to later deny coverage based on information revealed by the investigation

Question 6

Bad faith

Answer 6

(1) Design to deceive or mislead another. (2) Conscious wrongdoing. (3) Constructive fraud.

Question 7

Punitive damages

Answer 7

Damages in excess of those required to compensate the plaintiff for the wrong done, which are imposed in order to punish the defendant because of the particularly wanton or willful nature of his or her wrongdoing. Also called exemplary damages.

Question 8

Aggravated damages

Answer 8

Damages designed to compensate a plaintiff for suffering intangible damages, such as humiliation and distress, as a result of the defendant’s actions.