Topic 5 - Insurance Intermdeiaries Flashcards
Mackie v European Assurance
A principal’s agent may bind his principal by issuing cover notes.
Nasidi v Mercury Assurance
An agent exercises usual authority where he has been impliedly authorised to do anything which a similar agent in the same trade or profession would usually be authorised to do.
Case Summary
The branch manager of an insurance company has usual authority to issue cover notes
Anglo African Merchant v Bayley
The common law position is that both in marine and in non-marine insurance an insurance broker is the agent only of the assured whether in matters relating to the placing of the policy or in matters arising when a claim is made. Since an agent who has accepted employment from one principal cannot in law accept any engagement inconsistent with his duty to the first principal, unless he first makes the fullest disclosure of all material facts to both principals and obtains their informed consent to his so acting, an insurance broker would be in breach of his duty to the assured if, without his by-your-leave, he accepted the underwriter’s instructions to obtain an assessor’s report on the claim, the contents of which he was precluded from passing on to the assured and no custom which contradicts this principle will be upheld in the courts
Fact, Decision & Ration
The insurer instructed the broker to engage a lass assessor to investigate the facts. The broker did so and refused to disclose the report to the insured. The Court held that the broker was, in following those instructions, acting as agent of the insurer while still being the insured’s agent. There was a conflict of duty. Megaw J, was highly critical of the broker. He said that [t]he potential dangers and undesirable consequences are obvious in any case where, as here, an agent permits himself, without the express consent of his principal, to make a compact with the opposite party whereby he is supplied with information which he is, or may be, precluded from passing on to his principal. Such a relationship with the insurer inevitably, even if wrongly, invites suspicion that the broker is hunting with the hounds whilst running with the hare.a Megaw J. also said [clounsel for the defendant conceded that, in all matters relating to the placing of the insurance, the insurance broker is the agent of the assured, and of the assured only. I do not think that this proposition of law has ever been in doubt amongst la~yers.~ However, his Honour did acknowledge that if an insured engages a broker solely for the purpose of effecting a particular insurance there would be no conflict of duty and hence no breach of the obligations owed to the insured in he subsequently acts for the insurer.
Wing v Harvey
A life policy contained a term that the insured not to go beyond Europe without the consent of the directors of the insurance company. The insured later moved to Canada, communication of this fact was made to the agents of the insurer who continued to receive premium. The court held that communication to the agents of the insurer of that fact was communication to the insurers on the basis that the agents had ostensible authority to receive such information.
Unity life and Fire Assurance v Alahji Banire
A notice to of loss to the insurance agent is a valid notice to the insurer
North and South Trust v Berkeley
Broker not at liberty to disclose contents of documents (repudiation of the claim) to the Insured as he was held to be an agent of the Insurer
