3.1 Principles of Insurance Law: Statute and Duties Flashcards
(130 cards)
1
Q
What part of CL position on fraudulent claims did IA confirm
A
Prior legit claims stand - not void ab initio
2
Q
Prior insurers (case)
A
Joseph Fielding v Aviva
3
Q
What is a ‘fortuity’
A
Event which triggers the policy is uncertain
4
Q
Three kinds of qualifying breach under IA
A
Deliberate, reckless or neither
5
Q
Under CL, what happens if fraudulent claim
A
Forfeit whole claim, but unclear on if policy continued
6
Q
Remedy for careless MR under CI(DR)A
A
Compensatory - what insurer would have done if had answered truthfully
7
Q
If fraudulent device does not improve entitlement to payout, this does not taint the claim (case)
A
Versloot v HDI
8
Q
Does DoUGF under 17 MIA still apply under IA?
A
Yes
9
Q
Is it necessary, to breach 20 MIA, that D be asked a Q to which they gave material rep, or actually answer?
A
No - D can volunteer MR or omit answer
10
Q
What part of IA can no party contract out of
A
Basis of C clause
11
Q
Form of CoI usually
A
Written
12
Q
How many material terms are there for CoI
A
4
13
Q
How is a company deemed to have knowledge of circumstances under IA
A
Imputed knowledge (4(3))
14
Q
Before when does MIA apply
A
12/08/2016
15
Q
Channell J in Prudential v IRC - what did he give?
A
Definition of CoI
16
Q
3 points DoUGF (case)
A
The Star Sea
17
Q
Castellain v Preston key
A
N/A profit
18
Q
Two ways for insurer to accept insurance offer of insured
A
Accept premium or stamp slip
19
Q
When can insurer keep premium for breach of DoUGF under 17 MIA
A
If fraudulent non-disclosure
20
Q
From when does IA apply
A
12/08/2016
21
Q
Three ways in which CoI may be illegal
A
No insurable interest, achieves illegal purpose or subject matter is illegal
22
Q
What is an insurable interest
A
Ensures that individual suffers loss to claim - if no, void
23
Q
Collateral lie (Case)
A
Versloot
24
Q
17 MIA codifies what
A
Duty of utmost GF
25
From when do you judge materiality for MIA, and under what case
At time of placement, per Brotherton v Aseguradora
26
What case suggested position is the same for fraudulent claims at CL or under IA
Versloot
27
When is there no O to disclose material circumstances under 18 MIA
If known by insurer, common knowledge, insurer waived, decreases risk, or conviction spent
28
What is FMR
Statement knowingly or recklessly made
29
Is there a specific definition of CoI?
No
30
When is there doubt on right to void ab initio under 17 MIA
Where there has been a post-contractual breach
31
What is the remedy for NEITHER deliberate NOR reckless breach of DoFP under IA
What insurer would have done + return premium
32
What is there an O to disclose under MIA, and under what provision
All material circumstances, 18 MIA
33
What provision shows that insured needs an insurable interest - suffer loss or policy is void
4 MIA
34
Can you contract out of CI(DR)A?
No
35
What is the duty of reasonable care adjudged by
Standard of reasonable consumer (s.3)
36
How is the duty of fair presentation split under s.3 IA
Disclosing every material circumstance, OR putting insurer on notice
37
What is the 'Sum Insured'
Max possible to recover
38
What is the two limb test for 'material' under MIA
Objective and subjective
39
4 MIA
Shows that insured needs an insurable interest - suffer loss or policy is void
40
Can you contract out of IA?
Yes
41
Can you ever avoid ab initio for fraudulent claim?
No - only if fraud at inception
42
Where is definition of 'materiality' under IA
7(3)
43
The Star Sea key
3 points DoUGF + post-C MF
44
Remedy for honest + reasonable MR by consumer under CI(DR)A
Insurer must pay claim
45
Four peculiarities to CoI for C to come into existence
An 'insurable interest', utmost good faith, 'fortuity' and condition v. warranty
46
What part of IA shows that, for knowledge, insured cannot turn blind eye
6(1)
47
Three kinds of MR
Fraudulent, negligent or innocent
48
What duty was abolished under CI(DR)A, in terms of what insured must disclose
No duty to volunteer material facts (S.2)
49
What is 'materiality' under IA
Affecting judgment of prudent UW, but unlikely to have subjective limb
50
Joseph Fielding v Aviva
Must disclose failure to disclose conviction to prior insurers **_even if_** now spent
51
Does it matter (for there to be binding CoI) if policy has been issued or not
No
52
How many elements make up DoUGF
Two
53
What should you check first if there is suspected fraud
Check no express term in the policy dealing w/ it
54
Is it necessary for premium to be paid before CoI comes into effect?
No, but usually condition precedent to risk
55
What part of IA covers knowledge
s.4 - 6
56
The Star Sea showed what
Gave the three times when DoUGF is most important
57
What must insurer prove for breach of CI(DR)A
'Qualifying MR' (5(1)) and induced by MR to enter into CoI (4(1)(b))
58
Remedy for deliberate/reckless MR under CI(DR)A
Void ab initio, decline claims and keep premium
59
What must insurer establish for remedies under IA
'Qualifying breach'
60
21 MIA
CoI is made when proposal accepted by insurer
61
What terms must be agreed before binding CoI
Material terms
62
Where is the duty of fair presentation under IA
Section 3
63
6 MIA
Insurable interest only needs to exist at time of claim
64
What counter-offer might insurer make to Proposal Form
Higher premium or excluding certain things
65
Insurable interest only needs to exist at time of claim - what provision?
6 MIA
66
Case stating cannot profit from insurance policy
Castellain v Preston
67
What remedy is NO LONGER available under IA (and what provision)
Cannot avoid for breach in all circumstances (s.14 IA)
68
When is offer made for CoI (not in subscription market)
When Proposal Form completed by prospect insured
69
What is the consideration in CoI
Premium paid by insured
70
What case showed that failing to disclose allegations relating to a moral hazard (dishonesty), even if unfounded, is a material non-disclosure
Brotherton v Aseguradora
71
When does the DoFP under s.3 IA not apply
If info diminishes risk, insurer has knowledge or waived duty
72
Claim tainted by fraud fails in entirety but cannot avoid (case)
Axa General v Gottlieb
73
When is the duty of utmost GF most important
At three points - formation, renewal and variation
74
What did Brotherton v Aseguradora show about when materiality is judged under MIA
At time of placement - so it is irrelevant if it becomes unfounded
75
Axa General v Gottlieb ratio
Claim tainted by fraud fails in entirety but cannot avoid
76
What do policies usually state about collateral lies, to hinder the effect of Versloot
Avoid policy if used.
77
Can you contract out of MIA?
No
78
What is a 'qualifying breach' under IA
1/3 kinds of breach, and but for breach, insurer would not have entered into C, or on different terms (8(1))
79
What case gave the three times when DoUGF is most important
The Star Sea
80
Where is duty of utmost good faith codified?
17 MIA
81
Versloot v HDI ratio
If fraudulent device does not improve entitlement to payout, this does not taint the claim
82
4 material terms for CoI
Definition of risk, duration of policy, payment of premium and Sum Insured
83
What does 'ought to know' mean for knowledge of insured under s.3 IA (DoFP)
Anything known by As or that reasonable search would have revealed (4(6))
84
Joseph Fielding v Aviva (key)
Prior insurers
85
Pan Atlantic
To judge 'materiality' under **MIA**, objective (considered by prudent UW) and subjective (actually induced UW).
86
Who and in what case provided definition of CoI
Channell J in Prudential v IRC
87
When might a spent conviction still need to be *indirectly* disclosed as a material circumstance under 18 MIA
If it relates to a failure to disclose to prior insurer **_before_** it was spent (_Joseph Fielding_)
88
Why is it necessary that there is an insurable interest
To ensure not a wager for profit
89
Brotherton
Moral hazard unfounded
90
What part of CL position on fraudulent claims did IA clarify
Policy does not continue - insurer can termination upon notice
91
What is insurance fraud under the Fraud Act - nature of offence
Criminal
92
Rules on contracting out of IA for **non**-consumer?
Can be less favourable, but duty of transparency under 17 IA
93
What is the remedy if FMR at inception of contract under IA
Qualifying breach + damages in tort of deceit
94
What case showed that material fraud in post-contractual breach likely to = ab initio, but otherwise just discharge liability
The Star Sea
95
Why is FMR a harder BoP
Beyond reasonable doubt that there was an intent to defraud (criminal BoP)
96
What is the remedy for breach of DoUGF under 17 MIA
Void ab initio + premium returned for all MRs
97
What duty of the insured is there under CI(DR)A
Duty of reasonable care to answer truthfully
98
Brotherton v Aseguradora on what must be disclosed
Failing to disclose allegations relating to a moral hazard (dishonesty), even if unfounded, is a material non-disclosure
99
What shows that binding CoI is made when proposal accepted by insurer
21 MIA
100
What case showed that convictions which are not yet spent must have been disclosed to prior insurers
Joseph Fielding v Aviva
101
What is the importance of the decision in _Joseph Fielding_
Although no O to disclose spent conviction, disclosure of conviction to **_prior**_ insurers _**before_** it was spent should be disclosed as goes to dishonesty (for breach of DoUGF)
102
When is a statement not false under 20 MIA - what must it be, if not completely true
If it is substantially true
103
What parts of MIA defines 'material' for what must be disclosed
18(2) and 20(2)
104
What part of MIA gives remedies for breach of DoUGF
17 MIA
105
Versloot key
Collateral lie
106
From wen did CI(DR)A come into effect
06/04/2013
107
Why is capacity important for CoIs
Usually carried out by As - do they have necessary authority?
108
What part of MIA requires that every material rep is true
20 MIA
109
Does the duty to disclose continue throughout CoI?
No - only at renewal
110
What case first recognise duty of utmost GF
Carter v Boehm
111
What are qualifying MRs under CI(DR)A
Deliberate, reckless or careless
112
When is a post-contractual break likely to = void ab initio
If material fraud (The Star Sea)
113
How is the duty of both parties different in CoI
Duty of utmost GF exists instead of caveat emptor
114
What case gave the two-limb test for 'materiality' under MIA
Pan Atlantic
115
Versloot v HDI on IA
Decided at CL, but indicated obiter also applied to s.12 IA
116
Is innocent qualifying MR under CI(DR)A
No
117
Two elements to DoUGF
Disclose all material facts and make true reps
118
Where are the remedies for breach of DoFP under s.3 IA
S.8 and Schedule 1
119
Does insurable interest need to exist at inception of policy?
No - only at time of claim
120
Rules on contracting out of IA for consumer
Cannot put consumer isn worse position
121
What happens under IA if fraudulent claim
S.12, discharge liability, clawback partial payment for claim, terminate, keep premium - CANNOT AVOID AB INITIO
122
What is the remedy for deliberate/reckless breach of DoFP under IA
Can avoid + keep premium
123
What is the usual duty of both parties in a contract?
Caveat emptor
124
What can insurer also seek if fraudulent non-disclosure by insured
Damages for tort of deceit
125
Moral hazard unfounded (case)
Brotherton v Aseguradora
126
Why is there a difference between CoIs and normal Cs regarding condition v. warranty
For CoIs, warranties are material, whereas conditions only = damages if breached
127
What was Channell J's in Prudential v IRC definition of CoI
Characterised by payment of premium in return for insurer indemnifying the insured if an uncertain event occurs
128
Carter v Boehm showed what
Recognised duty of utmost GF in CoIs
129
What is the duty of both parties under IA
Duty of fair presentation
130
Where are the remedies for breach of CI(DR)A
Schedule 1
