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Insurance > 3.1 Principles of Insurance Law: Statute and Duties > Flashcards

3.1 Principles of Insurance Law: Statute and Duties Flashcards

1
Q

What part of CL position on fraudulent claims did IA confirm

A

Prior legit claims stand - not void ab initio

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2
Q

Prior insurers (case)

A

Joseph Fielding v Aviva

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3
Q

What is a ‘fortuity’

A

Event which triggers the policy is uncertain

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4
Q

Three kinds of qualifying breach under IA

A

Deliberate, reckless or neither

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5
Q

Under CL, what happens if fraudulent claim

A

Forfeit whole claim, but unclear on if policy continued

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6
Q

Remedy for careless MR under CI(DR)A

A

Compensatory - what insurer would have done if had answered truthfully

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7
Q

If fraudulent device does not improve entitlement to payout, this does not taint the claim (case)

A

Versloot v HDI

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8
Q

Does DoUGF under 17 MIA still apply under IA?

A

Yes

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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

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10
Q

What part of IA can no party contract out of

A

Basis of C clause

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11
Q

Form of CoI usually

A

Written

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12
Q

How many material terms are there for CoI

A

4

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13
Q

How is a company deemed to have knowledge of circumstances under IA

A

Imputed knowledge (4(3))

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14
Q

Before when does MIA apply

A

12/08/2016

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15
Q

Channell J in Prudential v IRC - what did he give?

A

Definition of CoI

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16
Q

3 points DoUGF (case)

A

The Star Sea

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17
Q

Castellain v Preston key

A

N/A profit

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18
Q

Two ways for insurer to accept insurance offer of insured

A

Accept premium or stamp slip

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19
Q

When can insurer keep premium for breach of DoUGF under 17 MIA

A

If fraudulent non-disclosure

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20
Q

From when does IA apply

A

12/08/2016

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21
Q

Three ways in which CoI may be illegal

A

No insurable interest, achieves illegal purpose or subject matter is illegal

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22
Q

What is an insurable interest

A

Ensures that individual suffers loss to claim - if no, void

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23
Q

Collateral lie (Case)

A

Versloot

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24
Q

17 MIA codifies what

A

Duty of utmost GF

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25
Q

From when do you judge materiality for MIA, and under what case

A

At time of placement, per Brotherton v Aseguradora

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26
Q

What case suggested position is the same for fraudulent claims at CL or under IA

A

Versloot

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27
Q

When is there no O to disclose material circumstances under 18 MIA

A

If known by insurer, common knowledge, insurer waived, decreases risk, or conviction spent

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28
Q

What is FMR

A

Statement knowingly or recklessly made

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29
Q

Is there a specific definition of CoI?

A

No

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30
Q

When is there doubt on right to void ab initio under 17 MIA

A

Where there has been a post-contractual breach

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31
Q

What is the remedy for NEITHER deliberate NOR reckless breach of DoFP under IA

A

What insurer would have done + return premium

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32
Q

What is there an O to disclose under MIA, and under what provision

A

All material circumstances, 18 MIA

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33
Q

What provision shows that insured needs an insurable interest - suffer loss or policy is void

A

4 MIA

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34
Q

Can you contract out of CI(DR)A?

A

No

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35
Q

What is the duty of reasonable care adjudged by

A

Standard of reasonable consumer (s.3)

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36
Q

How is the duty of fair presentation split under s.3 IA

A

Disclosing every material circumstance, OR putting insurer on notice

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37
Q

What is the ‘Sum Insured’

A

Max possible to recover

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38
Q

What is the two limb test for ‘material’ under MIA

A

Objective and subjective

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39
Q

4 MIA

A

Shows that insured needs an insurable interest - suffer loss or policy is void

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40
Q

Can you contract out of IA?

A

Yes

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41
Q

Can you ever avoid ab initio for fraudulent claim?

A

No - only if fraud at inception

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42
Q

Where is definition of ‘materiality’ under IA

A

7(3)

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43
Q

The Star Sea key

A

3 points DoUGF + post-C MF

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44
Q

Remedy for honest + reasonable MR by consumer under CI(DR)A

A

Insurer must pay claim

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45
Q

Four peculiarities to CoI for C to come into existence

A

An ‘insurable interest’, utmost good faith, ‘fortuity’ and condition v. warranty

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46
Q

What part of IA shows that, for knowledge, insured cannot turn blind eye

A

6(1)

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47
Q

Three kinds of MR

A

Fraudulent, negligent or innocent

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48
Q

What duty was abolished under CI(DR)A, in terms of what insured must disclose

A

No duty to volunteer material facts (S.2)

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49
Q

What is ‘materiality’ under IA

A

Affecting judgment of prudent UW, but unlikely to have subjective limb

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50
Q

Joseph Fielding v Aviva

A

Must disclose failure to disclose conviction to prior insurers even if now spent

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51
Q

Does it matter (for there to be binding CoI) if policy has been issued or not

A

No

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52
Q

How many elements make up DoUGF

A

Two

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53
Q

What should you check first if there is suspected fraud

A

Check no express term in the policy dealing w/ it

54
Q

Is it necessary for premium to be paid before CoI comes into effect?

A

No, but usually condition precedent to risk

55
Q

What part of IA covers knowledge

A

s.4 - 6

56
Q

The Star Sea showed what

A

Gave the three times when DoUGF is most important

57
Q

What must insurer prove for breach of CI(DR)A

A

‘Qualifying MR’ (5(1)) and induced by MR to enter into CoI (4(1)(b))

58
Q

Remedy for deliberate/reckless MR under CI(DR)A

A

Void ab initio, decline claims and keep premium

59
Q

What must insurer establish for remedies under IA

A

‘Qualifying breach’

60
Q

21 MIA

A

CoI is made when proposal accepted by insurer

61
Q

What terms must be agreed before binding CoI

A

Material terms

62
Q

Where is the duty of fair presentation under IA

A

Section 3

63
Q

6 MIA

A

Insurable interest only needs to exist at time of claim

64
Q

What counter-offer might insurer make to Proposal Form

A

Higher premium or excluding certain things

65
Q

Insurable interest only needs to exist at time of claim - what provision?

A

6 MIA

66
Q

Case stating cannot profit from insurance policy

A

Castellain v Preston

67
Q

What remedy is NO LONGER available under IA (and what provision)

A

Cannot avoid for breach in all circumstances (s.14 IA)

68
Q

When is offer made for CoI (not in subscription market)

A

When Proposal Form completed by prospect insured

69
Q

What is the consideration in CoI

A

Premium paid by insured

70
Q

What case showed that failing to disclose allegations relating to a moral hazard (dishonesty), even if unfounded, is a material non-disclosure

A

Brotherton v Aseguradora

71
Q

When does the DoFP under s.3 IA not apply

A

If info diminishes risk, insurer has knowledge or waived duty

72
Q

Claim tainted by fraud fails in entirety but cannot avoid (case)

A

Axa General v Gottlieb

73
Q

When is the duty of utmost GF most important

A

At three points - formation, renewal and variation

74
Q

What did Brotherton v Aseguradora show about when materiality is judged under MIA

A

At time of placement - so it is irrelevant if it becomes unfounded

75
Q

Axa General v Gottlieb ratio

A

Claim tainted by fraud fails in entirety but cannot avoid

76
Q

What do policies usually state about collateral lies, to hinder the effect of Versloot

A

Avoid policy if used.

77
Q

Can you contract out of MIA?

A

No

78
Q

What is a ‘qualifying breach’ under IA

A

1/3 kinds of breach, and but for breach, insurer would not have entered into C, or on different terms (8(1))

79
Q

What case gave the three times when DoUGF is most important

A

The Star Sea

80
Q

Where is duty of utmost good faith codified?

A

17 MIA

81
Q

Versloot v HDI ratio

A

If fraudulent device does not improve entitlement to payout, this does not taint the claim

82
Q

4 material terms for CoI

A

Definition of risk, duration of policy, payment of premium and Sum Insured

83
Q

What does ‘ought to know’ mean for knowledge of insured under s.3 IA (DoFP)

A

Anything known by As or that reasonable search would have revealed (4(6))

84
Q

Joseph Fielding v Aviva (key)

A

Prior insurers

85
Q

Pan Atlantic

A

To judge ‘materiality’ under MIA, objective (considered by prudent UW) and subjective (actually induced UW).

86
Q

Who and in what case provided definition of CoI

A

Channell J in Prudential v IRC

87
Q

When might a spent conviction still need to be indirectly disclosed as a material circumstance under 18 MIA

A

If it relates to a failure to disclose to prior insurer before it was spent (Joseph Fielding)

88
Q

Why is it necessary that there is an insurable interest

A

To ensure not a wager for profit

89
Q

Brotherton

A

Moral hazard unfounded

90
Q

What part of CL position on fraudulent claims did IA clarify

A

Policy does not continue - insurer can termination upon notice

91
Q

What is insurance fraud under the Fraud Act - nature of offence

A

Criminal

92
Q

Rules on contracting out of IA for non-consumer?

A

Can be less favourable, but duty of transparency under 17 IA

93
Q

What is the remedy if FMR at inception of contract under IA

A

Qualifying breach + damages in tort of deceit

94
Q

What case showed that material fraud in post-contractual breach likely to = ab initio, but otherwise just discharge liability

A

The Star Sea

95
Q

Why is FMR a harder BoP

A

Beyond reasonable doubt that there was an intent to defraud (criminal BoP)

96
Q

What is the remedy for breach of DoUGF under 17 MIA

A

Void ab initio + premium returned for all MRs

97
Q

What duty of the insured is there under CI(DR)A

A

Duty of reasonable care to answer truthfully

98
Q

Brotherton v Aseguradora on what must be disclosed

A

Failing to disclose allegations relating to a moral hazard (dishonesty), even if unfounded, is a material non-disclosure

99
Q

What shows that binding CoI is made when proposal accepted by insurer

A

21 MIA

100
Q

What case showed that convictions which are not yet spent must have been disclosed to prior insurers

A

Joseph Fielding v Aviva

101
Q

What is the importance of the decision in Joseph Fielding

A

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
Q

When is a statement not false under 20 MIA - what must it be, if not completely true

A

If it is substantially true

103
Q

What parts of MIA defines ‘material’ for what must be disclosed

A

18(2) and 20(2)

104
Q

What part of MIA gives remedies for breach of DoUGF

A

17 MIA

105
Q

Versloot key

A

Collateral lie

106
Q

From wen did CI(DR)A come into effect

A

06/04/2013

107
Q

Why is capacity important for CoIs

A

Usually carried out by As - do they have necessary authority?

108
Q

What part of MIA requires that every material rep is true

A

20 MIA

109
Q

Does the duty to disclose continue throughout CoI?

A

No - only at renewal

110
Q

What case first recognise duty of utmost GF

A

Carter v Boehm

111
Q

What are qualifying MRs under CI(DR)A

A

Deliberate, reckless or careless

112
Q

When is a post-contractual break likely to = void ab initio

A

If material fraud (The Star Sea)

113
Q

How is the duty of both parties different in CoI

A

Duty of utmost GF exists instead of caveat emptor

114
Q

What case gave the two-limb test for ‘materiality’ under MIA

A

Pan Atlantic

115
Q

Versloot v HDI on IA

A

Decided at CL, but indicated obiter also applied to s.12 IA

116
Q

Is innocent qualifying MR under CI(DR)A

A

No

117
Q

Two elements to DoUGF

A

Disclose all material facts and make true reps

118
Q

Where are the remedies for breach of DoFP under s.3 IA

A

S.8 and Schedule 1

119
Q

Does insurable interest need to exist at inception of policy?

A

No - only at time of claim

120
Q

Rules on contracting out of IA for consumer

A

Cannot put consumer isn worse position

121
Q

What happens under IA if fraudulent claim

A

S.12, discharge liability, clawback partial payment for claim, terminate, keep premium - CANNOT AVOID AB INITIO

122
Q

What is the remedy for deliberate/reckless breach of DoFP under IA

A

Can avoid + keep premium

123
Q

What is the usual duty of both parties in a contract?

A

Caveat emptor

124
Q

What can insurer also seek if fraudulent non-disclosure by insured

A

Damages for tort of deceit

125
Q

Moral hazard unfounded (case)

A

Brotherton v Aseguradora

126
Q

Why is there a difference between CoIs and normal Cs regarding condition v. warranty

A

For CoIs, warranties are material, whereas conditions only = damages if breached

127
Q

What was Channell J’s in Prudential v IRC definition of CoI

A

Characterised by payment of premium in return for insurer indemnifying the insured if an uncertain event occurs

128
Q

Carter v Boehm showed what

A

Recognised duty of utmost GF in CoIs

129
Q

What is the duty of both parties under IA

A

Duty of fair presentation

130
Q

Where are the remedies for breach of CI(DR)A

A

Schedule 1

Insurance (7 decks)

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