Flashcards in Chapter 5 - Good Faith Deck (57)
What sort of product is insurance? Tangible or Intangible?
What does the insurance act 2012 replace?
The duty of consumers to disclose material fact with a duty to take reasonable care not to make a misrepresentation
What does the insurance act 2015 introduce?
Duty to make fair presentation of a risk for a non-consumer contract
What is utmost good faith?
A positive duty to voluntarily disclose, accurately and fully all facts material to the risk, whether requested or not.
What must parties do before the contract comes into effect?
Volunteer material information in all negotiations
Who does utmost good faith apply too?
Both insured and insurer
What must the insurer disclose as an act of utmost good faith?
The insurer must not introduce non-standard terms that were not discussed during negotiations, they cannot withhold any discounts that are available for certain measures that improve a risk.
What is the duty of disclosure?
In all insurance negotiations there is a duty to disclose material facts, particularly at the proposal stage.
When is the duty of disclosure revived?
At each renewal date unless it is a continuing one.
What is the insureds duty of disclosure?
To make a full and complete disclosure of all material facts relating to the contract if they wish to ensure that in the event of a loss their claim is paid.
What is the insurers duty of disclosure?
They must notify an insured of a possible entitlement to a premium discount, only take risks they are registered to accept, ensuring statements made are true.
Who does the Consumer insurance act 2012 apply to?
Consumers not commercial customers
What defines a Consumer under the act?
Someone who takes out insurance wholly unrelated to the individuals trade.
Who does the Insurance act 2015 apply to?
What changes did the act make to the duty of fair presentation?
The insured must make the insurer a fair presentation of the risk.
What must the insured disclose under this act?
Every material fact the insured knows or ought to know , make the disclosure in a manner which could be reasonably clear and accessible, every material presentation to a matter of fact is correct.
Who does the onus shift to under this act?
It has shifted from the insured to the insurer, which is assumed to know information that would be expected of it.
What is a measure of the insured's knowledge?
What is known to them as an individual, a non-individual knows only what is known to one or more of the individuals who are part of the senior management.
What is a measure of the insurers knowledge?
If the employee or agent of the insurer knows it and ought to have passed it on, the relevant information is held by the insurer and is readily available.
What is the insurer presumed to know?
Things which are common knowledge, things which an insurer offering insurance in that class of business would reasonably be expected to know.
What was outlawed in the insurance act 2015?
The basis of contract clause
What do you have to do to contract out under the insurance act 2015?
Take sufficient steps to draw the disadvantageous term to the insured's attention
Clear and unambiguous
Under what law does the duty of disclosure end at inception?
What policies have a duty of disclosure start at renewal?
General (non-life) policies
What are the duty of disclosure rules in regards to life and pension policies?
The duty of disclosure ceases once the policy is in force, even if a material fact were to change it does not need to be declared.
What policies generally have a continuing requirement of duty of disclosure?
public liability insurances.
Does the duty of disclosure revive on alteration of a policy?
Yes if there is a need for an endorsement to the policy.
What happens if the consumer does not provide material fact for a question asked by the insurer does not follow it up?
The Insurer has waived its right to the information and cannot claim there has been a breach of duty of disclosure.
What is meant by the term Ab Initio?
From the beginning