Flashcards in contract law and legal factors affecting underwriting Deck (95)
a binding promise between two or more parties and or an agreement enforceable by law
define formal contract
a contract that is binding because of the form of the instrument in which the promise is expressed. such instruments are binding contracts if they comply with the special requirements of the form. eg: check or loan agreement
define informal contract
a binding contract that creates certain legal duties because the parties have met requirements concerning the substance of the agreement rather than form. Eg: insurance contract, leases,
define bilateral contract
both parties to the contract make legally enforeable promises
define unilateral contract
one part to the contract makes legally enforceable promises, eg insurance contract
define breach of contract
the failure of a party to preform according to the terms of a contract. A court remedy can be sought.
in insurance, a statment of facts made by an applicant upon which an insuere based its decision
a statment of fact that is actually false
define material misrepresentation
a false statement of fact that is so substantial and important that had the party to whom the statement was made known the statement was false, it would have caused that party not to enter the contract
an action of the court by which a contract is revised to express the real agreement or original untent of the parties
a remedy in which a contract is voided because of material misrepresentation
the giving up of a known right
to prevent or preclude
the legal principle in which a party is prevented from asserting a claim or right that is inconsisten with prior conduct on which another party detrimentally relied.
a legal means of correcting a wrong
define punitive damages
damages awarded to a plaintiff to punish the defendant
a person who acts for another person or entity
what is usually included in an insurance contract?
policy form, copy of application signed, any state approvedd questionnaires, and riders
what are the 5 requirements to create a contract?
3. legally adequate consideration
4. competent parties
6. legal agreement
7. no duress or undue influences
What does the Health Insurance Policy Language simplification Model Act, formed by the NAIC intale?
the act prohibits print size that makes the contract difficult to read, and specific that the style and arrangement of the policy must be such that no portion is given undue proiminence
Do canadian policies need to be filed?
no, except for those used with variable or equity product contracts
in canada, what act is in place for Life insurance contracts to be regulated, and by who?
regulated by provincial law and follow the unifrom life insurance act drafted by the confernce of commissioners on uniformity of legislatin.
what concept is in place to help avoid, contract laws that are used for wagering purposes
concept of insurable interrest
what is an example of the laws that regulate the claims practices of insureres, and what does it promote?
fair claim practice laws, mandate that insueres promptly investigate and settle claims
does a conditional premium receipt provide temporary life insurance/
no, unless certain conditions occur
does binding premium reciepts provide temporary insurance?
yes- effective immediateley on payment of the initial premium without conditions.
Will premium reciepts have limits?
usually, a limited amount of coverage (1MM)
what is an approval premium reciept?
a conditional premium recoept. there is no coverage under this type of reciept until the insurer approves the risk.
Rare, d/t limited protection
what is an insurability premium?
a conditional premium receipt. coverage is provided under this form of reciept if the insuere determines the proposed insured was insurable at the time the reciept was issued