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Flashcards in contract law and legal factors affecting underwriting Deck (95)
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1

define contract

a binding promise between two or more parties and or an agreement enforceable by law

2

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

3

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,

4

define bilateral contract

both parties to the contract make legally enforeable promises

5

define unilateral contract

one part to the contract makes legally enforceable promises, eg insurance contract

6

define breach of contract

the failure of a party to preform according to the terms of a contract. A court remedy can be sought.

7

define representation

in insurance, a statment of facts made by an applicant upon which an insuere based its decision

8

define misrepresentation

a statment of fact that is actually false

9

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

10

define reformation

an action of the court by which a contract is revised to express the real agreement or original untent of the parties

11

define rescission

a remedy in which a contract is voided because of material misrepresentation

12

define waver

the giving up of a known right

13

define estop

to prevent or preclude

14

define estoppel

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.

15

define remedy

a legal means of correcting a wrong

16

define punitive damages

damages awarded to a plaintiff to punish the defendant

17

define agent

a person who acts for another person or entity

18

what is usually included in an insurance contract?

policy form, copy of application signed, any state approvedd questionnaires, and riders

19

what are the 5 requirements to create a contract?

1. offer
2. acceptance
3. legally adequate consideration
4. competent parties
5. form
6. legal agreement
7. no duress or undue influences

20

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

21

Do canadian policies need to be filed?

no, except for those used with variable or equity product contracts

22

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.

23

what concept is in place to help avoid, contract laws that are used for wagering purposes

concept of insurable interrest

24

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

25

does a conditional premium receipt provide temporary life insurance/

no, unless certain conditions occur

26

does binding premium reciepts provide temporary insurance?

yes- effective immediateley on payment of the initial premium without conditions.

27

Will premium reciepts have limits?

usually, a limited amount of coverage (1MM)

28

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

29

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

30

define a binding premium reciept (Temporary insurance reciept)

temporary insurance becomes effective on the date the premium reciept is issued. The reciept is cancelled should the insuere find the proposed insured is uninsurable or upon issue of the policy. An abbreviated medical question is asked on the reciept.