Legal issues relating to reinsurance (Chapter 8)

Question 1

What is a reinsurance contract subjected to?

Answer 1

The general rules governing contracts & the special rules governing ‘insurance’ contract.

Question 2

Principles of insurance & for reinsurance contracts

Answer 2

Utmost good faith, indemnity, insurable interest, form

Question 3

In what acts is the principle of ‘Utmost good faith’ portrayed.

Answer 3

Originally the ‘ Marine Insurance Act 1906’. Amended by ‘Insurance Act 2015’ concept of fair presentation of risk’.

Question 4

Is there any expressed remedy for breach of the duty of ‘Utmost good faith’ under the ‘Insurance Act 2015’ towards a reinsurance contract?

Answer 4

No.

Question 5

What is the remedy for a breach of the duty of ‘Fair Presentation’ under a reinsurance contract?

Answer 5

Depends on the breach: Avoidance, increase in premium, varying policy wording

Question 6

For the formation of a valid reinsurance contract, the general rules of contract law require what elements?

Answer 6

offer and acceptance;
* consideration;
* legality; and
* legally binding contracts.

Question 7

Under the ‘Insurance Act 2015’ what is the effect of a breach f warranty towards a reinsurance contract?

Answer 7

a breach of warranty
causes the reinsurance cover to be suspended until the breach is remedied (if it can be).