Principles of Insurance Contracts: L07 Key Rules

introduction

• in consideration,the insured promises to pay to the insurer a sum of money called premium.the premium may consist of lump sum or periodic payment.one person the insurer undertakes to identify another the insurer against loss which may arise upon the occurance of some event

insurance act 1996

• section 4,divide insurance business two classes,life business and general business.

two type insurence

• contingency insurance-involve payment on contingent event in which the sum paid is not measure by loss but stated in policy where insurer undertakes to pay a certain sum of money on death
• indemnity insurance-indemnity against loss in which measure of loss in the measure of payment.if the risk insured against does not occur,the no payment is made to the insured.example,fire policy where the liability of insurer is only to reimburse the insured for loss he has suffered.

utmost good faith

• case:Goh chooi leng v public life assurance co-assured's answer in the declaration was a deliberate lie.therefore voidable.

insurable interest

• case:macaura v northem -macaura had no insurable interest as he had assigned the plantation to the company.case:nanyang v insurance co ltd v salbiah $ anor-lau teck siaw had an insurable interest in the car on the date of accident

material fact

• insurance law

• material fact means a matter or fact which if known by licensed life insurer,would have led to its refusal to issue a life policy to the policy owner.case:new india assurance co ltd v pang piong chong & anor-the first defendent answer did not constitute a non disclosure of material fact.

exemption clause-case:tan keng hong & anor v fatimah binti abdullah- al lorry wad insured under a third party which exempted liability for death caused to any person carried vehicle

completion of proposal by agent

• case:ong eng chai v china insurance-the proposal form had been filled in and signed by an agent of defendant company and contained untrue answer.