Unit 2: General Principles of Law of Insurance
2.1 Contract of Insurance
The insurance contract’s elements: the offer-and-acceptance (the proposal form-and-the-cover note/policy); the consideration (the premium vs the promise); the capacity (the insurer’s licensing; the insured’s majority); the legality (the insurable-and-lawful purpose); the consensus (the utmost good faith’s overlay — the misrepresentation’s avoidability). The contract’s special characters: the standard form (the policy’s take-it-or-leave-it — the regulator’s-and-court’s pro-policyholder reading); the aleatory nature (the unequal exchanges’ possibility — the small premium vs the large claim); the executory-and-conditional faces (the conditions’ performance precedent to the claim).
2.2 Nature and Classification of Insurance: Life Insurance, Non-Life Insurance and Re-Insurance
Life insurance — the human life’s contingency: the sum paid on death-or-survival (the benefit form — not indemnity: the life’s not valued in money); the savings-and-protection blend. Non-life (general) insurance — the property-and-liability world: fire, motor, marine, engineering, aviation, the miscellaneous faces; the indemnity form (the loss restored, no profit from misfortune). Re-insurance — the insurer’s insurance: the risk’s further spread (the ceding insurer-and-the reinsurer); the treaty-and-facultative forms; the follow-the-fortunes doctrine’s lore; the regulator’s reinsurance rules (the retention-and-abroad cession balances). The classification’s legal significance: the indemnity-vs-benefit divide (the life policy’s payment regardless of the “loss” measurement); the regulatory segmentation (the life-and-non-life separation; the composite ban).
2.3 Parties, Principles of Good Faith in Contracts, Disclosure and Representation of Insurance Contract
The parties: the insurer (the licensed company); the insured/proprietor (the policyholder); the beneficiary (the life policy’s nominee — the payment’s recipient); the intermediaries (the agent-broker-surveyor of U7); the reinsurer (the background risk-bearer). The utmost good faith (uberrimae fidei): the insurance’s cardinal doctrine — both parties (especially the insured) must disclose the material facts; the reason (the information’s asymmetry — the insurer knows the risk only through the insured’s eyes). The disclosure’s duty:
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