Insurance Law PO5 Ch 6

20 terms by Hel_Stubbs 

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Formation of an Insurance Contract

TAYLOR V. ALLON (1966)

Is communication of acceptance necessary?

If the Insured does not receive the renewal notice, they cannot accept the off of temporary cover which it contains.

Formation of an Insurance Contract

RUST V ABBEY LIFE ASSURANCE CO LTD (1979)

Is communication of acceptance necessary?

Held that the proposed for a life policy accepted by retaining without objection the policy that had been sent to her.

Formation of an Insurance Contract

GENERAL REINSURANCE CORPORATION V. FORSAKRINGSAKTIEBOLAGET FENNIA PATRIA (1983)

What must be agreed

Signing down over 100% in Lloyds which alters the premium and extent of risk does not affect the 'acceptance' of the contract as it is an implied term of the contract.

Formation of an Insurance Contract

WOODS V CO-OP INSURANCE SOCIETY (1924)

Contractual intention and insurance

A newspaper offered free insurance against fire, accident and sickness to it's registered subscribers but stated that whist the scheme had the backing and support of the proprietors it did not involve contractual liability. Held that there was no contract of insurance.

Insurance contracts, as commercial transactions, are almost invariably intended by the parties to be legally binding.

Formation of an Insurance Contract

ORION INSURANCE CO. PLC V. SPHERE DRAKE INSURANCE LTD (1992)

Contractual intention and insurance

An agreement between 2 insurance companies to run off outstanding liabilities under two insurance pools in the London Market was held to be a 'goodwill' agreement that had not been meant to be legally binding.

Formation of an Insurance Contract

TYRIE V. FLETCHER (1777)

Return of premium under insurance contracts

Lord Mansfield said that once the risk has started to run the insured is not entitled to any return of premium if the contract is ended prematurely. However if the insurers have never been on risk then the insured is entitled to recover their premium.

Formation of an Insurance Contract

ANDERSON V FITZGERALD (1853)

Return of premium under insurance contracts

Where there is fraudulent mis-representation or non-disclosure, the Insurers may avoid the policy and keep the premium.

Formation of an Insurance Contract

CLEMENTS V. LONDON, NORTH WEST RAILWAY (1894)

Capacity to contact - Minors

A minor who joined a mutual insurance society which provided accident insurance on his taking up employment as a porter with a railway co. was held to be bound by it's rules as it was beneficial as a whole.

Formation of an Insurance Contract

IMPERIAL LIFE INSURANCE CO OF CANADA V AUDETT (1912)

Capacity to contact - Drunken persons / Mental patients

An insurance agent obtained a proposal for life insurance from a man he knew to be drunk, court held contract did not bind the proposer.

Formation of an Insurance Contract

PHOENIX GENERAL INSURANCE CO. OF GREECE SA V. ADMINISTRATIA ASIGURATIROR DE STAT (1986)

Capacity to contact - the contractual capacity of insurers

At common law, an insurance contract issued by an insurer which does not have the necessary authorisation is illegal and void.

Insurable Interest

LUCENA V. CRAUFURD (1806)

Economic or Financial Interest (definition of insurable interest)

Current Interest not an 'expectancy'

Crown Commissioners insured a number of enemy ships captured in the Napoleonic wars whilst they were still on the high seas. the authority of the Commissioners to take charge of the ships began only when the vessels reached the port and so the court upheld that the Commissioners had no interest in ships which were lost before they reached port.

Insurable Interest

MACAURA V NORTHERN ASSURANCE CO LTD (1925)

Legal Interest

The claimant insured a quantity of timber in his own name, he had already sold the timer to a company of which he was the sole shareholder. When the timber was destroyed in a fire, the claim was not met because claimant had no interest in the timber (it was owned by the company, a separate legal person). Held.

Development of law on insurable interest

HARSE V PEARL LIFE INSURANCE CO (1904)

Effect of a policy without interest

Insurance on the life of the policyholder's mother was held to be illegal due to lack of insurable interest.

Development of law on insurable interest

WORTHINGTON V CURTIS (1875)

Effect of a policy without interest

An insurer paid under a life policy effected by a father on the life of his son, knowing the policyholder had no interest and the the insurance was, therefore illegal. The court held both parties were IN PARI DELICTO (equal in wrong doing) and the father was entitled to keep the money.

Creation of insurable Interest

DALBY V. THE INDIA AND LONDON LIFE INSURANCE CO. (1854)

Time when interest is required - Life Insurance

The claimant's company had insured the life of the Duke of Cambridge and reinsured the risk with the defendent reinsurer. Although the original insurance was cancelled the reinsurance policy was kept in place. Held that defendent would have to pay out.

LIFE ASSURANCE ACT 1774 does not require that the interest, necessary at inception, still exists at the time of the loss.

Creation of insurable Interest

WILLIAMS V. BALTIC INSURANCE ASSOCIATIO OF LONDON (1924)

Waiver of insurable interest

Policyholder was allowed to make a claim on behalf of his sister who had negligently driven his car and caused an inury. Court held that this was a policy on goods and that the insurers had waived any requirement of insurable interest.

Application of insurable interest

SIMCOCK V. SCOTTISH IMPERIAL INSURANCE CO (1902)

Life Insurance - Business Relationships (Employer/Employee)

A pork butcher's interest in the life if his 'right-hand man' was limited to the value of one week's employment, since his was a weekly contract.

Application of insurable interest

HEBDON V. WEST (1863)

Life Insurance - Business Relationships

A bank clerk insured the life of his employer under two policies, one for £5k, one for £2.5k. He had a 7yr contact with his employer (£600/yr), he also owed him £4.7k which the employer had promised he would not call for repayment as long as he was alive.

On the death of the employer the first policy paid out £5k (approx interest in the life of employer i.e. £4.2k expected wages) however the court held the clerk could not collect under the 2nd policy as he had no further interest. Because the promise not to call for the debt was not legally binding (no consideration) it was just an expectancy.

Application of insurable interest

WATERS V MONARCH FIRE AND LIFE INSURANCE CO (1856)

Property Insurance - Limited interests

The claimants held a fire policy for goods held in their warehouse both owned by them and goods held 'in trust or on commision'. After a fire destroyed the goods it was held they could recover the whole loss and not just the value of their own goods. The part of the claim payment that related to goods belongong to others had to then of course be paid to the owners of the goods.

Application of insurable interest

HEPBURN V. A TOMLINSON (HAULIERS) LTD (1966)

Property Insurance - Limited interests

The claimants effected a GIT policy for cigarettes being transferred from the manuacturer's factory to their warehouse. Vehicles containing the cigarettes were stolen from the warehouse due to the negligence of the manufactueres own staff. Held that the policy was not merely a liability policy (which would not have responded as the hauliers were not negligent) but a property insurance as well. The claimants could recover the whole loss for the benefit of the property owners.

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