Nature Of Insurance,regulation And Formation

Front 1

Prudential Assurance v IRC [1904]

Back 1

The issue here was whether the contract was a policy of insurance. Channell J said that “A contract of insurance, then, must be a contract for the payment for money, or for some corresponding benefit such as the rebuilding of a house, to become due on the happening of an event, which event must have...some degree of uncertainty about it and must be of a character more or less adverse to the interest of the person effecting the insurance”.

Front 2

DTI v St Christophers' Motorists Association [1974]:

Back 2

There is no definition in the act because they do not want to exclude any insurance contract as it may be. The characteristics however are that 1) insurance requires a contract 2) there should be an insurable interest 3) there needs to be a degree of uncertainty about the event insurance against 4) the contract should involve the transfer and sharing of the risk.

Front 3

Medical Defence Union v DTI [1980]:

Back 3

On the question of whether the contract between each member and the union was a contract: held
1) that the term “insurance” was to be construed in the context according to general law.
2) that 1/3 elements for insurance was that the insured would be entitled to something on the occurrence of some event, which would normally be of the nature of money or that equivalent.

In this case it was held that the benefit of the union which provided an examination of the union member’s request for assistance could not met number 2) because it was not itself nature of money or money’s worth, and therefore the contract was not made. Furthermore, the general nature of the union’s work was different from the work carried out by those who are insurers.

Front 4

Re Digital Satellite Warranty Cover Ltd [2011]

Back 4

The businesses involved sold extended warranty contracts relating to electrical equipment, targeting people whose warranties were about to run out. The warranty by Digital Cover indicated that it would cover breakdown AND accidental damage. A customer would receive a warranty certificate which did not exclude accidental damage. The question is whether these contracts were contracts of insurance and therefore needed to be regulated. CA said that the risk covered by a contract which provides for repair and replacement and a contract which covers for loss is essentially the same. The risk is the breakdown of equipment.

Front 5

The use of agents

Stockton v Mason (1978)

Murfitt v Royal Insurance Co (1922

Back 5

Where an insurer gave his agent blank cover notes, he had an implied authority to effect binding insurance contracts.

if the insurer continuously adopts temporary oral contracts entered into by its agent, then this will confer implied authority on the agent.

Front 6

General Accident Insurance Corp v Cronk (1901)

Back 6

It is only when the insurer seeks to impose unusual terms onto the insured that it is to be regarded as a counter offer.

Front 7

Lambert v CIS [1975]

Back 7

The normal indemnity contract lasts for a fixed period and the renewal of such a contract amounts to an entirely new contract. Mr Lambert signed a proposal form for all risks insurance over her husband’s jewellery, without mentioning that her husband was convicted previously of receiving 1700 stolen cigarettes. The Co-op issued the policy. Mr Lambert was convicted of two more dishonesty offences in 1971 and sentenced to 15 months jail. He did not reveal these either when the policy was renewed in 1972. In April 1972 some items worth £300 were lost or stolen and the Co-op refused on the basis of disclosure. Held that the insured was under a duty of disclosure, but the extent of this duty is a matter of controversy. Applied the marine insurance principle that he should have disclosed everything a reasonable or prudent insurer thinks is material. He did however say that the Co-op was doing a heartless thing.