The Malaysian Insurance Institute

(35445-H)

105

Insurance Law

Objectives:
To provide knowledge and understanding of the laws which form the background to the operation of insurance, the system within which these laws operate and the ability to apply knowledge and skills to simple situations.

Learning Outcomes:
At the end of the course, student should be able to: 1. 2. 3. 4. Understand basic legal concepts and general principles of law; Gain knowledge and understanding of the laws relevant to insurance; Gain knowledge and understanding of the system which applies these laws; and Develop an analytical approach to the application of knowledge and skills to simple problems.

Notes: The syllabus will be based on Malaysian law & practice. Reference is made to UK law & practice where applicable.

Syllabus:
1. THE NATURE AND SOURCES OF LAW
1.1 1.2 1.3 Classification of law The Malaysian legal system Sources of law The Law in England and in Malaysia Applicability of English statutes in Malaysia 1.4 1.5 1.6 1.7 1.8 Delegated legislation and statutory interpretation Effect of supra-national legislation on national systems Courts and the system of precedent Principal legal personnel and their roles in the legal system Elements of Civil Procedure

2.

LEGAL PERSONALITIES
2.1 2.2 2.3 Status and capacity Distinction between a registered company and a partnership Corporations and unincorporated associations

3.

THE LAW OF TORT

3.1 3.2 3.3 Nature and classification Main torts Commonly insured liabilities

3.4 3.5 3.6 3.7

Defences Limitation of actions Remedies Damages

4.

THE LAW OF CONTRACT

4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 Contractual liability and classification of contracts; Formation of contract Classification of contract terms Validity Discharge Breach Privity Assignment of contractual rights and duties

5.

THE INSURANCE CONTRACT

5.1 5.2 5.3 Offer and acceptance Insurers usual policy Parties to a contract of insurance 5.4 5.5 The insured The insurer Its applicability in insurance law Sections 18 & 19 of the Contracts Act 1950

Misrepresentation;

Duty of disclosure Origins Effect of non-disclosure Duty applies to both the insurer and the insured Time for disclosure Answers in the proposal form and the duty of disclosure Onus of proof

5.6 5.7 5.8 5.9 5.10 5.11

Effect of the proposal form Application of utmost good faith Breach Legislation and codes of practice Insurable interest Definition of insurable interest Insurable interest in life insurance Section 40 of the Insurance Act 1963/ 1996 Time at which insurable interest must exist Insurable interest and the amount recoverable under a life policy Effect of the absence of insurable interest on a life policy

Insurable interest in non-life insurance

 5.12 Fraud

Insurance on goods Insurance on land Insurance involving the interest of third parties

Applicability in insurance law Section 17 of the Contracts Act 1950 5.13 5.14 5.15 5.16 5.17 Joint and composite insurance contracts Assignment in relation to insurance Classification of terms in insurance contracts Codes of practice Special rules for compulsory insurances

6.

VOID AND ILLEGAL INSURANCES

6.1 6.2 Void and voidable contracts Illegal insurance contracts

7.

INSURANCE CLAIMS
7.1 7.2 Introduction Claims process Notice and proof of loss; Form of notice Notice to the insurers agent Proximate cause Continuing duty of good faith Indemnity Affirmation and waiver Time for giving notice of loss/making a claim Condition precedent or collateral stipulation 7.3 7.4 7.5 7.6 7.7 Parties who can make a claim under a policy Proof of loss Arbitration Fraudulent claims Claims arising out of illegal conduct Claims arising out of motor accidents Claims arising out of other illegal acts 7.8 Settlement of claims Contracts of settlement Ex gratia payments Payment of interest 7.9 Payment of claims under a life policy

8.

SUBROGATION AND CONTRIBUTION

8.1 8.2 8.3 Subrogation; Justifications and origins Prerequisites for the application of the doctrine Source of subrogation rights

8.4

Insurers rights against the insured Gifts and other voluntary payments Windfalls

8.5 8.6 8.7 8.8 8.9 8.10 8.11 8.12

Modification of subrogation rights Waiver of subrogation rights Double insurance and contribution Elements of double insurance; same subject matter, same interest & same risk Contribution and common law Common contribution conditions Basis of contribution Application of contribution Market agreements

9.

AGENCY
9.1 9.2 9.3 9.4 9.5 9.6 9.7 Nature of agency Agents, principals and third parties Insurance agents; the scope of their authority Creation of agency Rights and responsibilities Termination The law of agency and insurance

Primary Texts
1. 2. Course book P05: Insurance Law. London: The CII. Insurance Law in Malaysia, Nik Ramlah Mahmood

Periodicals
1. 2. 3. 4. 5. 6. Bank Negara Malaysia Insurance Annual Report Asia Insurance Review. The Journal, The CII Post Magazine. BNM Annual Report. BNM Takaful Annual R