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NATURE & STRUCTURE OF INSURANCE DOCUMENTS
Transcript of NATURE & STRUCTURE OF INSURANCE DOCUMENTS
NATURE & STRUCTURE OF INSURANCE DOCUMENTS
TYPES OF DOCUMENTS
- Proposal Forms
- Policy Forms
- Cover Note
- Certificate of Insurance
- Renewal Notice
- Claim Forms
- Completion or Satisfaction Note & Discharge
GENERAL - document which is drafted by the insurer containing questions designed to elicit material information about the particular risk proposed.
1) a document produced by the insurer.
2) not the contract, but merely the written evidence of it.
3) has to be stamped in accordance with the provisions of the Stamp Act, otherwise it cannot be used as evidence in the court
1- identify some common insurance documents
2- describe the usage & purpose of various insurance documents
3- describe the structure of proposal forms and policy forms
4- define some common provision contained in some of the documents
FUNCTION OF PROPOSAL FORMS
- the standards type of form is likely to produce the required information more speedily
- most proposal forms contain details of the cover available under the company's standard policy for that class of insurance
- the completed proposal form constitutes an offer by the propose to the insurer
4) Basis of a Contract
- if the contract is completed, the proposal becomes the basis on which the contract is formed
STRUCTURE OF MOST PROPOSAL FORMS
a) General Questions
- proposer's name
- proposer's address & Situation of Risk
- Proposer's Occupation
- Insurance History
- Loss History
- Sum Insured
- Subject Matter of Insurance
b) Particular Questions
- insurance of person
- insurance of property
- insurance of liability
Structure of Scheduled Policy
1) the heading
2) the preamble (or Recital Clause)
3) the Operative Clause
6) Attestation or Signature Clause
CLASSIFICATION OF POLICY CONDITIONS
* EXPRESS & IMPLIED
- conditions which actually appear in the policy document.
- eg: claim condition & cancellation condition which can be found in the policy
- conditions which the law reads into any contract of insurance but which do not appear in the contract
- the insured has insurable interest
- the parties observe the duty of Utmost Good Faith (U.G.F)
- the subject matter insured is actually in existence
- the subject matter can be identified
Conditions Precedent To The Policy - must be fulfilled before the contract can be valid
Conditions Precedent To Liability - must be fulfilled before the insurer is liable for a claim
Condition Subsequent To The Policy - must be fulfilled if the contract is to continue once it has become binding
- document issued in advanced of the policy because it may take sometime before the policy is issued.
Certificate of Insurance
- normally issued when insurance is compulsory.
- the certificate certifies that the insurance is issued by an authorized insurer in accordance with the requirements of the law
- recording on a policy document alterations to its terms & conditions during its currency or to vary or extend the printed wording at the time of issues
- renewal notices frequently contain a warning on the duty to this close changes affecting the policy since the policy inception or last renewal date
- to identify the insured, the insured's interest in the damage or lost property, the cost, the time and date of lost and also to quantify the amount of lost.
Completion/ satisfaction note & discharge
* completion/ satisfaction notes
- used by insurers to indicate that the repair had been completed & that the insurers could pay the garage's account
- an acknowledgment by the person legally entitled to receive the payment from the policy that the sum payable is in full satisfaction of all claims at law which he may have under the policy
* Conditions Precedent & Conditions Subsequent
- the proposal will be the basis of contract
- below the declaration & questions there are spaces for the proposal's signature and date