1. GENERAL PRINCIPLES OF INSURANCE
CHAPTER 3

2. PRINCIPLE OF INSURABLE INTEREST
TO DIFFEENTIATE BETWEEN INSURANCE AND GAMBLING
SUBJECT MATTER OF INSURANCE
SUBJECT MATTER OF CONTRACT INSURANCE

3. POLICY HOLDER MUST HAVE SIGNIFICANT RELATIONSHIP WITH THE PROPERTIES OR INDIVIDUAL
POLICYHOLDER GETS:
SUBJECT MATTER
BENEFIT
PROPERTY AND INVIDUAL IN GOOD & PERFECT CONDITION, SAFE AND SOUND

4. POLICYHOLDER GETS:
SUBJECT MATTER
LOSS OR DISADVANTAGE
IF SOMETHING BAD HAPPENED ON PROPERTIES / INDIVIDUAL

5. OBJECTIVE OF INSURABLE INTEREST
To avoid gambling
To decrease moral hazard
To enable the insurers determine amount of losses

6. When Insurable Interest exists
General insurance – at the
beginning and at the
time of loss
Life insurance – at the
beginning of contract
only

7. WHO HAS A RIGHT OF INSURABLE INTEREST???
GENERAL INSURANCE

8. LIFE INSURANCE

9. PRINCIPLE OF UTMOST GOOD FAITH
ORDINARY COMMERCIAL CONTRACT
Tidak mengkehendaki pihak terlibat memberitahu maklumat yang tidak diminta
Hasil terbaik asalkan tidak mengelirukan
prinsip undang-undang – caveat emptor (pembeli harus berhati-hati)
INSURANCE CONTRACT
-Pencadang (insured) menngetahui atau harus mengetahui tentang risiko yang dicadangkan itu
Insurer tidak boleh buat penilaian yang tentang risiko tersebut kecuali pihak pencadang bersedia untuk memberi maklumat matan
PROPOSAL FORM

10. DUTY OF UTMOST GOOD FAITH
Tugas untuk menyatakan secara lengkap dan tepat semua fakta matan berkaitan dengan risiko yang dicadangkan yang dalam pengetahuan pencadang atau sepatutnya diketahui oleh pencadang samada ditanya atau tidak

11. AKTA INSURANS 1996 – subseksyen 150 menekankan tanggungjawab utmost good faith

12. MATERIAL FACTS ARE TO BE DISCLOSED BY THE INSURED
A FACT WHICH WILL INFLUENCE A PRUDENT UNDERWRITER IN DECIDING THE ACCEPTANCE OF THE RISK OR PREMIUM TO BE CHARGED

13. Duration of duty to disclose
THE PROPOSER IS REQUIRED TO DISCLOSE MATERIAL FACTS DURING NEGOTIATION
THE RESPONSIBILITY TO EXPOSE MATERIAL FACTS IS HELD UNTIL THE IMPLEMENTATION OF THE CONTRACT

14. BREACHES OF UTMOST GOOD FAITH
fails to disclose the material fact
misrepresents the material fact
NON DISCLOSURE
MISREPRESENTATION
BREACH OF UTMOST GOOD FAITH
VOIDABLE CONTRACT

15. INDEMNITY
DEFINITION
OBJECTIVE
EFFECTS OF THE PRINCIPLE

16. INDEMNITY
Definition : Prinsip yang mengkehendaki insurer supaya meletakkan insured di dlm keadaan kewangan yang sama seperti sebelum berlaku kerugian
Objective : supaya insured selepas dibayar pampasan tidak berada di dalam keadaan yg lebih baik daripada sebelum kerugian itu terjadi.

17. ..samb.
Effect : Insured tidak boleh menerima jumlah yang lebih daripada amaun kerugian yg dialami walaupun ia mungkin menerima jumlah yang kurang daripada jumlah kerugian disebabkan oleh pembatasan pd polisi.

18. Menyatakan pemegang insurans tidak sepatutnya memperoleh keuntungan drpd pampasan yg dituntut ke atas kerugian yg diinsuranskan dgn sy. Insurans
Hanya setakat dipulihkan kpd kedudukan kewangan asal sbgmn sblm mengalami kerugian.

19. Main purpose of the indemnity:
To prevent policy holder to gain profit via insurance
To decrease moral hazard among the policyholder

20. …samb.
KONTRAK INSURANS AM IALAH KONTRAK INDEMNITI kecuali KONTRAK INSURANS KEMALANGAN DIRI
KONTRAK INSURANS HAYAT BUKAN KONTRAK INDEMNITI
Sebab : sebarang yg melindungi nyawa, anggota badan dan fizikal seseorang, prinsip indemniti tidak digunapakai.

21. Settlement channels of indemnity :
Class of indemnity
Indemnity measurement
Examples
Property
Kos gantian – susutnilai / harga pasaran
Insurans kereta, insurans
Liabilities
Keputusan Mahkamah + kos perbelanjaan
Pecuniary
Kerugian kewangan
Insurans jaminan kewangan
Settlement channels of indemnity :
CASH, REPAIR, REPLACEMENT, REINSTATEMENT

22. INDEMNITY EXCEPTIONS valued policy valued policy law
replacement cost insurance
life insurance

23. SUBROGATION
PRINSIP SUBROGASI MEMBOLEHKAN INSURER YANG TELAH MEMBAYAR INDEMNITI KEPADA INSURED ATAS SEBARANG KERUGIAN MEMPERGUNAKAN HAK INSURED UNTUK MENUNTUT AMAUN YANG DIKELUARKANNYA DRPD PIHAK KETIGA.
WUJUD AGAR INSURED TIDAK AKAN MENDAPAT LEBIH DARI DUA CARA UNTUK DIA MEMPEROLEHI JUMLAH KERUGIAN ITU.

24. LOSSES TO THE INSURED CAUSED BY THE THIRD PARTY
DOES THE INSURED CAN CLAIM FROM THE 3RD PARTY NO
INSURED CAN CLAIM FROM THE INSURER
INSURER CAN GET SUBROGATION RIGHT
YES
INSURED CANNOT CLAIM FROM THE INSURER
INSURER CLAIMS FROM THE 3RD PARTY
CASE SETTLED
CASE SETTLED

25. HOW DOES SUBROGATION ARISE?
SUBROGATION ARISING OUT OF TORT
KECUAIAN YG DILAKUKAN OLEH PIHAK KETIGA SEHINGGA MEROSAKKAN/MENGHILANGKAN HARTA BENDA YANG DILINDUNGI DALAM POLISI,INSURED BERHAK MENERIMA BAYARAN INDEMNITI DAN JUGA BERHAK MENUNTUT KERUGIAN DR PIHAK KETIGA.

26. SUBROGATION ARISING OUT OF CONTRACT
INSURED MUNGKIN MENGALAMI KERUGIAN YANG TIDAK DILINDUNGI DI BAWAH POLISI TETAPI DI BAWAH KONTRAK ANTARA INSURED DAN PIHAK KETIGA
INSURED MENDAPAT GANTIRUGI SAMADA DARI INSURER ATAU PIHAK KETIGA

27. SUBROGATION ARISING OUT OF STATUtE
KADANGKALA STATUT MEMBENARKAN SESEORANG ITU MENUNTUT BAYARAH KERUGIAN DARIPADA PIHAK KETIGA
CONTOH AKTA INNKEEPERS 1952 (AKTA RUMAH TUMPANGAN)

28. SUBROGATION ARISING OUT OF THE SUBJECT MATTER
APABILA INSURED MENGALAMI KEMUSNAHAN KESELURUHAN HARTA BENDANYA, INSURER AKAN MEMBAYAR KERUGIAN MENYELURUH KEPADA INSURED
SLPS INSURER MEMBAYAR TUNTUTAN ITU, IA BERHAK MEMPEROLEHI BAKI YG TINGGAL DR PERKARA POKOK/SALVAJ YG ADA

29. CONTRIBUTION DUA POLISI ATAU LEBIH
APABILA KERUGIAN DILINDUNGI DI BAWAH
DUA POLISI ATAU LEBIH
PRINSIP SUMBANGAN MEMBENARKAN INSURER
YANG TELAH MEMBAYAR INDEMNITI KPD
INSUREDMEMANGGIL INSURER YANG TERLIBAT SUPAYA MEMBUAT SUMBANGAN BAYARAN INDEMNITI MENGIKUT BAHAGIAN MASING- MASING
MERUPAKAN CABANG INDEMNITI
KEWUJUDANNYA UNTUK MENGELAK INSURED MEMPUNYAI DUA POLISI ATAU LEBIH YANG MELINDUNGI KERUGIAN YG SAMA DRPD
MENERIMA LEBIH DARI AMAUN KERUGIAN

30. ESSENTIAL OF CONTRIBUTION
TO APPLY THE PRINCIPLE, THE FOLLOWING CONDITIONS HAVE TO BE FULFILLED:
1. TWO OR MORE POLICIES OF INDEMNITY MUST BE IN FORCE
2. THE POLICIES MUST BE COVER A COMMON INTEREST
3. THE POLICIES MUST COVER A COMMON PERIL WHICH GIVES RISE TO THE LOSS
4. THE LOSS MUST INVOLVE A COMMON SUBJECT MATTER COVERED BY THE POLICIES

31. PROXIMATE CAUSE Onus of proof of loss rests on the insured
Which among the many causes of losses can be taken to be the dominant cause of loss?

32. …samb.
THE INSURER WILL NOT LIABLE FOR A LOSS CAUSED BY EITHER AN UNINSURED PERIL OR EXCLUDED PERIL
A PROBLEM ARISES WHEN THE TWO OR MORE CAUSES INVOLVED ARE BOTH INSURED PERILS & EXCLUDED PERILS
TO RESOLVE THIS DIFFICULTY USES DOCTRINE PROXIMATE CAUSE -“CAUSA PROXIMA NON REMOTE SPECTATUR”(LATIN MAXIM)

33. THE INSURER’S LIABILITY UNDER CONCURRENT CAUSES
SINGLE EVENT
INSURED PERIL
LIABILTY IN FULL
UNINSURED/ EXCLUDED PERIL
NO LIABILITY
CHAIN OF EVENTS NO EXCLUDED PERILS
EFFECTS SEPARATE
LIABILITY IN RESPECT OF INSURED PERIL ONLY
EFFECT UNSEPARABLE
FULL LIABILITY
CHAIN OF EVENTS + EXCLUDED PERILS
EFFECTS SEPARABLE
EFFECTS UNSEPARABLE
THE INSURER’S LIABILITY UNDER CONCURRENT CAUSES

34. Points to remember:
INSURED PERIL
EXCLUDED PRIL
UNINSURED PERIL

35. 1 CONCURRENT CAUSE PERILS SEPARATED EFFECT OF LOSS INSURER LIABLE
INSURED PERIL +
UNINSURED PERIL +
NO EXCLUDED PERIL 1
INSURER LIABLE
FOR LOSS OF INSURED
PERIL

36. 1 CONCURRENT CAUSE NON SEPARATED EFFECT PERILS OF LOSS INSURER LIABLE
INSURED PERIL +
UNINSURED PERIL +
NO EXCLUDED PERIL 1
INSURER LIABLE
FOR FULL AMOUNT OF
LOSS

37. CONCURRENT CAUSE 1 PERILS SEPARATED EFFECT OF LOSS INSURER LIABLE
INSURED
PERIL
UNINSURED
PERIL 1
INSURER
LIABLE
ONLY LOSS CAUSES BY
INSURED PERIL
EXCLUDED
PERIL

38. CONCURRENT CAUSE 1 PERILS NO SEPARATED EFFECT OF LOSS INSURER WILL NOT
INSURED
PERIL
UNINSURED
PERIL 1
INSURER WILL NOT
LIABLE FOR THE
LOSS
EXCLUDED
PERIL

39. CHAIN OF EVENTS UNBROKEN CHAIN OF EVENTS
INSURER WILL BE LIABLE FOR THE LOSS INSURED UNDERTHE POLICY
NO EXCLUDED PERIL PRECEDES AN INSURED PERIL

40. EXAMPLE 1 NO EXCLUDED PERIL IS INVOLVED
INSURER IS LIABLE FOR ANY LOSS DUE TO FIRE AND LOSSES RESULTING FROM WATER OF FIREFIGHTERS
FIRE POLICY
CATCHES FIRE
DUE TO SHORT
CIRCUIT
(UNISURED
PERIL)

41. EXAMPLE 2 NO EXCLUDED PERIL IS INVOLVED
A LIFE ASSURED IS KNOCKED DOWN BY A VEHICLE AND DIES
ACCIDENT COLLISION RESULTING DEATH IS PROXIMATE CAUSE
THE INSURER IS LIABLE

42. EXAMPLE 1 EXCLUDED PERIL IS INVOLVED AFTER BEFORE FIRE POLICY
INSURER NOT LIABLE
FOR THE LOSS
GAS TANK EXPLODES
(COMMERCIAL PURPOSE)
(EXCLUDED PERIL)
BOOM
FIRE
(INSURED PERIL)
INSURER
LIABLE
FOR THE LOSS BEFORE THE EXPLOSION
FIRE
(INSURED PERIL)
GAS TANK EXPLODES
(COMMERCIAL PURPOSE)
(EXCLUDED PERIL)

43. EXCLUDED PERIL IS INVOLVED
EXAMPLE 2
EXCLUDED PERIL IS INVOLVED

44. EXCLUDED PERIL IS INVOLVED
EXAMPLE 1
EXCLUDED PERIL IS INVOLVED

45. EXCLUDED PERIL IS INVOLVED
EXAMPLE 2
EXCLUDED PERIL IS INVOLVED

46. EXCLUDED PERIL IS INVOLVED
EXAMPLE 2
EXCLUDED PERIL IS INVOLVED
COMMIT SUICIDE
IS EXCLUDED PERIL
SO THAT INSURER
DOES NOT LIBLE
TO THE LOSS
EVEN AFTER ONE
YEAR HE TOOK WHOLE
LIFE ASSURANCE
POLICY

47. BROKEN CHAIN OF EVENTS
IF THERE IS BROKEN CHAIN OF EVENTS, THE PROXIMATE CAUSE OF LOSS IS THE ONE IMMEDIATELY FOLLOWING THE LAST INTERRUPTION

48. EXAMPLE 1
PERSONAL ACCIDENT POLICY

49. EXAMPLE 1
PERSONAL ACCIDENT POLICY

50. EXAMPLE 1
PERSONAL ACCIDENT POLICY

51. EXAMPLE 1
PERSONAL ACCIDENT POLICY
HEART ATTACK

52. EXAMPLE 1 PERSONAL ACCIDENT POLICY DROWNED
THE INSURER IS LIABLE TO PAY THE BENEFITS UNDER THE PERSONAL ACCIDENT POLICY