1. Today’s Lecture Types of Insurance Fundamental Doctrines Agency Law Contract Requirements Distinguishing Characteristics of Insurance Contracts

2. Agency Law Three Parties Principal Agent Third Party Agent’s authority can be actual or apparent Agent has binding authority

3. Agency Law - Example Which party in an insurance contract does the insurance company represent? APrincipal BAgent CThird Party

4. Agency Law (Cont.) Waiver - intentional relinquishment of a known right Estoppel - cannot claim a right previously waived Agency by estoppel is created if someone acts as an agent with the consent of the insurer

5. Requirements of a Contract Offer and Acceptance Consideration Competent Parties Legal Purpose Legal Form

6. Requirements of a Contract - Example Fred Guppy

7. Contract Requirements - Example Which of the requirements of a contract was missing in the Fred Guppy case? AOffer and Acceptance BConsideration CCompetent Parties DLegal Purpose or Legal Form ENone of the above

8. Distinguishing Characteristics of Insurance Contracts Based on Utmost Good Faith –Representations –Concealment Contracts of Adhesion –Ambiguity is decided in favor of the insured

9. Distinguishing Characteristics of Insurance Contracts (Cont.) Indemnity Concept –Insurable Interest Life - at inception of contract Property - at time of loss –Subrogation Insurer obtains right of recovery against other parties –Actual Cash Value –Other Insurance Provisions

10. Distinguishing Characteristics of Insurance Contracts (Cont.) Personal –Property-liability policies cannot be assigned –Life policies are assignable

11. Distinguishing Characteristics - Example An applicant for life insurance indicates on the application that he does not smoke, although he is a heavy smoker. The insurance company, when it learns about this, may be able to void the policy due to: AMisrepresentation BConcealment CAdhesion DLack of insurable interest ENone of the above