Insurance Law

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Insurance Law by Mind Map: Insurance Law

1. Introduction

1.1. Section 8 of the Financial Service Act

1.1.1. Do not carry on any authorized business unless it is : a) licensed by the Minister of Finance, under Section 10 to carry on banking business, insurance business or investment banking business b) approved by Bank under Section 11 to carry on any business set out in Division 1 of Pat 1 of Schedule 1.

1.2. The Minister of Finance & Bank Negara Malaysia are responsible for license authorizing the holder.

1.3. Section 20 of Financial Services Act 2013 sets out the circumstances by Minister & Bank Negara revoke the licensed.

1.4. Contract where one person, "the insurer" undertakes to indemnify another "the insured"

2. Premium of Insurance

2.1. The insured promises to pay to the insurer a sum of money in consideration.

2.2. Section 2(1) of Financial Services Act 2013

2.2.1. "Premium" is the amount payable to an insurer under a policy as consideration for the obligations assumed by the insurer.

2.3. Premium consists of

2.3.1. A lump sum or periodic payments.

3. Policy of Insurance

3.1. Section 2(1)of Financial Services Act 2013

3.1.1. Policy is an insurance policy includes cover note / contract of insurance, whether or not embodied in or evidenced by an instrument in the form of an insurance policy, and references to --

3.1.2. (a) issuing a policy shall be construed as entering into a contract of insurance, whether or not a formal contract has been issued.

3.1.3. (b) a policy of an insurer that liability transferred to the insurer from the other insurer.

3.2. The contract which outlines what the insurance company will pay in case of loss.

4. Financial Services Act 2013

4.1. Section 5 divides insurance business into two classes

4.1.1. Life business - Concerned with life policies shall include any type of insurance business carried on as incidental only to the life insurer's business.

4.1.2. General business - Insurance business which is not life business.

5. Example of Insurance

5.1. Life insurance

5.2. Marine insurance

5.3. Fire insurance

5.4. Accident insurance

5.5. Aviation insurance

6. Two types of Insurance

6.1. Contingency Insurance

6.1.1. Involves payment on a contingent event and in which the sum paid is not measured by the loss but stated in the policy.

6.1.2. The insurer's liability is to pay certain fixed sums specified in the policy, on the death, accident or sickness of the insured.

6.2. Indemnity Insurance

6.2.1. Indemnity against loss in which the measure of loss is the measure of payment.

6.2.2. It binds the insurer to pay the amount of the insured's actual loss up to the amount covered by the insurance policy.

6.2.3. If the risk insured against does not occur, then no payment is made to the insured.

7. Material Fact

7.1. Section 129(4)(1) of Financial Services Act

7.1.1. Before a contract of insurance other than a consumer insurance other than a consumer insurance contract is entered into, varied or renewed, a proposer shall disclose to the licensed insurer a matter that... (a) a reasonable person in the circumstances could be expected to know to be relevant.

7.2. Section 129(4)(2) of Financial Services Act

7.2.1. The duty of disclosure shall not require the disclosure of a matter that... (a) diminishes the risk to the licensed insurer (b) is of common knowledge (c) in respect of which the licensed insurer has waived any requirement for disclosure.

8. Insurable Interest

8.1. An interest in the subject matter of a contract of insurance which provides the insured with the right to enforce the contract.

8.2. Section 128 of Financial Services Act

8.2.1. Person shall be deemed to have insurable interest in relation to another person if the other person is his spouse, his employee and his ward under age of majority at the time the insurance is effected.