BL – May 2015 – L1 – SB – Q5a – Contract Law

Define the concept of assignment in relation to insurance and explain the types of assignment possible.

Question

Assignment is ONE of the principles in a contract of insurance.

Required:
i. Define the concept of assignment in relation to insurance contracts. (3 Marks)
ii. State the THREE types of assignment that are possible under an insurance contract. (3 Marks)
iii. “Insurance contracts are contracts uberrimae fidei”. Explain this doctrine, and state any ONE major duty the doctrine imposes on the parties to an insurance contract. (4 Marks)

Answer

i. Assignment refers to the transfer of rights and duties acquired under an insurance contract from the assignor to another person known as the assignee. (3 Marks)

ii. The three types of assignment possible under an insurance contract are:

Assignment of the subject matter of the contract
Assignment of the benefit of the contract
Assignment of the contract itself (3 Marks)

iii. Doctrine of Uberrimae Fidei (Utmost Good Faith): This doctrine requires that both parties to an insurance contract deal with each other honestly and openly, without withholding any material information. The major duty it imposes is that both parties must disclose all relevant information truthfully during negotiations leading to the formation of the contract. (4 Marks)

Tags: Assignment, Doctrine of Good Faith, Insurance Contracts
Level: Level 1

Topic: Contract Law

Uploader: Kwame Aikins