Unit 2 of Law of Insurance (syllabus: Module II — the IRDAI and the regulatory architecture; the contract of life insurance, its formation, assignment, nomination and claims; and motor third-party liability, including no-fault liability and the claims machinery). Below: what the unit covers, the provisions it turns on, and the cases an examiner expects you to name.
What this unit covers
- Why was a statutory regulator created in 1999, and what is its double mandate?
- What are the powers and functions of the Authority, and what is deliberately left out of them?
- Can an insurer assume risk before the premium is paid?
- How did India nationalise insurance, and on what terms was the market reopened?
- For how long may a life policy be called in question for misstatement, and on what conditions?
- Is an insurer liable where the assured dies by suicide?
- May a motor insurer refuse to pay a third party on a defence good against its own insured?
- What must a claimant prove under no-fault liability, and how does the Claims Tribunal deal with the claim?
Treat that list as a self-test: recite each topic's rule from memory before you open its cases.
Provisions
- Insurance Regulatory and Development Authority Act 1999, s. ss. 3, 4 and 14(1)
- Insurance Regulatory and Development Authority Act 1999, s. s. 14(2)
- Insurance Act 1938, s. s. 64VB
- Life Insurance Corporation Act 1956; General Insurance Business (Nationalisation) Act 1972; Insurance Act 1938, s. LIC Act ss. 7 and 30; Insurance Act s. 2(7A)
- Insurance Act 1938, s. s. 45
- Indian Contract Act 1872, s. s. 23
- Motor Vehicles Act 1988, s. ss. 147 and 149
- Motor Vehicles Act 1988, s. ss. 140, 165, 166 and 168
Leading cases
- The statutory rule that no risk may be assumed before premium is received
- Mithoolal Nayak's case; LIC v. Asha Goel
- Beresford v. Royal Insurance Co; Northern India Insurance Co v. Kanhaya Lal
- Sohan Lal Passi v. P. Sesh Reddy; Swaran Singh's case
- Satvantkumar Harjit Singh Vig v. Aarti Jayant Lalwani; Minu B. Mehta v. Balkrishna