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LAW OF INSURANCE For LLM (COURSE OUTLINE)

Course I nstructor: Professor M. Sridhar

Aims and Objectives of the Course:

Insurance is the area, which is looked at as one of the most common methods of risk management

and financial planning. The law of Insurance became an integral part of business law and business

management because it deals with risk management. The course on Law of Insurance is intended to provide

understanding of legal principles of insurance contract and unique features of insurance transactions

imposing different legal obligations on the parties. With advancement of modern civilization and scientific

progress in all fields including industrialized life and travel with great speed, the safety concerns and

planning the risk assumed greater importance. The life, health and day-to-day activities in any career could

be a risk factor and need to be planned. The Insurance provides a perfect answer. Thus the insurance has

grown into an industry, business, marketable product and an international commerce. Today the insurance

is the reason for research into safety of various living activities, especially motor cars and health. The

insurance companies are funding heavily the research into automobile world and every other enterprise,

which has some thing to do with human civilization. Today insurance generates utmost funds all over the

world. Recently, after globalization it emerged as one of the well-regulated international commercial

enterprise, offering wonderful profits.

Apart from unique features of the contract insurance, which has legal, moral and socialsignificance, its regulation also offers an interesting study. The Insurance Law in India passed through

several phases of Privatization, Nationalization and again Privatization along with globalization. The

Insurance Regulation, though comprehensively planned, which is reflected in amendments to Insurance Act

1938 and Insurance Regulatory Development Authority Act, 1999, it is still shaping up, as several

amendments suggested by Law Commission of India in consultation with Insurance Regulatory

Development Authority of India, are now under consideration. This course is intended to deal with these

aspects with the study of cases and developing insurance law in other countries.

Module 1Introduction

A. Concepts of Insurance and Law of Insurance: Evolution of Insurance Laws: History, scopeand development of Insurance Law, - From Insurance Act 1938 to IRDA Act 1999.

Module 2Contract of Insurance

A. Features of Insurance Contract: Parties to contract, Classification of Contracts of Insurancebased on nature of event, nature of interest affected, and nature of insurance. Nature of

contract of insurance, subject matter of insurance, description of subject matter. Uberrimae

fides

B. Insurable interest: - General principles, RequirementsStatutory interest. Nature ofInterest, Consequences of lack of insurable interest, Insurance covering other interests, Illegal

contracts of Insurance, Loss following a criminal act, Suicide, Criminal Negligence.

Insurable interestLife insurance, Property insurance, insurance of Third parties interests.

C. Nature of Risk, Definition of Risk and Risk ManagementD. Consideration for Contract: PremiumE. Formulation of Contract: Formalities of insurance contracts- Forming- Formalities-

Forming at Lloyds, Temporary CoverDuration and Renewal of PoliciesF. Indemnity and GuaranteeG. SubrogationH. Assignment of Insurance policiesI. Warranties and Representations

Module 3 Classification of Insurance

A. Marine Insurance: History and Development of Marine Insurance, Object of FundamentalPrinciples, Insurance for Ships and Cargo, Loss Total Loss (Actual Total Loss and

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Constructive Total Loss), Partial Loss (General Average and Particular Average,

Abandonment), Marine Insurance as a model for other insurance, Marine Insurance in India,

Perils on Sea, Voyage and deviation, Marine Insurance Act 1963.

B. Fire Insurance: Meaning of fire, Loss by Fire, Kinds of Insurance Policies, FundamentalPrinciples, Contracts ofProcedure, Assessment of fire policy, Kinds of Fire Polices,

Settlement of Claims, Forfeiture, Retention and Reinsurance, Doctrines: Subrogation,

Contribution and Reinstatement. Double Insurance and Reinsurance.

C. Life Insurance: Importance of, Elements of protection, History of-, Contract of, FundamentalPrinciples of-, Kinds of-, Life insurance Corporation of India Act, 1956, Management of-,

Functions and powers of LIC, Control by Government, Life Policies, Persons entitled to buy,

Selection of Lives, etc.

D. Accident and Motor Insurance: Miscellaneous Insurance.Module 4 Insurance Regulation in India

A. State Regulation of Insurance and Liability: Purpose of State Regulation, History of StateRegulation, Pre Independence and Post Independence RegulationStatutes; Insurance Act,

1938, LIC Act 1956, General Insurance Business (Nationalization) Act, 1972 Personal

Injuries Compensation Insurance Act, 1963, Motor Vehicle Act, 1988, Marine Insurance Act,

1963, Public Liabilities Insurance Act, 1991

Module 5 Insurance and Consumer Protection

Module 6 Changes in Regulation of Insurance

A. Liberalization and Privatization of Insurance in India: Deregulation of Insurance SectorRecommendations for Private Entrants, Malhotra Committees Recommendations, Privatization of

Insurance industry in India, consequences

B. Insurance Regulatory and Development Authority Act, 1999C. Law Commissions Recommendations for Changes in Insurance Regulation.

Suggested Books:

1. D. S. Hansell, Elements of Insurance, 1970 London,2. JB MacLean, Life Insurance,3. Riegel and Miller, Insurance Principles and Practice,4. E.R. Hardy Ivamy, General Principles of Insurance Law, Butterworths London, Sixth

Edition, 1993,

5. MacGillvray on Insurance Law, (10th ed. 2003)6. Principles of Insurance, R L Mehr7. Birds Modern Insurance Law8. Modern Law of Insurance, KSN Murthy & KVS Sarma9. MN Srinivasans Principles of Insurance Law