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Lcc303: Insurance Law Question Paper

Lcc303: Insurance Law

Course:Bachelor Of Laws

Institution: Kenyatta University question papers

Exam Year:2012

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2011/2012
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR
OF LAW
LCC 303:
INSURANCE LAW
=================================================================
DATE: THURSDAY 19TH APRIL 2012
TIME: 12.00 P.M. – 2.00 P.M.

INSTRUCTIONS

1) Answer question ONE and TWO other questions
2) You will be penalised for failing to answer question one
3) Support your answer with relevant case law, statutes and any other
relevant references
4) Write neatly and legibly
5) Your answer sheet must bear your student registration number

QUESTION 1

(a)
The Claims Manager of Perfect Insurance Company Limited has sent you an e-mail
narrating the following facts.

“A customer took out a commercial motor insurance policy in respect of motor
vehicle KAA 1234C, a Nissan Minibus. The policy was effective from 25/10/2010 to
24/10/2011. The customer completed a proposal form in which he declared that the
motor vehicle would be used to carry own goods only and would not be used to carry
passengers for hire. The Company accepted the proposal and agreed to issue
insurance cover.

The customer paid the premium and then issued a cover for third party risks only and
issued a certificate of insurance and subsequently a policy document was issued.

Page 1 of 3

On 6/3/2011, during the currency of the policy, the motor vehicle was involved in a
self-involving accident (no other vehicle was involved)) at around 5 pm on the
Nakuru- Nairobi Road. The insured declared that at the time of the accident he was
traveling to Nairobi to ferry his won goods.

Subsequently the company received a Statutory Notice dated 17/7/2011 and a Plaint
in Naivasha RMCC 11111/2011 in which the insured was named as the defendant.
The Plaintiff was one Tabitha Wawetu. Tabitha described herself in the plaint as a
fare-paying passenger.

The Company did not involve itself in the suit. It has now received a demand letter
requiring it to satisfy a decree under the provisions of the Insurance (Motor Vehicle
Third Party Risks) Act, Cap 405.”

The Claims Manager requires your urgent advise.

With the aid of decided cases and citing relevant statutory provisions advise the
Claims Manager regarding the legal position.

(20 Marks)

(b)
“The common law on insurance is unduly biased against the insured” Discuss this
statement supporting your answer with specific examples.

(10 Marks)

QUESTION 2
“In case of goods, or other property, insurable interest may be based on ownership and this
ownership may be either sole or joint, absolute or limited; legal or equitable. Ownership is
not however, necessary, insurable interest may be founded on contract….”
Ivamy General Principles of Insurance Law

Discuss this statement. In your answer distinguish clearly between the approaches to
insurable interest in insurance not dealing with property.

(20 Marks)

Page 2 of 3

QUESTION 3
(a)
Discuss in detail the regulatory framework of insurance business in Kenya (10 marks)

(b)
What specific recommendations would you make for improved regulation of the
insurance sector?

(10 Marks)

QUESTION 4
“One overriding factor in insurance is that the insured shall only be indemnified but shall not
be more than indemnified”

Discuss this statement.

(20 marks)

QUESTION 5
Write brief notes on any four of the following

(a)
Subrogation

(5 marks)
(b)
Termination of Insurance Cover

(5 marks)
(c)
Reinstatement

(5 marks)
(d)
Cover Note

(5 marks)
(e)
Islamic Insurance

(5 marks)

Page 3 of 3

Lcc303: Insurance Law Question Paper

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