Law Of Insurance Question Paper
Law Of Insurance
Course:Bachelor Of Laws (Llb)
Institution: Kabarak University question papers
Exam Year:2012
KABARAK
UNIVERSITY
UNIVERSITY EXAMINATIONS
2011/2012 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF LAWS
KLAW 313: LAW OF INSURANCE
DAY: FRIDAY
DATE: 23/03/2012
TIME: 9.00 – 11.00 A.M.
STREAM: Y3S2
INSTRUCTIONS
1.
Answer Question 1 and any two other questions
2.
Question 1 carries 30 marks. All other questions carry Equal(20) marks
3.
No materials are to be brought into the examination room
Q.1 John Onyango took out an insurance policy for his Motor Vehicle
(Toyota AE100) registration KAX 4000Y. Initially he was issued with a
temporary cover for 14 days. Within the 14 days Onyango knocked and
damaged a third party vehicle belonging to a Mr. John Smith. The
Certificate of Insurance was issued by Carefree Insurance Brokers Ltd
(Carefree) on behalf of Underworld Insurance Company Ltd (Underworld)
before the expiry of the temporary cover note. Onyango was never
issued with the policy document but 27 days after being issued with the
Certificate of Insurance his vehicle rammed on to the rear of a lorry
while driving home late at night as a result of which his motor vehicle
was declared a total loss. At the time of the accident Onyango was dead
drunk and subsequently he pleaded guilty to the offences of driving while
under the influence of alcohol and negligent driving. Onyango lodged his
claims with Underworld Insurance Co. Ltd who have rejected the same
arguing that (i) the claim by Mr Smith was not covered by the policy as it
was not reported; (ii) Onyango was bound by the terms of the policy even
though they were not included in the temporary cover; (iii) the premium
on the policy was not remitted by Carefree on time or all and therefore
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Underwood did not assume the risk; and (iv) that the alleged second
“accident” involving the lorry was self inflicted and therefore not an
accident under the policy as Onyango caused the same by driving while
drunk.
Mr. John Onyango has approached you for legal advice. Advise him in
respect of all the grounds advanced by Underworld to reject his claims.
(30 Marks)
Q.2 “The term insurable interest is manifestly a misnomer; the proper term is
insurable relationship. Factual expectation of damage should be the conclusive
test of an insurable relationship. To those who cling to strict property
delineations in fear of the process of drawing the line between a genuine
factual expectation of damage and wager, it can be said not only that judicial
wisdom is equal to the task, but that a just line drawn with difficulty exceeds
in value simple line which works disproportionate injustice.”
(Bertram Mavnett and John Thornton: Insurable Interest and Property
Insurance [1948] Columbia Law Review pg.163 at 1188)
Citing relevant case law and other authoritative sources discuss the concept of
insurable interest as it applies to property and life insurance.
(20 Marks)
Q.3 “Assignment of the subject matter of insurance is a distinctly different
concept from assignment of the contract of insurance and assignment of the
benefits or proceeds of a contract of insurance. The distinction must be
noted because different rules govern each kind of assignment and applying
rules governing one type of assignment to another type may lead to absurd
legal results.” Anonymous.
Discuss the various forms of assignment alluded to in the statement and
highlight the legal principles applicable.
(20 Marks)
Q.4 (a) Distinguish between the concepts of subrogation and contribution as
used in contracts of insurance?
(8 Marks)
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(b) David Nyangweso recently purchased a brand new Mercedes Benz E 240
Kompressor registration number KBC 4000Z which is insured with
Century Insurance Co. Ltd (Century) for a sum of KShs.5,500,000/=.
The vehicle was involved in a road accident along Nakuru– Eldoret road
at Ngata Farm after which it was towed to Universal Garage Limited
located at Industrial Area, Nairobi for repairs on instructions of
Century. Nyangweso was dissatisfied with the repair work which he
claimed was substandard and he refused to sign a satisfaction note.
After transferring the car for repair to D.T. Dobie, Nyangweso on the
instructions of his lawyers (Wapenda Pesa & Co. Advocates) sued the
third party (General Hauling Co. Ltd) responsible for the accident to
recover the sum of KShs.550,000/= paid to D.T. Dobie. Century have
objected to the suit claiming that Nyangweso is claiming double
indemnity and that they are entitled to sue the third party under their
subrogation rights.
Century has engaged your services as their lawyers and wish to have
your advice on the matter. Advise Century appropriately.
(12 Marks)
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