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Book part

Andre Farrugia

Insurance is a dynamic business highly affected by the environment it operates in. Alongside the practice of insurance, come principles on which the business of insurance

Abstract

Insurance is a dynamic business highly affected by the environment it operates in. Alongside the practice of insurance, come principles on which the business of insurance is based. One of the principles, that is not short of controversy, is the doctrine of utmost good faith which requires full disclosure of material facts by the contracting parties. The author, in this chapter, explored the need for change in the regulation of this insurance principle and discussed the drivers behind these changes and the commensurate effect on the practice of insurance. The author delved into case studies, practices and literature and traced back to the origins of the long-standing principle of utmost good faith. This principle is one on which the acceptance (or otherwise) and premium of an insurance contract is based and through which certain factors and developments in the industry have led to a major reform in some jurisdiction.

The author discussed the development and drivers leading to reform and concluded that reform is ultimately the result of public outcry, through individual cases heard predominantly in court, a well-established reform committee, the socio-political environment of that country and the advent of technology. Moreover, although, different countries have their own jurisdictions, laws and regulations as well as market practices and international trade have made it imperative to have common technical practices between market players especially in insurance, which depends on the spread of risks between countries internationally. Smooth insurance business can only be established if this reform is harmonised between jurisdictions.

Details

Governance and Regulations’ Contemporary Issues
Type: Book
ISBN: 978-1-78743-815-6

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Article

Gerald Swaby

The purpose of this paper is to provide a critical examination of the current law and the proposed changes made by the Law Commission, after consultation, in relation to…

Abstract

Purpose

The purpose of this paper is to provide a critical examination of the current law and the proposed changes made by the Law Commission, after consultation, in relation to non‐fraudulent pre‐contractual duties in insurance law.

Design/methodology/approach

The research is addressed using case law, statutes, current academic and law commission publications in the UK and Australia.

Findings

First, the paper finds that the current state of the law is unfair in relation to consumers and small businesses and much reform is needed to rebalance the nature of insurance contracts to reflect modern day practice.

Research limitations/implications

This work does not address detailed issues in relation to fraudulent misrepresentations.

Practical implications

The law will be brought into line with current practice by the Financial Ombudsman Service.

Originality/value

This paper will be of interest to legal practitioners and academics and those in the insurance industry.

Details

International Journal of Law and Management, vol. 52 no. 1
Type: Research Article
ISSN: 1754-243X

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Book part

Shauhin Talesh and Jérôme Pélisse

This article explores how legal intermediaries facilitate or inhibit social change. We suggest the increasing complexity and ambiguity of legal rules coupled with the…

Abstract

This article explores how legal intermediaries facilitate or inhibit social change. We suggest the increasing complexity and ambiguity of legal rules coupled with the shift from government to governance provide legal intermediaries greater opportunities to influence law and social change. Drawing from new institutional sociology, we suggest rule-intermediaries shape legal and social change, with varying degrees of success, in two ways: (1) law is filtered through non-legal logics emanating from various organizational fields and (2) law is professionalized by non-legal professionals. We draw from case studies in the United States and France to show how intermediaries facilitate or inhibit social change.

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Studies in Law, Politics, and Society
Type: Book
ISBN: 978-1-78973-727-1

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Article

Craig R. Brown and Drew B. Winters

The State of Delaware recently passed a new banking law that allows banks and bank affiliates chartered in Delaware to sell and underwrite insurance nationwide. The new…

Abstract

The State of Delaware recently passed a new banking law that allows banks and bank affiliates chartered in Delaware to sell and underwrite insurance nationwide. The new laws provide two potential benefits to banks; (1) increased profits from selling insurance and (2) reduced interest rate risk exposure from underwriting insurance. We find support for increased profit potential to banks from the law, but we fail to find a reduction in the interest rate risk exposure of the banks.

Details

Studies in Economics and Finance, vol. 17 no. 1
Type: Research Article
ISSN: 1086-7376

Abstract

Details

The Handbook of Road Safety Measures
Type: Book
ISBN: 978-1-84855-250-0

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Article

Gerald Swaby

The purpose of this paper is to provide a critical examination of the current law and the possible changes that are under consideration by the Law Commissions, after…

Abstract

Purpose

The purpose of this paper is to provide a critical examination of the current law and the possible changes that are under consideration by the Law Commissions, after public consultation in relation to the continuing duty of good faith and post‐contractual duties owed by the insured towards the insurer.

Design/methodology/approach

The research is addressed using case law, statutes, current academic and Law Commissions publications in the UK.

Findings

First, the paper finds that the current state of the law allows for the insurer to claim damages from an insured when a fraudulent claim is made to recover the cost of any investigations. Second the insurer can refuse to meet a claim that is tainted by fraud. Third the insurer can have the right to avoid the policy obligations upon the discovery of a fraud, but subject to some limitations. Fourth there is a need for the insured to be protected against an insurer's unjustified allegations of fraud.

Research limitations/implications

This work does not address detailed issues in relation to pre‐contractual issues of good faith. These have been discussed in a previous edition of this journal see Swaby. G. (2010) “Insurance law: fit for purpose in the twenty‐first century?” IJLMA, 52 (1), pp. 21‐39. ISSN 1754‐243X.

Practical implications

The Law Commission will be undertaking further consultations before reforming this area of law.

Originality/value

This paper will be of interest to legal practitioners and academics and those in the insurance industry.

Details

International Journal of Law and Management, vol. 53 no. 6
Type: Research Article
ISSN: 1754-243X

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Article

Fidelis Ogbuozobe

This paper aims to answer the question of whether the incorporation of corporate governance into the Companies and Allied Matters Act (CAMA) and Insurance Act enhance the…

Abstract

Purpose

This paper aims to answer the question of whether the incorporation of corporate governance into the Companies and Allied Matters Act (CAMA) and Insurance Act enhance the effectiveness of the boards of insurance companies in Nigeria?

Design/methodology/approach

The researcher's approach is the deductive approach in which a theory and hypothesis have been developed and a research strategy to test the hypothesis.

Findings

Arguably, most of the companies implementing the code are public companies, probably because it is a listing requirement or it is fashionable to do so, but this study has shown that implementation for both private and public companies is on the upward trend albeit, at a slow pace which is the area the government and regulatory authorities need to do more work. While acknowledging the effort of regulators like the SEC and CBN (Thisday), the result is still not encouraging.

Originality/value

From the results of this study, one of the most respected provisions of the code is the audit committee requirement, of which companies in Nigeria, both private and public, ensure strict compliance because it is a provision of the law and no company will want to infringe this stringently enforced requirement. Therefore, if other provisions were to be part of the CAMA (1990) or any other statute it means such provision will enjoy the same level of compliance, assuming the same level of enforcement.

Details

International Journal of Law and Management, vol. 51 no. 6
Type: Research Article
ISSN: 1754-243X

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Article

O.W. PENDLETON

A primitive form of marine insurance existed in very early times in what are known as contracts of bottomry or respondentia. This was an arrangement by which the owners of…

Abstract

A primitive form of marine insurance existed in very early times in what are known as contracts of bottomry or respondentia. This was an arrangement by which the owners of ships borrowed money at a high rate of interest and did not repay the loan if the ship was lost. This was also extended to other property, so that a rudimentary form of burglary insurance can be traced in the distant past. Loans of this kind were transacted in ancient Babylon, as is shown in the Code of Hammurabi, c. 2025 B.C. Contracts of bottomry were prohibited by a decree of Pope Gregory IX in 1234 on the grounds that they were usurious, and some authorities think that it was at this point that insurance in its true sense developed. In 1310 there existed at Bruges a ‘Chamber of Assurances’ for the insurance of merchandise against marine and other risks.

Details

Journal of Documentation, vol. 3 no. 4
Type: Research Article
ISSN: 0022-0418

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Article

Rocco R. Vanasco

This paper examines the role of professional associations, governmental agencies, and international accounting and auditing bodies in promulgating standards to deter and…

Abstract

This paper examines the role of professional associations, governmental agencies, and international accounting and auditing bodies in promulgating standards to deter and detect fraud, domestically and abroad. Specifically, it focuses on the role played by the US Securities and Exchange Commission (SEC), the American Institute of Certified Public Accountants (AICPA), the Institute of Internal Auditors (IIA), the Institute of Management Accountants (IMA), the Association of Certified Fraud Examiners (ACFE), the US Government Accounting Office (GAO), and other national and foreign professional associations, in promulgating auditing standards and procedures to prevent fraud in financial statements and other white‐collar crimes. It also examines several fraud cases and the impact of management and employee fraud on the various business sectors such as insurance, banking, health care, and manufacturing, as well as the role of management, the boards of directors, the audit committees, auditors, and fraud examiners and their liability in the fraud prevention and investigation.

Details

Managerial Auditing Journal, vol. 13 no. 1
Type: Research Article
ISSN: 0268-6902

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Article

Robert J. Dijkstra and Michael G. Faure

The purpose of this paper is to understand the incentive effects of existing compensation mechanisms in case of the bankruptcy of a financial institution.

Abstract

Purpose

The purpose of this paper is to understand the incentive effects of existing compensation mechanisms in case of the bankruptcy of a financial institution.

Design/methodology/approach

The paper uses insights of law and economics to predict the effects of compensation mechanisms on the incentives of depositors, financial institutions, financial regulators and government.

Findings

The paper shows that the current compensation system in The Netherlands will not provide sufficient incentives for all stakeholders to prevent the failure of a financial institution. Adjustments to this system are necessary to improve these incentives.

Original/value

The paper examines for the first time the impact of different compensation mechanisms on the incentives of multiple stakeholders. It also shows how these mechanisms influence each other regarding their incentive generating capability. These findings offer important insights for policy makers.

Details

Journal of Financial Regulation and Compliance, vol. 19 no. 2
Type: Research Article
ISSN: 1358-1988

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