CII I11 flashcards

35 cards. Read the term and the definition here. The deck at the top of this page is optional.

Ratio decidendi

The legal reasoning or rule of law on which a court's decision is based; it binds lower courts in the same hierarchy under the doctrine of precedent.

Obiter dicta

Comments made by a judge by the way that are not essential to the decision. They are persuasive but not binding on later courts.

Balance of probabilities

The civil standard of proof: a fact is proved if it is more likely than not to be true. It applies to insurance disputes.

Limitation period for contract

Under the Limitation Act 1980, a simple contract claim must be brought within six years of the breach; deeds allow twelve years.

Invitation to treat

An indication that a party is open to receiving offers, such as an advertisement or shop display. It is not itself an offer capable of acceptance.

Postal rule of acceptance

Where post is contemplated, acceptance takes effect when the letter is posted, not when received, provided it is properly addressed and stamped.

Consideration

Something of value given by each party in exchange for the other's promise. It must be sufficient but need not be adequate; past consideration is invalid.

Condition versus warranty

A condition is a fundamental term whose breach allows termination and damages; a warranty is a lesser term whose breach gives damages only.

Contra proferentem

A rule of construction that ambiguities in a contract are interpreted against the party who drafted the clause, typically the insurer.

Warranty under Insurance Act 2015

Breach of a warranty suspends rather than discharges cover for the period of breach; the insurer must give notice of termination where relevant.

Condition precedent to liability

A policy condition that must be satisfied before the insurer is obliged to pay a claim; breach relieves the insurer of liability for that claim.

Subrogation

The insurer's right, after indemnifying the insured, to pursue third parties liable for the loss in the insured's name, subject to full indemnity.

Contribution between insurers

Where two or more policies cover the same interest, peril and subject matter, insurers share the loss rateably or by equal shares or independent liability.

Average clause

A property policy provision reducing the claim payment where the sum insured is less than the value at risk: payment equals (sum insured ÷ value) × loss.

Duty of fair presentation

Under the Insurance Act 2015, business insureds must disclose all material circumstances they know or ought to know, and provide sufficient information to alert a prudent insurer.

Material circumstance

A fact or piece of information that would influence the judgement of a prudent insurer in deciding whether to accept the risk and on what terms.

Consumer disclosure duty

Under CIDRA 2012, consumers need only take reasonable care to answer the insurer's questions honestly and accurately; there is no duty of voluntary disclosure.

Proportionate remedy

For non-deliberate breach of fair presentation, the insurer's remedy is proportionate to what it would have done had the information been provided.

Insurable interest

A legal or equitable relationship to the subject matter such that the insured benefits from its preservation or is prejudiced by its loss.

Indemnity principle

The insured should be restored to the pre-loss financial position, no better and no worse, subject to sums insured, deductibles and policy limits.

Valued policy

A policy where the value of the subject matter is agreed at inception; on a total loss the agreed sum is paid regardless of actual value.

Betterment

An improvement in the insured's position following a claim, such as replacing old property with new; the indemnity principle requires it to be adjusted.

Apparent authority

Authority that appears to a third party to have been given to an agent by the principal, even where actual authority is absent; the principal is bound.

Ratification

Retrospective adoption by a principal of an unauthorised act performed by an agent, giving the act the effect of prior authority.

Insurance broker

An intermediary acting on behalf of the insured, advising on cover and presenting the risk to insurers, owing duties of care and disclosure.

Appointed representative

A firm or individual that carries on regulated activity as agent for an authorised principal firm, which accepts responsibility for the activity.

Caparo three-stage test

A duty of care arises where harm is foreseeable, there is proximity between the parties, and it is fair, just and reasonable to impose a duty.

But-for test

Factual causation test: the defendant is liable only if the damage would not have occurred but for their breach of duty.

Contributory negligence

A claimant's own failure to take reasonable care for their safety, which reduces damages under the Law Reform (Contributory Negligence) Act 1945.

Vicarious liability

An employer's liability for torts committed by an employee in the course of employment, applying the close connection test.

Consumer Duty

FCA Principle 2A requiring firms to act to deliver good outcomes for retail customers across four outcomes: products, price and value, understanding, and support.

Financial Ombudsman Service

The statutory dispute resolution scheme for complaints against regulated firms; it can award compensation up to the statutory limit.

Senior Managers and Certification Regime

A regime imposing prescribed responsibilities, statements of responsibilities and fitness and propriety requirements on senior staff and certified employees.

Financial promotions rule

Promotions must be fair, clear and not misleading, and must be approved by an authorised firm with adequate systems and controls.

Vulnerable customer

A customer with characteristics of vulnerability such as poor health, life events, low resilience or low capability, requiring firms to adapt their approach.