Insurance Law and Regulation
Legal framework
Insurance contracts are governed by general contract law plus insurance-specific statute and regulation. Candidates must know the elements of a valid contract - offer, acceptance, consideration (the premium), intention to create legal relations, and capacity - and how they map to the proposal, cover note, and policy schedule. Key statutory concepts include duty of fair presentation of risk, warranties and conditions, cooling-off periods, and disclosure and cancellation rights. Consumer protection rules typically impose clearer, fairer obligations on insurers than on commercial buyers.
Regulation and conduct
Regulators require insurers and intermediaries to be authorised, maintain solvency and capital adequacy, treat customers fairly, and handle complaints through defined processes and ombudsman schemes. Know the distinction between prudential regulation (solvency, governance) and conduct regulation (fair treatment, disclosure, complaints). Anti-money-laundering, data protection, and sanctions screening are cross-cutting duties.
Traps
Questions test timing (when cover attaches, when a cooling-off period runs), the difference between a condition precedent (must be met before liability arises) and a condition subsequent, and the effect of breach on different clause types. Do not assume a warranty breach automatically voids the whole policy - remedies are now often proportionate. Distinguish regulation from legislation.
Worked example
A consumer buys a policy online and cancels within the cooling-off period. Because cancellation is a statutory/regulatory right, the insurer refunds premium (less any cover provided), regardless of the general contract terms.