Chapter6+(T)or(F) on the cover note


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Chapter6+(T)or(F) on the cover note

  1. 1. Chapter 6 The acceptance & the issuance of the policy of insuranceComplete Offer + Acceptance = Complete Insurance.ContractInsurance contract is one of the formal •contracts , written in an instrument called.” ”Policy
  2. 2. The PolicyThe policy contains • All terms of .Agreements Description of the risk subject to the . insurance Circumstances .affecting the risk
  3. 3. The Policy According to Art 750 of the Egyptian •civil code it is considered as void thefollowing terms if provided in the: insurance policy All the printed conditions which are not -1 prominently projected and which are related to one .of the conditions leading to the annulment of right An arbitration clause, if it is set in the policy as -2 part of its printed general conditions, and not in the form of a special agreement independent from the .general conditions All other arbitrary conditions, the violation -3 of which has had no effect on the occurrence .of the insured accident
  4. 4. The methods of Acceptance
  5. 5. The methods of Acceptance Issuance of Conduct of insurance the policy insurer Receiving Formal theAcceptance Premium
  6. 6. The methods of Acceptance Formal AcceptanceIt means that the parties intended to be bound prior •to the time the policy is delivered, delivery is not.essentialThe contract of insurance takes effect without •delivery ,it takes effect when the insurer declares bound either orally or in writing
  7. 7. The methods of Acceptance Issuance of insurance policyIssuance of insurance policy = Insurer has accepted the •proposal form there is no need that the policy materially deliveredThe difficulty arises if the contract is manually delivered or •.(constructively delivered ( material deliveryThe policy is considered as delivered & accepted regardless •. the type of the delivery once the delivery is valid
  8. 8. : The conditions of valid delivery areA- The intention of the parties executing the policy to.give it legal effect as a complete legal instrumentB- This intention must be evidenced by some words oracts indicating that the insurer has put the instrumentbeyond his legal control , not necessarily beyond his.physical controlC- . The insured must be informed about this intentionDr‘s Point Of View: the conclusion of the contract • in this case wouldn‘t be affected if the insured didn‘t treat the delivery as an acceptance, or he negotiated.But if the policy departs from the proposal byintroducing a new term , it won‘t be considered as anacceptance but a counter offer needs to be accepted by
  9. 9. The methods of Acceptance Receiving the premiumIn the case of the insurer has accepted to receive •the premium and retained it –Although the policyhasn‘t issued yet– this indicates implicit acceptance.of the proposal formIn such case, the insurer isn‘t entitled to refuse the •issuance of the policy and he will be liable to pay .damages at the happening of the risk to the insured
  10. 10. The methods of Acceptance Conduct of the insurerSometimes, in spite of the absence of an issued •policy and payment of the premium by the insured, theacceptance of the insurer can be concluded from thesurrounding circumstances such as: 1- The meredemand for the premium by the insurer , 2- Thenomination of an expert to evaluate the damages.suffered by the insured
  11. 11. The Effect Of AcceptanceThus by the acceptance, the parties become •bound by the contract, and can‘t withdraw. from, except by mutual consentThe contract becomes binding from the date •of the insurer acceptance. And the insuredbecomes obliged to pay the premium fixed by. the terms of the contractFor the insurer it is his duty to issue the •policy and to accept the premium when it ispaid, and to pay damages suffered by the. insured
  12. 12. Cover note is one of the •.formal contractsThis statement is false, because,-Issuing the cover note in a formaldocument is not necessary, it mightbe issued informally by sending aletter to the insured by the company.head office
  13. 13. the insurer may intimate his •rejection of the proposal form to.the insured through phoneThis statement is false, because the -insurer is obliged to intimate hisrejection of the proposal form to the.insured in writing only not orally
  14. 14. In all cases, the cover note of a •fixed period comes to an end by.the expiration of this periodThis statement is false, because it is not -necessary that the cover note remain inforce during its whole fixed period, since itmay come to an end in an earlier time bythe acceptance of the insurer )issuing thepolicy(, or by the declaration of therejection of the proposal form by the . insurer to the insured inwriting
  15. 15. Acceptance of the insurer is •the only way to end the cover.noteThis statement is false, because the cover-note comes to an end by three ways. Thefirst one is the acceptance of the insurer)Represented in issuing the policy(. Thesecond one is the expiration of the periodspecified in the cover note without issuingthe policy )implicit rejection(. The thirdone is the declaration of the rejection ofthe proposal form by the insurer to the . insured inwriting
  16. 16. the cover note is one of the •.insurance contract componentsThis statement is false, because the cover-note represents an insurance contract anddetermines the rights and duties of itsparties in the event of loss or injuries,taking place during its validation.Therefore it is not one of the insurance contract components but it is.a separated independent contract