Section 45 of the Insurance Act

Section 45 of the Insurance Act

It lays down that no policy can be challenged after two years from the date of policy on the ground that any statement mode in the proposal or in any report of the medical  officer or any document was inaccurate or false unless it is material to disclose and it was fraudulently made and the policy holder knows at the time that it was false or he suppressed the fact material to be disclosed, provided that nothing in that section prevent the insurer from calling for proof of age of assured or to adjust the rate of premium.

In life Insurance Corporation V/s Parvathavardhini

One policy in March 1955 Rs. 20000/-

Second policy in May 1955 Rs.30000/-

Husband of Parvathvardhini died in May 1955 of  Hearth trouble.

It was held by the court that as the company failed to examine the doctors the statement made by the doctors in their reports have to be taken as true unless evidence is adduced to contrary.

The failure to examine the doctors and the other officers of the corporation or company shall make the court draw an adverse inference against the company.

In All India General Insurance Co. Vs. SP Maheshwari

It has been held that the insurance company is entitled to avoid the policy on the grounds of deliberate misrepresentation about a drinking habit and non-discloser of venereal disease.

Mithrolal vs. Life Insurance Corporation

If a period of 2 years has expired from the date of which the policy of life insurance was effected that policy cannot be called in question by an insurer on the ground that statement made in proposal for insurance on an any report of a medical officer or referee or a friend of insured or in any other documents leading to issue of the policy was inaccurate or false.

Circumstances affecting the Risk in Life Insurance

Circumstances affecting  the Risk in Life Insurance

Risk in life insurance is the risk of death at an early date due to disease or distinguished from accident

In. Thomson vs. Weems 1884 9 AC 671,681

 Lord Blackburn observed

“Those whose business is to insure lives calculate on the average rate of mortality and charge a premium which on that average will prevent their being loses.

a.       Age of the proponent.

b.      His family history.

c.       Personal health

d.      Moral history including habits of life past and present.

e.      Geographical position & occupation

Age of the Proponent

                Age is an important material fact in life insurance as the rate of premium depends on theage of the assured.

Case law:-Alliance and strutgarter Vs. Hemantha Kumar  AIR 1938 Cal 641

Once it is written

Then it is admitted

In case of M.K. Shah V. Yorkshire Insurance Co. AIR 1938 Bom 161

Once the age is admitted by the insurer then correctness of the age cannot be questioned unless the insurer can prove that his admission was procured by the fraud of the assured.

{Section 45 of the Insurance Act 1938 says After 2 years company have no right to reopen the things.}

The section generally provides that the correctness of a representation shall not be questioned by an insurer after two years but the proviso specifically makes an exception with reference to the representation of the age in a proposal form.

·         According to this the insurer is entitled to call for proof of the age from the assured at any time if the same had not been proved and admitted as true by an endorsement on the policy notwithstanding the fact that the requisition of the proof has been made by insurer after two years.

·         When once a date is given as date of birth and on subsequesnt verification after the issue of the policy the date is found to be wrong it may result in either

Overstatement of Age :---------- Overage

Understatement of Age:---------Underage

In either case the original representation becomes a misrepresentation, but effect on the validity of the policy is different.

Ø  If it is overstatement:- it is considered to be an innocent misrepresentation as it will be against the interest of the maker and so in such cases the validity of the policy is not affected. In such cases if the insurer accepts the proof of age, he can be compelled to refund the excess  payment towards the premium and to adjust the rate for future payment according to the proved age.

Ø  But when it turns out to be an understatement of age, if is proved gross understatement or is proved to have been made willfully, it amounts to fraud and the policy become voidable.

1.       The sum assured may be reduced to such amount

2.       The assured may be required if he wants to continue the policy for the entire insured amount to pay the difference of premium with interest.

Hemmin’s v/s Scetore (1905) ch 365

Misstated age as 41 years through in fact she was at that time forty-four years, of age. This fact was brought  to notice of the insurers in 1997 and inspite of that the insurers accepted the premiums for two subsequent year later they demanded form the assignee a highter rate of premium ande also the difference of premiums accumulate to date at the revised rate premium and the insurers refused to receive the same.

                If after becoming acquainted with a breach of warranty the office continue to treat the policy as valid it will be held to have waived the breach.

Family History

                The risk in life policies the assured and heredity throws sufficient light and play an important role in the determination or the probable longevity of a person.

                In Asia Assurance Company V/s Kartiya Devi 1936 Cal 437 The total numbers of bothers and sisters had to be filled in one column and the actual number alive in another column. The assured filled the first column but left the other b lank. It was helf that answer amounted to suppression of truth and hence amounted to misrepresentation and the policy was void.

Personal Health and Moral History

                The habits of life, past and present and which tend to shorten the life must be disclosed ,e.g. the use of opium, tobacco or alcohol.

·         The present state of health is important.

·         The past illness also become important

·         Regulat habits regarding food, sleep etc. tend to increase the longevity.

Geographical Position

        The place where the applicant lives is important as climate and environment have an appreciable effect on one’s health. Unhealthy surrounding  have  a  tendency to shorten the life.  Further, the particular, place may be subject to earthquake, volcanoes and floods.

        Huguenin v/s Rayley Where the assured gave his residential address but actually he was not there at that time. It was held that the omission of this fact was fatal to the policy and the insurance company was not liable.

Occupation

If it is a dangerous occupation like a soldier, sailor, airman or workman in an ammunition factory the insurers charge a higher rate of premium.

Sociometry

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Sociometry

Inlegal Research, the research has often to study group behaviors.

The sociometic technique has been developed by J.L Moreno, in his book “We shall Survive’ to study the closed Community.

Sociometry is the measure of assessing the attractions and repulsions within a given group.

The legal research report is the statement adopted and fingings arrived at tby the researcher of a legal problem.

It is only a brief statement of most significant facts that are necessary for understanding the generalizations drawn by the investigator.

Requirement of the Sociometric test

Moreno has developed the following requirement of the sociometiric test

1.     The limits of the group should be indicated to the subject.

2.     The subject should be permitted and unlimited number of choices or rejections.

3.     The subject shouldbe asked to indicate the individuals they choose or reject in terms of specific criteria.

4.     Results of the Sociometric questions should be used to restructure the group.

5.     The subject should be permitted to make their choices and rejection privately without other members of the group being able to identify the responses and

6.     The questions used should be ranged to the level of understanding of the members of the group.

Characteristics of a good Sociometric scale

1.     Reliability

2.     Validity

3.     Simplicity

4.     Universality

5.     Practicability

6.     Based on norms

7.     Properly weighed

 

Socio-metirc tool that make it a desirable and useful instrument.

1.     The subjects should express themselves spontaneously in their choice of companion.

2.     Directions should be clear about tools and situations and methods of recording choices.

3.     The confidential nature of choices made should be emphasized

4.     Each student would have a companion out of the choices given by him.

5.     The word test cannot be used anywhere because it is associated with right and wrong answer.

TECHNIQUES OF SOCIOMETRY

1.     Sociometricself rating or related analyse

2.     Scaling method

3.     Group preference record

4.     Multinational Sociometic Survey.

5.     Estimate of time

6.     Guess who

Insurance Law and essential ingredients of a valid Insurance Contract

Q. Discuss the nature of Insurance Contract. Explain the essential ingredients of a valid Insurance Contract?

Ans. Nature of Insurance :-

                                                Hindu philosophy gives the axiomatic truth of the nature of insurance ‘YatBhavathi tat nasyathi’ which means whatever is created will be destroyed.

Risk is inevitable in life.

Business is a course of life, so in life and business there lie a variety of risks. Risk is closely connected with ownership. The owner want to save themselves from risk and out of this desire the business of insurance born.

Ø The nature of insurance depends upon the nature of the risk sought to be protected.

The chief variety of contract are :-

1.     Life

2.     Fire

3.     Marine

In modern time third party insurance .

v -The death of an individual is a certain event but the certainty lies in the time when it happens.

v The fundamental function of insurance is to shift the loss suffered by a sole individual to a willing and capable professional risk bearer.

Ø Thus the institution of insurance serve a two fold purpose.:-

ü The immediate and direct object is to protect the individual assured form any loss or damages to his life or property by distributing the loss among a large number of persons through the media of the professional risk bearers, the insurers, thus serving also the sociological purpose.

ü The far sighted and long-range purpose is to accelerate the economic growth of the nation.

Essential ingredient of a valid Insurance Contract.

a.     An agreement

Section 2(h) of contract Act.:- Agreement enforceable by law is contract.

LIC VsKamalvathi 1984(2)SCC 719 a cheque for the premium is sent and the money is received and retained till after the death of the insured.

b.     Competency of Parties

Compentency of the Insured.

Mohoribibi vs. Dharmo Das Ghose.

In India ,  a Contract by a minor is not merely voidable but is altogether void.

Chandulal v/s IT commissioner

Supreme court held that in such cases in substance the contract of insurance between child father and the LIC is a contract of life insurance. With regard to the life of the child who is the insured, and the clauses in the policy regarding return of premiums to the proposer are merely ancillary or subordinate to the main purpose. The idea of the policy is to introduce the child into the insurance habit.

Coparcener in a Hindu Joint Family

c.      Free Consent

Two positive element & 3 negative elements

Sec. 14 of contract :- Consent is not free when it is obtained by

i.                    Coercion

ii.                  Undue influence

iii.                Fraud

iv.               Misrepresentation

v.                 Or mistake.

d.     Indeminity:- Every contract of insurance, except life assurance, is a contract of indeminity.

e.     Duty of Disclosure

f.       Uberrima Fides

(Utmost Good Faith)

g.     Policy---Cover note

h.     Insurable Interest

i.       Contractual relationship

INDUCTIVE METHOD OF RESEARCH

INDUCTIVE METHOD OF RESEARCH

Inductive method of research :

Induction is the most frequently used method of scientific research. Induction is a

process of reasoning from particular cases to whole group of cases from specific

instances to general rules. The inductive method is also known as historical, empirical

and a posseriori method, It tries to remove the gulf between theory and practice. This

method examines various causes one after another and tries to establish casual

relations between them. General principles are laid down after examining a large

number of special instances or facts. The method is said to be ‘empirical’ because the

formulation of principle is made only after an extensive indicative argument does not

establish the conclusion conclusively. The premise of a valid argument may be true, but

the conclusion may still be false. Its premise only supports the conclusion but it does not

make the latter certain.

(iii) Merits of inductive method :

1. More realistic: This method is more realistic because it studies the changes in

2. Possibility of verification: The method is more useful because its prepositions can be

3. Proper attention to complexities: This method takes full note of the complex

4. Dynamic approach: This method takes into consideration the changeable nature of

(iv) Demerits of inductive method :

1. It is a difficult method. This method cannot be used by a beginner or a common man

conditions surrounding the social activities of man and their effect on social activities

is analyzed deeply.

tested and verified easily.

relationship found in actual life and examines them carefully.

assumptions. It does not consider facts to be stable. It is a dynamic method.

2. Danger of bias: The propositions obtained through this method are based upon data

3. Limited scope of verification: Since the propositions obtained through this method

4. Limited use in socio-legal studies: This method is commonly used for lifeless objects

because it is impossible for an ordinary person to collect facts, study them and derive

some conclusions out of them. The cost is too much for him.

collected by investigators. Therefore, there is a danger of investigator’s bias entering

into propositions.

are based on a few facts, the universal applicability of these propositions is always in

doubt.

of the physical science. In socio-legal studies, we study a man’s problems. As such

the method has limited used.

If anyone asks which method is preferred, the answer is both. Prof. Marshall says

“Induction and deduction are both needed for scientific study as right and left foot for

walking.

Induction operates on faith that in the course of things for a long time is a basic

and regularity evidenced. Surely enough for the inference that it will continue in the

future. If the premise and conclusion in the logical case, are both known, some

probability relations maybe established between them and this may serve as a

paradigm of an inductive inference. Inductive explanations also have explanandum and

explanans. The explanandum is generally probable. Explanandum cannot be deducted

from the explanans with certainty. The explanadnum is implied by the explansns. The

explanans support or provide evidence for the explanandum but does not make the

latter certain. The explanans can be true and the explanandum can be false in inductive

explanations. Inductive explanations explain either the probability of individual evens or

statistical generalizations.

Inductive examines the particular phenomena and discovers from them the

general law. There are two laws which binds the process of induction, i.e., the law of

universal causation and the law of uniformity of nature. Perfect induction is a method of

arriving at a universal proposition after taking into consideration of all the individual

instances of phenomena under investigation.

Induction argument derives a generalized conclusion on the basis of particulars

which are often empirically derived observations. The premise of an inductive argument

makes the conclusion probable, not certain. The inductive approach relies on the

scientific discovery of facts. One characteristic of inductive argument is that it

establishes a conclusion with a content which goes beyond its premise. From the

observation of sample, an inference is made about a whole population. This is called

the ‘inductive leap’, jumping from the premise, which relates to an observed sample, to

the conclusion which concerns with entire population. The greater the number of

representative units in the premise of observed in the sample, the smaller is the

inductive leap. The premise of a heap of fats. Better than either the spider or an ant is

the bee, which selectively gathers pollen and transforms it into honey. To be a bee, one

has to mingle both induction and deduction in intricate way.

The combination of induction and deduction is necessary for obtaining true

knowledge because the testing of the truth or validity of a set of propositions depends

upon demonstrating that the consequences deduced from those propositions are

observable.

Through observations and inductive reasoning we accumulate knowledge

consisting of facts, concepts and empirical generalizations. This is not necessarily true

knowledge. The next step makes use of deductive reasoning. In this step a theoretical

model is constructed from known generalizations and other assumptions, the

hypotheses are deduced from the mode, Hypotheses are propositions  which are

deduced from theoretical models and whose truth has be tested through observation.

The process of constructing the theoretical model and deducing hypotheses from it is

entirely based on reasoning. To complete the study, however, hypotheses have now to

be tested through observation. If the hypotheses are validated then it is to be accepted

that the theoretical model from which the hypotheses have been deduced is also true. It

then becomes part of the theoretical knowledge or true knowledge. Thus we succeed in

acquiring knowledge about the true reality through an investigation of the empirical

reality.

The above approach of study starts with induction, is followed with deduction and

then ends up, again with induction. Studies need not always begin with observation. If

there are already a sufficient number of tested propositions, one can straightaway

formulate a theoretical model and deduce hypotheses and then test the hypotheses with

observation. This approach of study starts with reasoning (deduction) and ends up with

observation (induction). However, in either of these approaches both induction and

deduction are involved.