AFM231 Lecture Notes - Lecture 14: Insurable Interest, Inverse Relation, Co-Insurance
20 Mar 2016
School
Department
Course
Professor
Document Summary
Insurance introduction: essential legal risk management mechanism. Insurance companies must be licensed: meet specific initial and ongoing regulatory requirements to do business. Legislation regulates contracts mandating certain provisions/terms: different regulatory environments may take different approaches. Cannot offer insurance policies to the public without getting approved and getting a license to provide insurance products to the public. Life and property must be watched because its based on reliability and it is very easy to not be reliable. Parties are agreeing to pay amounts of money to another party who is agreeing to compensate them for their loss should something happen. Could have intentional abuse and accident error/abuse. Insurance companies need to be properly regulated and capitalized to ensure that the company has the money they need to meet the claims of their clients: governments run insurance differently in every jurisdiction. Steep learning curve in terms of insurance contracts. Insurance introduction: key purpose, the shifting of risk, not always available.
