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NECO INSURANCE Answers 2022

NECO INSURANCE Answers 2022

*NUMBER 2*

(i)RISK AVOIDANCE* is a way for businesses to reduce their level of risk by not engaging in certain high-risk activities. While it’s impossible to eliminate all risks, a risk avoidance strategy can help prevent some losses from happening. It’s an important part of any risk management plan and a way to protect your organization’s assets from potential losses.

“`2ii)“` *RISK REDUCTION* deals with mitigating potential losses through more of a staggered approach. For example, suppose an investor already owns oil stocks. The two factors discussed earlier are still relevant: there is political risk associated with the production of oil, and oil stocks often have a high level of unsystematic risk.

“`2iv)“` *RISK TRANSFER* refers to a risk management technique in which risk is transferred to a third party. In other words, risk transfer involves one party assuming the liabilities of another party. Purchasing insurance is a common example of transferring risk from an individual or entity to an insurance company.

“`2v)“` *A CAPTIVE INSURANCE* company is a wholly-owned subsidiary insurer that provides risk-mitigation services for its parent company or a group of related companies. A captive insurance company may be formed if the parent company cannot find a suitable outside firm to insure them against particular business risks, if the premiums paid to the captive insurer create tax savings, if the insurance provided is more affordable, or if it offers better coverage for the parent company’s risks.

*INSURANCE*

*Number 1*

*Features of insurance contract*

i.) Insurable interest

ii.) Contract of ‘Uberrimae fidei’ or Contract of Utmost good faith

iii.) Indemni0

iv.) Mitigation of Loss

V) Causa proxima

vi.) Causa proxima

*INSURANCE*

*Number 1*

*Features of insurance contract*

i.) Insurable interest

ii.) Contract of ‘Uberrimae fidei’ or Contract of Utmost good faith

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iii.) Indemni0

iv.) Mitigation of Loss

V) Causa proxima

vi.) Subrogation

EXPLANATION

*INSURABLE INTEREST*

A person can enter into a contract of insurance only when he has some insurable interest on the life or property which is insured. Insurable interest basically means that the non-existence or any injury or damage caused to a property or life should bring loss which can be estimated in terms of money.

*Contract of ‘Uberrimae fidei’ or Contract of Utmost good faith*

Both the parties to the contract, that is the insured and the insurer have to disclose all the facts connected with the insurance contract. Non-disclosure of facts or declaration of false information will make the contract null and void.

*INDEMNI0*

Life insurance is different from contract of indemnity. It is a contingent contract where the event death is certain to take place but it is a question of time. Hence, the insurance company cannot guarantee against death or prevent death but can agree to pay a stipulated sum in the event of death happening at an earlier date than agreed upon.

*MITIGATION OF LOSS*

Though insurance aims at minimizing the loss, it is expected that every party to the contract of insurance should take adequate steps to minimize the loss. Thus, when a fire accident takes place in a match factory, the insured should minimize the loss by taking adequate preventive measures. He cannot allow the goods to be destroyed by fire simply because he has insured them.

*CAUSA PROXIMA*

The cause for the accident should be a direct cause for which an insurance is taken and it should not be a remote cause. In other words, the insurance company will pay compensation to the insured only when the cause of accident is directly related to the loss. If the loss is the result of two causes, one must look into the nearest cause and ascertain whether that cause is insured.

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*SUBROGATION*

Subrogation means stepping into the shoes of another person. When the insurance company pays full compensation to the insured, it takes over the ownership of the goods insured and will enjoy complete right of taking necessary legal steps to claim compensation from such persons who are responsible for the loss suffered.

*INSURANCE*

3a) Insurance certificate is a document used so that coverage is provided to cover loss or damage to cargo while in transit when insurance is placed against an open marine cargo policy.

*NECO INSURANCE SOLUTION*

(1) *PICK ONLY 5*

Features of Insurance Contract:

(i) Legality.

(ii) Aleatory.

(iii) .Warranties.

(iv) Insurable interest.

(v) Utmost good faith.

(vi)Adhesion.

(vii) Personal contract.

(viii)Acceptance.

(ix) Consideration.

(x) Intention to create ‘legal relations/obligations

(xi) Offer.

(xii) Contractual capacity.

(i) ‘Legality: This relates to the basis or the contents of the contract which must•be lawful otherwise it-would be treated as illegal. contract.

(ii) Aleatory: Insurance contract is aleatory because an insured may collect a large amount or nothing in return for the premium paid. in an ordinary contract, the amounts to be exchanged are .intended to the roughly equal.

(iii) Warranties: Warranties are known as certain things which the insured undertakes that shall or shall not,be done, or certain state of affairs that must.or must not exist. It is a fundamental condition in insurance and any breach, whether material or not is sufficient to discharge the insurer from liabilities.

(iv) Insurable Interest: It is the legal right to insure arising out of the financial relationship between the insured and the subject matter of insurance which is recognized at law. There is no valid insurance contract if there is not insurable interest,

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(v) Utmost Good Faith: This implies that the two parties to the insurance contract should tell each other willingly all the truth they know about the Contract. It is all about being honest and transparent.

(vi) Adhesion: This is .a fundamental feature of insurance contract which says that the insurance company should write the contract and the insured must either take it or leave it. Simply put, the insured which is the receiving party does not have the option of negotiating, revising or deleting any part or provisions of the contract.

(vii) Personal Contract: insurance is a personal contract because it is an agreement between the insurer and the insured and it is • not transferrable (except in life.and marine insurance) without the consent of the insurer.

(viii) ‘Acceptance: This is when an insurer agrees to receive a person’s application for insurance.

(ix) Consideration: In insurance, the insurance company’s offer to make a loss good is a consideration in exchange for payment of premium by the insured.

(x) Intention to Create Legal Relations/Obligation: A valid contract must be supported with an intention that supports the existence of a legal relations.

(xi) Offer: An offer in insurance is a proposal to buy a policy from an insurer. An offer generally may be made

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