Category: Insurance

Introduction

The Australian insurance industry is divided into three parts. There is life, general and health insurance. Australian law that is responsible for the regulation and guidance of insurance policy in Australia has two main acts that it refers to. This is the Insurance Act of 1973 and the Insurance Contracts Act of 1984 that are the main cornerstones of Australian insurance law. However, there are other legislations that have been ratified by other states within the country that provide different insurance cover for all the individuals in the community (Lewis and Mann, 2003).

There are different provisions that determine when it is the correct time to get relief from an insurance policy under the insurance law of Australia. The aim of this essay therefore is to find out the different laws that are present with regards to insurance, when an insurer has the right to get relief from his or her insurance policy and if he or she is covered or not. Some of the insurance policies tend to claim that they do cover everything. In this respect therefore, what are their extents and does the location of the insurer really matter during such a situation and how much information is to be provided by the insured with reference to the Insurance Contracts Act of 1984(Lewis and Mann, 2003).

Insurable Interests and Insurance contracts

The Insurance Contract act of 1984 is an act that is placed by Australian government on the terms and provision of insurance-by-insurance companies. The Insurance Contracts Acts of 1984 contains the different insurance policies, the standard cover provisions, the extent of each cover and when a given insurer is to get relief or not and circumstances that can make the insurance policy invalid (Latimer, 2011).

According to Insurance Contracts Act of 1984 act, before any individual enters into any insurance policy, it is their duty to disclose to the insuring company any details they may know or should know concerning the decision whether to accept the risk of insurance and if so on what terms and conditions. The same duty applies before the policy is verified or reinstated. However, the insurer does not require disclosing any matter that diminishes the risk, is common knowledge, and is an ordinary course of business that is ought to be known. If these duties are not complied with then the contract entered, under the Insurance contract act of 1984, is not valid and the insuring company may default the policy (Australian Government [AG], 1984).

Insurance basics state that the insurer covers the insured and in the event of any circumstances unknown to the insured, the insurer is supposed to pay relief to the insured. The insured to be covered should pay some premium to the insurer and must provide them with all needed information when required. Therefore, an insurance cover is a binding contract between these two parties and follows the principles of contract law.

Insurable interest must be there as insurer is paid premium for covering the insured. The insured benefits from the policy as loss of the item or services insured can be recovered though a claim. For example a home owner has insurable interest on his house. This concept of insurable interest helps to distinguish wagering and insurance contracts (Butt, 1986).In Macuara v. Northern Assurance Co. Ltd2 an assignment of timber was made by Macuara to a limited company which he formed and controlled. The timber however was insured in his own name. Subsequently, a fire destroyed the timber and Macuara himself tried to recover the loss from the insurance company. The Court held that he had no insurable interest as the timber was owned by the company. Macuara had no legal or equitable relation to the timber. The company would have succeeded had it had its own policy (Butt, 1986).In sections 16,17 and 18 of the Insurance Contracts Act alters the common laws required for any insurable interest to exit.

In section 86 of the Life Insurance Act of 1945 it goes out further to set out when other persons can have an insurable interest in another life. This further highlighted in the Insurance Contracts Act of 1984, section 19 is about assurance whereby an event is bound to happen, for example, in life assurance the attainment of the age of 60 or earlier death (AG, 1984).For contracts of indemnity insurance the insured must have the insurable interest at the time of the loss. With regards to life policies the interest needs to exist when the contract is made. Tenants and purchasers of land have equitable rights and interests to the property that they do possess and the landlord or owners can not forcefully do anything to them. They have to follow the law as they have entered into a contract with the occupants of their properties.

In the utmost good faith as dictated in the doctrine of utmost good faith found in the Insurance contract act of 1984, it is the principle of both parties of the contract to provide the necessary required information na failing to do that might result in breach of the contract. Also the doctrine of duty of disclosure by both parties is required by the act. With these principles being followed by the insurer and the insured there will be good grounds for insurable interests by both parties (AG, 1984).

Conclusion

In concluding, the insured needs to be genuine in the terms of his insurance cover as stated by the different laws in regards to his insurance cover or risks involved. It is further established by ownership or possession. A person might not have exclusive right to a property that he has signed for as illustrated in the case Macaura v Northern Assurance Co Ltd [1925] AC 619, where it was held that the insurable interest does not have to be present at the time of the loss. We have also seen that other people with only minimal rights can also insurable interests due to the temporary contracts that they have entered.

Professional Indemnity Insurance

Indemnity is an insurance principle that aims at making sure that the insured does not come out from an insurance claim better than he was, that is, the insured is not supposed to make a profit from the cover. For instance if Tom has insured his house against fire, accident or theft, when his house get burnt, he is not entitled for a whole house but just compensation for the damages cause by the fire. If the house was completely burnt down he will receive compensation for the house according to market prices at the time. The indemnity policy can however be negotiated when there is an agreed upon replacement value policies by both parties stating that the insured is to get a greater relief than the actual loss suffered (Butt, 1986).

Professional indemnity insurance for liability covers between partners with issues to deal with financial consequences in case of professional negligence, professional breach of duty due to neglect, error or omission. Indemnity provides cover for any legal representation and other costs incurred in the defense of any claim. Any professional cannot ignore professional negligence allegations. These allegations must be defended in a court of law or otherwise admitted with heavy cost implications in either case (Ace Insurance Limited [AIL], 2010).

In our we have a proposal for a partnership professional indemnity policy whereby the two partners entered into a contract with the firm but one partner was aware of possible claim with the firm while the other firm was ignorant. Due to this fact, the second client cannot make claims against the firm in case of any short negligence on the firms’ side. An indemnity is supposed to protect and at the same time benefit the client but in this case it is not so. Therefore, liability claim by the second partner may be tricky.

A liability clause in an indemnity is applicable where a firm is a sole proprietorship or a partnership. In our case, we have a partnership whereby the liability is supposed to be shared amongst them and this continues even when the firm is non-existent until the contract ends. The individual in this partnership must prove negligence of the other partner to claim liability. The claim might be in the form of contract or tort. A claim brought in tort the plaintiff, in this case, must prove that the other partner owed him a duty of care, the partner breached that duty or that the plaintiff suffered financial loss as a direct result of that breach. If an allegation of negligence is upheld, then the defendant is bound to be liable for the losses incurred by the plaintiff and this also include his legal fees. Direct financial losses which are both economic and consequential losses are a must for an indemnity contract unless stated otherwise by both parties in our case it not agreed upon therefore the second client is bound by contract to the other partner for losses (AIL, 2010).

However, an indemnity insurance cover only provides limited cover against claims of professional negligence only unless a contractual limitation clause is agreed between partners. In our case scenario there was no such agreement thus the liability can be of any unlimited amount and this can extend for any considerable amount of time. A professional insurance policy by contrast should have a limit on the amount of money that the insurer is supposed to pay, this is the limit of the indemnity, and it should operate for asset period of time and is subject policies, limitations and exclusions agreed by both parties (Merkin, 2006).

Professional indemnity insurance operates on a claims basis policy. This means that the policy will come into effect at the time the claim is notified by either party irrespective of when the alleged act of negligence took place. The client can bring a case many years after his completion of service as this policy emphasizes the importance of time for this type of cover (Pooley, 1998).

The limit of the indemnity is the maximum amount that other party of the policy can claim from the firm due to professional damages as liabilities. Defense costs are usually paid in addition to the limit of indemnity. Disclosing the limit of indemnity to a client does not lead to a limitation of liability, which can only be achieved by negotiating a specific financial cap as part of the professional’s appointment. Indemnity limit can be in two ways; that is each and every claim cover and the aggregate cover. In our case we have an aggregate cover for each of the partners (Merkin, 2006).

In general, we can say that the insurer has grounds to deny any liability claims by the insured partners. This is because there was no full disclosure by both partners when they entered the contract. Part IV on Disclosures and Misrepresentation section 21 states that it is the duty of the insured to disclose to the insurer any matter known to him before the contract of insurance is entered and this case, one of the partners did not come forward with the information, this a breach of contract. The other client did not offer good representation of his partner and thus the insurer can see it as misrepresentations by both parties and can default in liabilities claims. However, misrepresentation claims by the insurer cannot stand in a court of law. This is because, the other partner can claim ignorance of not knowing what was required of him. According to section 26 of the insurance contract act of 1984, it shows that if the insured did not fully understand the contract in was entering and that the insurer did not make the case clearer to him, he is liable for his claim. Section 28 goes on to further state that if the failure was fraudulent or the misrepresentation was made fraudulently, the insurer may avoid the contract which is not the case for one of the partner as he was ignorant on the matter (AG, 1984).

The insurer can offer liability claims on the one partner who was forthcoming with his claims and the other partner be left out but this is all in utmost good faith as provided in the insurance contract act of 1984. All in all the insurer can decide to give liability claims or not. The partners who entered into the contract did not fully disclose all the information required and this was some misrepresentation in a way.

References

Ace Insurance Limited (2010). ACE Professional indemnity insurance.Sydney: Sage Publications

Australian Government (1984). Insurance Contracts Act. Web.

Balla, A. and Marks, F. (1998). Guidebook to Insurance Law in Australia.Sydney: Sage Publications.

Butt, N. (1989). Supplement to the Standard Contract for Sale of Land in N.S.W. p. 119

Greg, P. (2003). Australian Insurance Law: A First Reference. Chatswoods:LexisNexis Butterworths.

Latimer, P. (2011). Australian Business Law. Sydney: CCH

Mann, P. and Lewis, C. (2003). Annotated Insurance Contracts Act.4. Pyrmont: Lawbook Company.

Merkin, R. (2006). The way forward for UK insurance law (part 1). Web.

Pooley, G. (1998). Formal Review of the Insurance Council of Australia Ltd’s General Insurance Code of Practice. Canberra: Winston Publishers

In order to prevent an offense and draw up a protocol on an administrative offense, the authorized person has the right to apply such a measure to ensure production as the detention of a vehicle. This happens if it is impossible to draw it up on the spot of detecting an administrative offense, ensuring timely and correct consideration of the case and execution of the resolution. In case of violations of the rules of operation, use of the vehicle, and its management, the detention of the vehicle is applied. This is due to placement in the nearest specially designated protected place (in a specialized parking lot), and storage there until the cause of detention is eliminated.

The costs of moving and storing a detained vehicle, with the exception of vehicles, are reimbursed by the person who committed the offense. The cost of storing a detained vehicle is charged for each full hour of its stay in a specialized parking lot from the moment the detained vehicle is placed in a specialized parking lot until it is returned to the owner. Payment for the cost of moving and storing a detained vehicle is carried out within the time limits and at the rates established by the authorized executive authority. The prices of the parking lot owner, which should be involved in payment, should also be taken into account. Thus, attention should also be paid to the fact that Outback Insurance Company was notified by the parking lot owner and by the police. However, it should be noted that the company “took no action to take possession of the vehicle”.

Consequently, they were fully aware of the situation and had to take appropriate measures. The fee for the car storage services should be charged to the owner of the vehicle, who has not fulfilled their obligation to receive the car from the special parking lot, while the storage services have been provided in full. From the analysis of the above legal norms, it follows that legally significant circumstances for the correct resolution of this dispute are determining the number of reimbursable expenses incurred by a person in connection with the storage of a car. However, it should be noted that Outback Insurance Company has the right to demand a revision of the cost of payment in accordance with the median market value. This is necessary in order to assess the correctness of the cost of compensation that Ron Dexter requires.

In addition, it should be taken into account the fact that the car was seized on February 14, and the company received notification only on May 8. This fact is essential in order to understand what rights Outback Insurance Company could lose due to untimely notification. It is important to understand that if the owner applies to a special parking lot for the car’s return on the first day of storage, they will not have to pay for the car’s storage since payment is made for a full day of hold. Thus, the company has the right to request a revision of the cost of storage, which is required by Ron Dexter. The correct solution here is to demand payment from the date of receipt of the notification by the police. The conclusion from this case may be the fact that the Outback Insurance Company must pay the cost of storing the vehicle. However, the requested $15,510 is not a valid and fair amount, since several factors listed above must be taken into account.

Introduction

It is not a secret that health insurance is one of the most sensitive topics in the workplace, as employees are insured with the help of employer-sponsored medical insurance every year. Thus, employer-sponsored health insurance is an integral part of the American health care landscape and is the main component when it comes to employee compensation. It is vital in offering employees reliable care, making sure that their families can afford it. When it comes to the relations between the employer and the employees concerning health insurance, all actions should be agreed upon and coordinated. No matter what authority the employer has in making decisions, the company should know the opinion of the workers in controversial situations, especially when it comes to medical insurance.

Medicaid’s responsibilities

Medicaid is a public insurance program created to provide health coverage to low-income individuals, elders, pregnant women, persons with disabilities. It is jointly funded by the states and the federal government to assist states in providing proper medical care to qualified individuals. Thus, Medicaid programs vary from one state to another, offering modified programs that were formed by the state over time. Medicaid-managed care is an integral part of the program that provides individuals with comprehensive health care plans at a particular cost. Moreover, Medicaid beneficiaries are also involved in the primary care case management plans, which means that each individual involved in the program is eligible to a primary health care provider which is paid by the individual’s managed care contract (Green & Rowell, 2015, p. 542).

Case Study: Request to change the insurance plan

The company was made known that the medical insurance costs would be increasing by 40 percent per month, thus, the company’s president was not sure whether the company could afford it. Instead, a reasonable decision was finding a new insurance company that would provide the same services at a lower cost. Thus, a meeting occurred to explain the main difference between the two insurance plans, and the only difference was the prescription drug benefit (Holley, Jennings & Wolters, 2012, p. 335). A question arises: is such change in the insurance carrier reasonable? On one hand, this decision is practical, as it solves the issue with the company’s funding (the bank loan was to expire and was to be fully paid). Moreover, the new plan was compliant with the contractual language that stated that the company should provide the workers with medical insurance.

On the other hand, the decision about changing the insurance carrier is unreasonable. The main concern of the employees was a questionable prescription card that required a deductible payment before the new plan covered any expenses (Holley, Jennings & Wolters, 2012, p. 335). Nevertheless, this deductible is usually a significant determinant of the health plan richness (the cost-sharing relationship between the health plan and its enrollees). However, employers tend to enroll the high-deductible health care plans, which often result in low premiums. In the majority of states, employees choose not to enroll in them (The Pew Charitable Trusts, 2014, p. 2). Thus, the employee union was not content with the new plan and rejected it completely. The union had the right to decline the decision proposed by the management as it represents the interests of all employees in the most vital questions, and health insurance is one of them.

When it comes to the question of whether or not the employer’s decision was legal, in the absence of a labor union contract (collective bargaining agreement) or an employee benefits agreement, the employer has the complete right to change the insurance policy at any necessary time. However, the employers should give as much advance notice about the change in the insurance policy as possible, although it can sometimes be impossible due to a lack of time for negotiations with insurance companies. Thus, an employer has the right to change the insurance plans for any specific reason without the employee’s notice, although in case of a labor union existing, the employer has to abide by the rules stated in the collective bargaining agreement (Employee Benefits Security Administration, 2014, p. 12).

Conclusion

To sum up the case study, the examined situation is common, as many employers tend to make decisions in favor of the company’s prosperity rather than the employee’s health. Nevertheless, the real change in the insurance plan was not drastic, as the deductible paid by the employees is instrumental in the plan’s richness. However, the decision of the employer to change the medical insurance carrier knowing that the labor union was opposed to it and was expecting further negotiations was unreasonable. When it comes to the relations between the employer and employees concerning any vital question, especially medical insurance, all actions should be coordinated to avoid lawsuits. Thus, no matter what power is assigned to the employer in making decisions, the union and the rights of the employees should be put first.

References

Employee Benefits Security Administration. (2014). Retirement and Health Care Coverage. Questions and Answers for Dislocated Workers. Web.

Green M. A., & Rowell J. C. (2015). Health Insurance: A Guide to Billing and Reimbursement (12^th ed.). Stanford, CT: Cengage Learning.

Holley, W. H., Jennings. K. M., & Wolters, R. S. (2012). The Labor Relations Process (10^th ed.). Mason, OH: South-Western Cengage Learning.

The Pew Charitable Trusts. (2014). State Employee Health Plan Spending: An examination of premiums, cost drivers, and policy approaches.Web.

The insurance sector in Australia plays an important role in the country’s financial service market (Kellam, 2011, p.1). This sector depends on insurance agents and brokers to plan, market and distribute their products and services in the Australian market (Anne, 2010, p.332). However, numerous cases abound where insurance brokers have failed to discharge their duties in a proper way. This paper will focus on one particular case illustrated below.

Con-Stan Industries of Australia Pty Ltd (Con-Stan) solicited services of an insurance broker to advice it on suitable insurance products for a variety of risks. Norwich was selected by the insurance broker to underwrite Con-Stan. The latter that insurance premiums submitted to the brokerage firm failed to submit payment to Norwich. Later on, the brokerage firm went into bankruptcy and Con-Stan was sued for unpaid insurance premiums by Norwich. However, Con-Stan disputed that there was an oblique term in the insurance agreement, as it was obligated only to remit insurance premiums to the broker (Doyle, 2007, p.1). However, the court discovered later that the implied term, contained in the contract, was neither agreed upon by all parties, nor was a standard in the insurance sector. Hence, the failure by the brokerage firm to remit insurance premiums to Norwich did not release Con-Stan’s from its obligations (Doyle, 2007, p.2).

The custom used to draft the contract was not acknowledged by all parties. As a matter of fact, there was no evidence to prove that the inclusion of the implied term in the contract was a professional custom in the insurance sector (Jackman and Faulkner, 2010, p.18). Consequently, there were no indirect terms to satisfy business efficiency, as the assumed implied term was not apparent to the parties and that it could not assume that both parties would have acknowledged the inclusion of the implied term in the agreement (Byrne, 1998, p.18). The court ruled that a term can only be implied in the agreement if the prevailing custom was acknowledged and accepted in the contract by all parties. The contracting parties should not make assumptions that oblique or obscure terms to be implied into contracts. In case they have doubts regarding implications of the implied term, it must be clearly expressed in the contract (Doyle, 2007, p.1).

The obligation for good faith in insurance agreements is not restricted to the obligation of full disclosure of material facts, but is enforced by all relevant parties. This phenomenon has been acknowledged and adopted legislatively as a professional practice in Australia’s insurance industry (Meagher, 2006, p.2). The requirement of good faith in contractual agreements does not require that a party considers the welfare of the other party. However, having given the opportunity costs of the contract, the party is prevented from using contractual powers to recover them. The court deals with the matter by assessing the basis upon which the contract was executed (Meagher, 2006, p.3).

The Australian common law makes it clear that, in a case where an insured party remits payments for premiums to an insurance broker, who becomes bankrupt before the premium is transmitted to the insurer, the insured party is legally responsible to the insurer for the unpaid premiums. In the Con-Stan Industries of Australia Pty Ltd vs. Norwich Winterthur Insurance (Aust), the court ruled that Con-Stan was legally responsible for unpaid premiums to Norwich in spite of the fact that the last one had paid the insurance broker (Anne, 2010, p.347).

Reference List

Anne, T.J. (2010) The regulation of insurance intermediaries in the Australian financial services market. Australian Business Law Review, 38, 332-350.

Byrne, J. (1998) Implied terms in building contracts: Inference or imputation? Web.

Doyle, J. (2007) Con-Stan Industries of Australia vs. Norwich Winterthur (Aust) Limited[1986] 64 ALR 481. Web.

Jackman, I. M. and Faulkner, T. M. (2010) The High Court of Australia: Sydney Office of the Registry on Appeal from the New South Wales Court of Appeal. Sydney: High Court of Australia.

Kellam, J. (2011) Market trends and regulatory framework. Web.

Meagher, D. (2006) Will good faith falter in the High court? Proceedings of the 2006 LxisNexis Professional Development Conference held in Melbourne. Melbourne: Owen Dixon Chambers West.

Facts

The defendant appealed an award to the plaintiff on an insurance premium dispute. The dispute was a result of changes made to the insurance cover policy, by the plaintiff without the consent of the defendant. The plaintiff had sent the policy renewal with changes which the defendant had refused, and as a result, failed to respond to the plaintiff.

The plaintiff subsequently charged the defendant premiums even though he had not responded, and therefore, the defendant failed to pay. The lower court ruled in favor of the plaintiff which lead to the appeal by the defendant who cited that there was no meeting of the mind thus the offer was not accepted. Therefore, the defendant had no contractual obligation to pay the plaintiff.

Issues

1. Was the lower court award to the plaintiff lawful?
2. Does the defendant have a contractual obligation to pay a premium to the plaintiff?
3. Are the changes made by the plaintiff in the insurance coverage contract, legally bidding?
4. Does the failure by the defendant to respond to the plaintiff constitute acceptance of changes in contractual terms?
5. Was there a meeting of the mind between the defendant and the plaintiff with respect to an increase in premium on renewal of insurance cover?

Holding and Rule (Daley)

1. No. The lower court award to the plaintiff was unlawful. The judgment was reversed since the defendant did not accept to renew the revised insurance policy.
2. No. The defendant has no contractual obligation to pay a premium to the plaintiff since there is no evidence of acceptance of the contract. Furthermore, the defendant’s silence can not be interpreted in a court of law as implying acceptance as claimed by the plaintiff.
3. No. The changes to the terms of the contract are not legally binding. First, the contract did not contain a provision for express renewal on the expiry date. As such the continuation of the contract after the expiry is subject to acceptance by the defendant of the offer made by the plaintiff on renewal. There is no evidence to indicate that the defendant accepted the terms of the renewal of the contract.
4. No. The failure by the defendant to respond to the plaintiff cannot be construed as acceptance in a court of law. The defendant had no obligation to speak on the expiry of the insurance contract.
5. NO. There was no meeting of the mind between the contracting parties. The plaintiff refused the defendant’s offer, as well as the defendant, rejected the plaintiff’s counter offer. The communication between the two parties does not entail acceptance of the offer.

Disposition

The defendant’s application is granted. The Judgment is reversed. The court decision was based on the rationale that an offeror in a contract cannot coerce the offeree to speak. Silence can only imply acceptance if there is an express duty to speak. Otherwise, in this case, there is no obligation to speak.

One of the principles of the law of contract states that parties are assumed to be in a bidding contract if there is evidence that the offeree receives valuable service with prior consent and knowledge. This is also lacking in this case. The court, therefore, found reasonable grounds to fault the lower court ruling. The award to the plaintiff lacked legal backing. The appeal court decision implied that the defendant had no contractual obligation to pay insurance premiums that was been sought by the plaintiff.

A landlord is an individual who leases a home to another who is known as; a lessee. It is an owner of the property who yields the right to use the property for a particular point in time in exchange for the reception of the rental fee. A tenant on the other hand is a person to whom a property-owner allows impermanent and restricted use of land or a division of a house or property, typically in substitute for payment. The agreement for this bargain is called a lease. Insurance can be defined as, “A system under which individuals, businesses, and other organizations or entities, in exchange for payment of a sum of money (called a premium), are guaranteed compensation for losses resulting from certain perils under specified conditions in a contract” (Glossary of Terms, 2007).

There are certain responsibilities of the landlords as well as the tenants that need to be understood by the Greens before buying an apartment building. The first and foremost rule is to be clear about everything. This includes the limitations, the use of property, any sustainable damage and its consequences, etc. The expected regulation of landlord responsibility is that a property owner will be detained answerable for any goings-on on his property if the lessor at the time of the lease approved to such commotion or had an idea that it would be carried out, and the lessor also had an or idea had the motive to know that it would inevitably entail such a difficult to deal with a threat or that special safety measures that were essential to security would not be taken. In order to be apprehended as accountable for damage on the property, the landlord or property manager must have been neglectful in preserving the property, and that carelessness must have been the cause of the damage. Landowners in most states to a certain degree are held legally responsible for the safeguard of their tenants from the hands of probable attackers and burglars and from the acts of crimes being committed by fellow residents. Landlords should ensure the protection of the neighborhood from the illegal activities of their tenants, such as drug dealing. These legal duties stanch from building codes, decrees, rulings, and, most often, decisions of the court. The liability of the tenant is somewhat the same as that of debt. Most often than not landlords charge tenant liability for any harm to the property, which means that the charge of fixing something that they believe has been damaged by the tenant. The insurance papers of the house are usually kept by the landlords, but tenants also need Tenant Insurance.

Tenant Insurance permits the tenant to restore their possessions including furnishings, garments, pieces of equipment etc if it is damaged, stolen or completely destroyed. It further envelops damages that happen to other people or their belongings for the time period that they spend at the tenants and then tenants are held responsible for it. Moreover, it takes into consideration the extra living everyday expenditure if the tenants are required to go away from their rental place due to an insured loss. It also offers exposure for their individual accountability if they unintentionally cause harm to an adjacent unit. Tenant insurance also guarantees insurance for the personal property of the tenants for the time that they are provisionally away from their apartment. The Greens should opt for a Variable Life Insurance policy as, “It pays a death benefit to the beneficiary you name and offers you low-risk, tax-free cash accumulation. It allows the death benefit to vary in relation to the fund returns of the cash value account. It allows you to borrow from the policy during your lifetime” (Variable Life Insurance, 2007). Another option of insurance policy that can be recommended to them is the Universal Variable Life as, “It pays a death benefit to the beneficiary you name and offers you low risk tax deferred cash value options. It offers separate accounts for you to invest in such as money market, stock, and bond funds. It offers premium flexibility.

It allows you to make withdrawals or to borrow from the policy during your lifetime. It stipulates that if you terminate the contract in early years you will receive less cash value total return than in a whole contract” (Universal Variable Life Insurance, 2007). The basic features of a will are that it has to be in prearranged form that convinces all the official procedure. It functions only as statement of purpose and does not stop a testator from disposing throughout their life span of property which had the tendency to be owed to someone in the will. It is functional only on death and before that time the recipients have no concern of the property. It does not only deal with the allotments of possessions and it may also cover things like the appointment of a protector of minors or to give directions related to funeral or cremation arrangements. The most common feature of a trust is that is in a written form and is an agreement between the settlor, who is the one creating it, and the trustee. The written trust contract holds that the settlor will relocate certain possessions to the trustee and the trustee will take charge of those belongings for the profit of the named beneficiaries. Estates on the other hand can he held together as joint tenants with rights of survivorship or as tenants in common. The basic difference in both of them is the inheritance of the estate. In join tenancy the surviving tenant becomes the owner of the estate. The Green’s will states that, their grandchildren (born and unborn) get to receive $10,000,000. Their son Jeffery gets the dry cleaning business owned by the Greens. Their dog receives $5000, 000 and when he dies the remaining money goes to the local animal shelter. Their butler receives an amount of $1 million but if he gets fired or if he quits then the money goes back into the estate. The balance held by the estate would then be set up into a trust for college scholarships to the university.

Bibliography

Glossary of Terms. (2007). Web.

Universal Variable Life Insurance. Web.

Variable Life Insurance. (2007). Web.

Insurance-based Solution

Policy Owners

The policy owners are Wendy and Marty Byrde because they purchased several types of insurances which represent financial coverages that are to be paid upon their deaths. Moreover, they are the owners as they can control the policy.

Insured

The insured people are also Wendy and Marty Byrde. They are both registered in the Whole Life Insurances and the disability ones as the insured.

Beneficiaries

The primary beneficiaries are Wendy and Marty’s children, Charlotte and Jonah, who will receive coverage, namely death benefits after their parents pass away. The Byrdes’ goal was to leave money for their children’s post-secondary education for the following four years after their deaths. Another beneficiary would be The Canadian Centre on Substance Abuse and Addiction, which is supposed to receive a donation of $150,000 upon the insureds’ deaths. Moreover, Marty’s long-time loyal assistant, Ruth, should receive full funding for care. No contingent beneficiaries were identified in the case study.

Face Value

The life insurance policy has two types of value: a face value and a cash one. The former is a death benefit that is granted after the insured’s death to the beneficiaries assigned by a policy owner. It is typically written in the table of benefits of the insurance policy. Face value primarily contributes to the entire value of life insurance and the monthly payments called the premium. Therefore, the face value that all the beneficiaries of Marty and Wendy will receive equals $1,000,000 as their insurance guarantees $500,000 for each one, respectively.

Health Policy

The type of health policy they use is named the Whole Life Insurance, which presupposes insured person’s coverage for the duration of their lives as long as they pay the premium on time. Such an insurance policy usually serves for 10 or 30 years. However, the period can be extended on one’s demand.

Additional Riders

Despite that their insurance policy covers many aspects, some riders can be added. For instance, they can add Accidental Death Rider as recently they encountered robbery in their own house and could have been potentially killed. Moreover, sometimes they use heroin, which can also result in an accidental death. Furthermore, they may include Accelerated Death Benefit Rider if any of the partners dies of a disease as the Byrdes identified heart problems.

Own Occupation

A disability is a physical or mental disorder caused by an accident or illness that wholly or partially limits a person’s ability to perform a job. Both spouses, Marty and Wendy, personally own disability insurance of $ 3,000 per month and $ 2,500 per month, respectively (the maximum of the plan), which is not indexed and taxable. As a result, they should both keep their occupation, since it includes numerous advantages. Such insurance will allow them to receive coverage if they cannot comply with the duties of a specific occupation while capable of doing other activities. Marty is a self-employed financial advisor, and Wendy works in the sphere of Public Relations. Thus, it would be beneficial for them to receive full disability coverage if they cannot do their jobs. Despite the fact that it is an expensive option, the insured will continue to receive full payment until they can pursue their profession, even if they take up another job not connected to their previous occupation.

A Case of Robbery

Because of the prevailing circumstances, the spouses have to insure their property as they faced the robbery. Marty and Wendy recently had a terrible experience, which could have been fatal. When they returned home after a night out to the movies, they found someone in their house. The robber held them at gunpoint, and several personal items were taken from them. Therefore, this case can be considered purple, since robbery occurs where violence or the threat of violence is used to take property from a person. Technically, the couple was threatened with a weapon so that they could have been injured or even killed. Therefore, they would also need homeowner insurance that would keep property value high.

The Grace Period

The period for the clients to decide whether they need insurance or not is named the grace period. This period allows a policy owner to make a premium payment so that their coverage would not expire. The amount of time available depends on the type of policy; thus, it can last 24 hours up to a month. However, paying after the due date may impose some financial fines on a policy owner. If there is a default, the is no chance to cancel the date of payment; therefore, a person will have to go through the entire insurance policy application again.

Risk Management Strategies

Spouses try to elude any difficulties associated with their insurance programs. Primarily, they use the risk avoidance strategy, which aims at minimizing any risk exposure. Nevertheless, they resort to a retention strategy, which implies acknowledging the potential risk as given. For instance, they use credit cards and do not make enough savings to repay the loans. Moreover, they have their mortgage unpaid, which causes some risk to the family; however, they try to manage their finance.

Healthcare professionals need their own professional liability insurance coverage in order to shield themselves from malpractice lawsuits. According to healthcare industry experts, liability insurance is defined as “a product that protects doctors and other medical workers when courts award patients financial damages in medical malpractice lawsuits” (Danzon, 2005, p. 14). Furthermore, some healthcare establishments require their workers to have liability insurance cover. The insurance premiums that are paid by different healthcare professionals as liability cover are determined by insurance companies in accordance with various considerations such as the professional’s specialty, level of experience, and career history.

On some occasions, individuals who are covered by their employer’s liability insurance still require their own individual cover for a number of reasons. For instance, some lawsuits might name individual healthcare professionals as defendants. Consequently, the coverage that is provided by the employer will not cover instances where a lawsuit names a healthcare professional individually. Furthermore, healthcare professionals such as physicians are required to pay for part of the damages that are awarded to patients during malpractice lawsuits (Studdert & Brennan, 2008). Other healthcare professionals such as dental assistants and nurses are also required to take up their own liability insurance in case they are named in a malpractice lawsuit.

My employer’s insurance policy is fitted into his/her own interests in regard to malpractice lawsuits. The interests of the healthcare professional are secondary to those of the employer in case of a lawsuit. For instance, some employers require their employees to take up mandatory insurance covers to ensure that their establishments are not affected by events that might transpire in the incident of a malpractice lawsuit. Statistics indicate that only less that 25% of malpractice lawsuits are won by the plaintiffs annually but the high settlements in cases of losses by healthcare professionals can have far-reaching effects on their careers (Sloan, 2013). The employers have put measures in place to shield themselves from the financial and operational shocks that result from malpractice lawsuits.

Having a personal professional liability insurance policy does not mean that an individual has a lot of money. Personal liability policies safeguard the careers of both experienced and inexperienced healthcare professionals. The issue of money is secondary to that of career prospects when it comes to liability insurance policies. The American Medical Association advises physicians and other healthcare professionals to carry out their own liability insurance policies. In addition, a personal liability policy is a mandatory requirement for practicing healthcare professionals in at least six states across the country. State sanctioned “liability programs include caps on damages and compensation funds that pay patients in the event of a judgment” (Hyman, 2011).

One advantage of having individual professional liability insurance is that it shields an individual from incurring heavy financial losses. The insurance coverage also provides healthcare professionals with legal representation and a means of investigating the claims that have been lodged against them. Individuals who have insurance cover are able to go about their professional activities with relative calm and peace of mind.

One disadvantage of having professional liability insurance is that its premiums might be expensive to some healthcare professionals. In addition, gaps in the coverage and renewal of policies might leave a healthcare professional vulnerable for a limited period of time. Having insurance coverage might also give healthcare professionals a false sense of security leading them to make mistakes. Furthermore, the insurance premiums can be adjusted upwards in case of a malpractice lawsuit.

References

Danzon, P. M. (2005). Medical malpractice: theory, evidence, and public policy. Harvard: Harvard University Press.

Hyman, D. A. (2011). Medical malpractice and the tort system: what do we know and what (if anything) should we do about it. Tex. L. Rev., 80(1), 1639.

Sloan, F. A. (2013). Suing for medical malpractice. Chicago: University of Chicago Press.

Studdert, D. M. & Brennan, T. A. (2008). Medical malpractice implications of alternative medicine. Jama, 280(18), 1610-1615.

Abstract

The Saudi Arabian insurance industry has been on steady growth in the past few years. This work hopes to appraise the effect of corporate finance law in Saudi Arabian insurance institutions through effective machinery to enhance development in the sector. The presence of agencies like the Business-Monitor-International (BMI) as a self-regulating body that monitors the sector is valuable for a forecast of the insurance industry up to the year 2015. This study will stand on available research to examine the fundamental growth drivers and estimate the prospects that Insurance institutions in Saudi Arabia have under the corporate finance law in terms of the situation of macro-economy, growth-potentials, developmental rate poised by the insurance industry.

Introduction

There is very rapid growth in the Saudi Arabian insurance sector. However, to ensure better productivity in the sector, the need for corporate finance law is necessary. Corporate-financial-law monitors marketing as involving a shareholder, business –Director, an employee, or a creditor with another stakeholder such as a consumer, or a community and takes into account the environment where a transaction is conducted in terms of adhering to stipulated rules under which the transaction was conducted. This entails the need for the application of the insurance sector.

A number of institutions have presently been on the ground to ensure the effectiveness of the application of corporate finance law to the Saudi Arabian insurance institution. This includes the BMI which has articulated a report on Saudi Arabian insurance institutions including excellent information on the sectors’ competitive intelligence, regulations, professionalism, as well as consultancy.

The paper will appraise commercial incentives instituted by major field players with the inclusion of governmental policies, as well as regulatory agencies, And how the corporate finance laws have been helpful to the realization of better insurance industry in Saudi Arabia through a thorough assessment of Saudi Arabian insurance institutions’ premiums, competitive-positioning, ownership-structure, as well as basic products/services.

Aims and objectives

The aim of the paper is to present an outline for a dissertation that would provide an overview of Corporate Finance Law in Saudi Arabian Insurance Institutions under the following objectives:

• To extrapolate from the findings regarding the development of the current system of financial law the suggestion for financial legal reforms necessary to grow Saudi Arabian Insurance Institutions
• To analyze the influence of various macroeconomic factors influencing Corporate Finance Law in Saudi Arabian Insurance Institutions.

Outline of Proposed Contents

Declaration

The declaration for the dissertation would be as follows:

I certify to the originality of this PhD dissertation that it is solely my work which is presented for the award of a degree in law at the university and that where the works of other persons have been used, there is appropriate credit given to the original author(s) of the works very clearly. There is equal credit to joint studies conducted by other persons and myself for the course of this work. I warrant the use of this work on the condition that it would be used solely for the purpose of furthering knowledge and that it would be properly acknowledged. The work should not be copied or reproduced through any medium without a forehand request for permission from the author.

I am confident that the authorization would by no means infringe third-party’s rights.

Discussion

The Saudi Arabian insurance industry has been on a steady growth on the few past years. This work hopes to appraise the effect of corporate finance law in Saudi Arabian insurance institutions. The studies will consider previous studies on the subject such as assessments conducted by Business-Monitor-International (BMI)’s self-regulating assessment which five-year forecast of the insurance industry up to the year 2015. The study will examine the fundamental growth drivers and estimate the prospects which Insurance institutions in Saudi Arabia has under the corporate finance law in terms of the situation of macro-economy, growth-potentials, developmental rate poised by the insurance industry. The paper will equally appraise commercial incentives instituted by major field-players with the inclusion of governmental policies, as well as regulatory agencies. This will be assessed through a thorough assessment of Saudi Arabian insurance institutions’ premiums, competitive-positioning, ownership-structure, as well as basic products/services.

Analyses by the BMI are considered very fundamental for this work based on the fact that the agency has articulated report on Saudi Arabian insurance institutions including excellent information on the sectors’ competitive intelligence, regulations, professionalism, as well as consultancy. Therefore the benefits of considered studies under the BMI include:

• Benchmark BMI’s independent 5-year insurance industry forecasts for Saudi Arabia to test other views provides a key input for successful budgeting and strategic business planning in Saudi Arabia’s insurance market;
• Target business opportunities and risks in Saudi Arabia through reviews of latest industry trends, regulatory changes, and major deals, investments and macro-economic developments.

Conclusion

This paper presents a proposal for a doctorate degree dissertation entitled: corporate finance law in Saudi Arabian insurance institutions. The proposal topic supposes the necessity to apply corporate finance law in Saudi Arabian Insurance Institutions for stability and faster development of the sector.

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Introduction

Last year, Jenny Jones’ mother was admitted to Happy Acres since he had advanced Alzheimer’s disease. Being on the second floor of the facility, she fell down the stairs and broke her hip, and got a concussion. The patient eloped through a door which was proposed since the air conditioning was not working. The alarm did not go off to provide the relevant alert. The nursing home had failed to implement the relevant measures to maximize the safety of the individual. John Greco is the owner of both Shady Oaks and Happy Acres. With an operating capital of 300,000 US dollars, Happy Acres only has an insurance cover that compensates amounts of 1 million US dollars or less depending on the incident.

Procedural History

The United States lacks a uniform standard regarding the process of veil piercing. However, states have unique regulations that guide courts to pursue this issue depending on the facts of the case. The guiding case in Broward Marine, Inc. vs. S/V Zeus, No. 05-23105CIVOSULLIVAN, 2010 WL 427496 of the U.S. District Court for the Southern District of Florida (Jimerson & Cobb P.A.). The court proved that shareholders of businesses could be liable for torts arising from organizational malpractices. This opinion is crucial for the success and outcome of the current case.

Issue

The current case has emerged after Jenny Jones has sued Happy Acres nursing facility and its owner, John Greco, for 5,000,000 US dollars for the death of her mother. She believes that the institution neglected the wellbeing of the patient. Since the facility offers insurance cover for only a million US dollars, the inclusion of Greco as a respondent is a move aimed at balancing the damages since he has adequate financial resources. The outstanding issue for this case is: Will Jenny Jones recover the intended compensation from Greco by piercing the corporate veil?

Rule

Healthcare facilities should maintain the highest level of standards when providing medical services. Such institutions will be liable for any injury and death arising from medical malpractice. The environment should be able to provide the required patient safety. They should achieve this aim by maintaining and servicing equipment to ensure that they remain functional. The door in question propped open since the air conditioning in the ward was not working. Hospitals should have the relevant measures to protect the wellbeing and safety of their patients (Kabour 68). Veil piercing is a common strategy for handling cases involving corporations and businesses that are closed.

Depending on the nature of the case, courts can reconsider limited liabilities by holding shareholders, leaders, and directors personally liable for their organizations’ debts, actions, and errors. The judges involved will have to identify specific factors to determine when to pierce the corporate veil. Some of them include engagement in fraud, failure to adhere to corporate rules and formalities, and inappropriate actions that result in the issue in question (Studdert and Mello 431). This aspect explains why small facilities have higher chances of becoming vulnerable to such a judicial process.

Analysis

The above section has outlined the major legal provisions governing the performance of healthcare facilities. When the managers and workers in such organizations fail to complete their duties diligently, the chances of being sued increase significantly. According to the nature of this case, it is agreeable that Jenny Jones is aware that the alarm responsible for preventing a fall was not working. In the case of Happy Acres, those who were required to protect patients failed to complete their duties professionally. They ignored the air conditioning system by not repairing it immediately (Kabour 60). A series of events in the facility created a scenario that resulted in the fall of Jones’ mother.

The four elements of negligence apply to this case. First, the facility and all the workers had a responsibility to protect the targeted patients. Second, those in charge of the alarm and air conditioning systems breached the outlined corporate formalities for protecting all stakeholders (Kabour 61). Third, these malpractices created the circumstances that led to the unexpected death of Jones’ mother. Fourth, the court would argue and agree that there was negligence at the facility.

The concept of piercing the corporate veil would be applicable in such a situation since the two facilities have the potential to raise the requested amount. The court will also observe that Happy Acres had failed to follow the required provisions, safety standards, and guidelines to meet the demands of all patients (Studdert and Mello 429). This kind of malpractice explains why Jones’ mother slipped and broke her hip and got a concussion. The serious injury led to her untimely death. Since the liability has been set at only 1 million US dollars, the court would have adequate information to make its final decision.

Conclusion

The application of the selected legal principles and facts reveal that the leaders at Happy Acres failed to follow the outlined guidelines for protecting patients. While the institution’s insurance cover will only cover each incident up to the amount of 1 million US dollars, the court will find a reason to pierce the corporate veil to compel the owner to provide the requested 5 million US dollars. In conclusion, Jones will be in a position to recover the intended compensation from Greco by piercing the corporate veil.

Works Cited

Jimerson & Cobb P.A. “The Five Most Common Ways to Pierce the Corporate Veil and Impose Personal Liability for Corporate Debts.” Lexology, 2016. Web.

Kabour, Reem. “Revisiting the Inhibited Doctrine of Piercing the Corporate Veil in English Company Law.” The King’s Student Law Review, vol. 9, no. 2, 2019, pp. 59-73.

Studdert, David M., and Michelle M. Mello. “In From the Cold? Law’s Evolving Role in Patient Safety.” DePaul Law Review, vol. 68, no. 2, 2019, pp. 421-458.