The insurance company will find the nearest cause of loss to the property. 6 0 obj[/ICCBased 7 0 R] Principle of Causa Proxima : This principle is based on the maxim in jure non remota cause, sed proxima spectator, which means in law the immediate and not the remote cause is to be considred in measuring the damages. • Non-Life insurance products include property or casualty, health insurance or house, fire, marine insurance etc. see the proximate cause and not the distant cause. Financial & Insurance Awareness MCQs Ebook – LIC Assistant Mains Exam 2019. Q14. What is the Principle of Insurance called under which the insured can claim the compensation only to the extent of actual loss either from all insurers or from any one insurer? endobj a. subrogation b causa proxima c. indemnity d. insurable interest. Mitigation of loss, a) Insurable Interest 5. Which of the following principles of Insurance denotes a positive duty of the person seeking insurance to voluntarily disclose all facts material to the risk being proposed whether requested or not? x���wTS��Ͻ7�P����khRH �H�. *1 J�� "6DTpDQ��2(���C��"��Q��D�qp�Id�߼y�͛��~k����g�}ֺ ����LX ��X��ň��g`� l �p��B�F�|،l���� ��*�?�� ����Y"1 P������\�8=W�%�Oɘ�4M�0J�"Y�2V�s�,[|��e9�2��s��e���'�9���`���2�&c�tI�@�o�|N6 (��.�sSdl-c�(2�-�y �H�_��/X������Z.$��&\S�������M���07�#�1ؙY�r f��Yym�";�8980m-m�(�]����v�^��D���W~� ��e����mi ]�P����`/ ���u}q�|^R��,g+���\K�k)/����C_|�R����ax�8�t1C^7nfz�D����p�柇��u�$��/�ED˦L L��[���B�@�������ٹ����ЖX�! Hazard refers to a condition that may create, or increase the chance of loss from a given peril. Insurance Company v. Tweed, 74 U.S. 7 Wall. • Indemnity principle is a rule of insurance law which says an insurance policy should not confer a benefit greater in value than the loss suffered by the insured. Causa proxima it is a rule of law that in actions on fire police ,full regard must be had to the causa proxima if the proximate cause of of the loss is fire, the loss is recoverable. 2. Q1. Page-4 section-1. Insurance Law; Principle of Causa Proxima; Principle of Causa Proxima. This also means the insurer (insurance company) has the legal right to claim any future gains from the said property for any recovery and/or settlement. b. Principle of Causa Proxima (Nearest Cause). Insurable amount is paid either on the occurrence of the event or maturity. Immediate or proximate means Proximate in efficiency and not necessarily in time. Through this hole, sea water has entered into the ship and damaged the goods insured. The maxim is “Causa-proxima non remota spectaturs”. In it, the insurer agrees to pay or compensate for the loss. b) Principle of Subrogation c) Principle of Contribution Which of the following principles of Insurance tells that an insured may not be compensated by the insurance company in an amount exceeding the insured’s economic loss? • If the risk insured is the remote cause of the loss, then the insurer is not bound to pay compensation. • Loss is reimbursed, or liability will be repaid on the occurrence of an uncertain event. As per this principle of causa proxima, when a loss if caused by more than one causes, then the nearest or the closest cause should be taken into consideration to decide the liability of the insurer. 44. CAUSA … This is a very important principle of insurance which an insured person should be aware about. In case property insured for only one cause. It means ‘the immediate, and not the remote cause is to be considered.’ This is a maxim of causation that is applied both in marine and general insurance. Proximate cause means the active, efficient cause that sets in motion a train of events which brings about a result, without the intervention of any force started and working actively from a new and independent source. Contribution . However, a marine insurance is commercial indemnity, so even the reasonable anticipated profit is also made good. ... D. Causa Proxima. Insurance MCQ Questions and answers with explanations. 3 0 obj<> For example, if a trespasser opens a gate on another person's property, and a stray dog walks through the open gate and kills the property owner's dog, the trespasser is responsible for the dog's death, even though the trespasser did not kill the dog himself. LIKE, SHARE & SUBSCRIBE Do check out other videos on this channel. In popular terms a dialect it is famous as non-life insurance. In these cases when damage has resulted due to two or more causes, we have to look to the proximate or the nearest cause of damage, although the damage might have not been taken without remote cause. Insurance from the date of the application until the policy is issued or the application is rejected. �@���R�t C���X��CP�%CBH@�R����f�[�(t� C��Qh�z#0 ��Z�l�`O8�����28.����p|�O×�X Insurance Services -> Introduction (Nature of Business Risks, Meaning of Insurance, Importance of Insurance), Types of Insurance (Life Insurance, Fire Insurance, Marine Insurance, Other Insurances, Differences between different Insurances), Principle of Insurance (Utmost Good Faith, Insurable Interest, Indemnity, Contribution, Subrogation, Mitigation, Causa Proxima) • The principle of contribution is a corollary to the doctrine of indemnity. Learn the meaning of Principle of Causa Proxima in Hindi in about 2 minutes. c) That legislation has been passed prohibiting or severely limiting lawsuits for injuries. Question 5. if the causes is not fire but some other cause remotely connected with fire, it is not recoverable, unless specifically provided for. POTENTIA Latin: Possibility; power. Oliveboard Live Courses & Mock Test Series, © 2020 Oliveboard.in - All Rights Reserved. insurance company or the insurer, agrees to compensate the loss or damage sustained to another party, i.e. Leyland Shipping Company Vs. Norwich Union Fire Insurance Society; it was held that proximate cause of loss does not mean that which is the nearest in point of time to the disaster, but means the real efficient or dominant cause of loss. proximal bei Wortbedeutung.info: Bedeutung, Definition, Übersetzung, Herkunft, Rechtschreibung, Beispiele. Insurance MCQ Questions is important for the preparation of exams like LIC EXAM, IRDA, UIIC, NICL, NIACL, and OICL. The principle of indemnity is such principle of insurance stating that an insured may not be compensated by the insurance company in an amount exceeding the insured’s economic loss. The maxim "causa proxima non rempota spectature." Question 3. The nearest cause of the damage caused t… proximate cause, expressed in the legal maxi, Causa Proxima Non Remota Spectator, which means that proximate and not remote cause shall be taken as the cause of the loss. 1.Principle of utmost good faith: The principle of Uberrimae Fidei (a Latin phrase), or in simple English words, the Principle of Utmost Good Faith , is a very basic and first primary principle of insurance. Principle of Causa Proxima (a Latin phrase), or in simple english words, the Principle of Proximate (i.e Nearest) Cause, means when a loss is caused by more than one causes, the proximate or the nearest or the closest cause should be taken into consideration to decide the liability of the insurer. Insurance Multiple-Choice Questions Flashcards Preview ... With respect to automobile insurance, no fault insurance means a) A strict tort system of compensation b) Minimum limits under the Third Party Liability coverage. • Causa Proxima means proximate cause or cause which, in a natural and unbroken series of events, is responsible for a loss or damage Physical hazard; an objective characteristic, increasing the chance of loss such as the age or health of an insured or the location, use and construction of insured property, the production of gun powder in a building; b. c) Principle of Contribution This must be direct, dominant, operative & efficient. e) Reinsurance, a) Insurable Interest Insurance. Insurer pays the claim money only if the nearest cause is insured. • Non-Life insurance products include property or casualty, health insurance or house, fire, marine insurance etc. In case of life or marine insurance, insured must be the owner both at the time of entering of entering into the insurance contract and at the time of accident. If the proximate cause of the loss is fire, the loss is recoverable. It is a contract between an insurer and an insured. stream MEANING OF INSURANCE Insurance is contact in which insurance of indemnity company or insurer in consideration of certain agrees to pay certain sum periodical payment of money i.e. (IV) Causa Proxima: The insurer indemnifies if the loss arises only from the nearest cause. Examples: Term Assurance, Whole Life, Endowment Assurance, Family Income Policy, Life Annuity, Joint Life Assurance Etc. Features of insurance risks There are various types of risks related with insurance. Marine Insurance: Marine Insurance provides protection against loss during sea voyage. Causa Proxima LIC Assistant Mains Exam 2019 is scheduled on 22nd of December 2019 and it is high time that you start revising your insurance notes for the section of General/Financial Awareness. This was all from us in this blog of “Insurance Notes & MCQs LIC Assistant Exam | Principles of Insurance”. In a contract of indemnity, only loss is made good. a. subrogation b causa proxima c. insurable interest d. uberrima fides 10. A 14—BANKING AND INSURANCE (2017 Admissions) Part A Answer all questions. Basis of legality of Insurance: Insurable interest is the basis of legality of Insurance contracts, in the absence of insurance interest the insurance contract An arrangement … Insurable interest is an essential requirement for issuing an insurance policy that makes the entity or event legal, valid and protected against intentionally harmful acts. b) Utmost Good Faith • This principle applies to life, fire and marine insurance. • Each party must reveal all material information to the other party whether such information is asked or not. • It is meant insurance other than life insurance. Proximate cause is the cause which sets other causes in motion. _____ principle means that the insured is not entitled to make a profit on his loss. Cattle Insurance • There should not be any fraud, non-disclosure or misrepresentation of material facts. So, it does not apply to life insurance. • Insured must have the insurable interest on the subject matter c) Principle of Proximate Cause Causa proxima, non remota spectator is a Latin phrase. Principle of utmost good faith is also known as _____ . Syllabus. • Insurance interest is that interest when the policyholders get benefited by the existence of the subject matter and loss if there is death or damage to the subject matter. 1 The bank which meets the long-term credit requirements of the agriculturist : (a) Land Development Banks. "Policy" means this document of Policy describing the terms and conditions of this contract of insurance, including the company's covering letter to the insured if any, the Schedule attached to and forming part of this Policy, the Insured's Proposer form and any applicable endorsement thereon. e) Principle of Partnership. b) Utmost Good Faith Insurance Definition: Insurance refers to a contractual arrangement in which one party, i.e. Such losses, if covered by conventional insurance, mean having to pay a premium that includes loadings for the company's general expenses, cost of putting the policy on the books, acquisition expenses, premium taxes, and contingencies. This binding receipt is beneficial to the prospects because he becomes insured from the time the application is filed. e) Causa Proxima, a) Insurable Interest 7. • In case of life insurance spouse and dependents have insurable interest in the life of a person. If the proximate cause is the one in which the property is insured, then the … Norwich Union Fire Insurance Society Ltd (1918) illustrates that the causa proxima may not necessarily be the last event to occur. First, the hole that was caused in the bottom of the ship and second, the seepage of sea water into the ship. 4. The nearest cause should be insured by the insurer, only then the insurer liability comes into picture and policy holder will be paid. Word "Cause Proxima" means "Nearest Cause" An accident may be caused by more than one cause. a) Insurable Interest LIC Assistant Mains Model Paper 2019 – For General English, Quants & Reasoning. This form of receipt is not widely used. The two words are commonly in use together, but there is a fine distinction between the two. The topic also holds relevance for the general awareness section of other government exams such as Bank exams, SSC … • Insurance interest is that interest when the policyholders get benefited by the existence of the subject matter and loss if there is death or damage to the subject matter. • The principle of contribution is a corollary to the doctrine of indemnity. • Assurance is used in those contracts which guarantee the payment of a certain sum on the happening of a specified event which is bound to happen sooner or later, for example attaining a certain age or death. Learn the meaning of Principle of Causa Proxima in Hindi in about 2 minutes. A couple of examples of its application in insurance: Renovation to a house damaged by fire. If the cause is not fire but some other cause remotely connected with fire, it is not recoverable, unless specifically provided for. Understanding Insurance Principles: Loss Minimization And Causa Proxima (Part 3) Leave a comment; In the advent of any occurrence of uncertain event, it is the utmost duty of the insured to make sure that if controlled, minimality of loss on the damaged insured property should be taken into account. Each question carries 1 mark. Pursuant to this principle, the cause nearest in the order of causation, without any efficient concurring cause to produce the result, must be considered as the direct cause. The basic principles which govern the insurance are: • Each party must reveal all material information to the other party whether such information is asked or not. It’s a long term contract. 3. 4. • It is meant insurance other than life insurance. endobj 6. Insurance MCQ Questions is important for the preparation of exams like LIC EXAM, IRDA, UIIC, NICL, NIACL, and OICL. Renovation is done only to the parts of the house which are affected by the fire. LIKE, SHARE & SUBSCRIBE Do check out other videos on this channel. Insured can't make any profit from the insurance contract. • This principle applies to life, fire and marine insurance. It is a contract for an year. Indemnity means to make good the loss and nothing more than actual loss. Under the policy, goods have been insured against damage likely to be caused by sea water. There is no hard and fast rule to dete Written by Arjun March 10, 2020 April 17, 2020. Principle of Causa Proxima (a latin phrase), or in simple English words, the Principle of Proximate or nearest cause , which means when a loss is caused by more than one causes, the proximate or the nearest or the closest cause should be taken into consideration to decide the liability of the insurer. In insurance, “Causa Proxima” means ← Prev Question Next Question → 0 votes . d) Principle of Indemnity endobj (c) Foreign Banks. • Indemnity is considered to be a contractual agreement between two parties where the insurer agrees to pay for potential losses or damages caused by insured. Example of Principle of proximate cause A ship was severely torpedoed and was in the process of sinking. See Possibility. d) Principle of Indemnity 1 Answer +1 vote . In such case nearest cause of the accident is found out. {{{;�}�#�tp�8_\. • Assurance is used in those contracts which guarantee the payment of a certain sum on the happening of a specified event which is bound to happen sooner or later, for example attaining a certain age or death. • Indemnity is considered to be a contractual agreement between two parties where the insurer agrees to pay for potential losses or damages caused by insured Question 4. EXAMPLE OF PRINCIPLE OF INEMINTY MR. Proximate cause means the active, efficient cause that sets in motion a train of events which brings about a result, without the intervention of any force started and working actively from a new and independent source. Insurable interest CAUSA PROXIMA; i.e. Insurance is the process in which the loses of few are shared by many persons who are equally exposed to same risks. • An insured must take all reasonable care to reduce the loss. c. Prevent the causes of loss . a. Utmost good faith . The insurance company will be liable to pay only that particular or nearest cause that is covered by the policy. Mr.A has taken a marine policyto cover the goods exported by him. As a policy may exclude certain perils, if the one determined to be the proximate cause is not covered in the policy, the insurer would not have to pay out benefits, while the inverse would hold true as well. In principles of insurance, a principle of Principle of causa proxima is the fundamental principle. 9. 6. d) Principle of loss Minimization The real cause of the loss must be considered while payment of the loss. Hence loss caused by smoke arising out of the fire, or damage cause by water escaping from pipes, melted in the course of fire, is covered by the policy. • If one of the insurers pays the whole loss, he is entitled to contribution from other insurers. 2019 Mains, Types of Insurance in India – Download the free E-book, Glossary of Important Insurance Terms – Download the Ebook, Role of IRDAI in India’s Insurance Industry, SBI PO Complete Practice Course – for Advanced Level Aspirants, ICMR Assistant Exam 2020 – Complete Test Series: Attempt Now, IBPS PO 2020 Mock Tests – Attempt a Free Mock Test Now, Attempt a Free SEBI Grade A Mock Test here, Insurance Notes & MCQs – Principles of Insurance. In this blog post, we have compiled Insurance Notes & MCQs on classification & Principles of Insurance. Meaning and Principles of Insurance forms an important part of the general awareness section of various competitive exams. • According to it, after the insured is compensated for the loss caused by the damage to the property insured by him, the right of ownership to such property passes to the insurer after settling the claims of the insured in respect of the covered loss. Thus life policies come under ‘assurance’. • According to it, after the insured is compensated for the loss caused by the damage to the property insured by him, the right of ownership to such property passes to the insurer after settling the claims of the insured in respect of the covered loss. Tweed brought suit in the Circuit Court for the Eastern District of Louisiana against the Mutual Insurance Company on a policy of insurance against fire which covered . • The insurers must share the burden of payment in proportion to the amount insured by each Common possibility. The ship was insured under a policy that covered perils of the seas, however excluded war risks. Any written information regarding it is insurance correspondence. According to this principle the insured actual loss is indemnified on the occurrence of certain event PRINCIPLE OF INDEMINITY 13. It generally comes to an end at the expiry of the year and may be renewed. Is rooted in the life of their employees not be any fraud, non-disclosure or of... Basic principles which govern the insurance company will find the nearest cause of the event or as variation. Equally exposed to same risks by Ritika ( 68.7k points ) in insurance, a policyto! 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