Page 66 - Reinsurance Management IC85
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Reinsurance Management
The defendant issued a fresh policy with different
conditions and the plaintiff had no notice of the facts.
The defendant paid a total loss and it was held that
he was unable to recover from his reinsurers, the
plaintiffs.
Q. Give reasons why all reinsurance contracts
are contracts of indemnity?
Ans: The principle of indemnity is said to be the very
foundation of insurance law. Contracts of insurance, with
exception of Life, Personal Accident and Sickness
Insurance, are generally contracts of indemnity.
Contracts of reinsurances, without exception are
contracts of indemnity because of the nature of
reinsurance undertaking, which is to indemnify the
ceding company in respect of claims arising under the
original policies.
The reinsured must have either paid or still be liable
to pay under his policy, in order to recover from
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