Misrepresentation in the contract of insurance

Abstract

This paper treats the problem which insurers worldwide are facing constantly - that is, the vast amount of untrue and misleading statements made in applications for insurance. This problem is tackled abroad by means of legislation, rules and regulations 'ad hoc'. The introductory Chapter of this paper takes a brief look at the origins of insurance practice and insurance in Malta. It also discusses the classifications, functions and legal implications of insurance. The second Chapter deals with the characteristics and requisites of insurance contracts, emphasizing the distinction between the principles of contracts in general and those pertaining exclusively to insurance contracts. The faith, subsequent Chapter discusses the concept of utmost good which is a peculiar feature of insurance contracts, these being contracts "uberrimae fidei". In the fourth Chapter it discusses the three forms of misrepresentation which may be found in insurance contracts, and it also touches on the subject of non-disclosure (which is a corollary to the notion of misrepresentation). In the concluding Chapter, the existing remedies under our law are confronted with proposed statutory new ones. These are proposed both with the intention of safeguarding the interests of insurers and policyholders alike, as well as in the light of Malta's application to join the EC. The continuous reference to English jurisprudence and insurance practice could not be avoided as our courts have traditionally referred to English case-law in deciding cases concerning insurance disputes. One is also to note that, until recently, all insurers in Malta have been insurance agents working, through an agency agreement, for foreign insurance companies.