Warranty
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A warranty is defined by the Act. "It is an undertaking by the assured that some particular thing shall or shall not be done or that some conditions shall be fulfilled, or where by he affirms or negates the existence of a particular state of facts". Warranty is an important condition which must be complied with strictly. The policy may be declared void for non compliance with any of them. Warranty may be expressed or implied.
(i) Express Warranty
An express warranty is a condition which is expressed in the policy documents,
(ii) Implied warranty
These are not stated on the face of the policy document but are automatically applicable by law. These appear in Marine Insurance.
(B) Lloyd's Association (Lloyd's Policy)
Lloyd's association was organized at Lloyd's Coffee House in London in the late 17th century. This place was situated near the River Thames where exporters underwriters and the brokers frequently met each other.
It is the association of over 6000 underwriters who provide facilities for transacting insurance in their individual capacity. They do not deal with the public directly.
Marine insurance with them must be placed through a broker who is a very responsible person. It is his duty to approach an underwriter in “The Room”. If underwriter agrees the terms with brokers, he initials the slip to show the extent of his acceptance. The ship is the document from which the broker prepares the po11cy.This is done in the broker's office but all policies are checked and signed by the clerks of each underwriter. This policy is named as Lloyd's Policy which is finally forwarded to client.
(c) Proposal form
Proposal form consists of several questions drawn up by the insurer, requesting certain information which are written by the proposer in the blank space. Every insurer provides such form through his agent to the insured without any charges. The prosposer must disclose all material facts regarding the subject matter. It guides the insurance company to form a clear cut idea of the degree of risk involved in the insurance. It is always used for all type of insurance except in Marine Insurance where original slip is prepared by the broker. Some insurers devote particular attention in the drafting and style of their forms. Such forms render valuable services in advertising the benefits of the type of policy concerned. It creates the relation between insurer and insured and it tends to avoid misunderstanding among them.
(d) Mortality table
A mortality table is a device for showing the annual death rate at each age by the experience of the past. It is thus simply record of the mortality rate of past experience which is used to compute annuity rates. Mortality table enables the administrator of city of compare the healthful qualities of one place with another. In this way the factors of better health and lower death rate may be pointed out. It is extensively used in Life Assurance Company. Its rate not only determines the future claims payments but also guides to estimate the future premiums being deposited by the survivors.
