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Insurance Law (M05)

Insurance Law (M05) provides candidates with knowledge and understanding of the laws which form the background to the operation of insurance, the system within which these laws operate and are administered and apply knowledge and skills to practical situations.

The default Enrolment option for this unit includes:

  • Latest version of the core learning content, in digital format only.
  • Assessment entry.

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This unit looks at general legal principles, how the legal system works and legal personality - how the law applies to different types of natural persons and juristic persons. It considers the law of torts and examines civil wrongs such as negligence, trespass and nuisance. This is relevant to liability insurance because most claims under liability policies are based on tort. It also considers the law of contract. This is central to the business of insurance where an insurance policy is a contract in which insurers promise to pay claims. It then examines the law of agency which is often regarded as a branch of law of contract. This is important because the majority of insurance policies are sold through an agent of some type.

It then deals with the law of insurance contracts and the legal principles of insurable interest and utmost good faith. It looks the legal rules which govern the duties of the insured when they make a claim, how the loss is measured and how insurers may call upon others to share the loss.

Building a successful career in insurance

This course is relevant for anyone seeking to develop their knowledge and skills for a rewarding career in insurance or in a support role. Insurance Law (M05) counts towards a Diploma in Insurance. It may also count towards the Advanced Diploma in Insurance.

Please note it is assumed that you already have knowledge of the fundamental principles of insurance as covered in Insurance, Legal and Regulatory (IF1) or equivalent examinations.

Summary of learning outcomes 

  1. Understand the nature and sources of English law and the concept of natural legal persons.
  2. Understand the principles of the law of torts and the characteristics of the main torts.
  3. Understand the law of contract.
  4. Understand the law of agency and its application to insurance.
  5. Understand the main principles governing the formation of insurance contracts.
  6. Understand the classification and interpretation of insurance contract terms, the effects of their breach and other vitiating factors.
  7. Understand the main legal principles governing the making of an insurance claim.
  8. Understand how losses are measured and how the principle of indemnity applies to insurance claims.
  9. Understand how the principles of subrogation and contribution apply to insurance claims.

Assessment

  • Coursework assignment with 10 compulsory short answer questions; and a 60 minute exam comprising 50 multiple-choice questions (MCQs)
  • 60% coursework nominal pass mark
  • 65% exam nominal pass mark
  • The average pass rate for those completing Diploma in Insurance mixed assessment units in full is currently 91.7%

Study material - editions available

2021-22 edition (applicable to exams sat 01 May 2021 to 30 Apr 2022).