UBERIMAE FIDEI AND THE EXTENT OF JUDICIAL COMPLIANCE IN NIGERIA WITH THE INNOVATION INTRODUCED BY INSURANCE DECREE OF 1997

Uberrimae fidei (utmost good faith) means that each of the parties should not conceal any material facts which they know or ought to know may influence the judgment of
prudent insurer in fixing or determining whether to take the risk, or whether to insist on a higher premium as a condition for bearing the risk. 

This fundamental principle of non-Concealment of material facts and showing of utmost good faith by the insured is the hall-mark of all contracts. The insured must manifest utmost good faith in all his dealings with the insurer. 

The same applies to the insurer, they of the parties who contradict this good faith makes the contract.

The duties are three fold:

1. To disclose all materials facts.

2. Not to unrepresented material facts and

3. Not to make fraudulent claims.

SOME OF THE REFORMS OF THE (INSURANCE DECREE 1997) INCLUDES

1. The designing of their proposal form must not contradict the provision of the Act.

2. Every insurance company must prepare their proposal form in such a way that will illicit every want from their prospective customers.

3. The insurance company must be registered and must deposit capitation fee with the bank. Law is fundamental and persuasive because as society can exist without it. Law as a continue increase that law is progressive by what is obtainable at that point. Moreover, law is responsive because it responds to phenomenal changes in the society. 

This is because the very essence of law is to couple obedience. A number of cases would be used to analyze judicial compliance of the Insurance Decree of 1997. 

Section 50 (1) of the insurance Act No. 29, 1997 provides that the premium is a condition precedent to a void contract of insurance and that cannot be cover in respect of insurance unless or except the premium therefore is paid in advance, see Jumbo United Company Ltd V. Leadway Assurance Co. Ltd. (2006) LP’ELR-Section 8/2005.

Hence, by virtue of section 50 (10 of the Act, once premium is not paid in advance, the contract becomes void and unenforceable. See Irukwu v. Trinity Mills Insurance Brokers (1997) 12 NWLR (pt.531) 11 at 134-135.

In Ajaokuta Steel Co Ltd.v. Corplus Ltd (2004) 16 NWLR (pt. 899). It was held that the fundamental  purpose of an insurance contract is give cover for insurance risk in other words, were a law state  that there is no insurance cover unless premium is paid, then in effect, it means that the contract is no insurance if no premium is actually pre-paid.

Under section 23 of the Marine Insurance Act of 1961, a contract of insurance shall be deemed to be concluded when the proposal of the insured is accepted by the insurer even when no policy has been issued. 

But the operative Act governing the contractual relationship of the parties is the insurance. Decree now act of 1997 section 50 (1) of which provided. “The receipt of an insurance premium shall be a condition precedent to a valid contract of insurance, and there shall be no insurance risk unless the premium is paid in advance.

In section 6 (1) (a) (b) (c) of the decree provided that before the commission registers an applicant as an insurer, it must satisfy itself the class or category of insurance business shall be conducted in accordance with sound insurance principles. 

The Decree ensures also that the proposal form is not designed in way that the insurer can easily deny liability. This was illustrated in the case of Ogbebo v. Corplus Ltd. (2004) 16 NWLR (pt.899) 369.

In conclusion, they have been a number of decided to show judges compliance to the Insurance Decree of 1997.  The compliance of the judicial in Nigeria had advised insurance and with the help of the innovation of the insurance Decree of 1997, the society has progressed because the essence of justice is to bring progress.