Claim handling in the insurance sector

Abstract

Claim-handling is admittedly one of the thorniest issues in today's insurance market, both locally and abroad. A number of issues tend to influence this sector, amongst which there are public policy, fraudulent claims, cumbersome and sometimes even tricky procedures and a lot of other intricacies which may well serve the insurer's purposes, but which might just as well induce the insured into a trap. In Malta there is no real and proper substantive law addressing insurance issues, let alone one on insurance claims. Thus, we have to refer to English common-law and other jurisdictions to form our 'common law' in this area. In the introduction, I will explain the issues I will be dealing with in the thesis, and shall thereby expose the major sources of literature for the thesis. In Malta the insurance legislation we have is mostly regulatory, that is the Insurance Business Act and the Insurance Brokers and Other Intermediaries Act. Substantive insurance, particularly on the claims sector is rather scarce, if not inexistent. The first chapter contains a review of the principle of public policy, which is the point of departure when dealing with insurance claims. Ex turpi causes non oritur actio (no action can arise from a wrongful cause). There may be exceptions however, largely depending on whether the act committed was negligent or wilful. The second chapter comprises a discussion about the main issues in claims-handling law, dealing particularly with notice and particulars of loss, the burden of proof in claims cases, and dispute settlements. The third chapter discusses one of the most frequently recurring themes in insurance claims: fraudulent claims. In this chapter one will see how the English courts have dealt with fraudulent claimants, from two hundred years ago till today. There are some jurisdictions which while having the English common law as their basis, departed from such law to form their own substantive insurance law, as is the case of Australia. The fourth chapter will analyse this particular country, together with some other jurisdictions, in order to seek model laws for future reference when coming to draft our autochtonous law. The last chapter reviews the situation in Malta, both by reviewing court judgments and by analyzing the local scene through the opinions of several stakeholders. It also contains several suggestions for a new Maltese law in this area.