31 Dec



In addition to all that has been discussed, the following are features peculiar to life insurance.

Section 2 Insurance Act classifies insurance into life and general insurance business. Life insurance is futher classified into individual, group andpension and health insurance. Section 97 defines a life policy as any instrument by which repayment of money is assured on death.

This is done to prevent the adverse consequences of death on others affected by the death.

– Whole life policy: an agreed sum is paid on the death of the life insured. Excluding accidental death unless expressly covered usually at higher premium.

– Term Policy: the money paid if the life assured dies within a stipulated period.

– Endowment Policy: on death of the insured… to finance children and beneficiaries based on the terms of the policy.

Life policies are assignable in equity. The assignee would have to sue in the name of the assignor.

Insurance is one of the exceptions to the doctrine of privity. Privity is usually excluded through:

  1. A trust of the life policy created by an express declaration of trust in the policy by the assured.
  2. An assignment of the proceeds to trustees for the benefit of named beneficiaries.
  3. In Green V Russel, the court held that the insured can also constitute himself as a trustee fo the proceeds of the policy until the child reaches a specified age.


Promise to indemnify the insured against loss of property by fire… depending on the terms of the contract. Note the following:

  1. There must be actual ignition and fire.
  2. The fire must not have been deliberate or expected-James V West of Scotland Insurance.
  3. The losses must have been proximately caused by the fire.

Special Perils are policies which the insurers are prepared to cover even though such perils are generally not covered. E.g. riot, civil commotion, explosion, riot, and so on. Usually comes for an extra premium.


Regulated by the combined working of tort law and insurance. Insurance under this head include:

  • Third party and theft.
  • “The Act” motor vehicle insurance.

When an accident occurs, a tortfeasor may not be able to meet his judgment debt. This is why we need insurance.

Section 3 of the Motor Vehicle (Third Party Insurance) Act mandates the user of a motor vehicle to insure it in respect of death or bodily injury to third parties arising from use of the vehicle on the road. “Person” as used in the Section 3 means any person that can control the use of the motor vehicle on the road. A vehicle is in “use” where it is in a place where the public has access to. Even where it is parked or broken down so long as it can be moved even if not by driving. Penalty of 100 naira or 1year imprisonment or both also disqualification for 12 months from holding driver’s license.

Section 5 of the Act exempts government vehicles and vehicles in respect of which the owner has deposited 10k with the accountant general. Although in practice, getting compensation from the government is bureaucratic.

The scope of the cover under the MVA is limited:

  • It only covers liability for personal injury or death. Property damage is excluded-Adeoye V West African Provincial Ins.
  • Injury or death caused to an employee in the course of his employment are not covered-Section 6 of the Act. Section 6 (2) provides they can pay no more than N100 in the case of an in patient and N10 for an out patient. For hospital expenses reasonably incurred. This is clearly ridiculous taking into consideration the current value of the Naira. Section 6(3) dispenses with the need of privity as affected third parties can sue the insurer. In Sule V Norwich Union Insurance, the court held that even the insured can be a “third party” so long as he is not driving.
  • A gratuitous passenger cannot claim: In Stella Anuloha V Lion of Africa Insurance Co, the court held that the widow could not recover because her husband was a gratuitous passenger.


Section 10 provides that when judgement has been obtained against the insured, the insurer must pay the judgement creditor notwithstanding that the insurer may be entitled to cancel (or has in fact cancelled) the policy. A seven days’ notice of institution of proceeding must be given to the insurer. There is no obligation to pay where an appeal is pending-Section 10(2). Section 10(3) entitles the insurer to avoid the policy for non-disclosure or misrepresentation.


  • The insured may join the insurer.
  • The insured may be joined as a co-defendant.
  • The third party may join the insurer as co-defendant.

The courts have okayed the first 2 above. However, they have frowned against the third type of joinder (third party and insurer as co-defendant). As was noted in Fasegha V Akinwunmi, Audu V Barau, Carpenter V Ebblewhite and a host of other cases. Noting that the right to recover against the insurer only arises in the future (after successfully suing the defendant). However, in Brisino V Alabi, the court concluded that since the insurers are persons who may likely be affected by the result of the suit, they have an interest and can be joined and this would prevent protracted litigation.

Section 68 of the insurance decree provides that a third party can join the insurer in respect of an action against the insured after giving at least 30 days’ notice to the insurer.

In conclusion, Prof Agomo has recommended that compensation for motor accidents should be administered by the government rather than private individuals who are only out for the money.


Section 68(1) prohibits use of motor vehicle on road unless it has been covered for third party damages. The liability covered must not be less than one million. Section 70 provides that where the insurer accepts liability, he is to settle the claim within 90 days from the date when the claim was delivered to the insurer.

Section 75 of the decree dispenses with the need for police report except in the case of car theft or where the accident results in serious bodily injury to or death of a person involved in the accident.



Quite eccentric really

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