Insurance law

Purpose
At the end of this unit, candidates should be able to:
• demonstrate a knowledge and understanding of the laws which form the background to the
operation of insurance;
• demonstrate a knowledge and understanding of the system within which these laws operate and
are administered;
• apply knowledge and skills to practical situations.

Assumed knowledge
It is assumed that the candidate has knowledge of the fundamental principles of insurance as covered
in IF1 Insurance, legal and regulatory or equivalent examinations.

Summary of learning outcomes Number of questions

in the examination*

1. Understand the nature and sources of English law and the concept of natural legal 5
persons.

2. Understand the principles of the law of torts and the characteristics of the main torts. 4

3. Understand the law of contract. 4

4. Understand the law of agency and its application to insurance. 4

5. Understand the main principles governing the formation of insurance contracts. 9

6. Understand the classification and interpretation of insurance contract terms, the 8

effects of their breach and other vitiating factors.

7. Understand the main legal principles governing the making of an insurance claim. 6

8. Understand how losses are measured and how the principle of indemnity applies to 4
insurance claims.

9. Understand how the principles of subrogation and contribution apply to insurance 6

claims.

* The test specification has an in-built element of flexibility. It is designed to be used as a guide for study and is not a statement of actual
number of questions that will appear in every exam. However, the number of questions testing each learning outcome will generally be within
the range plus or minus 2 of the number indicated.

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©2024 The Chartered Insurance Institute. All rights reserved. M05
 Important notes
• Method of assessment:
Mixed assessment consisting of two components, both of which must be passed. One component
is a coursework assignment and one is a multiple choice question (MCQ) examination. The details
are:
1. an online coursework assignment using RevisionMate consisting of 10 questions which
sequentially follow the learning outcomes. This must be successfully completed within 6 months
of enrolment; and
2. an MCQ exam consisting of 40 standard format and 10 multiple response questions. 1 hour is
allowed for this exam. This exam must be successfully passed within 18 months of enrolment.
• This syllabus will be examined from 1 May 2024 until 30 April 2025.
• Candidates will be examined on the basis of English law and practice unless otherwise stated.
• This PDF document has been designed to be accessible with screen reader technology. If for
accessibility reasons you require this document in an alternative format, please contact us at
[email protected] to discuss your needs.
• Candidates should refer to the CII website for the latest information on changes to law and practice
and when they will be examined:
1. Visit www.cii.co.uk/qualifications
2. Select the appropriate qualification
3. Select your unit from the list provided
4. Select qualification update on the right hand side of the page

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©2024 The Chartered Insurance Institute. All rights reserved.
1. Understand the nature and sources of 5.3 Explain how the law of insurable interest applies to
English law and the concept of natural the main classes of insurance.
legal persons. 5.4 Explain the duty of fair presentation in non-consumer
1.1 Describe the classifications and characteristics of insurance and the effect of a breach.
English law. 5.5 Explain the duty to take reasonable care not to make
1.2 Describe the sources of English law. a misrepresentation in consumer insurance and the
effects of a breach.
1.3 Describe the professions involved within English law.
5.6 Apply the main principles governing the formation of
1.4 Describe the structures and procedures of the insurance contracts to practical situations.
courts.
1.5 Describe the status and capacity of natural legal 6. Understand the classification and
persons and corporations. interpretation of insurance contract
1.6 Apply the nature and sources of English law and the terms, the effects of their breach and
concept of natural legal persons to practical other vitiating factors.
situations.
6.1 Explain the classification, formation and
interpretation of insurance contract terms.
2. Understand the principles of the law of
torts and the characteristics of the main 6.2 Explain the effect of breach of warranty or condition
and how illegality arises in insurance contracts.
torts.
6.3 Apply the classification and interpretation of
2.1 Describe the nature and classification of torts.
insurance contract terms to practical situations.
2.2 Explain the main torts.
2.3 Explain how the law of torts apply to employers’ 7. Understand the main legal principles
liability, products liability and occupiers’ liability. governing the making of an insurance
2.4 Explain the main defences, remedies and limitations claim.
of actions in tort. 7.1 Describe the parties who can claim on or benefit
2.5 Apply the law of tort to practical situations. from an insurance contract.
7.2 Explain the rules governing notice and proof of loss.
3. Understand the law of contract. 7.3 Explain the insured’s contractual duty to mitigate or
3.1 Explain the nature of contractual liability and prevent an insured loss.
classification of contracts.
7.4 Explain the doctrine of proximate cause.
3.2 Explain the formation of a contract.
7.5 Explain the investigation of fraudulent claims and the
3.3 Explain how contract terms are classified under the remedies available to the insurer.
general law.
7.6 Apply the main legal principles governing the making
3.4 Explain defective contracts. of an insurance claim to practical situations.
3.5 Explain the circumstances in which a contract may
be discharged. 8. Understand how losses are measured
3.6 Explain the remedies for breach of contract. and how the principle of indemnity
3.7 Explain the doctrine of privity of contract. applies to insurance claims.
3.8 Explain the assignment of contractual rights and 8.1 Explain the principle of indemnity.
duties and how it applies to insurance. 8.2 Explain the measure of indemnity in various classes
3.9 Apply the law of contract to practical situations. of insurance.
8.3 Explain the factors which limit, reduce, extend or
4. Understand the law of agency and its modify the principle of indemnity.
application to insurance. 8.4 Explain the methods of providing indemnity.
4.1 Explain the nature of agency and how an agency 8.5 Explain the doctrine of salvage and abandonment.
relationship can be created.
8.6 Explain the effect of claim payments on policy cover.
4.2 Explain the nature of an agent’s rights,
8.7 Apply how losses are measured and the principle of
responsibilities, authority and duties.
indemnity to practical situations.
4.3 Explain the termination of agency and its effects.
4.4 Explain how the principles of agency law apply to 9. Understand how the principles of
insurance and practical situations. subrogation and contribution apply to
insurance claims.
5. Understand the main principles 9.1 Explain the doctrine of subrogation in insurance.
governing the formation of insurance
9.2 Explain the source of subrogation rights and apply
contracts. the law to practical situations.
5.1 Explain how the principles of contract law apply to
9.3 Explain how subrogation rights may be modified or
the formation of insurance contracts.
denied and apply the law to practical situations.
5.2 Explain the concept and key elements of insurable
9.4 Explain the effect of market agreements on rights of
interest.
contribution.

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©2024 The Chartered Insurance Institute. All rights reserved.
9.5 Explain the nature of double insurance and operation Reading list
of contribution.
9.6 Apply the principle of contribution to the main lines of The following list provides details of further
insurance and to practical situations. reading which may assist you with your
studies.
Note: The examination will test the
syllabus alone.
The reading list is provided for guidance
only and is not in itself the subject of the
examination.
The resources listed here will help you
keep up-to-date with developments and
provide a wider coverage of syllabus topics.

CII study texts

Insurance law. London: CII. Study text M05.
Insurance, legal and regulatory. London: CII.
Study text IF1.
Books (and ebooks)
Birds' modern insurance law. 12th ed. John
Birds. Sweet and Maxwell, 2022.
Colinvaux’s law of insurance. 13th ed.
London: Sweet & Maxwell, 2022.
Drafting insurance contracts: certainty,
clarity, law and practice. Christopher Henley.
London: Leadenhall press, 2010.
Insurance claims. 5th ed. Alison Padfield.
Bloomsbury Professional, 2021.
Insurance theory and practice. Rob Thoyts.
Routledge, 2010.*
MacGillivray on insurance law: relating to all
risks other than marine. 15th ed. London:
Sweet & Maxwell, 2023.
The law of insurance contracts. Malcolm A
Clarke. 6th ed. London: Informa, 2009.
Tort law: text, cases and materials. Jenny
Steele. 5th ed. Oxford: Oxford University
Press, 2022.
Tort law and liability insurance. Gerhard
Wagner. Wien: Springer, 2005.
Online resources
The Insurance Institute of London (IIL)
provides access to lectures from leading
industry figures and subject experts
speaking on current issues and trends
impacting insurance and financial services.
Available online at www.cii.co.uk/learning/
insurance-institute-of-london (CII/PFS
members only).
Recent developments in tort I and II. Alan
Peck.

* Also available as an eBook through eLibrary via www.cii.co.uk/elibrary (CII/PFS members only).

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©2024 The Chartered Insurance Institute. All rights reserved.
 Civil procedure rules. Alan Peck.
The regulatory framework. Simon Collins.
Journals and magazines
The Journal. London: CII. Six issues a year.
Post magazine. London: Incisive Financial
Publishing. Monthly. Contents searchable
online at www.postonline.co.uk.
Insurance law monthly. London: Informa.
Monthly.
Reference materials
Colinvaux & Merkin’s insurance contract law.
Robert M Merkin. Brentford: Sweet &
Maxwell. Looseleaf, updated.
Concise encyclopedia of insurance terms.
Laurence S. Silver, et al. New York:
Routledge, 2010.*

Exemplars
Exemplar papers are available for all mixed
assessment units. Exemplars are available
for both the coursework component and the
MCQ exam component.
These are available on the CII website under
the unit number before purchasing the unit.
They are available under the following link
www.cii.co.uk/qualifications/diploma-in-
insurance-qualification.
These exemplar papers are also available on
the RevisionMate website (ciigroup.org/login)
after you have purchased the unit.

Exam technique/study skills

There are many modestly priced guides
available in bookshops. You should choose
one which suits your requirements.

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©2024 The Chartered Insurance Institute. All rights reserved.