Study On The Material Fact Of Duty Of Disclosure In Insurance Contract

In this paper, I put my emphasis on the analysis of the material fact of duty of disclosure in insurance contract. The concept of material fact or material circumstance comes from the statutory law of the Maritime Insurance Act 1906(hereinafter referred to as MIA 1906) and a series of cases prior to and after MIA 1906. When it comes to the judge of material fact, we can argue it from two aspects. The first aspect is about the prudent insurer test and the reasonable insured test, and the second one is how to define influence.The prudent insurer test was adopted in MIA 1906, while the reasonable insured test was used in Australian Insurance Contract Law in 1984. Besides, I introduced the latest legislations on the material fact of the duty of disclosure in U.K., including the Consumer Insurance(Disclosure and Representations) Act 2012 and the Insurance Act 2015. After my study on the statues and cases in U.K. and Australia, I draw the conclusion that reasonable insured test was much more reasonable. About the issue that how to define influence, there are also three criteria, including the decisive influence test and the mere influence test. In this part, I discussed two critical cases in U.K. From the judgments of the two cases, there is no doubt that the courts adopted the mere influence test. But I prefer to the decisive influence test.In the third part of this paper, I made a legal research on material fact, and analyzed these cases. Based on all these analysis and legal research, finally I draw the conclusion that material fact is critical to the duty of disclosure, and the judgments of it should be based on the reasonable insured test and decisive influence test.