KSLU Solved Question Papers
Insurance Law
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 8
2025 Jun Examination
munotes.in
Mumbai
B.A. LL.B. (Five Years) Sem 8 Insurance Law 2025 Jun Question Paper with Solutions
First published on munotes.in on 21 October 2026.
Published by munotes.in, Mumbai.
Model answers written and edited by the munotes.in editorial desk.
Passages from this volume may be quoted, in print, online or by an AI system, with credit: name munotes.in and link to this volume's page. The volume may not be reproduced as a whole. Full terms at munotes.in/content-license.
munotes.in is an independent study resource for students of Karnataka State Law University. It is not affiliated with Karnataka State Law University, and is not endorsed by it.
The University does not publish an official answer key for this paper. The answers in this volume are model answers, written to show how a full-mark answer is built. They are a study aid, not an authority on what an examiner marked.
The question paper reproduced here is the paper as set by Karnataka State Law University at the 2025 Jun examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2025 Jun examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2025 Jun examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 80 · 20 questions answered
Instructions printed on the paper
- N.B. (1) Answer all five Units. (2) One essay type question and short note/problems is compulsory from each Units. (3) Figures to the right indicate marks. (4) Answer should be written either in English or Kannada completely.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)"Indemnity is the controlling principle in insurance contract, but all insurance contract are not contracts of indemnity". Discuss.[10]
Answer
For full marks, cover: what indemnity means and why it controls insurance (Brett L.J. in Castellain v. Preston); how the law enforces it (measure of loss, subrogation, contribution, average); the sum insured as a ceiling (Kantika Colour Lab); the contracts that are NOT indemnity: life, lump-sum personal accident, and valued policies (Dalby); modified indemnity (reinstatement value); conclusion on the statement.
The statement explained
The statement makes two claims. First, indemnity is the "controlling principle" of insurance: most of insurance law grows out of it. Second, it does not govern every policy. Some contracts of insurance pay a fixed sum whatever the actual loss.
Meaning of indemnity
Indemnity means compensation for loss, no more and no less. The insurer restores the insured, in money, to the position he was in just before the loss. He must not be worse off, but he must not profit either.
The classic statement is that of Brett L.J. in Castellain v. Preston, (1883) 11 QBD 380. A vendor of a house recovered from his fire insurer for fire damage, and the buyer later paid the full price. The insurer recovered its payment. Brett L.J. said insurance is "a contract of indemnity, and of indemnity only". The assured shall be fully indemnified, but never more than fully indemnified.
Why it is the controlling principle
- It prevents gambling. A person who could gain from a loss would be tempted to cause it.
- It protects the pool. Every payment beyond the real loss comes out of other policyholders' premiums.
- It produces the other principles. Insurable interest, subrogation, contribution and average all follow from it.
How the law enforces indemnity
- Measure of loss. The insured recovers the actual value lost at the time and place of loss, up to the sum insured.
- Subrogation. After paying, the insurer takes over the insured's rights against wrongdoers, so he cannot recover twice.
- Contribution. Where two insurers cover the same loss, they share it, and the insured recovers once.
- Average. Where property is under-insured, the insured bears a rateable part of the loss himself. Section 81 of the Marine Insurance Act, 1963 deems him his own insurer for the uninsured balance.
The sum insured is only a ceiling
United India Insurance Co. Ltd. v. Kantika Colour Lab, (2010) 6 SCC 449, shows indemnity at work. Imported photo processing machines were insured in transit for Rs. 53 lakh. One machine was damaged and the other was found sound. The National Commission awarded the full Rs. 53 lakh. The Supreme Court reversed that award in part. Except life, personal accident and contingency insurance, policies are contracts of indemnity. The insured recovers only the actual loss proved, and the sum insured is the outer limit. The Court awarded the cost of replacing the damaged printer, on surrender of the damaged machine.
Contracts that are not contracts of indemnity
- Life insurance. Human life cannot be valued in money. The insurer pays the fixed sum assured on death or maturity, whatever the actual loss to the family.
- Personal accident insurance. A fixed sum is paid for death or the loss of a limb, as stated in the policy.
- Valued policies. In marine insurance the parties may agree the value in advance. Under section 29(3) of the Marine Insurance Act, 1963, that value is conclusive between them in the absence of fraud. It binds them even if the real value turns out to be different. A valued policy is therefore only a partial departure from indemnity.
Dalby v. India and London Life Assurance Co., (1854) 15 CB 365, settled that life insurance is not indemnity. A company re-insured part of its own policies on the life of the Duke of Cambridge. Its original policies were later cancelled, so it had no loss when the Duke died. Yet it recovered the full sum, because a life policy is a promise to pay a fixed sum on death.
Indemnity modified by agreement
A reinstatement value policy pays the cost of new property, not depreciated value, if the insured actually replaces it. This goes beyond strict indemnity, but only by agreement and on conditions.
Comparison
| Point | Indemnity insurance | Non-indemnity insurance |
|---|---|---|
| Examples | Fire, marine, motor, burglary | Life, lump-sum accident |
| Amount paid | Actual loss, up to the sum insured | Fixed sum assured |
| Subrogation and contribution | Apply | Do not apply |
| Insurable interest | At the start and at the loss | At the start only |
Conclusion. The statement is correct. Indemnity controls fire, marine, motor and other property insurance, and gives rise to subrogation, contribution and average (Castellain v. Preston). The sum insured is only a ceiling, and the insured recovers his proved loss (Kantika Colour Lab). But life and lump-sum accident policies, and valued policies, are not contracts of indemnity, as Dalby shows. They pay an agreed sum because the loss cannot be, or has not been, measured in money.
The rest of the answers
The first answer is free. The rest come with the KSLU B.A. LL.B. Semester 8 solved papers.
You have read the question paper and its first answer in full. Buy the solved papers once and you can read every answer of every solved paper in this semester.
Solved papers: ₹499 Already bought it? Sign in
The question paper itself stays free.
Found an error in this volume? Report it and we will check it against the paper.