Mumbai University Solved Question Papers
Law of Insurance
Previous Year Question Paper with Solution
LLB 3 years · Sem 6
Nov 2016 Examination
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LLB 3 years Sem 6 Law of Insurance Nov 2016 Question Paper with Solutions
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First published on munotes.in on 24 October 2026.
Published by munotes.in, Mumbai.
Model answers written and edited by the munotes.in editorial desk.
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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 the University of Mumbai at the Nov 2016 examination.
Contents
The questions below are the paper as the University of Mumbai set it at the Nov 2016 examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the Nov 2016 examination, reproduced as the University of Mumbai set them, in the order it set them. Nothing has been reworded, added or left out. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 25 questions answered
Instructions printed on the paper
- N.B: (1) Answer all questions. (2) The Figures to the right indicate the marks.
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.
1.
Q.1: Write answers in one or two lines
20 Marks - 2 marks each
(1)Define a contract of insurance.[2]
Answer
A contract of insurance is a contract between an insurer and an insured. In return for a payment called the premium, the insurer promises to pay money or give a benefit. It pays if a stated uncertain event happens that harms the insured's interest.
The judge-made definition. In Prudential Insurance Co. v. Commissioners of Inland Revenue, [1904] 2 KB 658, Channell J. gave three marks of such a contract:
- a payment of money, or a benefit worth money, on the happening of an event;
- the event must involve some uncertainty, either whether it will happen or when it will happen; and
- the event must be adverse to the interest of the insured.
The premium is the price paid for the insurer taking on the risk.
The statutory definition. Since 5 February 2026 the Explanation to section 2(6D) of the Insurance Act, 1938 defines an "insurance contract" as one "whereby the insurer, on payment of premium, undertakes to assume risk and to pay to the insured person an agreed compensation for loss, damage or liability arising from a contingent event". A contingent event is one that may or may not happen.
Example. A trader pays a premium of ₹20,000 for a fire policy on his godown. If a fire destroys the stock, the insurer pays for the loss.
Conclusion. Insurance is a contract that moves the risk of an uncertain loss from the insured to the insurer in return for a premium.
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