2. Outline the laws governing insurance contracts. Insurance contracts are governed by a combination of common law principles (especially contract law), and statutory law, which regulates the formation, operation, and enforcement of insurance agreements. Common Law (Roman Dutch Contract Law) Insurance contracts are first and foremost contracts, and must therefore comply with all general requirements of a valid contract:      Consensus Capacity Legality Possibility Formalities (if applicable) Additionally, insurance contracts are contracts Uberrimae fidei (of utmost good faith), which imposes unique duties on the parties. Common law principles specific to insurance include:      Insurable interest: The insured must stand to suffer direct loss from the event. Indemnity: In non-life insurance, the aim is to place the insured in the same position as before the loss. Subrogation: The insurer, after paying a claim, can take over the rights of the insured to recover from third parties. Contribution: If multiple policies cover the same risk, each insurer pays a proportion of the loss. Disclosure: The insured must disclose all material facts that could influence the insurer’s decision. The Insurance Act 18 of 2017 This is the main statute regulating insurers and insurance business in South Africa. Key Provisions:     Establishes prudential standards to ensure the financial soundness of insurers. Introduces licensing requirements for insurers. Regulates corporate governance, risk management, and capital requirements. Empowers the Prudential Authority to supervise and enforce compliance. Financial Sector Regulation Act 9 of 2017 (FSRA) Creates a twin peaks system of regulation:  The Prudential Authority oversees financial soundness of insurers.  The Financial Sector Conduct Authority (FSCA) focuses on market conduct (fair treatment of policyholders). Policyholder Protection Rules (PPRs) Issued under the Long-term Insurance Act and Short-term Insurance Act, now integrated into the 2017 Insurance framework. Key Protections Include:     Clear and understandable disclosure of policy terms. Cooling-off periods (usually 31 days). Prohibition of unfair clauses and misleading advertising. Duty on insurers to handle claims fairly and timeously. Long-term and Short-term Insurance Acts (now largely replaced by the Insurance Act) These two statutes used to regulate life insurance and non-life (general) insurance separately.  The Long-term Insurance Act 52 of 1998 and the Short-term Insurance Act 53 of 1998 still apply in some respects (mainly regarding transitional matters and regulations), but their core provisions have been consolidated into the Insurance Act 18 of 2017. Consumer Protection Act 68 of 2008 (CPA) Applies to insurance contracts insofar as they constitute consumer agreements, especially:    Protection against unfair contract terms, Disclosure requirements, Right to fair value, good quality, and safety. Note: If the insurance agreement falls under the FSCA's regulatory jurisdiction, the CPA may not fully apply due to sector-specific exemptions. Other Applicable Laws  The Law of Evidence: Applies to the interpretation and proof of insurance claims.  The Prescription Act 68 of 1969: Insurance claims are usually subject to a 3-year prescription period. The Companies Act 71 of 2008: Applies to insurers as corporate entities. 