The rule was first recognized by Lord Mansfield (2) in 1766 and codified in 1906 in English maritime insurance law.3 The rule was enshrined in U.S. maritime insurance law by the U.S. Supreme Court, which stated that “[t]he is a mutual insurance contract; and the principles that define them are those of an enlightened moral policy. Presumably, the insurer assumes that the party to the insurance party does not, at this stage, have raw material for the risk it does not disclose. 4 “The roots of the Uberrimae Fidei doctrine are therefore deeply rooted in American law, having had nearly 200 years to assert themselves. 5 Born centuries ago of British maritime insurance legislation, the doctrine of uberrimae fidei or “very good faith” has adopted, in recent decades, a specific application within the framework of reinsurance. This development has led the courts to address issues such as. (b) whether the obligation is the basis of an independent remedy, a building instrument applicable to contractual remedies or a fair remedy for resignation. An understanding of the nature and history of doctrine and its evolution in the context of reinsurance is useful, both in terms of contract negotiations, claims development and management, as well as reinsurance arbitrations and litigation. The relative lack of uniformity in the application of uberrimae fidei in the context of reinsurance leaves much room for debate and, perhaps more optimistically, creativity. The maxim refers to a contract of legal agreement that requires the highest level of good faith during the disclosure of all essential facts that could influence the other party`s decision. Non-compliance with uberrimae fidei is one of the reasons for the cancellation of the agreement. Insurance contracts are the most common type of insurance contract, as the parties are required to respect a degree of good faith higher than that of the general law of the contract.
The applicant must disclose all essential facts and circumstances. Uberrimae fidei is in opposition to the term “caveat emptor,” which means “let the buyer watch.” Caveat emptor is a contractual principle that governs, for example, the sale of real estate. Caveat emptor is also a disclaimer reinsurance contracts require the highest level of uberrimae fidei. Indeed, reinsurance companies consider “the greatest good faith” as the basis of their sector. With respect to the obligation to disclose all essential facts, the case of reinsurance is no different from that of an initial insurance. Engagement in both cases is an obligation to fidei uberrimae. The duty of communication is in fact independent of intent and is violated by concealment, even if there is no intent to deceit. Information activity may, in some cases, be more important in the case of reinsurance than between parties to an initial insurance7 “Other examples, which are generally included, although not all stricto sensu exchange contracts, are share underwriting contracts in a company, family comparisons, land sales contracts, bond contracts and partnerships. The principles of uberrimae fidei were first expressed by the British Lord Mansfield in the Carter v Boehm case (1766). He said: “Insurance is a contract of speculation… The particular facts on which the conditional opportunity must be calculated are more often than not only the knowledge of the insured.
The Underwriter relies on his presentation and is confident that he does not take any circumstances in his knowledge to deceive the insurer into the belief that the circumstance does not exist… Good faith prohibits both parties from hiding what they know in private, from drawing the other from his ignorance of this fact and his belief in a good deal. Uberrimae fidei or uberrima fides refers to insurance contracts.