MANAGEMENT

Detailed explanation-1: -The doctrine of utmost good faith is a principle used in insurance contracts, legally obliging all parties to act honestly and not mislead or withhold critical information from one another.

Detailed explanation-2: -Material fact refers to the relevant and important fact that can form the basis of taking a decision. In life insurance, material facts influence the insurer’s decision of insuring a risk and issuing a policy. Non-disclosure of material facts can lead to cancellation of the policy.

Detailed explanation-3: -The principle of utmost good faith states that the insurer and insured both must be transparent and disclose all the essential information required before signing up for an insurance policy. It states that both the parties must disclose all the material facts before subscribing to the policy.

Detailed explanation-4: -The term of principle of utmost good faith is also known as the principle of uberrima fidei or buying and selling contracts based on good intentions.

Detailed explanation-5: -Principle of Utmost Good Faith-According to this principle, insurance is a contract based on faith. The insured and insurer must disclose all the material facts regarding the purpose and the subject matter of the insurance.