Lloyds

Where a warranty is broken, the assured cannot avail himself of the defence that the breach has been remedied, and the war ranty complied with, before loss.

Double Insurance.

Where two or more policies are effected by or on behalf of the assured on the same adventure and interest, or any part thereof, and the sums insured exceed the indemnity allowed by the Marine Insurance Act, the assured is said to be over-insured by double insurance. In such circumstances he may according to the Act, claim payment from the insurers in such order as he may think fit, unless the policy otherwise provides, but he is not entitled to receive any sum in excess of the indemnity allowed by the Act. Where, however, the policy is a valued policy, the assured must give credit as against the valuation for any sum received by him under any other policy without regard to the actual value of the subject matter insured. Where the policy is unvalued, he must give credit, as against the full insur able value, for any sum received by him under any other policy, and where the assured receives a sum in excess of the indemnity allowed by the Act, he is deemed to hold such sum in trust for the insurers, according to their right of contribution amongst themselves.

The insurers, on their part, are bound, by the Act, to con tribute rateably to the loss in proportion to the amount for which they are liable under their contracts, and if any insurer pays more than his proportion of a loss, he is entitled to main tain an action for contribution against the other insurers. Where the assured has over-insured under an unvalued policy, a propor tionate part of the premium is returnable, but if the policies have been effected at different times, and the earlier policy has, at any time, borne the entire risk, or if a claim has been paid on the policy in respect of the full sum insured, no premium is return able in respect of that policy nor is any premium returnable when a double insurance is effected knowingly by the assured.

Subrogation.

Where there is a loss either partial or total, the insurer becomes entitled to the advantage of every right of the assured in respect of the subject matter of the loss. A good

example of this is where there has been a total wreck, and the underwriter has paid a total loss, since he then becomes entitled to the proceeds of the sale of the wreck. On broad lines, the assured must account to the insurer for any diminution of the loss. A very general application of this right of subrogation is where the insurer pays a loss and then proceeds against a third party to recover; for his own benefit, but in the name of the assured ; in respect of a liability that third party may have in curred.

Re-Insurance.--Re-insurance is the indemnification of one insurer by another in respect of liabilities that the former has incurred in the course of business, and the Marine Insurance Act of 1906 gives the re-insured an insurable interest in his risks, but stipulates that unless the policy provides, the original assured has no right or interest in respect of such re-insurance. Re-in surance may be either facultative, which is the re-insurance of specified individual risks, or by treaty. A treaty of re-insurance is an agreement by one insurer to accept a stated proportion of the whole, or any specified part of, the business accepted by another, it being customary to place limits as to the maximum amount that may be given off under the treaty. In connection with these treaties an anomalous situation has arisen concerning their val idity under British law, for while they are undoubtedly contracts of marine insurance, the fact that they cover no specified amount makes it impossible to pay duty on them in accordance with the provisions of the Stamp Act so that it would seem that they are unenforceable in law. The leading legal decision on this point is that of the House of Lords In re National Benefit Assurance Co., Ltd. (31 Ll. L. Rep. 321). In practice, however, legal difficulties are not likely often to arise, since most treaties provide that stamped policies shall be issued in respect of the risks accepted under the contract, and in the event of dispute arising, legal action can be taken on these policies.