Insurance Act 2021 and Pension Fund Management

Questions and Answers

What occurs when two identical offers are sent by two parties to each other?

Cross offer (correct)

Unilateral contract

Counter offer

Bilateral contract

What does a purported acceptance that includes 'subject to contract' imply?

It specifies conditions that are binding.

It is an effective communication of acceptance.

The acceptance is not binding until a formal agreement is signed. (correct)

It is a definitive acceptance.

In which case did the court rule that an acceptance could constitute a valid contract despite the absence of a formal agreement?

Lindsell v. Adams

Adams v. Lindsell

Felthouse v. Bindley

Medz-Moroukian v. Haroutunian (correct)

What is required for an acceptance to be valid?

It must be communicated to the offeror through a prescribed method. Signup and view all the answers

When does acceptance by post take effect?

When it is posted. Signup and view all the answers

What is the consequence of silence or mere intention to accept an offer?

It cannot be considered an acceptance. Signup and view all the answers

In Adams v. Lindsell, what mistake did the defendant make regarding the offer?

He misdirected the offer letter. Signup and view all the answers

What does it mean if a method of acceptance is prescribed but not insisted upon?

Any method available can be used safely. Signup and view all the answers

What is a primary restriction placed on trustees or pension fund managers regarding investments?

They can't invest in shares issued by themselves or related parties. Signup and view all the answers

What is one of the main objectives of the National Insurance Commission?

To contribute to the stability of the financial system. Signup and view all the answers

Which of the following is NOT part of the National Insurance Commission's objectives?

Support the development of sustainable transport. Signup and view all the answers

How is the National Insurance Commission characterized as a legal entity?

As a body corporate with perpetual succession. Signup and view all the answers

What role does the National Insurance Commission play in relation to banks?

It regulates banks that are licensed by the Central Bank. Signup and view all the answers

What is a purpose of the working relationship among financial regulators?

To ensure consistent regulatory approaches to licensees. Signup and view all the answers

Which of the following functions is NOT performed by fund managers regulated by the National Pension Regulatory Authority?

Complying with insurance regulations. Signup and view all the answers

What does the National Insurance Commission aim to support in the insurance market?

Financial inclusion within the insurance market. Signup and view all the answers

What is required for an appointment to be valid in a corporate body?

It requires a seal and signature from an authorized officer. Signup and view all the answers

What liabilities do past members of a company face if the company winds up within one year of their leaving?

They may be required to cover the company's debts and expenses. Signup and view all the answers

Which of the following actions can shareholders take?

Institute legal proceedings if the board is unresponsive. Signup and view all the answers

Which of the following decisions requires a resolution from the members at their meeting?

Considering the company's accounts. Signup and view all the answers

Under Section 144(1) of Act 992, how can a company act?

Through members of general meeting or appointed officers. Signup and view all the answers

When can members of a company act independently of the board?

When board members are unable to act due to deadlock. Signup and view all the answers

What is the nature of liability for limited liability companies?

Liability is restricted to their unpaid share value. Signup and view all the answers

Which of the following duties requires prior recommendation from the board?

Declaration of dividends. Signup and view all the answers

What does section 147(1) state about the acts of members in a general meeting or the board of directors?

They are acts of the company. Signup and view all the answers

Under what condition can a person transact with a company without assuming liability for the company's actions?

If the person knew about the board's limitations. Signup and view all the answers

What document can a person presume to be authentic according to section 150 of Act 992?

A document bearing the company seal. Signup and view all the answers

What is the status of a person having dealings with a company in relation to its incorporation?

They can presume the company is duly incorporated. Signup and view all the answers

Which of the following statements is true regarding the authority of company officers or agents?

They have implied authority for customary business operations. Signup and view all the answers

When is a person not entitled to assume a company's authority according to section 150?

If they have actual knowledge to the contrary. Signup and view all the answers

What happens to a contract if it includes a meaningless phrase?

The meaningless phrase can be removed without affecting the contract. Signup and view all the answers

What liability does a company face when a managing director acts in the usual course of business?

It is criminally and civilly liable for that act. Signup and view all the answers

Under what conditions can a contract be considered illegal?

If it involves a breach of criminal law or forbidden subject matter. Signup and view all the answers

Which of the following is NOT considered a presumption an individual can make when dealing with a company?

The company's officers are acting beyond their authority. Signup and view all the answers

What is required for a contract to be valid in terms of consideration?

Consideration must have legal status and real value. Signup and view all the answers

In the context of consideration, what did Currie v. Misa (1875) establish?

Consideration can be a benefit to one party and a detriment to another. Signup and view all the answers

What does the term 'consideration' imply in a contract?

The exchange of something valuable between parties. Signup and view all the answers

What was the legal outcome for the employee in Miller v. Karlinski (1945)?

He was unable to recover salary due to the illegal nature of the transaction. Signup and view all the answers

Which of the following statements about consideration is true based on Kwadey v. Okantey (1972)?

A promise made in exchange for a cessation of litigation is valid consideration. Signup and view all the answers

What determines the severability of a phrase in a contract?

The importance attached to the clause by the parties. Signup and view all the answers

Study Notes

Trustee and Pension Fund Regulations

Section 178 prohibits trustees or pension fund managers from investing in shares or securities issued by themselves, custodians, or their shareholders to avoid conflicts of interest.

National Insurance Commission

Established under the Insurance Act, 2021 (Act 1061) to regulate and supervise the insurance market.
A body corporate with perpetual succession, can sue and be sued.
Objectives include:
- Promoting a fair, efficient, and stable insurance market.
- Protecting past, current, and prospective customers.
- Contributing to stable financial systems.
- Encouraging financial inclusion and insurance penetration.

Working Relationships Among Financial Regulators

Regulatory bodies have supervisory roles over licensees.
The National Insurance Commission regulates banks licensed by the Central Bank acting as custodians and public companies.
Fund managers regulated by the National Pension Regulatory Authority are also licensed by the Commission.

Liability of Members (Section 40 of Act 992)

Members must contribute to outstanding amounts before winding up.
Past members are liable for company debts if winding up occurs within a year after leaving.
Shareholders have rights to:
- Recommend actions to the board.
- Ratify board decisions.
- Initiate legal actions on behalf of the company when necessary.
- Act in specific cases of board incapacity or deadlock.
Resolutions made at member meetings include:
- Dividend declarations and accounts consideration.
- Director and auditor appointments and remuneration fixings.

Acts Done by or on Behalf of the Company

A company acts through its members or board as per the constitution.
Company is liable for acts performed by members or directors within their authority.
Liability exceptions apply if the person knew of a lack of authority or irregular actions.

Legal Assumptions Regarding Company Dealings

Assumptions for external dealings include:
- Valid incorporation and appointment of officers.
- Authority of officers to issue documents and authenticate them.
- Seals of the company being duly authenticated.
These assumptions are invalidated if the person had actual knowledge to the contrary.

Contractual Decisions and Acceptance

Cross offers do not constitute acceptance as both are offers.
Acceptance may be conditional upon a formal contract being drawn up.
Acceptances must be communicated clearly; mere intention or silence does not count.
If a mode of acceptance is prescribed, it must be followed; otherwise, any reasonable method may suffice.
Acceptance by post is effective upon posting.

Legality of Purpose

Contracts may be void if they involve illegal activities or breaches of law.
Ignorance of law does not excuse illegality in contracts.

Consideration

Contracts require consideration, which is the value exchanged between parties.
Defined as rights, benefits, or detriments that accrue to parties involved.
A promise can only be enforced if the promisee provided consideration.
Consideration must be real and sufficient, though not necessarily adequate.
Past rulings illustrate that certain agreements, even informal, can constitute binding contracts.

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Description

This quiz covers key aspects of Section 178 of the Insurance Act, 2021, focusing on the regulations that prevent trustees and pension fund managers from conflicts of interest when investing pension fund assets. Explore the roles of the National Insurance Commission and the implications for fair dealings in fund management.