Section 61: Liability of insurers

61. Liability of insurers (1) Where, after a certificate of insurance has been issued, under section 57 (3), to the person by whom a policy has been effected, judgment in respect of such liability as is required to be covered by a policy under section 57 (1) (b), being a liability covered by the policy, is obtained against any person insured by the policy, the insurer shall, notwithstanding that he may be entitled to avoid or cancel, or may have avoided or cancelled, the policy, but subject to this section, pay to the persons entitled to the benefit of the judgment any sum payable in respect of— (a) the liability; (b) costs; and [Issue 1] R27 – 52 Revised Laws of Mauritius (c) interest by virtue of any enactment relating to interest on judgments. (2) No sum shall be payable by an insurer under subsection (1)— (a) in respect of a judgment, unless before or within 14 days after the commencement of the proceedings in which the judgment was given, the insurer had notice of the proceedings; (b) in respect of a judgment, as long as its execution is stayed pending an appeal; or (c) in connection with any liability, where, before the occurrence of the event which was the cause of the death or bodily injury giving rise to the liability, the policy was cancelled by mutual consent or by virtue of any provision contained in it, and the Commissioner was informed of the cancellation and— (i) before the occurrence of the event, the certificate was surrendered to the insurer, or the person to whom the certificate was issued, made a declaration stating that the certificate had been lost or destroyed; (ii) after the occurrence of the event, but before the expiry of a period of 14 days from the taking effect of the cancellation of the policy, the certificate was surrendered to the insurer or the person to whom the certificate was issued made the declaration under subparagraph (i); or (iii) either before or after the occurrence of the event, but within the period of 14 days specified in subparagraph (ii), the insurer has commenced proceedings under this Part in respect of the failure to surrender the certificate. (3) (a) No sum shall be payable by an insurer under subsection (1) where, in an action commenced before or within 3 months after the commencement of the proceedings in which the judgment was given, he has obtained a declaration that— (i) apart from any provision contained in the policy, he is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact or by the representation of fact which was false in some material particular; or (ii) where he has avoided the policy on the ground specified in subparagraph (i), he was entitled so to do apart from any provision contained in it. (b) An insurer who has obtained a declaration under paragraph (a) in an action shall not become entitled to the benefit of any judgment obtained in proceedings commenced before the commencement of that action unless, before, or within 7 days after, the commencement of that action, he had given notice to the person who is the plaintiff in those proceedings, specifying the non-disclosure or false representation on which he proposes to rely, and any person to whom notice of such an action is so given shall be entitled, if he thinks fit, to be made a party to it. R27 – 53 [Issue 3] Road Traffic Act (4) Where the amount which an insurer becomes liable, under this section, to pay, in respect of a liability of a person insured by a policy, excee the commencement of that action, he had given notice to the person who is the plaintiff in those proceedings, specifying the non-disclosure or false representation on which he proposes to rely, and any person to whom notice of such an action is so given shall be entitled, if he thinks fit, to be made a party to it. R27 – 53 [Issue 3] Road Traffic Act (4) Where the amount which an insurer becomes liable, under this section, to pay, in respect of a liability of a person insured by a policy, exceeds the amount for which he would, apart from this section, be liable under the policy in respect of that liability, he shall be entitled to recover the excess from that person. (5) In this section— “liability covered by the policy” means a liability which would be covered by the policy but for the fact that the insurer is entitled to avoid or cancel, or has avoided or cancelled, the policy; “material” means of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk, and, if so, at what premium and on what conditions. (6) In this Part, references to a certificate of insurance in any provision relating to the surrender, loss or destruction of a certificate of insurance shall be construed— (a) in relation to policies under which more than one certificate is issued, as references to all the certificates; and (b) where a copy has been issued of a certificate, as including a reference to that copy. (7) (a) Where— (i) a policy of insurance has been issued or a security has been given in respect of third party risks in relation to the use of a motor vehicle; and (ii) during the continuance of the policy or security under subparagraph (i), the vehicle is sold, the policy or security shall, notwithstanding the sale and the non-issue of a certificate of insurance or a certificate of security to the purchaser, be deemed for the purposes of this Part to have been effected by, or been given to, the purchaser. (b) The policy or security shall have effect and remain in force until— (i) 2 days after the Commissioner has received notification in writing from the insurer or the giver of the security that the policy or security has been cancelled; or (ii) the expiration of the policy or security, as the case may be.