Indemnity Contract Research Articles

The Impact of the Sarbanes-Oxley Act on Takeover Protection Provisions

We investigate the effects of the Sarbanes-Oxley (SOX) Act on corporate governance metrics, such as the takeover protection provisions and the governance index (G-index). We look at provisions related to takeover protection such as severance agreements, indemnity contracts, golden parachutes, compensation schemes, director liability and indemnity. We examine the effects of SOX between the two periods, designating the 1998–2000 timeframe as the pre–SOX period and the 2002–2004 timeframe as the post–SOX period. Then, in order to determine whether these provisions were affected in any way after 2004, we compare the values from 2004 to the values from 2006. We discover that between the pre-SOX and post-SOX periods, the G-index mean score had increased, indicating a declining degree of total shareholder rights. When we examine the six protection provisions, we discover that two of them—compensation plans and golden parachutes—had deteriorated (i.e., the percentage of firms using these measures had increased) and four of them—indemnification contracts, severance agreements, director indemnity, and director liability—had improved. Put differently, following the passage of the Act, businesses began to select different takeover protection options. However, the SOX's long-term effects were restricted to two variables only. After 2004, the proportion of companies employing golden parachutes climbed (i.e., negatively), whilst the percentage of companies utilizing severance agreements decreased (i.e., positively). We conclude that, in general, the SOX Act had a favorable effect on the majority of the measures that we looked at, with the exception of two measures: golden parachutes and compensation schemes.

NARROW YET BROAD; CLEAR YET BLUR: THE LAW OF CONTRACT OF INDEMNITY IN INDIA

The Contract of Indemnity is a wide used clause used frequently within the mercantile fraternity. However, the same has been down written in the Indian Contract Act under two sections, namely, 124 and 125. There is yet an ongoing dilemma whether the two clauses cover implied indemnity within its ambit and on when does the indemnity contract comes into play in favor of the promisee. Moreover, there is ambiguity on whether the term indemnity is synonymous to the terms such as damages, compensation, reimbursement and restitution. The following article distinctly attempts to resolve these obscurities. Furthermore, there are frequent mercantile disputes where the crystal yet coinciding line between indemnity, insurance and subrogation are blurred out. Therefore, the author comes up with a concentric circle mode of solution to resolve the entire vagueness of the Indian Contract of Indemnity, 1872. In addition to this, the author has also pointed out that despite the two sections being looked down upon as being a narrow scope of indemnity to be compatible with the transnational disputes; if the contemporary precedents being taken into account and the parent contract of indemnity is examined cautiously, the two plain sections are a massive ground to rely upon while resolving contemporary transnational as well as domestic trade disputes on indemnification. Lastly, the author recommends a few suggestions that can be taken into account while resolving the civil law disputes of indemnification in the contemporary era unless a massive amendment is undergone by Sections 124 and 125 of the Act, 1872.

A Critical Exposition of Contingent and Indemnity Contracts under the Law of Contract in Pakistan

A Critical Exposition of Contingent and Indemnity Contracts under the Law of Contract in Pakistan

The Differences Between Surety and Indemnity Contracts

Garanti ile kefalet sözleşmeleri kişisel teminat sözleşmelerinin bir türüdür. Bu sözleşmenin tarafı olan alacaklı, borç ifa edilmediği takdirde güvence verene başvurma imkânı kazanır. Kefalet sözleşmesi Türk Borçlar Kanunu’nda (TBK) açıkça düzenlenmişken, garanti sözleşmesi ancak TBK’nın 128. maddesi ve içtihatlar ışığında yorumlanabilmektedir. Uygulamada ve teoride bu iki sözleşmenin ayrımını yapmak her zaman kolay olmamıştır. “Aslilik- fer’ilik”, “yorum” ve “taraf iradeleri” gibi ölçütler bu hususta yol göstericidir. Tüm bunların yanında yasa koyucu, TBK’nın 603. maddesiyle kefalet sözleşmesinin kefili koruyucu yanlarının bertaraf edilmesi çabasının da önüne geçmek istemiştir. Bu mecburiyet özellikle bankacılık faaliyetlerinde, borca güvence veren gerçek kişilerin uğradıkları mağduriyetten doğmuştur. Daha önce yargı kararlarıyla yapılan yorum, bu şekilde kanuni zemine oturtulmuştur.

The Principle of Indemnity in Valued Marine Policies

To consider people are encountering many perils that threat their health, life and property as such people interested to insure their belonging and get rid of risk and danger to live and work tranquility. As stated that marine insurance is the oldest branch of insurance and now days most of trade is by sea transportation and economic of countries are rely on export and import which are strongly depend on marine insurance, because the marine insurance plays an important role in the world and has high position. And how marine insurance includes the loss and which losses are not included considering one of the most important subjects for that person who wants to insure their life and property. The paper intends to give a wide-ranging account of the principal of indemnity in a marine insurance and analyses which losses are not included by a marine insurance contract. A policy of assurance has long held is not perfect contract of indemnity. This paper attempt is to examine this truism in the context of value policies.

Designing contracts for a reverse supply chain with strategic recycling behavior of consumers

In this paper, we propose five typical contracts to coordinate decentralized reverse supply chains with strategic recycling behavior of consumers. First, a reverse supply chain model with strategic recycling behavior of consumers is developed based on the classical newsvendor problem. Next, after analyzing the wholesale price contract, we find that the collection quantity of used products increases with the wholesale price. Then, we develop a two-stage price contract and find that under this contract the manufacturer could increase the collection quantity by offering a direct incentive to the collector. Afterwards, using the centralized optimal profit as the benchmark, we compare the wholesale price contract with the subsidy contract and the cost-pooling contract respectively. The results show that the subsidy contract is more beneficial to the manufacturer, while the cost-pooling contract is helpful to the collector, yet both lead to lower transfer prices than the wholesale price contract for reverse supply chains. Finally, we design an indemnity contract and conclude that the collector's maximum performance is achieved only when the transfer price equals to the indemnity. The total profit of the reverse supply chain under the indemnity contact is not less than that under the wholesale price contract.

Difference between Contract of Indemnity and Contract of Guarantee: Ten Case Analysis

The paper discusses the difference between Contract of Indemnity and Contract of Guarantee. The determination of the nature of contract is a matter of construction and depends upon facts of each case. The paper analyzes ten prominent cases on this issue.

Minor differences

Minor differences

Our Money or Your Life: Indemnities vs. Deductibles in Health Insurance

When the value of a medical treatment differs across individuals, it may be socially beneficial to treat some, but not all, patients. If individuals are ignorant of their health status ex ante, they should be willing to purchase insurance fully covering treatments for high-benefit patients (Hs) and denying treatment for low-benefit patients (Ls). But if prognoses are observable but not verifiable, insurers may have trouble denying care to Ls. Deductibles force Ls to reveal their status by imposing a marginal cost on treatment, but at a price of incomplete risk-sharing. Lump-sum indemnities can similarly induce Ls to forgo treatment but are rare in health insurance markets. They were once more common and remain so in non-health markets. This paper reviews the potential for health insurance indemnities. We model an insurance market for a single illness and derive conditions determining the relative efficiency of indemnities and deductibles.We define a disease that strikes randomly, where there is no private information, and where benefits are measured as cure rates. These and other assumptions yield several rules of thumb: It is never socially or (ex ante) privately beneficial to offer an indemnity larger than the cost of treatment. The optimal indemnity is always larger than the optimal deductible. If Ls outnumber Hs, the best deductible contract always yields higher welfare than the best indemnity contract. As the Ls' cure rate approaches 0, the choice of indemnity or deductible depends entirely upon the relative numbers of Hs and Ls.

Insurance Contract Design When the Insurer Has Private Information on Loss Size

AbstractThis article examines the optimal indemnity contract in an insurance market, when the insurer has private information about the size of an insurable loss. Both parties know whether or not a loss occurred, but only the insurer knows the true value of the loss and/or to what extent the losses are covered under the policy. The insured may verify the insurer's loss estimate for a fixed auditing cost. The optimal contract reimburses the auditing costs in addition to full insurance for losses less than some endogenous limit. For losses exceeding this limit, the contract pays a fixed indemnity and requires no monitoring. The optimal contract is compared with the contracts obtained in cases where it is only the insured who can observe the loss size.

SUBROGATION AND INDEMNITY

A Ford employee named Roberts carelessly drove a forklift truck into Morris, a person employed by Ford's cleaning contractor, Cameron. Morris sued Ford. Ford admitted vicarious liability for Roberts' negligence, and claimed against Cameron under a clause in the cleaning contract whereby Cameron had agreed to indemnify Ford against any loss or liability arising out of the cleaning operation. Cameron conceded liability to Ford under this clause and now sought an indemnity from Roberts, the careless employee of Ford: Morris v Ford Motor Co. [1973] 2 W.L.R. 843. The trial judge upheld Cameron's claim, but the Court of Appeal (Stamp L.J. dissenting) allowed Roberts' appeal on the ground that an implied term in the indemnity clause (or, per Lord Denning M.R., equitable considerations) excluded Cameron's normal right, as indemnitor, to be subrogated to Ford's right of recourse against Roberts, their careless employee, this right of recourse having been held by the House of Lords in Lister v Romford Ice & Cold Storage Co. [1957] A.C. 555 to enure even to the insured employer. Cameron has been granted leave to appeal, so the House of Lords has a good opportunity to reconsider Lister. While, at the technical level, Morris turns on the implications of a contract of indemnity and Lister deals with the implications in a contract of employment, the situation underlying both cases raises basic questions about the interaction of tort and that most familiar of indemnity contracts, insurance.

Design of an Optimal Indemnity Contract: Fixed Payment Contract vs. Variable Payment Contract

Design of an Optimal Indemnity Contract: Fixed Payment Contract vs. Variable Payment Contract

The Role of Uncertainty on Alternative Disaster Management Strategies

The work presented in this paper is an outgrowth of a multi—year study at the Wharton School of the University of Pennsylvania on Managing Catastrophic Risks. We focus on the role of homeowners and insurance companies in managing the hazard from earthquake risk. Specifically, we consider alternative earthquake disaster management strategies for a typical homeowner and a small insurance company in the Oakland, California region. These strategies involve the adoption of mitigation measures and the purchase of earthquake insurance by the homeowner and the purchase of an indemnity contract (e.g., excess—of—loss reinsurance) by the insurer. We focus on how uncertainty impacts these disaster management strategies. Specifically, we illustrate the impact of structural mitigation and risk—transfer mechanisms on the insurer's performance when there is uncertainty in the company's risk profile. This risk profile is captured through a loss exceedance probability (EP) curve, representing the probability that a certain level of monetary loss will be exceeded on an annual basis. Parameters considered in the sensitivity analysis that will shift the loss EP curve include: earthquake recurrence, ground motion attenuation, soil mapping schemes, and the exposure and vulnerability of the residential structures. The paper demonstrates how uncertainty in these parameters impacts the cost effectiveness of mitigation and reinsurance on the insurer's profitability and chances of insolvency, as well as the number of policies the insurer is willing to issue.

Customizing Indemnity Contracts and Indexed Cat Bonds for Natural Hazard Risks

This article examines how reinsurance coupled with new financial instruments can expand coverage to areas exposed to catastrophe losses from natural disasters, and demonstrates how reinsurance and the catastrophe‐linked financial instruments can be combined to lower the price of protection from its current level. A simple example illustrates the relative advantages and disadvantages of pure catastrophic bonds and pure indemnity reinsurance in supporting a structure of payments contingent on certain extreme events occurring. The authors suggest ways to combine these two instruments using customized catastrophe indices to expand coverage and reduce the cost of protection. This article states six principles for designing catastrophic risk transfer systems and discusses practical issues for implementation, and then concludes with suggestions for future research.

Optimal insurance under Wang’s premium principle

Wang et al. (1997) [Axiomatic characterization of insurance prices. Insurance: Mathematics & Economics 21(2), 173–183] propose axioms for pricing insurance that characterize the premium principle of Wang (1996) [Premium calculation by transforming the layer premium density. ASTIN Bulletin 26, 71–92]. Under this premium principle, the price to insure a given risk is the expectation of the risk with respect to a distorted probability. In this paper, we assume that prices are given by Wang’s premium principle. We determine the optimal indemnity contract for a risk-averse buyer who acts to maximize expected utility. Deprez and Gerber (1985) [On convex principles of premium calculation. Insurance: Mathematics & Economics 4, 179–189] describe the optimal insurance for convex premium principles that are Gâteaux differentiable. Wang’s premium principle is convex, but it is not Gâteaux differentiable; thus, we extend the work of Deprez and Gerber (1985) to this special case.

Optimal indemnity contracts

Conditions under which policies with deductible provisions, coinsurance provisions, or premium rebates are optimal are given. Results of previous papers on indemnity costs are considered as special cases. For both personal and commercial lines of insurance, further applications consider income taxes, interest income and acquisition costs.

Probability distributions of aggregate sickness durations

Abstract The statistic that is obviously appropriate for calculating the premium to be charged for sickness indemnity insurance is the so-called “sickness rate”, namely the age-specific average number of days of covered sickness per person per annum. In fact most sickness experiences since early in the nineteenth century have been limited to the calculation of sickness rates for various covered durations of sickness. However if one is interested in the probability distribution of the length of sickness, as one would be if one wished to calculate the risk reserve required on a given portfolio of sickness indemnity contracts, it is necessary to measure both the probability of becoming sick in a specified interval and that of remaining sick for various periods thereafter. An early example of the calculation of these two different types of probability is the Leipzig sickness society's publication of its data on the first 34 weeks of sickness collected in the period 1887-1905. 1

Contracts. Illegal Contracts. Indemnity Contract Closely Related to Antecedent Illegal Act Is Unenforceable. Kansas City Operating Corp. v. Durwood (8th Cir. 1960)

Contracts. Illegal Contracts. Indemnity Contract Closely Related to Antecedent Illegal Act Is Unenforceable. Kansas City Operating Corp. v. Durwood (8th Cir. 1960)

Process. Securities Act of 1933. Extrastate Service upon Third-Party Defendants Permitted Whether Liability Was Asserted under Statute or under Contract of Indemnity

Process. Securities Act of 1933. Extrastate Service upon Third-Party Defendants Permitted Whether Liability Was Asserted under Statute or under Contract of Indemnity

Contracts of Indemnity. Public Policy. Langley v. Fidelity Insurance Company of Canada, [1935] O. R. 424

Contracts of Indemnity. Public Policy. Langley v. Fidelity Insurance Company of Canada, [1935] O. R. 424