Reforming The English Law On Insurable Interest

5955 words - 24 pages

Introduction:

The law on insurance in the UK has not been updated for quite long and the call for reform is catching pace by every passing day. The issues to be raised in this research are the areas where reform is needed, the reason there is this need and what would be achieved by the reform. This research will however be confined to one major area where reform is required, namely, the insurable interest. This area might seem to be minimal but there are many issues within this area which needs to be clarified and reformed. This area affects the daily lives of a common person in the UK and it has been the courts and to some extent the insurers themselves who are giving them remedies. This ...view middle of the document...

The purposes of insurable interest can be identified as follows:
► Prevention of Gambling: Any insurance contract without insurable interest is a gambling contract and these cannot be legally enforced.
► Reducing intentional losses: It is a common belief that the requirement of insurable interest reduces intentional losses resulting from moral hazards.
► Enforcing the principle of indemnity: This principle states that a person should not profit from an insured loss. A contract of indemnity provides payment of a sum equivalent to the loss and therefore if a person has not suffered any loss the insurer has no duty to indemnify against that loss.

Before the enactment of the Marine Insurance Act 1745, English law acknowledged the European doctrine that the marine insurance contract required an insured to have an interest in the subject matter to have a contract of indemnity. During the 17th century insurers started issuing policies which did not require any insurable interest by including the words “interest or no interest”. Therefore it clearly suggested that parties were not interested in the interest but were rather wagering under the cover of insurance policies.
The first time the courts criticised these policies directly was in the case of Goddard v Garrett . However, the courts were not fully hostile towards these policies as these were beneficial to merchants and traders and they sometimes even turned a blind eye towards it. In the 18th century the courts not only approved these policies but also redefined the concept of wagering to accommodate the wagering character of these policies .

With the enactment of the Marine Insurance Act 1745 the Parliament prohibited the ‘interest or no interest policies’. It made all these policies null and void . The purpose was not only to prevent gambling but the adverse effect wagering had on the overall trade in the country. The most common mischief was that of fraudulent claims and deliberate losses which put lives and property at risk which was in turn loss for the underwriters.

However, not all was good as wagering policies were allowed for foreign ships and cargo for the reason that bringing witnesses from abroad was difficult . There were a few other exceptions in Sections 2 and 3 of the Act but are out of the ambit of this discussion.

In Lucena v Craufurd Lord Eldon and Lawrence J established that the ownership of the property was not the only source of interest but there had to be sufficient certainty of benefit from the safety of the property (factual expectation of benefit from the continued existence of property ).

During the 19th Century the courts usually referred to Lord Eldon’s rules in cases where insurable interest was an issue. It was also further refined to include situations where the assured was liable to bear the cost of loss and damage to insured property. The court decided many cases where they clarified the issues and...

Other Papers Like Reforming the English Law on Insurable Interest

The Impact of English Loanwords on Russian Language

3819 words - 16 pages The impact of English loanwords on the Russian lexis for the recent decades Introduction Russian people for a long time have been involved into the political, commercial, scientific and cultural relations with other nations. At the same time the Russian language has been replenished with words from other languages. Loanwords from ancient languages Greek and Latin, words from Dutch, German, Polish, Ukraine and other languages mastered the

Examine The Effects Of A Change In Interest Rates On The Price Of Equity And Government Bonds. Briefly Explain What Other Major Factors Affect The Price Of Equity. 1911 Words

2036 words - 9 pages gilts on behalf of HM Treasury.As with all forms of assets gilts pay a annual yield, known as the coupon in the gilt edged market. However the coupon isn't a perfect guide to the interest rate the Government had to pay when they issued the gilt because stocks are sometimes issued at a premium or discount o their par value.The prices of gilts are determined primarily by interest rates but are also influenced by news and technical influences.Firstly

Our Interest in the Parallels Between Pride and Prejudice and Letters to Alice on First Reading Jane Austen Is Further Enhanced by Consideration of Their Marked Differences in Textual Form

1235 words - 5 pages Our interest in the parallels between Pride and Prejudice and Letters to Alice on First Reading Jane Austen is further enhanced by consideration of their marked differences in textual form. Evaluate this statement in light of your comparative study of Pride and Prejudice and Letters to Alice on First Reading Jane Austen. The parallels of social ideologies between the past and the present continue to be of interest to the contemporary reader

Does the English Child Protection System Enable Children and Young People to Exercise Their Rights Under the Un Convention on the Rights of the Child. Discuss Critically with Reference to Current...

3125 words - 13 pages *Does the English Child Protection System enable children and young people to exercise their rights under the UN Convention on the Rights of the Child.* Discuss critically with reference to current legislation, literature and research. The ‘United Nations Convention on the Rights of the Child (1989)’ (UNCRC) is a human rights treaty designed specifically to cater to children and young people around the world. It was created because it was

In English Class We Were Given The Freedom To Write On Any Personal Topic. I Chose To Describe The Effects That Evolution In Terms Of Ascension Will Have On Biology And Society

2301 words - 10 pages the authentic self, I will do my part to unfold human potential to consciously evolve on physical, mental, intuitive, creative, and spiritual levels.Many aspects are addressed in a process that has been called "ascension" or the process by which we rise above the current paradigm of disunity on all levels conscious, subconscious, and unconscious. For me this is a process that will bring about being my most authentic self in every moment. The first

By 1750 the English Colonies on the North American Mainland Had Matured and Changed. What Were the Key Ways in Which the Colonial Societies of This Era (1700-1750) Differed from Those of the Early...

827 words - 4 pages , religious beliefs, cultural liberty but no major changes in the social equality and political liberty of the colonies during this time. All colonies developed different economic systems based upon the weather and local resources. The major part of economy was based on export to England and other European countries. The northern colonies had fishing and shipping industries with small manufacturing. The Southern colonies exported crops like

Insurable interest case study

563 words - 3 pages transfers the title to him. Adia and her cousin move into an apartment. With two months remaining on the Ajax policy, a fire totally destroys the house, at the same time, Adia's third cousin dies. Both insurance companies tender back premiums but claim they have no liability under the insurance contracts, as Adia did not have an insurable interest.Insurable interest can be established through either pecuniary (monetary), or relationship.Pecuniary

Life Insurance Collateral in New York

1747 words - 7 pages security interests in insurance policies.1 Instead, counsel must go back in time to pre-UCC law to find answers. Creation of Security Interest In general, institutional lenders seek to obtain a security interest in a life insurance policy by a debtor's delivery of a written collateral assignment of the policy. Counsel will deliver the collateral assignment (or a copy) to the insurer for its endorsement and recording on its records. However, such

Aig Fair or Foul?

576 words - 3 pages had agreed to give AIG an additional loan of $37.8 billion. While on their spending spree they managed to spend another $86,000 on an English hunting trip. The WSJ reported that a family sued AIG for alleged complicity in a ‘stranger-originated life insurance’ scheme, whereby AIG managers welcomed people without an insurable interest to take out policies against other people not even know to them. Tempers really began to flare up when

Businessn Law

588 words - 3 pages AFRICA NAZARENE UNIVERSITY CAT ONE. ANSWER ALL QUESTIONS TO BE SUBMITTED ON 7TH NOVEMBER 2014 Question One What is the significance of section 3 of the judicature Act (Chapters 8 of the Laws of Kenya) and of the 12th August 1897 in determining the regime of law applicable in Kenya. (10 Marks) Question Two On Monday, Albert inspected Betty’s car at her house in Rongai and offered to pay ksh 3,000,000 for it. Betty wanted Ksh

Business Law

588 words - 3 pages AFRICA NAZARENE UNIVERSITY CAT ONE. ANSWER ALL QUESTIONS TO BE SUBMITTED ON 7TH NOVEMBER 2014 Question One What is the significance of section 3 of the judicature Act (Chapters 8 of the Laws of Kenya) and of the 12th August 1897 in determining the regime of law applicable in Kenya. (10 Marks) Question Two On Monday, Albert inspected Betty’s car at her house in Rongai and offered to pay ksh 3,000,000 for it. Betty wanted Ksh

Related Essays

The Influences Of English On Chinese

649 words - 3 pages The Influences of English on Chinese We drink kekoukele. we surf the yintewang. We wear Txushan. We watch DVD. Unconsciously, the Chinese we speak today is not that authentic and orthodox anymore. Everywhere in our life, we can see the vague shadow of English. As the air permeates every corner of the space, English permeates our language, our culture and our mind silently. After doing some extensive research, today I want to show you

On The Language Characteristics Of English Advertisement

2763 words - 12 pages On the language characteristics of English advertisement Introduction In modern age, we find ourselves surrounded by various advertisements every day. An American writer writes:” we find advertisements of all kinds everywhere, for example, glittering neon signs on top of high buildings and along main streets, colorful pictures painted on buses, pamphlets sent to every house, advertisements jammed between TV programs, various ads glutting

The Impact Of The Fugitive Slave Law On Abolitionism

1231 words - 5 pages The Impact of the Fugitive Slave Law on Abolitionism     In his first draft of the Declaration of Independence, Thomas Jefferson accused the King of Britain of violating the sacred human rights of life and liberty by promoting slavery as a means of economic development. While Congress omitted this section from the final document, it does show that slavery was an issue for the American nation from its inception. So, while it may have been

The Effect Of Morality And Justice On Law

1164 words - 5 pages The Effect of Morality and Justice on Law Over the years, the legal personnel of the English Legal System have tried to separate law from morality and justice. This has proven to be quite a hard task considering the fact that even the House of Lords judges allow their morals to influence their decisions on certain cases. I think it is difficult to separate morality from law because most of the laws in Britain are