Lloyd's Maritime and Commercial Law Quarterly
LEGAL OR EQUITABLE RELATIONSHIP TO INSURED SUBJECT-MATTER AS A DETERMINANT OF INSURABLE INTEREST—THE APPROACHES OF ENGLISH AND SWEDISH LAW
Johanna Hjalmarsson *
It has been said about English law on insurable interest that it “is antiquated, sometimes unclear and prevents legitimate business”
1
and that it is “a confusing and illogical mess”.
2
In the light of the Law Commissions’ consideration of the topic
3
a discussion of the
raison d’être of the regulatory principles as well as an outward look to other jurisdictions is called for. Swedish insurance contract law recently underwent partly radical changes to the concept of insurable interest providing a test case for an alternative approach.
4
1. Scope of the requirement
In English law, life insurance is now not considered indemnity insurance.5
Nevertheless, a requirement for insurable interest remains at the time of making the insurance. By contrast, in Swedish law,6
for insurance of persons (encompassing commercial life,
* Informa Law Research Fellow in Maritime and Commercial Law, University of Southampton. The author wishes to thank the Institute for Maritime and Transport Law at the University of Stockholm, in particular Dr Johan Schelin and Ms Tammie Simpson, for generous permission to use its library as well as kind and cheerful assistance, and is as ever grateful to Professor Rob Merkin, University of Southampton, for his support. Any errors are attributable to the author only.
The following abbreviations are used in the footnotes:
Bengtsson: B Bengtsson, Försäkringsavtalsrätt
(Norstedts Juridik, Stockholm, 2006);
Clarke, LIC
: MA Clarke, The Law of Insurance Contracts
, 5th edn (Informa, London, 2006);
GFAL: (Swedish) Insurance Contracts Act 1927: Lag (1927:77) om försäkringsavtal;
Hellner: J Hellner, Försäkringsrätt (Försäkringsjuridiska Föreningens Publikation Nr 15: Stockholm, 1965);
Hult: Ph Hult, Föreläsningar över försäkringsavtalslagen
(PA Norstedt & Söner, Stockholm, 1936);
Prop: Government Proposal for the Insurance Contracts Act 2005.
1. Law Commissions, Insurance Contract Law—Analysis of responses and decisions on scope
(2006), [3.3].
2. RM Merkin, Reforming Insurance law: Is there a case for Reverse Transportation?
, available at http://www.lawcom.gov.uk/docs/merkin_report.pdf
(accessed on 12 November 2007).
3. See Law Commission, Insurance Contract Law: Misrepresentation, Non-Disclosure and Breach of Warranty by the Insured
(LCCP 182; Sc L Com DP No. 134, 2007), [1.3].
4. A revised Insurance Contracts Act entered into force in Sweden on 1 January 2006. The Act is comprehensive and generally consumer protection oriented, and only a small number of provisions are mandatory in a business context. The decades of work preceding the enactment of the new text, which replaces the Insurance Contracts Act from 1927 (“GFAL”) as well as the Consumer Insurance Contracts Act from 1980, ensures that it is mostly a well-adapted and at the very least interesting and modern product.
Brief introductions to the Act may be found at R-M Lundström, “Swedish Act Crystallises”, in Insurance Day, 10 March 2006 or J Hjalmarsson, “Insurance contract law reform in Sweden” (2006) 18(5) ILM 1–3.
5. Dalby
v. India & London Life Assurance Co
(1854) 15 CB 365.
6. Life Assurance Act 1774, s 1; Feasey
v. Sun Life Assurance Corp of Canada
[2003] Lloyd’s Rep IR 637.
97