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Compendium of Insurance Law




1.1 This Chapter sets out the statutory framework for the regulation of insurers. The history of the regulation of insurance companies is long but not particularly glorious. Insurance appears to be as old as trading itself, and the practice of marine insurance seems to have spread to England in the twelfth and thirteenth centuries with the development of England as a maritime and trading power. The foundation of Lloyd’s in the seventeenth century secured England’s prominence as a provider of marine insurance for both domestic and foreign purchasers, and other forms of insurance followed. Fire insurance grew in the aftermath of the Great Fire of London in 1666, and life insurance—with its origins in the various forms of mutual assistance societies—had become of some significance by the end of the eighteenth century. The industrialisation of the first half of the nineteenth century, and the winning of the battle for corporate limited liability in 1847, opened the way to what has been termed the “Golden Age of British Insurance” in the second half of the nineteenth century. This period saw the consolidation of various new forms of insurance, including personal accident insurance (brought about by the increasing use of trains), reinsurance, livestock insurance and machinery insurance. As the law of liability expanded, most importantly at the workplace, liability insurance followed. Consumer mass insurances did not of course develop until the post-Second World War period. What can be seen, therefore, is a gradual move, over a period of three centuries, from insurance as a form of protection for merchants and the privileged few, to the growth of what is probably England’s pre-eminent financial industry.