Insurable interest and fraud

In the light of the Law Commissions’ recent proposals on insurable interest, and in particular their recommendation that it should remain necessary for a person taking out a policy to possess an insurable interest in the life assured, the facts of Patel v Windsor Life Assurance Co Ltd [2008] EWHC 76 (Comm) must raise serious doubts as to whether the insurable interest requirement is really any protection against fraud on behalf of the beneficiary of the policy. The circumstances of the fraud may be extreme, but it seems that a number of reputable insurers were taken in by it.

Patel: the facts

At the end of 2000, applications were made to a number of life insurers for insurance on the life of one Amitkumar A Barot.