Despite the long and influential history of insurance in the United Kingdom, the basic questions of what is an insurance contract and therefore what is an insurance company still pose a difficult problem. The number of cases that the courts have had to answer are few, but it may well be that the growing Governmental powers of supervision of insurance companies will generate more cases in the near future, particularly as the requirements of the EEC Directives on various aspects of insurance regulation are introduced into the domestic law of the U.K.

The handful of cases that do exist divide into two groups, those where a shareholder or policy holder seeks to prove that the company is acting ultra vires and should cease a particular type of insurance business and those where a Government agency is endeavouring to show that the company is transacting insurance business and therefore is governed by their regulatory powers. The cases are dealt with below, however, in chronological order.

In Prudential Insurance Company v. Commissioners of Inland Revenue 1 the company sought the opinion of the Inland Revenue as to the stamp duty payable under s. 12 of the Stamp Act 1891, on a policy they had issued. The policy was entitled, Old Age Endowment with Life Assurance from entry to 65 years of age. In consideration for a weekly premium of 6d. the company agreed to pay a sum of £95 should the assured reach the age of 65 years and, if he died before that age, the company would pay £30 to the deceased’s executors or administrators. Additionally, the policy provided for further payments if it remained in force for five years. The policy was taken out by a father for the benefit of his 13-year-old son. The calculation of the sums involved were made after reference to actuarial life tables. This type of endowment policy had first appeared at the beginning of the 18th century, and by 1863 had become very common, so much so that by the turn of the century they comprised (apart from industrial assurance), the largest part of the business transacted by life assurance companies. The Commissioners were of the opinion that the main part of the policy was not one of life assurance as defined in the Stamp Act 1891, whereby the duty payable would have been one shilling but considered it coming under the heading “Mortgage, Bond, Debenture, Covenant”, and was thus subject to duty of 2s. 6d. The court held against the Commissioners. The Stamp Act, while defining a policy of insurance, merely