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Insurable interest is the most recent topic of attention of the Law Commission team responsible for the Consumer Insurance (Disclosure and Representations) Act 2012 and the Insurance Act 2015.
This “double-header” lecture will consider the case for and against abolition of the doctrine of insurable interest, with a particular focus on interests in life assurance.
As a topic, insurable interest continues to be discussed and (occasionally) litigated as new forms of insurance product (and new examples of the perverse incentives insurance can create) arise. Comparable jurisdictions (e.g. Australia) have largely abolished the requirement of an insurable interest without alarm.
Insurable interest may have a significant role to play in establishing the boundary between insurance and other risk-related contracts such as gambling and credit default swaps.
James Davey is Professor of Insurance and Commercial Law at the University of Southampton, where he is a member of the Institute of Maritime Law and co-director of the Insurance Law Research Group. He has published extensively on insurance law and regulation, including articles in the Cambridge Law Journal, Lloyd’s Maritime & Commercial Law Quarterly and the Journal of Business Law. He has a keen interest in insurance law theory, including aspects of behavioural economics as a model for regulation.
Stephen Lewis, a former BILA Chairman, was appointed as Law Commissioner for Commercial and Common Law on 1 January 2015. For the previous 10 years he was a consultant at Clyde and Co, working within the firm’s international insurance and reinsurance group. He joined Clyde and Co after almost 20 years as a partner at Clifford Chance. Stephen’s responsibilities at the Law Commission include the recent further consultation on insurable interest, a report on which is currently awaited.