Insurable Interest Bill 2018: A Critical Analysis
| Author | Sean Burke |
| Position | LLB (Hons) (Winton), LLM (Soton) |
| Pages | 61-70 |
(2021)
Vol. 11
61
Insurable Interest Bill 2018: A Critical Analysis
Sean Burke
*
Abstract
In 2016, a consultation exercise was conducted by the Law Commission of England and Wales with the aim of
‘improving an antiquated and restrictive insurance law.’ Resultantly, in 2018, the Law Commission published a
draft Bill, with regards to the reform of insurable interest in life and life-related insurances. The fundamental
objective this paper sets out to achieve is to establish whether or not this draft Bill has successfully accomplished
its overarching aim of updating the law surrounding life and life-related insurable interest as well as elucidating
any discrepancies ingrained within its current existence. This paper will criti cally analyse this dr aft Bill with
particular attention pai d to the pressing problems potentially solved by this legislation as well as the problems
potentially caused by it. It will provide a comprehensive analysis into the issues each clause of the Bill will likely
cause, doing so in ascending order.
Introduction
ince 2006, the Law Commission of England and Wales (hereinafter ‘the Law
Commission’), in collaboration with the Scottish Law Commission, have embarked on
a radical reform of insurance contract law, with the overarching objective of ‘improving
an antiquated and restrictive insurance law’.
1
Thus far, the work has led to a usually
unresponsive government enacting the recommendations, culminating in Royal Assent being
granted and the Consumer Insurance (Disclosure and Representations) Act 2012 (hereinafter
CIDRA 2012) as well as the Insurance Act 2015 coming into force. These represent
watershed moments in the development of insurance contract law and have, in many ways,
fundamentally altered the landscape of such. However, the Law Commissioners identified
another area of interest for consultation and possible reform.
In 2016, a short consultation exercise was conducted, and subsequently, a draft Bill was
produced with regards to the reform of insurable interest.
2
Overall, it was a popular
proposition.
3
However, there was almost unanimous agreement between consultees that, in
fact, amendments were required, and details needed reviewing, in particular, there was
significant concern over the ‘interaction with current market practice’. The most prominent
concern, though, regarded non-life insurance. There was an unequivocal consensus that that
specific area should be left alone. The comments suggested an ‘if it’s not broken, don’t fix it’
type feeling from consultees.
4
Resultantly, two years forward, the Law Commission has
published a draft bill, appropriately titled the ‘Insurable Interest Bill 2018’
5
(hereinafter the
‘Bill’), which is confined to solely life and life-related insurances.
*
LLB (Hons) (Winton), LLM (Soton).
1
‘Insurance Contract Law: Insurable Interest’ (Law Commission, 2020)
<https://www.lawcom.gov.uk/project/insurance-contract-law-insurable-interest/> accessed 17 December 2020.
2
Law Commission, ‘Draft Insurable Interest Bill 2016 For Consultation’ (Law Commission, 2016) <https://s3-
eu-west-2.amazonaws.com/lawcom-prod-storage
11jsxou24uy7q/uploads/2016/04/draft_Insurable_Interest_Bill_April_2016.pdf> accessed 17 December 2020.
3
ibid.
4
ibid.
5
ibid.
S
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