Life Assurance Act 1774
| Territorial extent | Great Britain |
|---|---|
| Other legislation | |
| Relates to | Life Insurance (Ireland) Act 1866 |
Status: Current legislation | |
| Text of the Life Assurance Act 1774 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk. | |
The Life Assurance Act 1774
Provisions
The act has only four sections:
- Section 1 seeks to deal with these abuses by stipulating that henceforth no assurance is to be made on the life of any person or persons, or on any other event, where the person for whose use the policy was made had "no interest" in the matter, or if it were clearly done for the intent of "gaming or wagering", and that any assurance made contrary to this requirement was deemed null and void.
- To aid in preventing this, section 2 required that any such policy include the names of the persons who stood to benefit by it.
- Section 3 stipulated that, in all cases where the insured party had a legitimate interest in the life or event, they did not recover more than the value of their interest from the policy, guarding against the related abuse of deliberate overinsuring.
- For the avoidance of doubt, section 4 stated that the Act did not extend to legitimate insurances of ships, goods or merchandise. Gaming or wagering in relation to British ships and merchandise was already prohibited by the Marine Insurance Act 1745.
Sections 2 and 3 were amended by the
The defendant company in the important contract law case of
Effects
The Act did not define what an "insurable interest" was, and it has since been held as the definite expectation of suffering a financial loss directly due to someone's death. It is generally accepted that a person has an insurable interest in the life of someone financially supporting them - for example, in the life of their parent whilst they are still a juvenile - but that this interest can cease if the situation changes. In a 1904 case, it was held that a man insuring the life of his elderly mother to pay funeral expenses, where he was not at all dependent upon her, was void.[6] However, note that as long as an insurable interest existed at the time the policy was created, it remains valid even if the interest later ceases.[7]
A person is considered to have an unlimited interest in their own life
The Act co-governs (with other law) policies of life insurance, including investments that are packaged under the umbrella of life assurance, such as
References
- ^ short title was authorised by the Short Titles Act 1896, section 1 and the first schedule. Due to the repeal of those provisions it is now authorised by section 19(2) of the Interpretation Act 1978.
- ^ Halsbury's Laws, vol.44(1) (reissue), "Statutes", para 1268.
- short title given by the Short Titles Act 1896.
- ^ Annual Register for the year 1774, p.212-3
- ^ Carlill v. Carbolic Smoke Ball Company [1893] 1 QB 256
- ^ Harse v. Pearl Life Assurance Co Ltd [1904] 1 KB 558
- ^ Insurances Archived 2006-10-23 at the Wayback Machine, Fraser Brown solicitors.
- ^ Griffiths v. Fleming [1909] 1 KB 805; M'Farlane v. Royal London Friendly Society (1886) 2 TLR 755.
- ^ Griffiths v. Fleming [1909] 1 KB 805; Married Women's Property Act 1882, section 11.
- ^ Report on Family Law; Cohabitation, s. XVI Archived 2007-09-27 at the Wayback Machine, Scottish Law Commission.
- ^ For example, the investor was only able to recover his own plus any dependancy share of his mis-sold investment in Fuji Finance Inc v. Aetna Life Insurance Co Ltd [1997] Ch 173, [1996] 4 All ER 608. He could not claim against the input he made to his co-owner's stake save to the extent he can be deemed to be a direct dependant.
External links
- Text of the Life Assurance Act 1774 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.