The Study On The Marine Insurable Interest Doctrine

The principle of insurable interest,the principle of maximum good faith,the principle of loss compensation,and the principle of near cause constitute the four basic principles of the insurance law.The principle of insurable interest is the basis and core principle of the insurance law.The concept of insurable interest was originally born in Italy's marine insurance at the end of the 13 th century.It has been developed for more than a hundred years and has made an indelible contribution to the development of the insurance industry.It plays a role in distinguishing insurance and gambling,preventing moral hazard,limiting the amount of compensation,determining the subject matter of insurance,avoiding duplicate insurance,maintaining insurance order,and promoting the sound development of the insurance market.However,with the development of the insurance market,the principle of insurable interest has exposed more and more problems in practice.Some people have questioned that the principle of insurable interest not only does not play its original function,but also unduly hinders the innovation of the insurance market.Others have proposed that the principle of maximum good faith and loss compensation is sufficient to prevent gambling and prevent moral hazard.The principle of insurable interest can be completely replaced.The application of this principle will onlyaggravate the complexity of insurance practice.At present,there is indeed a precedent in the international community to abolish the principle of insurable interest: Australia first abolished the insurable interest claim in damages insurance in its 1984 Insurance Contract Law,and then in its 1995 Life Insurance Law.The requirement for the principle of insurable interest has been completely abolished.So far,insurable interest are no longer required in Australia for both life insurance and property insurance.In2001,Australia initiated the reform of the Maritime Insurance Law.Considering the particularity of marine insurance and the possible negative consequences of the abolition of the principle of marine insurable interest on marine insurance,Australia did not abolish the principle of marine insurable interest.Subsequently,the United Kingdom,which is the birthplace of the principle of insurable interest,has also aroused the call to abolish this principle.Since 2006,the United Kingdom has reformed its domestic insurance contract law.An important issue of reform is the abolition of the principle of insurable interest.However,after decades of research and discussion,the UK ultimately retained the principle of insurable interest and did not make any changes to the insurable interest principles established by the Marine Insurance Act of 1906.As one of the major shipping countries in the world,Norway still maintains the principle of insurable interests in the Nordic Marine insurance plan of 2013,which was formed on the basis of the Norwegian Marine insurance plan in1964.The attitude of these shipping powers towards the marine insurable interest principle proves from the side that the principle still has its necessity and plays a certain role in Marine insurance,which is of great reference significance for China's attitude towards this principle.On this basis,this paper further analyzes the main existing disputes on the principle of marine insurable interest,including the development status and existing problems of this principle in China.Combined with the background of the revision of China's maritime law,the final goal is to provide some legislative Suggestions for the improvement of the principle of marine insurable interest in China.This paper consists of five parts.The first part mainly elaborates the basic theory of the principle of marineinsurable interest and is divided into two major blocks.The first piece first introduces the origin and birth history of the principle.The principle of insurable interest originated from marine insurance.Since there were a lot of gambling and speculation in the field of marine insurance,which seriously disrupted the normal navigation and social order,the principle of insurable interest came into being.Therefore,the principle is inherently equipped with two major functions-preventing gambling and preventing moral hazard.Insurable interest is the main boundary between insurance and gambling.Without insurable interest,insurance is a tool for gambling.Preventing moral hazard helps prevent criminal offence.It is especially important for life insurance.The essence of insurable interest has laid an important role in the insurance system,making it gradually applied to other areas of the insurance market and becoming one of the basic principles of the insurance industry.The second section introduces the evolution and development history of the principle of insurable interest.The principle was not taken seriously at first,and the PPI clause was prevalent.Until the introduction of the British Maritime Insurance Law of 1745,it was written into the statute law as an important principle.Since then,it has been continuously inherited and developed,and in 1906 The Maritime Insurance Law has been improved.The law uses more than a dozen clauses to specify the principle.It is obvious that this principle is attached.Since then,the promulgation of the "Gambling Law 2005" has triggered a dispute over the principle of abolishing the interest of insurance,and the idea of replacing the principle with the principle of damage compensation is also rampant.Therefore,the author further analyzes the relationship between the two principles,and concludes that the principle of damage compensation should not replace the principle of insurable interest.The second part discusses the legislative situation of the current international insurable interest principle.At present,the international community can be roughly divided into two legislative attitudes: affirmative and negative.The former is represented by the United Kingdom and Norway,and the latter is represented by Australia.As a radical representative who advocates the abolition of the principle of insurable interest,Australia believes that the principle is a combination of inaccuratedrafting and historical accidents,rather than the implementation of clear and consistent legislative policies.It believes that the insurable interest is not necessarily related to the validity of the contract and the compensation for economic losses,and the existence of the principle will become a common means for the insurer to refuse compensation,which is unfavorable for the stability of the insurance market and the development of economic trade.Therefore,Australia took the lead in abolishing the principle of insurable interest in its domestic life insurance and property insurance.On the other hand,based on the appearance of a similar Leather case,the Australian Law Commission considered that the principle of insurable interest exacerbated the complexity of insurance for maritime cargo transportation and the unfairness of the insured,and therefore advocated the abolition of the principle in marine insurance,but The Law Commission's recommendations were not formally responded to by the Australian Government and the principle was retained.The UK is a conservative country representative who retains the principle of insurable interest.Affected by the reforms in Australia,the English Law Commission initially proposed to abolish the principle of insurable interest,and repeatedly issued questionnaires and consultation documents to the public to solicit opinions from the community.However,most of the feedback received is against the abolition of the principle,but should be amended.The British Law Commission adopted these opinions and finally decided to retain the principle.After decades of development,a separate draft law on insurable interest,the Insurance Interests Act of 2018(Draft)was issued.But it has no effect on marine insurance.That is to say,the British marine insurable interest principle is still subject to the "1906 Marine Insurance Law",and the status of the insurable interest principle established in the law is still deeply rooted.As a representative of civil law countries and one of the world's important marine insurance markets,Norway has applied the2013 Nordic Maritime Insurance Plan,to the other three Nordic countries Sweden,Finland and Denmark.The legislative attitude not only represents the four Nordic countries,but also has far-reaching influence on other civil law countries.From the provisions of the 2013 Nordic Marine Insurance Plan,Norway or Northern Europe also supports the marine insurable interest.Therefore,from the perspective of thecurrent international legislative attitude,the marine insurable interest still have its value and significance,and should not be abolished at the moment.The third part discusses one of the main problems existing in the marine insurable interest–the criteria is not clear.In general,whether it is the Anglo-American legal system or the civil law system,the criteria for judging the marine insurable interest can be divided into two types: the statutory interest theory and the economic interest theory.According to China's "Insurance Law" on the definition of insurable interest,China also belongs to the "legal interest theory" faction.For the definition of insurable interest,the statutory interest was established by the 1906 Marine Insurance Law,which is known as the“Bible”of the marine insurance law,and has long occupied an orthodox position.However,due to its strict requirements on the insured,the insurer often used this as a technical defense tool for refusal,which hindered the benign operation of the insurance market.Therefore,in order to stimulate the vitality of the insurance market and meet the actual needs of the insurance market,economic benefits are gradually becoming mainstream.The fourth part discusses another major controversy of the marine insurable interest: the subject transfer standard.In the early days of the maritime trade,the sea cargo was usually escorted by the owner himself.Therefore,the owner of the goods enjoyed full insurable interest to the goods.At this time,the ownership was used as a criterion for judging the attribution of insurable interest.However,with the development of international trade,the situation has become complicated,and the ownership and risk of goods are often separated.Under the current rules of international trade terms,the seller is often the owner of the goods,and the buyer is the risk bearer of the goods.Based on the nature of the loss compensation of insurance,only one party can enjoy the insurable interest,and the risk burden standard appears,that is,who bears the risk and who has the insurable interest.Although the risk burden standard is more in line with today's shipping practices,there are some limitations to this standard that need to be improved.On the basis of the first four parts,the fifth part puts forward some suggestions on adding the principle of marine insurable interest in the Maritime Law in light ofthe problems existing in China's marine insurable interest principle and the revised background of China's Maritime Law..The first is to define a clear definition of the principle of insurable interest in the Maritime Law,and the definition should be based on loose economic interests as a standard to cater to the practice of marine insurance and to be in line with the international.At the same time,it is recommended to define the principle of compensation,the principle of maximum good faith and the principle of proximity,and avoid confusion between these principles.Second,it is clear that the transfer of the subject of marine insurable interest is based on risk transfer.Where the goods are delivered to the carrier prior to shipment,the seller bears all risks associated with the delivery of the goods before the first carrier;the buyer bears all risks of loss of or damage to the goods from the delivery of the first carrier.Where the goods are delivered to the carrier at the time of shipment,the seller bears all risks of crossing the cargo on the side of the ship;the buyer bears all risks of loss of or damage to the goods over the ship's rail.The risk-taking party has an insurable interest in the goods from the time the risk is assumed.At the same time,for the defects of the risk transfer standard,it is also recommended to make up for it through legislation.Thirdly,the consequence of the lack of insurable interest in the Maritime Law is that the contract is invalid.Unless the insured has fraud or intention,the insured can retrieve the premium paid by him.In addition,it is recommended to clarify the principle of marine insurable interest.Subject to the scope of the subject,the owner of the ship,the mortgagee of the ship,the ship insurer,the buyer,the seller,the carrier,the cargo insurer and the pledge of the bill of lading may all be the subject of the insurable interest.