In order to judge whether insurable interest exists in property insurance contract, mature theories are put forward in two major legal systems. Nowadays the theory of economic insurable interest and the theory of factual expectation are welcome in German law and common law respectively. Specifically speaking, based on distinguishing the different kinds of insured interests, the theory of economic insurable interest aims to emphasize that insured interest ought to be determined by the risk bearing standard instead of formal ownership during the transaction process, while the theory of factual expectation insists that insured interest should not be judged only by legal or equitable interest but also by factual expectation. What’s more, Anglo-American legal system expands the scope of ownership insurable interest to solve the problems related to the insurance coverage of bailees in practice. The difficulties in Chinese judicial practice are mainly reflected in two aspects as follows. Firstly, carriers ought to purchase liability insurance while they prefer to buy cargo insurance containing ownership insurable interest. Secondly, it is not clear who has insurable interest during the transaction process. Based on the article 1 and article 8 in the Interpretation IV of the Supreme People’s Court on Several Issues concerning the Application of the Insurance Law（Draft for Comments）, the drafters tend to adopt the theory of economic insurable interest to solve the above problems. According to that theory, for one thing, carriers will get nothing from the insurance contracts only containing ownership insurable interest, for another, the transferring of insurable interest is consistent with the change of risk bearing. Owing to the removal of the rules whether carriers have ownership insurable interest in goods, the formal provisions show that the drafters still have doubts about the distinction among different insurable interests under the theory of economic insurable interest, but this theory is the better choice at present because of our insurance law system. On the one hand, there are many differences between insurance practice and the theory on insurable interest; on the other hand, it is also difficult to find out the value of insurable interest in each case, so the theory of economic insurable interest is not perfect. In the future, we should combine the principle of indemnity with the theory of culpa in contrahendo to improve and perfect rules about insurable interest which are unique and have special functions in insurance law.
Dilemma and Outlet: Judgement of Insurable Interest in Property Insurance Contract
Journal of Shanghai University of Finance and Economics Vol. 22, Issue 03, pp. 124 - 137,152 (2020) DOI:10.16538/j.cnki.jsufe.2020.03.009
Cite this article
Zhang Liyi. Dilemma and Outlet: Judgement of Insurable Interest in Property Insurance Contract[J]. Journal of Shanghai University of Finance and Economics, 2020, 22(3): 124-137.