Kerr LJ summarised the aim of the Directives underlying the 1977 Regulations as being to achieve a uniform classification of non-life insurance businesses and of insured risks for the purposes of the supervision of insurers with a view to ensuring their solvency and proper administration. He continued: ‘The wording of the Regulations appears to me to demonstrate that the allocation of particular insurances into their appropriate class of Regulations requires the need for an examination of the manner in which the particular risks are written. This is a question of the true construction of the wording of the cover (see per Lord Reid, at p. 468C) and the wording of the classes of the Regulations are directed to this question. In the context of the possibility of committing a criminal offence, by writing unauthorised insurance business, this interpretation is no doubt undesirable, artificial and unbusinesslike. And if it were not for the safeguard against prosecutions in section 81 of the Act of 1974 and the transitional provisions of the Regulations to which I come later, I should struggle even more strongly against this interpretation of the Regulations. But in his examination of the authorities Mr. Kentridge satisfied me that whenever it has been material to consider the nature of the precise interest or risk insured, its description in the contract is crucial. Thus, in Wilson v. Jones (1867) L.R. 2 Ex. 139, where a shareholder in a cable laying company took out cover on the successful laying and installation of a transatlantic cable of which part was subsequently lost at sea, it was held that he could recover because his insurance was upon the success of the adventure and not upon the cable itself, in which he had no insurable interest. Similarly in other well known marine insurance cases such as Joyce v. Kennard (1871) L.R. 7 Q.B. 78 and Cunard Steamship Co. Ltd. v. Marten [1902] 2 K.B. 624, where it was essential to determine whether the insurance was ‘on’ goods or insurance against liability for goods, the wording of the cover and not the nature of the insurable interest was held to be decisive.
The conclusion to which I am driven, unfortunately from the point of view of what seems to me to be business sense, is that this is the approach which has to be adopted for the purpose of assigning the ‘nature of business’ in Schedule 1 to its appropriate class of the Regulations.’
Judges:
Kerr LJ
Citations:
[1988] QB 216, [1987] 2 All ER 152
Statutes:
Insurance Companies (Classes of General Business) Regulations 1977
Cited by:
Cited – Digital Satellite Warranty Cover Ltd and Another v Financial Services Authority SC 13-Feb-2013
The appellants challenged an order for the dissolution of their company under the 2000 Acts. They had provided warranties for assorted consumer electrical goods which amounted to insurance, but said that they were not required to be registered under . .
Lists of cited by and citing cases may be incomplete.
Financial Services, European
Updated: 04 May 2022; Ref: scu.470964