Insurance Contracts CP - Law Reform Commission

to the extent of monies actually expended. AL Smith J distinguished this situation from instances where a
legal obligation to support a child is imposed by law, as in the case of a father and his son. Case-law
holds that should a son seek to contractually recognise benefits obtained from his father no insurable or
pecuniary interest will arise and any policy will be void as between the insurer and the insured:
Worthington v Curtis. 127 The policy behind such instances varied somewhat; the most obvious instances
being a desire to protect vulnerable persons 128 and require truthful disclosures by proposers.
2.76 The fact that natural love and affection was limited to spouses, judged at the time of taking out
the insurance policy led to a range of legislative adjustments in the family context. Legislative provisions
relating to payments upon the death of small children were contained in Friendly Societies legislation; the
Friendly Societies Act 1896 provided that no society should pay any sum of money on the death of a child
under five years of age in excess of £6, or £10 in the case of a child between 5 and under 10 years of
age. 129 Monies were also only to be aid to the parent of the child or the personal representative. 130
Section 67 specifically excluded these restrictions on insurances where the insurer had an insurable
interest in the life of the person insured. Before looking at the 1909 and 1936 Acts, it must be said that
although industrial insurance in Ireland has declined considerably, and the present trend is towards
winding up this form of insurance, the law does reflect some important public policy considerations that
remain valid today. Clearly children need to be protected against any moral hazard that may arise, but
the existence of a cap on the amount payable under a policy on the invalidation of policies on the basis of
absence of an insurable interest seem to be rather clumsy mechanisms which ignore the more effective
deterrents, namely, the public policy proscription against persons benefiting from an illegal act and the
general law against infanticide and murder.
2.77 The Assurance Companies Act 1909 131 was enacted to ameliorate the insurable interest
requirement and the fear of a ―parish burial‖. Section 36(1) of the 1909 Act provided that policies of
assurance could be issued for the purpose of insuring money to be paid for the funeral expenses of a
parent, grandparent, grandchild, brother or sister. Section 36(2) provided that no policy effected before or
after the passing of the Act would be void on the grounds (inter alia) that the person effecting the policy
had no insurable interest at that time, if such a person had a bona fide expectation that he would incur
expenses in connection with the death or funeral of the assured, and the sum assured be not
unreasonable for the purpose of covering those expenses. These life policies were intended to allow the
poor and working classes to have enough money set by to permit a dignified death and burial, rather than
suffer the ignominy of knowing that they would receive a parish or pauper‘s funeral and the case-law that
the statute threw up involved a diverse range of issues such as agent‘s misrepresentation, proposer fraud
and non disclosure, for example. 132 On the question of whether the 1909 Act created an insurable
interest there was a difference of opinion between the Irish and English judges. In O‟Brien v The Irish
National Insurance Co Ltd 133 Sealy J observed that section 36(2) ―comes to the relief‖ of the plaintiff who
had taken out a policy in respect of her brother‘s life. Subsequently, in a similar case, Gallagher &
McPartland v The Industrial & Life Assurance Amalgamated Co Ltd, 134 Dixon J observed that the 1909
Act ―made it legal for a policy to be effected on the life of inter alia, a sister for the purpose of providing for
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(1875) 1 Ch D 419 (on the basis, apparently, that consideration is past).
See Section 7 of the Children Act 1908, making it an offence for a nurse or a person maintaining a child to
insure the child‘s life. The dangers of infanticide and easy availability of poisons in Victorian England
contributed to such measures: See Whorton, The Arsenic Century (Toup, 2010).
Friendly Societies Act 1896, s.62. The consequences of non compliance were draconian: see Connors v
London and Provincial Insurance (1912) 47 ILTR 148.
Friendly Societies Act 1896, s.63.
9 Edw. 7 Ch. 49.
These cases raised some difficult points of law: eg Griffen v Royal Liver Friendly Society (1942) 76 ILTR 82;
Wall and Wall v New Ireland Assurance Co Ltd [1965] IR 386.
(1932) 66 ILTR 159.
(1946) 80 ILTR 99.
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