Studies on the Legal Issues on the Attribution of Insurable Interest in International Sale of Goods
|School||East China University of Political Science|
|Keywords||Insurable interest Risk transfer MIA1906 CISG SGA1979 Incoterms2010|
The principal of insurable interest applies to the marine insurance contract and ithas decisive influence on the validity of the insurance contract and who is entitled toask the insurer for the insurance indemnity because of the happening of the insuredevent. In addition, it is the buyer or the seller who insured the goods in theinternational sale of goods. If the assured do not have an insurable interest when theinsured event happened, the assured could not claim for the indemnity to the insurer.Therefore, to clarify who has the insurable interest when the happening of the insuredevent not only can guide the seller or the buyer to insure the goods properly, but alsohas great importance on the application of the principle of insurable interest and theperfection of the legislation of related laws.In the first section of this article, it has discussed the principle of insurableinterest. It has examined Section5of Marine Insurance Act1906and many classicEnglish cases, including Lucena V. Craufurd and concluded that the definition ofinsurable interest is the financial connection related to the subject-matter insured.Besides, MIA1906also provides that the time when the insurable interest should beattached is the time when the happening of the insured event but not the time whenthe assured insured the subject-matter. There are little provisions related on thisprincipal in Marine Insurance Law of P.R. China, so it can only be concluded bysearching in Insurance Law in China. In addition, the relationship between theattribution of insurable interest and passing of risk is discussed in the subsection3. In the second section, the attribution of insurable interest under CISG has beenexamined. As discussed above, who bears the risk of goods has insurable interest ofthe goods. Therefore, the general rules of risk transfer and the rules of risk transferafter the breach of two parties has been discussed. In general, risk passes after thedelivery of the goods under CISG, and also as to insurable interest. However, thebreach of the seller or the buyer may get some influence on the passing of risk and thepassing of insurable interest.In the third section of the article, it has discussed the rules of passing of risk andinsurable interest under SGA1979. The provisions of SAG1979have great influenceon the draft of our Marine Insurance Law. As United Kingdom is a traditional greatpower on marine business, it has its own Sale of Goods Act1979and it is not amember of CISG. Therefore, to compare its rules of passing of risk with those ofCISG has great significance on international legislation and practice.In the forth section, it has examined the attribution of insurable interest underIncoterms2010, as represented with FOB, CIF and CFR. It gave suggestions on theinsurance under such terms by the seller and the buyer to prevent the “blind Zone” ofsuch insurance.In the fifth section, it discussed the provisions related insurable interest inChinese laws and gave advice on the future related legislation in China.