A double-edged sword: The role of insurable interest in non-indemnity insurance in the light of the Covid-19 pandemic in Zimbabwe

Abstract

The on-going Covid-19 pandemic has affected many facets of life including the business of insurance. It raises fresh questions as to who can insure the life of another because it has led to the loss of many lives. This brings one to the requirement of insurable interest in non-indemnity insurance. This paper argues that the requirement should be removed as it adds confusion to this branch of insurance law. It further limits the categories of people who can insure the lives of others. The Insurable Interest Bill of England attempts to expand the circumstances where one can have insurable interest. It is a step in the right direction as it represents liberalisation of that requirement. However, there are persuasive decisions in both Zimbabwe and South Africa which held that the existence of insurable interest should be a mere factor in deciding whether a contract is one of insurance or a mere wager. It is submitted that this decision can still be arrived at in some cases without even considering the existence of insurable interest. Removing the requirement of insurable interest has precedence as it has happened in other jurisdictions such as New Zealand and Australia. In fact, the intention of the Life Assurance Act 1 774 has not been achieved in real practice. The legal principles surrounding insurable interest in non-indemnity insurance are not only confused but they are confusing. Thus, the paper proposes for other facts which may be taken into account in determining whether a contract is one of insurance and not a wager. Such factors may include the age of the parties, the intention of the parties, the relationship of the parties and the consent of the insured. The emphasis should be on determining whether a contract is not a wager rather than to rely solely on the presence or absence of insurable interest.