The need for a formal policy

The English and Scottish Law Commissions have, at the end of October 2010, published their ninth Issues Paper, on the need to retain the formal requirement in s22 of the Marine Insurance Act 1906 for a policy document. This is a curious choice of subject matter for investigation, given that: (a) insurers have not for many years relied upon any possible defence open to them under s22; and (b) the Market Reform Contract now in general use in the London Market ensures that policy wording is available to the assured from the outset. The Issues Paper is nevertheless an interesting summary of the law.

The present law

Section 22 of the Marine Insurance Act 1906 provides that a contract of marine insurance is inadmissible in evidence unless it is embodied in a marine policy. Section 23 in its original form went on to provide that a marine policy had to identify the subject matter insured, the risk, the voyage or period of time covered by the insurance, the sum insured and the names of the insurers. However, these provisions were repealed by the Finance Act 1959 and the only remaining part of s23 now states that the policy must include the name of the assured, or of some person who effects the insurance on his behalf. Finally, s24(1) provides that the policy must be signed by the insurers. There is no other equivalent legal requirement in any other form of insurance, and although there are statutory formalities in the case of compulsory motor insurance and compulsory liability insurance they are simply designed to ensure that the assured possesses the relevant cover and do not require the issue of a policy as such.