A Guide to the History of Insurance Law
Written by: Mohammad Kashefi, Solicitor, LLB (Hons), GDLP.
In ancient periods, some governments provided a risk guarantee for merchants against the perils of the sea, attacks by enemies or bad weather conditions. According to Livy,1 in 215 BCE, during the war of Iberia, the Roman army was in urgent need of supplies. The Republic of Rome responded by paying private merchants to ship clothing and grain to them, with the Republic agreeing to indemnify the merchants against the risk of enemy attacks and bad weather.2
History of Insurance Law
Towards the end of Middle ages (around 14th century), northern Italy developed marine insurance contracts. This new form of insurance contract was concerned solely about the transfer of risk. This is arguably the beginning of modern insurance; with the insured person paying a premium to the insurer and the insurer in return agreeing to cover the insured person against the perils of the sea.3
Around the 15th century, the Lombard merchants introduced marine insurance business to London and the Hanse merchants of Europe. In 1574, Queen Elizabeth granted Richard Candler the right to establish an insurance office for the purpose of drafting and registering insurance policies.4 The first English Statute specifically concerned with insurance was 42 Eliz C 12 of 1601,5 which established a Court of Assurance. The Court of Assurance was similar to a tribunal and dealt with a limited range of insurance disputes.6
Insurance soon became prominent and was introduced in many other areas. Events such as the Great Fire of London in 1666 which destroyed almost all buildings in London prompted the introduction of fire insurance businesses.7 Personal accident insurance in England began in 1849 with the establishment of the Railway Passenger
1 Titus Livius, The History of Rome, Book 23, (Columbia University, F G Moore, Prof Emeritus Ed) 48-9. 2 Greg Pynt, Australian Insurance Law: A First Reference (LexisNexis Butterworths, 2015 3rd ed.) 41.
3 Ibid 42-3.
4 Ibid 45.
5 Elizabeth Statute of 1601.
6 Pynt, above n 2, 45.
7 Ibid 47.
Mohammad Kashefi, LLB (Hons), GDLP.
Assurance Company which insured against death or injury caused by railway accidents.8 Finally, liability insurance appeared towards the end of 19th century. Today liability insurance is commonplace; mainly due to the emergence of the law of negligence, introduction of employer’s liability legislation and the introduction of legislation in Australia in the 20th century compelling motor vehicle owners and employers to insure against death and personal injury.9 Insurance in Australia was introduced during the British colonisation of Australia in the 18th and 19th centuries, with each colony inheriting the English common law. The current legislation that governs general insurance in Australia is the Insurance Contracts Act 1984 (Cth) (“ICA”). The ICA was enacted to reform and modernise the law relating to certain contracts of insurance so that a fair balance is struck between the interests of insurers, insured persons and other members of the public.10 The ICA came into effect on the 1 January 1986. It was enacted pursuant to Commonwealth’s power under section 51 (xiv) of the Commonwealth of Australia Constitution Act (Cth).