Question 2
This question required candidates to explain insurable interest, its features and features of insurable risk.
Observation
Some of the suggested responses were:
2.(a)(i) Insurable interest is the legal right to insure arising out of the financial relationship existing between the insured and the subject matter of insurance recognized at law
(ii) The features of insurable interest are:
- There must be some properties, right, interest life, limb or potential liability capable of
being insured;
- Such property, life, limb or potential liability, right, interest must be subject matter of
insurance;
- The insured must stand in a relationship with subject matter of insurance; whereby he
stands to benefit from its safety, wellbeing or freedom from liability or prejudiced by its
damage, loss or destruction or existence of liability
(b) The features of insurable interest are:
- It must be capable of financial measurement.
- It must be pure risk in nature.
- It must be fortuitous in origin.
- It must not be against public policy.
- There must be insurable interest.
- The risk must be homogenous in nature.
- It must be a particular risk.
- There must be element of uncertainty.
- The occurrence of the risk must be probabilistic in nature.