Understanding who has an insurable interest in goods under multimodal transport in Chinese law

Abstract

The insurable interest doctrine is a long-established principle that distinguishes insurance policies from gambling. However, the current statutory provisions in China on insurable interest are too vague to determine whether a specific interest is insurable. To guide judicial practice, this doctrine was reinforced with an interpretation by the Supreme People’s Court. Despite efforts made, though, current rules are still not entirely satisfactory for determining clearly who has an insurable interest under Chinese law. With the development of international commerce and multimodal transport, conflicts between the aim of preventing gambling and allowing legitimate business are increasing when applying the insurable interest doctrine. This article advocates a pecuniary interest approach to recognising the insurable interest under property insurance. By employing this approach, it attempts to clarify the rightful parties having an insurable interest in goods under multimodal transport.