What is a contract of insurance?
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Practice notesWhat is a contract of insurance?
Produced in partnership with RPC
Practice notes
This Practice Note covers the legal and regulatory framework to be considered in determining whether an arrangement constitutes a contract of insurance and the possible consequences of carrying on activities relating to a contract of insurance without the requisite regulatory permissions.
For further guidance, see Practice Note: Identifying contracts of insurance in English law—an introduction and the decision tree in Identifying a contract of insurance—flowchart.
The legislative and regulatory background
English insurance legislation does not provide a clear or an exhaustive definition of a ‘contract of insurance’.
The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO), SI 2001/544 defines a ‘contract of insurance’ as ‘any contract of insurance which is a contract of long-term insurance or a contract of general insurance’.
The question of whether a contract is a contract of insurance is important as a contract of insurance is likely to be within the meaning of a 'specified investment' under the RAO, and under section 19 of the Financial Services and Markets Act 2000 (FSMA 2000), a person must not by way of business carry on
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Contract definition
What does Contract mean?
A contract is a legally binding promise (oral or in writing) by one person to fulfil an obligation to another person in return for consideration. A binding contract comprises four elements: offer, acceptance, consideration and intention to create legal relations.
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