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Report No. 67

Appendix 2*

Statement Showing Law of Stamp Duty in England Before 1959, Regarding Marine Insurance

The Stamp (Consolidation) Act, 1891

(54 & 55 Vict., Ch. 39)

* It has been mentioned as Appendix 3 in the Report published by the Law Commission.

Section 92(1), Act of 1891

Defined policy of marine insurance to mean any insurance (including re-insurance) made upon any ship or vessel or upon machinery, tackle or furniture of any ship or vessel or any goods on board of any ship or vessel so as to cover the risk from the commencement of the transit to the ultimate destination.

Section 92(2), Act of 1891

Defined a contract of sea insurance to mean an agreement whereby any person in consideration of any sum of money takes upon himself any risk attending goods, merchandise, or property of any kind while on board of a ship or vessel or engages to indemnify the owner of any such goods, merchandise or property from any risk, loss or damage.

Section 93(1), Act of 1891

Section 93(1) says that a contract of sea insurance, excepting the one referred to in section 55 of the Merchant Shipping Amendment Act, 1862, shall not be valid unless expressed in a policy of sea insurance.

Section 93(2), Act of 1891

It says that a policy of sea insurance for time shall not be for a period exceeding 12 months.

Section 94, Act of 1891

It says that a policy of sea insurance, if made for voyage and also for time or to cover a time beyond 30 days after arrival at the destination and having been moored shall pay the duty as a policy for voyage and also duty as policy for time.

Section 95, Act of 1891

It provides how a policy of sea insurance, if not stamped at the time of execution, is to be stamped.

Section 96, Act of 1891

Section 96 permits alteration of the policy after it has been underwritten, provided the alternation is done before notice for determination of the risk originally insured, and does not extend the period beyond six months (in case of policies shorter than six months), or beyond 12 months (for policies of over six months). Provided further that the property remains the property of the same person, and the alteration does not extend the amount of the sum insured.

Section 97(1), Act of 1891

Provides for penalty of one hundred pounds as fine, if one becomes an insurer or enters into a contract of sea insurance in any manner without issue of a duly stamped sea insurance policy, or if one is concerned in a fraudulent contrivance or device or any wilful act or neglect with an intent to evade stamp duty.

Section 97(2), Act of 1891

Provides for a fine as above; if a broker, agent or other person transacts a sea insurance contrary to the true meaning any intent of this Act, or writes any policy upon material not duly stamped. Further, he shall lose the commission or brokerage or agency, any money paid to him shall be deemed to be paid without consideration, and shall remain the property of his employer.

Section 97(3), Act of 1891

Provides for a fine as above, if one makes a copy of the policy of sea insurance without there being, in existence, any duty stamped policy.

Section 11(1), Finance Act, 1901 (1 Edw. 7, ch. 7)

The Act of 1891 (section 91) was intended to insure a regular revenue, and to minimise tax evasion. But it caused hardship to the assured where the previous policy expired, when the ship was encumbered with bad weather or due to some casualty. This was sought to be met by a "continuation clause", but the same was held invalid, as it extended the period of insurance beyond 12 months. This disability was removed by the Finance Act, 1901. The Act of 1901, section 11(1), provided that notwithstanding anything contained in the Stamp Act, 1891, a policy of sea insurance made for time may contain a continuation clause and be same shall not be invalid on the ground that it makes the policy available beyond 12 months.

Section 11(2), Act of 1901

The same Act provided that an additional duty of six pence shall be chargeable on a policy having a continuation clause.

Section 11(3), Act of 1901

The Act also provided for payment of separate duty without penalty, if the risli covered by the continuation clause attaches and the duty is paid within 30 days after the risk has so attached.

Section 11(4), Act of 1901

It defines "continuation clause" to mean that the subject of insurance shall stand covered until its arrival if the voyage is not completed within the time of the policy, or for a reasonable time not exceeding 30 days after arrival.

Revenue Act, 1903 (3 Edw. 7, C. 46)

The definition of policy of sea insurance as given in the Act of 1891, did not include builders' risk, and hence that position was met by the Revenue Act of 1903.

Section 8, Act of 1903

A policy of insurance made or purporting to be made upon or to cover any ship or vessel or the machinery or fittings belonging to the ship or vessel, while on construction, repair or trial, shall be sufficiently stamped for the purposes of Stamp Act 1891 as a policy for voyage, and, though made for a period exceeding 12 months, shall not be deemed to be a policy of sea insurance for time.

Finance Act, 1912

The Act of 1891 had provided for a concession in stamp duty where the premium did not exceed 2s. 6d. But a practice started of availing the concession, and then, after the concession was availed of, of altering the policy by increasing the premium. To meet this situation, the Finance Act, 1912 was enacted.

Section 8, Act of 1912

Section 8 of the Act of 1912 provides for payment of additional stamp duty, if more duty was payable on account of increase of premium on the original premium. No penalty was payable if the additional duty was paid within 30 days.

Finance Act, 1920 (10 & 11 Geo., C. 18)

The Act of 1920 revised the scale of stamp duty, and the same is now in force except where repealed by the Act of 1959. It did not increase the stamp duty where the premium did not exceed 2s. 6d. per cent. of the sum insured (gross), nor did it interfere with the previous law relating to builders' risks and the continuation clause.

Finance Act, 1959 (7 & 8 Eliz. 2, C. 58)

Section 30(5) of the 1959 Act says that paragraphs (2) to (5) of section 23 and sub-section (2) of section 25 of the Marine Insurance Act, 1906 shall cease to have effect.1

For detailed discussion of each provision of the Marine Insurance Act, see Dover Handbook of Marine Insurance (1957), pp. 129-136.

Indian Stamp Act, 1899 Back

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