Opinion ID: 2325732
Heading Depth: 3
Heading Rank: 2

Heading: The Insurable Interest Statute is Ambiguous

Text: The plain language of 18 Del. C. § 2704(a) is ambiguous because a literal reading of the statute would permit wagering contracts, which are prohibited by the Delaware Constitution. [34] The rules of statutory construction are well settled. [35] First, we must decide if the statute is ambiguous. [36] A statute is ambiguous if it is susceptible of two reasonable interpretations [37] or if a literal reading of its terms would lead to an unreasonable or absurd result not contemplated by the legislature. [38] If it is unambiguous, then there is no room for judicial interpretation and the plain meaning of the statutory language controls. [39] If, on the other hand, the statute is ambiguous, then we consider it as a whole and we read each section in light of all the others to produce a harmonious whole. [40] Only when a statute is ambiguous do we look for guidance to its apparent purpose and place it as part of a broader statutory scheme. [41] We also ascribe a purpose to the General Assembly's use of particular statutory language and construe it against surplusage if reasonably possible. [42] Courts should, however, interpret statutory law consistently with pre-existing common law unless the legislature expresses a contrary intent. [43] We accordingly must approach section 2704(a) with these principles of statutory construction in mind. The Delaware Constitution prohibits all forms of gambling unless it falls within one of the enumerated exceptions. [44] Nearly one hundred years ago, the United States Supreme Court explained, [a] contract of insurance upon a life in which the insured has no interest is a pure wager.... [45] Accordingly, a life insurance policy procured or effected without an insurable interest is a wager on the life of the insured the Delaware Constitution prohibits. Because a literal reading of the statute creates an absurd result not contemplated by the General Assembly, we must interpret the statute in conformity with both Delaware law and the General Assembly's intent.