Final answer:
Insurable interest does not occur in the relationship of 'Insurance Carriers' as their role is to indemnify against risks rather than having a personal stake in the insured item or person.
Step-by-step explanation:
The concept of insurable interest is fundamental in establishing a valid insurance policy. Insurable interest exists when an individual or entity stands to suffer a financial loss or certain types of losses from a peril that can be insured against.
Answering the question regarding when insurable interest does NOT occur, we can determine that among the options provided:
- A business owner and a business client typically have insurable interests in their respective stakes in a business transaction.
- 'Implied Authority' is a concept in agency law rather than an entity or individual, so it does not pertain to insurable interests directly.
- Insurance carriers themselves have a stake in the insurance policies they offer, but they do not have an 'insurable interest' in the risks being insured against as they are indemnifying those risks.
- Insurable interest must exist at the time of the application, and throughout the policy, for the insurance to be valid.
Therefore, insurable interest does NOT occur in the relationship of 'Insurance Carriers' as they are not subject to loss from the perils being insured; they are in the position of evaluating and accepting risks.