The requirement to tell insurers everything that a “prudent insurer” would think relevant could be abolished under Law Commission proposals.
The requirement to tell insurers everything that a “prudent insurer” would think relevant could be abolished under Law Commission proposals.
Scrapping the requirement forms a key plank of the Law Commission and Scottish Law Commission’s joint report and draft legislation. Currently, insurers can refuse to pay out if a policyholder fails to disclose relevant information, which has sometimes led to unfair decisions for policyholders.
Under the Commissioners’ proposals, insurers would ask questions about any matter that they wish to know. The consumer would have a duty to take reasonable care to answer these fully and accurately and avoid misrepresentation.
The Association of British Insurers, which represents providers of 90% of domestic insurance services, is supporting the proposed reforms. The existing law, based on the Marine Insurance Act 1906, is more than a century old and was designed for the shipping industry.
Professor Hector McQueen, a Scottish Law Commissioner, says: “Although the majority of insurers already follow industry
