The Insurance Bill may alter centuries old law on disclosure by commercial policyholders, warranties & remedies for fraud & place more emphasis on active underwriting, says James Deacon
Changes brought about by the new Insurance Bill, which had its second reading in the House of Lords on 30 July 2014, will, if enacted, result in a major upgrade to insurance contract law, with far-reaching implications for insurers.
The most notable changes introduced by the Bill relate to disclosure by commercial policyholders, warranties and fraudulent claims.
Duty of disclosure
Under the Bill, the duty of disclosure is retained for businesses, placing it within a wider “duty of fair presentation” of the risk. Policyholders will comply with their duty by ensuring that all material circumstances are disclosed or sufficient information is provided to put insurers on notice to make further enquiries.
In recent years, underwriters have been swamped by electronic information on the risk from insureds in the expectation that “material circumstances” would be discovered somewhere among it. The Law Commission has made
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