Insurance contract law

The Law Commissions began their review of insurance contract law in 2006. The Law Commissions published a series of issues papers to consider the main areas of the current law that were thought to be problematic. Areas included misrepresentation and non-disclosure, the status of intermediaries, warranties, insurable interest, damages for late payment, post-contractual good faith and the requirements contained in statute for a formal marine policy. Following public consultation on the issues considered suitable for reform, the first Bill was laid before Parliament in December 2009. This Bill addressed the law of misrepresentation and non-disclosure in consumer insurance policies and came into force as Consumer Insurance (Disclosure and Representation) Act 2012.

In December 2011, the Law Commissions began the next stage of the reform process by publishing a consultation on post-contractual duties. The consultation covered insureds’ remedies for late payment, insurers’ remedies for fraudulent claims, the nature of insurable interest, and policies and premiums in marine insurance.

The Law Commissions published the third and final consultation paper in June 2012. This consultation considered proposals to change business insureds’ duty to give pre-contractual information to their insurers and the law of warranties in insurance contracts. 

The Insurance Bill 2014 was introduced into Parliament in July 2014. The Bill followed the special Parliamentary procedure used for uncontroversial Law Commission proposals and received Royal Assent on February 12, 2015 as the Insurance Act 2015. The Act comes into force in August 2016 and will modernise insurance contract law in relation to misrepresentation and non-disclosure, warranties and remedies for fraudulent claims.

The Consumer Rights Act 2015, which applies to consumer insurance contracts, will reform and consolidate consumer law in the UK. For insurers offering consumer products the main impact of the Act is likely to be seen in the new laws for digital content and ancillary contracts, unfair contract terms and the changes to the mechanisms for consumer redress. We include a briefing on how the Act could impact insurers.

In this section of our technical resource we include articles considering: