We use cookies to deliver our online services. Details of the cookies we use and instructions on how to disable them are set out in our Cookies Policy. By using this website you agree to our use of cookies. To close this message click close.

Consumer Insurance Contract Law Reform Comes to Fruition

05 April 2013

LONDON, 05 APRIL 2013 - The Consumer Insurance (Disclosure & Representations) Act 2012 is due to come into force this weekend (6 April).  The Act means that when a customer applies for insurance they will no longer be obliged to volunteer material facts in accordance with their duty of 'utmost good faith'. Instead, they must take 'reasonable care' to answer the insurer's questions 'fairly and accurately' and not to make a misrepresentation.

As a result of these changes any remedies the insurer may then have against the consumer are dependent upon the consumer's state of mind i.e. whether the misrepresentation was honest and reasonable; careless; or deliberate and reckless.

The Act also outlaws “basis of contract” clauses, which serve to turn representations made by consumers in a proposal form in to warranties.

Helen Chapman, partner at Hogan Lovells, commented: "The coming in to force of the Act will usher in a new era in the handling of consumer insurance claims.  It will be interesting to see the extent to which insurers will still challenge insurance claims, on what basis they will mount their challenge and what remedies they will seek.  Are we entering an era in which contested claims will become a rarity?"

Further information on the reforms can be found in our briefing note here: http://f.datasrvr.com/fr1/613/67941/Client_Briefing_-_Insurance_Contract_Law_Review_-_Update_-_3_April_2013.pdf

ENDS

About Hogan Lovells

www.hoganlovells.com

For more information, see www.hoganlovells.com
Hogan Lovells is a leading global law firm providing business-oriented legal advice and high-quality service across its exceptional breadth of practices to clients around the world.
"Hogan Lovells" or the "firm" is an international legal practice that includes Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses.

The word "partner" is used to describe a partner or member of Hogan Lovells International LLP, Hogan Lovells US LLP or any of their affiliated entities or any employee or consultant with equivalent standing. Certain individuals, who are designated as partners, but who are not members of Hogan Lovells International LLP, do not hold qualifications equivalent to members. 
For more information about Hogan Lovells, the partners and their qualifications, see www.hoganlovells.com.

Where case studies are included, results achieved do not guarantee similar outcomes for other clients.

 
Loading data