Insurance Act 2015

'Insurance Act 2015
Text of the Insurance Act 2015 as in force today (including any amendments) within the United Kingdom, from the UK Statute Law Database
Parliament of the United Kingdom
Long title	An Act to make new provision about insurance contracts; to Amend the Third Parties (Rights against Insurers) Act 2010 in relation to the insured persons to whom that Act applies; and for connected purposes.
Citation	4

The Insurance Act 2015 (c.4) is a UK Act of Parliament which makes significant reforms to insurance law.^[1] It follows on from the Consumer Insurance (Disclosure and Representations) Act 2012 (“CIDRA”). Both of these new Acts are a consequence of the Law Commission's millennium review of the law of insurance in general, and of marine insurance in particular. The Marine Insurance Act 1906 has been amended by these two new Acts.

Authors at Clyde & Co wrote: "When the Act comes into force in August 2016, it will (together with the consumer insurance reforms that came into effect in 2013), represent the greatest change to insurance contract law in this country in over 100 years". ^[2]

The title page announces that "Explanatory Notes have been produced to assist in the understanding of this Act and are available separately".^[3]

The Act's provisions

Part 1

The Insurance Act 2015 distinguishes between "consumer" and "non-consumer" insurance contracts, and proceeds to make different provisions for each type.

Part 2 addresses the Duty of Fair Presentation

Section 3 (s. 3) imposes upon the insured "a duty to make a fair presentation of the risk" to the insurer.
The insured must disclose (s.3(4)) "(a) every material circumstance which the insured knows or ought to know, or (b) failing that, a disclosure which gives the insurer sufficient information to put a prudent insurer on notice that it needs to make further enquiries ..."
Section 4 defines what the insured knows or ought to know; and Section 5 defines the insurer's knowledge.

Part 3 addresses "Warranties and other terms".

Section 9 provides that a representation made by the insured is NOT capable of being converted into a warranty.
Section 10 abolishes "any rule of law that a breach of warranty (express or implied" ... results in the discharge of the insurer's liability".
Section 11 provides that if the insured fails to comply with a term tending to reduce the risk, then the insurer may not rely on such breach if the non-compliance could not have increased the risk.

Part 4 addresses "Fraudulent claims".

Part 5 addresses "Good faith".

Section 14 provides that "any rule of law permitting a party to a contract of insurance to avoid the contract on the ground that utmost good faith has not been observed by the other party is abolished.
Accordingly, s,14(3) amends s.17 of the Marine Insurance Act 1906 to read: "A contract of marine insurance is a contract based upon the utmost good faith" and that section's subsequent words: "and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party" are now omitted.

There are two further parts: Part 6 and Part 7.

Late payment of insurance claims

Initially, the Insurance Act 2015 was to have contained provisions relating to damages for the late payment of insurance claims. However, these provisions were deemed to be too controversial to pass through the Law Commission's non-controversial Bill procedure.^[4] They were later reinserted in Part 5 of the Enterprise Bill, which was introduced into Parliament on 16 September 2015.^[5] Subject to Parliamentary approval the Insurance Act 2015 will be amended to state that:

"It is an implied term of every contract of insurance that if the insured makes a claim under the contract, the insurer must pay any sums due in respect of the claim within a reasonable time. A reasonable time includes a reasonable time to investigate and assess the claim".^[6]

Notes

↑ Insurance Act 2015 - ISBN 9780105404156
↑ Jon Turnbull & Michelle Radom: http://www.clydeco.com/insight/updates/view/the-insurance-act-2015
↑ http://lawcommission.justice.gov.uk/areas/insurance-contract-law.htm
↑ Lord Newby, Minister in charge of the Bill - http://www.publications.parliament.uk/pa/ld201415/ldselect/ldinsur/81/81.pdf
↑ "Late payment of claims` by insurers in The Enterprise Bill 2015", London, 12 January 2016.
↑ Enterprise Bill, Clause 29

United Kingdom legislation

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Acts of Parliament of the Kingdom of Great Britain	1707–1719 1720–1739 1740–1759 1760–1779 1780–1800

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Insurance Act 2015

The Act's provisions

Late payment of insurance claims

See also

Notes