The Insurance Act 2015 came into force on 12 August, 2016. It is the most extensive reform of UK insurance contract law for commercial policyholders that has taken place in over 100 years.
The changes have been introduced to redress the imbalance between insurers and policyholders – insurers having been perceived, historically, as having too much leverage in coverage disputes because the old regime was outmoded and overly protective of the insurers' position.
The Insurance Act 2015, which now applies to all contracts of insurance and reinsurance governed by English law, and to any variations to existing contracts made on or after 12 August:
- radically changes the pre-contractual disclosure process, which is now referred to as the ‘duty of fair presentation’
- extends the concept of what a commercial policyholder ‘ought’ to know for the purposes of assessing what should be disclosed, to that which should reasonably have been revealed by a reasonable search (including information held by third parties)
- introduces a wider range of remedies, which are designed to be more proportionate, in the event of policyholder breach of the duty of fair presentation
- transforms the law relating to insurance warranties to allow for temporary suspension if a breach of warranty can be remedied
- codifies the rules that apply if a policyholder makes a fraudulent claim
- provides for damages in the event of late payment of claims