As part of its ongoing review of insurance contract law, the Law Commission has recently published a policy statement on the passing of pre-contract information from consumer to insurer.
Where an intermediary acts dishonestly or negligently whilst arranging a contract of insurance for a consumer, the law needs to be clear as to whom that intermediary was acting for when the dishonest or negligent act occurred. The responses to the Law Commission's Consultation Paper published last year (click here) highlighted this as an area of legal uncertainty. The Commission notes it is often difficult to identify for whom the insurance intermediary is acting when handling pre-contractual information.
The Policy Statement seeks to clarify the law by proposing a new statutory code (based largely on the existing law) governing for whom the intermediary is acting when it passes pre-contractual information from the consumer to the insurer. The Commission states that the code needs to be clear but also flexible enough to adapt to a rapidly developing market. A number of "high level principles" will be included within the Bill currently being drafted on pre-contractual information in consumer insurance. It is anticipated that a draft bill and report should be ready by Autumn 2009.
The Law Commission is due to publish an issues paper on the reform of pre-contractual business insurance law later this year. We will monitor and report on these developments as they arise.