The Law Commission and the Scottish Law Commission have published a joint report which is entitled Consumer Insurance Law: Pre-Contract Disclosure and Misrepresentation (the Report).

In the Report the Commissions’ recommend a new consumer statute to address the issue of what a consumer must tell an insurer before taking out insurance.

The Report also includes draft legislation which seeks to replace the existing law, as set out in the Marine Insurance Act 1906, which requires a consumer to volunteer information to insurers.

The draft legislation replaces the duty to volunteer information with a duty on consumers to take reasonable care to answer the insurer’s questions fully and accurately. Where a consumer makes a deliberate or reckless misrepresentation, the draft Bill permits the insurer to treat the contract as if it did not exist, and refuse all claims. Where the consumer answers questions carelessly, it provides the insurer with a proportionate remedy. However, the consumer who acts both honestly and carefully is protected.

View Consumer Insurance Law: Pre-Contract Disclosure and Misrepresentation: Report and draft Bill, 15 December 2009