The Consumer Insurance (Disclosure and Representations) Act 2012 received Royal Assent on 8 March 2012. It abolishes the duty on consumers to volunteer material facts to their insurer (the duty of utmost good faith). Instead, consumers must take reasonable care to answer their insurer’s questions fully and accurately. If they do volunteer information, they must take reasonable care to ensure that the information is not misleading. The Act prescribes the insurer’s remedies where they have been induced by a misrepresentation to enter into an insurance contract. The remedy will depend on the consumer’s state of mind.

The Act applies to all consumer insurance claims, including those outside the Financial Ombudsman Service (FOS) jurisdiction, limited to £150,000, and those not covered by the Insurance: Conduct of Business Sourcebook (ICOBS) claims handling rules. An excellent summary of the Act is available on the Law Commission website.  

The Act will not come into effect for at least a year and it will only apply to insurance contracts entered into, or varied, after that date.