The Insurance Act 2015 has been granted Royal Assent and will come into force in August 2016. Its key provisions relate to:
- disclosure and misrepresentation in business and other non-consumer insurance contracts. There is now a duty of “fair presentation” of the risk, with proportionate remedies when a policyholder breaches the duty;
- warranties and similar terms. There will be no more “basis of the contract” clauses, and an insurer’s liability will be suspended, rather than discharged, in the event of a breach of warranty. Also, breach of a warranty or similar term should not allow an insurer to refuse to pay a claim if the insured shows that the breach was completely irrelevant to the loss; and
- insurers’ remedies for fraudulent claims. An insurer will now have clear, robust remedies when a policyholder submits a fraudulent claim.
The new law also makes it easier for claimants to claim against other parties who are now defunct, but who had insurance to cover the relevant risk at the relevant time. (Source: Insurance Act 2015 Becomes Law)