BLM’s director of policy and government affairs, Alistair Kinley, is closely monitoring the Insurance Bill as it makes its way through Parliament. The firm was the only law firm to provide written evidence to the Lords Committee.
Alistair said: “The Insurance Bill completed its Committee Stage in the Lords this week with a few minor amendments. The headline is that the ‘irrelevant warranties’ clause will come back into the Bill at report stage in January as a Government amendment. Several areas of lesser significance are also due to be revisited at Report Stage, which Treasury Minister Lord Newby said will “be very soon in the New Year”. It is imperative that our insurance customers and their policyholders are aware of the impact Bill itself - and any amendments - and we are working with them to ensure they adapt in advance of the Bill coming into force.”
The following are the main points emerging at Committee Stage and should be noted by both insurers and their policyholders:
Irrelevant warranties – The Government says that the weight of current opinion is such that this issue should no longer be regarded as controversial. Lord Newby therefore committed to bringing forward a Government-sponsored amendment at Report Stage to restrict reliance on breach of ‘irrelevant warranties’ in the way the Law Commission envisaged.
Knowledge of the insured – The Government will look at a tighter wording for the “reasonable search” limb of what the insured ought to know. It will also clear up a discrepancy between the Bill and the Explanatory Notes regarding the meaning of the insured’s ‘senior management’.
Fraud and group insurance - The present restriction of the remedy for fraudulent claims under a group policy was unnecessary and would be removed at Report Stage. [The remedy as presently drafted is restricted to cover which would have been a consumer policy if entered into by the fraudulent individual]. Companies in a group policy might be capable of making fraudulent claims and if so the insurer should be able to deploy the remedy.
Damages for late payment of claims – This is very unlikely indeed to form part of the Bill. The Government say it is “committed to taking it forward in the future”, according to Lord Newby. That may well be something of a hollow commitment given the General Election in May 2015.
For further information on the Insurance Bill and to ensure you are prepared, please click here to download a copy of BLM’s Time for Change document. Please contact Alistair Kinley or Terry Renouf if you would like any further details.