Are you ready for the Insurance Contracts Act 2015? - DAC Beachcroft

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Are you ready for the Insurance Contracts Act 2015?

Published On: 29 January 2014

The Law Commissions yesterday unveiled the first draft clauses of what may become the Insurance Contracts Act 2015 at an event hosted in our Minster Court offices in London. The draft clauses cover three key areas: business disclosure, damages for late payment and remedies for fraud. The Bill follows on from the consumer disclosure reforms contained in the Consumer Insurance (Disclosure and Representations) Act 2012.

Business Disclosure

Read more here.

Damages for Late Payment

Read more here.

Remedies for Fraud

Read more here.

Implications for Insurers

In response to the drafting on damages for late payment, insurers may also want to consider:

  • Drafting internal guidance, for example on documenting claims handlers' conduct and decision making processes as well as obtaining legal advice to evidence the "reasonableness" of disputing the claim;

  • Reviewing policy wordings, to determine whether:
    • To exclude or limit insurers' liability for damages for late payment;
    • Interim payment provisions (if any) require amendmen;
    • Claims co-operation provisions can be bolstered by listing minimum requirements of the categories of documents required for carrying out liability and quantum investigations.
  • The use and wording of settlement agreements so that any subsequent claims for late payment are also expressly covered;

  • Strategic responses to the threat of a late payment claim.

Looking Ahead

The current provisions of the draft Bill can be found here.

The Law Commissions welcome responses on the wording of their draft provisions by 21 February 2014 to

The outstanding drafting in relation to warranties and parties’ ability to contract out of the default provisions is expected within the next few months.