Growth was the key word throughout the first King's Speech delivered on behalf of the new UK Government. Although the issue of insurance was not a key focus throughout the Government's legislative programme, there are pieces of proposed legislation of interest to insurers, and our team has discussed those pieces below.
Terrorism (Protection of Premises) Bill
Widely referred to as 'Martyn's Law', a version of this Bill was laid by the previous Government but did not receive Royal Assent prior to the calling of the 2024 General Election.
The background briefing notes published by the Government to accompany the King's Speech confirm that earlier proposals identifying relevant premises within either 'standard' and 'enhanced' tiers have been retained. The specifics of those tiers and other measures are not detailed, and we will await the publication of the draft Bill with great interest.
From an insurance perspective, we recently highlighted the potential impact of this legislation on public liability and directors and officer coverage, and commented extensively during the progression of the previous version. Those issues raised at the publication of the earlier version of this Bill remain valid.
The Bill will generate a broader impact on insurance products, both in terms of the existing property and terrorism cover, and how other lines of business may be affected. There will also be an important impact on liability insurance as a result of the shared obligations and responsibilities introduced by the legislation.
Duncan Strachan, insurance partner in London, comments, "The Government is making good on its promise to see the Bill pass into law. This is a positive step in improving standards and increasing transparency over what organisations need to do to keep the public safe at their locations and events. It should also be a catalyst for insurers and brokers to have conversations with their clients about their insurance needs and in seeking assistance to ensure they are compliant with the standards which will be introduced by the legislation."
Product Safety and Metrology Bill
This Bill is presented as preserving "the UK's status as a global leader in product regulation, supporting businesses and protecting consumers." The UK's current product safety and metrology framework is derived from EU law; with the development of new technologies, updated regulation and powers are needed to address new threats and hazards.
The legislation will allow the UK to mirror or diverge from updated EU rules to encourage growth. In August 2023, the Office for Product Safety and Standards conducted a consultation, titled 'Smarter regulation', on the long-term approach to product safety and many of the proposals within that consultation will be given effect by this new Bill.
This will include:
- Responding to new product risks and opportunities including artificial intelligence, and commonplace issues not currently regulated such as the fire risks associated with lithium ion and e-bike batteries.
- Identifying new and emerging business models, such as online marketplaces, to ensure that consumers have confidence in the products bought, particularly from overseas retailers placing goods on the UK market.
- Ensuring the law can be updated to recognise updates to, or new, EU products regulation such as the CE marking. This will ensure that the UK "can end recognition of EU product regulations, where it is in the best interests of UK businesses and consumers."
- Giving the Government "specific powers to make changes to GB legislation to manage divergence and take a UK-wide approach" where the Windsor Framework may be applicable.
- Tackling non-compliance and allowing targeted interventions to allow data sharing between regulators and market surveillance authorities, and future-proofing the regulator for new product safety and metrology.
- Updating the product metrology framework, which governs the accuracy of weights and measures for purchased goods.
The description of the Bill makes no reference to a reform of the product liability regime, which was featured, albeit very briefly, within the 'Smarter regulation' review.
Stephen Turner, Legal Director and specialist in product safety issues, comments: "This Bill promises an updated product safety regime and addresses emerging risks. This is to be welcomed by insurers and the businesses they insure. It is also potentially significant that the Bill looks to the potential for alignment with future EU reforms in this area. With the new EU General Product Safety Regulation on the horizon, this may provide welcome relief for cross border supply chains. Although the consultation mentioned product liability, the elephant in the room remains how the UK will respond to the new EU Product Liability Directive and whether the UK will align or diverge."
For comments from our other sectors which may be of interest to insurance professionals, we are pleased to link to the following articles on Data, Privacy and Cyber, Property and Employment.
