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Chartered Insurance Institute
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Insurance Act 2015: bringing insurance law into the 21st century

CII Policy Briefing

On 12 February 2015, the Insurance Act 2015 became law, signifying the end of a detailed review of the legislation underpinning insurance law in the UK.

This latest round of reforms focused on commercial (non-consumer) insurance. This was essential because the existing law:

  • undermined market trust and confidence:the unbalanced nature of the law exacerbates disputes between insurers and business, reducing trust and confidence in insurance by UK economy; and
  • threatened the credibility of UK business law:very fact that the law is so antiquated and inconsistent with current practice threatens the long established credibility of UK business law itself.  

The 1906 Act the new law replaced was arguably designed to protect a then-fledgling insurance market from exploitation by long-established client firms: at a time when customers knew their business while the insurers did not. It gave insurers wide-ranging opportunities to avoid insurance policies at any sign of wrong-doing by the customer.

The Insurance Act 2015 seeks to achieve these aims and benefits by clarifying commercial insurance law in three key areas:

  • The pre-contractual duty of disclosure and the effect of (mis)representations at that stage;
  • The effect of warranties contained in the policy; and
  • The insurer's remedies for fraudulent claims.

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