The UK insurance industry is gearing up for change with the introduction of the Insurance Act 2015, which is set to go live on 12th August.
It has been introduced to reflect the way that the insurance market has evolved in modern times to achieve a fair and balanced regime between insurers and customers.
What do the changes mean?
Simon Lole, managing director at Peter Lole Insurance Brokers explains: “The new legislation will affect everyone in the insurance market, benefitting customers and making insurers become more pro-active in understanding the risks of each policyholder.
“It will still remain the customer’s duty to disclose any material facts they know about the risks for which they are seeking cover but the changes will put responsibility onto the insurance companies, encouraging them to ask transparent questions in order to accurately gauge risks.”
The changes will ultimately affect what happens in the event of misrepresentation of information. If an honest mistake is made, rather than the insurer avoiding the policy outright, they must look at what they would have done if the breach had not taken place. In order for the insurer to cancel the policy altogether, they must be able to prove that a misrepresentation was deliberate or reckless.
Click here to download our Insurance Act 2015 factsheet