Insurance Act 2015
The Insurance Act 2015 is a United Kingdom act of Parliament which makes significant reforms to insurance law. It came into effect on 12 August 2016, and follows on from the Consumer Insurance Act 2012. Both of these new acts are a consequence of the Law Commission's millennium review of the law of insurance in general, and of marine insurance in particular. The Marine Insurance Act 1906 has been amended by these two new acts.
The Act's provisions
The act prohibits insurers from rejecting customerrs' claims because they have given the wrong information about an irrelevant element of their policy.Part 1
- The Insurance Act 2015 distinguishes between "consumer" and "non-consumer" insurance contracts. Parts 2 and 3 apply only to non-consumer insurance contracts.
- Section 3 imposes upon the insured "a duty to make a fair presentation of the risk" to the insurer. The insured must disclose " every material circumstance which the insured knows or ought to know, or failing that, a disclosure which gives the insurer sufficient information to put a prudent insurer on notice that it needs to make further enquiries..."
- Section 4 defines what the insured knows or ought to know ; and Section 5 defines the insurer's knowledge. For the purposes of section 4, information is "known" by an organisation if it is known by its senior management or by those individuals responsible for arranging its insurance, including risk managers, staff who assist in the collection of data, or others including brokers who negotiate the terms of the insurance.
- Section 9 provides that a representation made by the insured is not capable of being converted into a warranty.
- Section 10 abolishes "any rule of law that a breach of warranty ... results in the discharge of the insurer's liability".
- Section 11 provides that if the insured fails to comply with a term tending to reduce the risk, then the insurer may not rely on such breach if the non-compliance could not have increased the risk.
Part 5 addresses "Good faith".
- Section 14 provides that "any rule of law permitting a party to a contract of insurance to avoid the contract on the ground that the utmost good faith has not been observed by the other party is abolished". Accordingly, this section amends s.17 of the Marine Insurance Act 1906 to read: "A contract of marine insurance is a contract based upon the utmost good faith"; and that section's subsequent words: "and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party" are now omitted.