CII welcomes new insurance contract law reforms

15 December 2009

The Chartered Insurance Institute (CII) has welcomed the Law Commissions' long-awaited reforms to the law underpinning disclosure and representation in consumer insurance contracts.

The reforms announced today will see the updating of the Marine Insurance Act 1906 to something more relevant to a modern consumer insurance market.

Laurence Baxter, head policy and research at the CII, said, "The Marine Insurance Act may have been a worthy craft for its time but it's clearly been in need of a refit. We believe the reforms will bring greater clarity around claims-handling and improve public trust and confidence in the general insurance sector.

"By distinguishing deliberate misrepresentations from honest mistakes made by customers, the changes strike a sensible balance between protecting consumers with limited financial capability and protecting insurers from proportionate financial loss due to carelessness or even fraud.

"Most importantly, as a result of these changes, the underlying contract law will provide a modern and stable foundation on which higher standards of practitioner professional knowledge and ethical conduct can be built in line with the public interest."

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