Insurance law might be reformed

An insurance law which has been on the books since 1906 might be changed to make claims easier for policy holders, it emerged today.

The Law Commission has put forward proposals which would make the refusal of claims due to errors or omissions in disclosure sections of the proposal forms more difficult.

Currently, insurers can use discrepancies between the claim and information given when the policy was taken out to deny funds.

The leader of the project, David Hertzel, said that the insurance law concerning errors in proposal forms, which is based on the Marine Insurance Act of 1906, needed to be amended thanks to the changing claims market. “Private insurance as we know it now was the preserve of the wealthy few”, he claimed. “Today the insurance industry is a huge business.”

He added that many claimants did not realise that “they have a duty to disclose information that they have never been asked for, but which could influence an underwriter’s judgement of the risk”, therefore leading honest claims being thrown out.

The Association of British Insurers said in a statement that claimants must not be priced out by any change to the law, and that they would make “a full and robust response” in the autumn. The proposals have been put out for consultation until November 16th.

Tags: Marine insurance, claimants, underwriter's judgement, proposal, Insurance, huge business."He, underwriter, Association of British Insurers