Insurance: Draft Bill To Form Consumer Insurance Law

Yesterday the English and Scottish Law Commissions published their joint report and draft Bill to reform the law on what a consumer must tell an insurer before taking out or varying their insurance policy.

The consumer's duty to volunteer information as currently understood, based on the Marine Insurance Act 1906, would be abolished. Instead consumers would have a duty to take reasonable care to answer insurers' questions fully and accurately and to avoid misrepresentation. Whether an insurer would have a remedy if a consumer makes a mistake in an application form, would depend on whether the mistake was reasonable, careless or deliberate/reckless.

The report and draft Bill also address the status of intermediaries (brokers) in consumer contracts and make consequential provisions for this type of business. The draft Bill does not make any reform to the law of warranties in consumer insurance, a matter of previous review, except for the abolition of basis of