Insurance/PI: Proposed Insurance Law Reforms

On Tuesday, the Law Commission and Scottish Law Commission published a joint consultation paper setting out provisional proposals for the statutory reform of insurance contract law in England, Wales and Scotland. The paper draws together comments made by the industry in three areas of insurance law, previously the subject of issues papers published over the course of the last year, namely misrepresentation/non-disclosure, warranties and intermediaries. The Commissions’ intentions are that a reforming bill will be presented to Parliament to approve in 2010.

The proposed law reforms are radical and affect three principal areas:

• Consumer business - the Commissions are clearly driven to bring the current law in line with the guidelines and practices adopted/currently in use by the FSA and FOS. For example, "basis clauses" are effectively to be outlawed.