AIRMIC Welcomes Insurance Reform Proposals

by Stewart Douglas

Story link: AIRMIC Welcomes Insurance Reform Proposals

Airmic has today announced its support for proposals by the Law Commission to radicalise the law in relation to contracts of insurance and the corresponding implied terms in the UK market, as a move that would help modernise insurance law and redefine the parameters of the industry.

The Association of Insurance and Risk Managers (AIRMIC)today supported proposals from the Law Commission for reform of the UK law in insurance, which is governed largely by common law principles, the law of contract and general principles derived from the Marine Insurance Act, which is now in excess of 100 years old.

The Act provides for certain specific circumstances arising in insurance cases, particularly relating to marine losses but carrying weight as a persuasive source of law in relation to general insurance policy sales.

Other aspects of the law of insurance are governed by decision in previous insurance cases, which introduces a significant degree of uncertainty into the way in which insurance companies operate, which it is hoped will be clarified in any new legislation that comes to fruition.

Furthermore intrinsic differences in legal systems and particularly contract law across the different UK jurisdictions means the insurance industry lacks legal definition and clarity which it is thought would be addressed by any new codifying statute.

The proposals for a new bill would see redefinition of many of the points clarified in case law precedents throughout the UK in order to firstly create a level playing field across both main jurisdictions whilst striving to simply the obligations of both parties to the insurance contract.

It is thought that any resulting statute would also address the role of insurance brokers, with the potential to radically shake up the insurance industry as at present.