Law Commission acts on duty of disclosure

by Gill Montia

Story link: Law Commission acts on duty of disclosure

The BBC has reported that the Law Commission is reviewing an aspect of insurance contract law that has resulted in huge numbers of claims being rejected over the years.

Under the Marine Insurance Act 1906, the consumer has a duty of disclosure when completing an insurance proposal form.

However, the Law Commission is dissatisfied because policyholders are currently expected to answer the questions asked by their insurance company and in addition, disclose any other facts that may be relevant to the insurer.

Speaking to the BBC, Law Commissioner David Hertzell argues that consumers don’t necessarily know what factors the insurer will take into account when accepting a risk, and can therefore easily slip up on disclosure.

A draft bill of reform for England, Wales and Scotland is being presented to Parliament by the Law Commission next week, and according to the BBC, the Association of British Insurers is giving its full support.