Daily Insurance Industry News
 
 
Daily Insurance Industry News
Wednesday 15th of August 2018
November 19, 2010

Insurers support reform of contract law

by Gill Montia

Story link: Insurers support reform of contract law

The Law Commission has reported on responses to its paper on “Damages for Late Payment and the Insurer’s Duty of Good Faith”.

The paper asks whether a policyholder should be entitled to damages where the insurer has refused to pay a valid insurance claim, or has paid only after considerable delay.

Under ordinary contract law principles, where one party breaches a contract, the innocent party may claim damages for the loss suffered.

However, according to the Commission, the English treatment of insurance contracts is out of step with these principles.

All 32 consultees but one agreed that the law in this area should be reformed and the Commission states: “It is noteworthy that all 12 of the insurers and insurance associations who responded thought there should be some change to the current law.”

Further proposals will be published in a consultation paper in Spring 2011.

 

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