Onus should be on insurers demands Law Commission
Mon, 21 Dec 2009
Under new rules proposed by the Law Commission, insurance providers, intermediaries and brokers will be required to ask clients all relevant questions when completing protection policies.

The Law Commission recently published a joint 192-page report with the Scottish Law Commission recommending the abolishment of the duty of disclosure for consumers and putting the onus on the insurer, or its representative, to ask the relevant questions.

The report, called Consumer Insurance Law: Pre-Contract Disclosure and Misrepresentation, proposes legislation that removes the consumer's duty to volunteer material facts. Instead, consumers who take 'reasonable care' to answer insurers' questions fully and accurately must have any subsequent claims paid in full.

Insurers will only be authorised to refuse claims in full if it is decided the consumer acted 'dishonestly' or 'recklessly’, rather than if they made a mistake. David Hertzell, the law commissioner leading the project at the Law Commission for England and Wales, said: "Our reforms would improve consumer protection, increase consumer confidence and enhance the reputation of the insurance industry.
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