Mulling over the Consumer Insurance (Disclosure and Representations) Act 2012
The Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) came into force in April 2013. CIDRA has changed the landscape — it impacts on any insurer or broker dealing with consumer/personal insurance. The principles behind it are also likely to impact on those dealing with commercial policies in the future.
The principles behind the new law are as follows: CIDRA only applies to consumer insurance contracts; there is a fundamental shift away from the policy holder’s duty of full disclosure (ie, the duty of utmost good faith) — that duty is replaced with a duty to take ‘reasonable care’ not to make a misrepresentation to the insurer; where previously complaints from consumers have been decided by the Financial Ombudsman Service (FOS), it would use the principles behind CIDRA anyway to ensure fair outcomes for consumers, so CIDRA therefore gives a statutory footing for the FOS approach; and basis clauses abolished.
The onus is now on insurers to ensure that all material information is obtained through questions put to the proposer — put simply, if you don’t ask, you don’t get. Therefore, the adequateness of the procedures used by insurers to obtain information will need to be assessed in light of this shift…
If you are registered and logged in to the site, click on the link below to read the rest of the Mills & Reeve briefing. If not, please register or sign in with your details below.
News from Mills & Reeve
News from The Lawyer
Briefings from Mills & Reeve
There is a widespread belief in the concept of ‘common law marriage’, which couples think will protect them when they buy property together. This is incorrect.
Mills & Reeve offers top tips for those looking to move or get their foot on the housing ladder.
Analysis from The Lawyer
The trend for unbundling legal work is advancing through the law firm ranks but there is still resistance in some quarters - namely in-house. We asked why