Last amended by Enterprise Act 2016 in 2016. Inserted s.13A, implying a term that insurers must pay claims within a reasonable time, with damages for late payment.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Summary
The Insurance Act 2015 is the most significant reform of insurance contract law in over a century. It replaces the duty of disclosure under the Marine Insurance Act 1906 with a duty of fair presentation, reforms the insurer's remedies for breach (introducing proportionate remedies instead of automatic avoidance), abolishes basis-of-the-contract clauses, and provides a new default regime for late payment of insurance claims.
Key Points
- Replaces duty of disclosure with duty of fair presentation (s.3)
- Insured must disclose material circumstances in a manner reasonably clear and accessible (s.3(3))
- Proportionate remedies for qualifying breaches — avoidance only for deliberate/reckless breaches (s.8, Sch.1)
- Abolishes basis-of-the-contract clauses (s.9)
- Implied term that insurers must pay claims within a reasonable time (s.13A)
- Contracting out permitted but with transparency safeguards (ss.16–17)
- Duty of fair presentation: the insured must disclose every material circumstance known or which ought to be known (s.3)
- Proportionate remedies for non-disclosure (depending on whether deliberate/reckless or innocent)
- Breach of warranty suspends insurer's liability; liability resumes when breach remedied (s.10)
- Abolition of 'basis of contract' clauses (s.9)
- Contracting out is permitted but subject to transparency requirements (s.16)
- Implied term to pay claims within a reasonable time (s.13A, added by Enterprise Act 2016)
Parts & Sections
Amendments History
2016 — Enterprise Act 2016
Inserted s.13A, implying a term that insurers must pay claims within a reasonable time, with damages for late payment.