Consumer Insurance (Disclosure and Representations) Act 2012

Rezumat

This Act reformed the pre-contractual duty of disclosure for consumer insurance contracts. It replaced the consumer's duty of disclosure (derived from the Marine Insurance Act 1906) with a duty to take reasonable care not to make a misrepresentation. The burden shifted to insurers to ask the right questions rather than relying on consumers to volunteer information. The Act provides a proportionate remedy regime depending on whether the misrepresentation was deliberate/reckless, careless, or innocent.

Puncte cheie

• Consumer's duty is to take reasonable care not to make a misrepresentation (s.2(2))
• Abolishes the consumer's duty to volunteer information — the insurer must ask specific questions (s.2(4))
• For deliberate or reckless misrepresentation: insurer may avoid the contract and refuse all claims (Schedule 1, Part 1)
• For careless misrepresentation: remedy depends on what the insurer would have done had it known the truth (Schedule 1, Part 2)
• For innocent misrepresentation (reasonable care was taken): the insurer must pay the claim in full
• A misrepresentation is a 'qualifying misrepresentation' only if the insurer can show it would have acted differently (s.4)

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