In December 2009, we reported on the Law Commission’s draft Bill on Consumer Insurance Law: Pre-Contract Disclosure and Misrepresentation (click here for our previous blog). The draft Bill applies only to consumer insurance contracts and deals with the issue of what information a consumer must tell an insurer before entering into or varying an insurance contract.

On 17 May 2011, the Government announced that the draft Bill would be taken forward. Mark Hoban MP, the financial secretary to the Treasury, said that “having considered the response to the Treasury’s targeted consultation on the Consumer Insurance (Disclosure and Representations) Bill, the Government have decided to take forward the proposed reforms, when parliamentary time permits“.

Once passed, the Bill will abolish the duty that is currently imposed on consumers to volunteer material facts about everything which a ‘prudent insurer’ would consider relevant. This will be replaced with a duty to take reasonable care to answer the insurer’s questions fully and accurately.

Further discussion on the contents of the Bill can be found in the March 2010 edition of Insurance and Reinsurance Review (click here for a copy).