Insurance Act: Market must work together on “fair presentation of risk”
Airmic has announced it will be publishing advice later this year on how to comply with the requirements of the 2015 Insurance Act, with a particular focus on the clauses covering the “fair presentation of risk”.
The guide will urge members to start discussions with their insurers and brokers as soon as possible in order to establish a common interpretation of the legal wording before the implementation date.
The new legal system, due to come into force in August 2016, provides greater protection for insurance holders but places newly defined obligations on the policyholder about the level of risk information that must be presented pre-inception.
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Members wanted for Insurance Act roundtable Do you want to voice your views on the Insurance Act? Airmic is hosting a roundtable in September to debate the issues surrounding the fair presentation of risk and is looking for member to take part. If you’re interested, please email georgina.wainwright@airmic.com. |
Feedback from Airmic members and the wider market has indicated that there is a high level of uncertainty about what will be required. Airmic’s guidance will therefore aim to unpick the legal wording and offer practical advice on how to meet the disclosure requirements described in the Act. The advice will be focused on the following three areas:
- What does “fair presentation” mean?
- What does the Act mean by “knowledge of senior management”?
- What does the Act mean by “information that would be revealed by a reasonable search”?
Georgina Wainwright, research and development manager at Airmic, said that conversations across the market need to happen well in advance of the Act coming into force: “There is certainly room for different interpretations of the requirements for the fair presentation of risk, and this is one of the concerns of our members.
“Our guide will aim to give our members a clearer idea what will be required in practice and we hope they can then speak to their own brokers before the Act comes into force and say, ‘this is how we are interpreting the wording, are you and our insurers happy with that?’”
Over the coming months, the association will be having a series of discussions with members, insurers and brokers to build a common understanding, as well as hosting a roundtable in September to debate the key issues.
Wainwrightadded: “We want Airmic members to be fully involved in these debates, so if anyone is interested in taking part in the roundtable, please get in touch.”