Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • October 2015
10

Insurance Act 2015 will restrict insurers' right to void commercial policies

Open-access content Friday 9th October 2015 — updated 5.50pm, Wednesday 29th April 2020

Insurers will no longer be able to void commercial policies out of hand in the event of a non-disclosure under Insurance Act 2015, a lawyer has said.

2

According to Jonathan Drake, partner at Bond Dickinson, under the current legislation if the insured party fails to disclose a "material fact" the insurer is entitled to void the policy regardless of whether the breach is deliberate or reckless.

Speaking at the seminar "Preparing now for the Insurance Act", organised by Bond Dickinson, Drake said under the new regime if the breach was not deliberate or reckless, insurers could only void the policy if the material fact would have prevented the policy been issued in the first place. 

He said if the insurer would have written the risk but on different terms and conditions had they been aware of the material fact, under the new law the policy must be treated as if it had been written on those terms.

If the insurer would have written the risk but for a higher premium, the insurer may reduce the claim "proportionately". 

"For example, if the insurer would have charged a premium that was 50% higher, it would be entitled to reduce the claim amount by 50%," he explained. 

Another key change under the Act is breach of warranty. Drake said under the current legislation, insurers were entitled to terminate the contract from the day of a breach of warranty. 

However, under the new Act, the liability of the insurer will only be suspended until the breach is fixed.

The Act also allows insurers to "contract out", meaning to introduce less favourable terms to the insured. However, Drake said both parties of the policy would have to agree on contracting out. 

"For you to be able to contract out, you have to take sufficient steps to draw the terms to the attention of the insured before the policy is concluded," he said.

Drake added that the insurer must ensure the disadvantageous term would be "clear and unambiguous as to its effect".

The new rules also give insurers more flexibility in how they deal with fraudulent claims. 

The new regime will take effect on 12 August 2016. 

This article appeared in our October 2015 issue of The Actuary .
Click here to view this issue

You may also be interested in...

2

People risk criminal conviction for loaning cars to other drivers who are 'popping to the shops'

UK adults risk a criminal conviction for lending their car to someone who isn’t on their insurance policy, according to Churchill Car Insurance.
Tuesday 13th October 2015
Open-access content
ta filler

FCA proposes 2018 deadline for PPI complaints

The Financial Conduct Authority (FCA) is consulting on a cut-off date for consumers to make payment protection insurance (PPI) complaints.
Monday 5th October 2015
Open-access content
2

Three quarters of insurers 'lack internal skills to innovate'

Insurers see innovation as a significant opportunity for success but most seem to struggle to innovate, according to a KPMG report.
Monday 5th October 2015
Open-access content
ta filler

Five steps insurers need to take to prepare for Solvency II

Insurers have been advised to adopt a five-point plan to get ready for Solvency II, which goes live on 1 January 2016.
Wednesday 14th October 2015
Open-access content
2

UK motorists' use of dash cams doubles

The proportion of drivers in the UK who use dash cams to record their journeys has more than doubled to 9% in the past year, according to a survey.
Wednesday 14th October 2015
Open-access content
ta filler

Increased life expectancy will impact catastrophic claims, warns lawyer

Increases in life expectancy will have a massive impact on insurers liability in cases of catastrophic personal injury claims.
Monday 19th October 2015
Open-access content

Latest from General Insurance

td

Brain power

The latest microchips mimic cerebral function. Smaller, faster and more efficient than their predecessors, they have the potential to save lives and help insurers, argues Amarnath Suggu
Wednesday 1st March 2023
Open-access content
bl

'Takaful' models of Islamic insurance

Ethical, varied and a growing market – ‘takaful’ Islamic insurance is worth knowing about, wherever you’re from and whatever your beliefs, says Ali Asghar Bhuriwala
Wednesday 1st February 2023
Open-access content
il

When 'human' isn't female

It was only last year that the first anatomically correct female crash test dummy was created. With so much data still based on the male perspective, are we truly meeting all consumer needs? Adél Drew discusses her thoughts, based on the book Invisible Women by Caroline Criado Perez
Wednesday 1st February 2023
Open-access content

Latest from October 2015

London busy

UK population to reach 74.3 million by 2039

The UK population is estimated to increase by 9.7 million to 74.3 million in mid-2039, according to official figures.
Friday 30th October 2015
Open-access content
A piggy bank and a calculator © Shutterstock

Cost of financial advice needs to be 'radically reduced'

Citizens Advice is urging a UK government review to explore how to radically reduce the costs of advice for people who don't have a big budget for help.
Friday 30th October 2015
Open-access content
2

'Concerning' gaps in pension trustees' knowledge, says regulator

Larger pension schemes are more likely to be well governed than small and medium-sized schemes, according to research.
Thursday 29th October 2015
Open-access content

Latest from small_opening_image

2

COVID-19 forum for actuaries launched

A forum for actuaries has been launched to help the profession come together and learn how best to respond to the deadly coronavirus sweeping the world.
Wednesday 25th March 2020
Open-access content
2

Travel insurers expect record payouts this year

UK travel insurers expect to pay a record £275m to customers this year as coronavirus grounds flights across the world, the Association of British Insurers (ABI) has revealed.
Wednesday 25th March 2020
Open-access content
2

Grim economic forecasts made as countries lockdown

A sharp recession is imminent in the vast majority of developed and emerging economies as the deadly coronavirus forces businesses to shut down across the world.
Tuesday 24th March 2020
Open-access content

Latest from 10

London busy

UK population to reach 74.3 million by 2039

The UK population is estimated to increase by 9.7 million to 74.3 million in mid-2039, according to official figures.
Friday 30th October 2015
Open-access content
A piggy bank and a calculator © Shutterstock

Cost of financial advice needs to be 'radically reduced'

Citizens Advice is urging a UK government review to explore how to radically reduce the costs of advice for people who don't have a big budget for help.
Friday 30th October 2015
Open-access content
2

'Concerning' gaps in pension trustees' knowledge, says regulator

Larger pension schemes are more likely to be well governed than small and medium-sized schemes, according to research.
Thursday 29th October 2015
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

BPA Transition Manager

London, England / Edinburgh, Scotland
£45000 - £65000 per annum + market leading bonus and benefits
Reference
148878

London Market Pricing Contracts - Inside & Outside IR35

London (Central)
£1000 - £1300 per day
Reference
148877

SME Pricing Director

London (Central), London (Greater)
£225K + bonus + benefits
Reference
148872
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ