In a bid to change the relationship between professional indemnity insurance providers and their customers in a radical way, the Government recently introduced a new commercial insurance bill dealing with the nature of disclosure and representations.
The new legislative proposal shifts the duty of a consumer away from having to fully disclose all pertinent information and onto the shoulders of business insurance providers to specifically query customers in order to obtain all the proper particulars before issuing any policies.
The law on disclosure as it stands now has seen little change since 1906. Ministers have expressed concerns that additional regulatory layers have made the process a complex and confusing one for customers, not to mention an unneeded expense in regards to administration for the insurance industry.
Mark Hoban, Financial Secretary to the Treasury, commented on the new bill by stating that the Government wished to express its commitment to increasing the amount of protection available to consumers when engaged in business with the financial sevices industry. Mr Hoban added that these much-needed reforms to the disclosure rules will aid in meeting this commitment.
The Government had worked hard to act after consulting with all the interested parties in regards to the production of the new bill, said Mr Hoban. As a result of this due diligence on the part of the Government, the new bill has received widespread support from a broad base of sources, the financial secretary remarked.
Insurers and brokers have expressed their support for the new revisions to the disclosure law. Legal groups and consumers have also come forward to support the new legislation as well.