The document discusses the duty of fair presentation under the Insurance Act 2015 in the UK. It states that to meet this duty, an insured must disclose every material circumstance known or that should be known, provide sufficient information for the insurer to ask further questions, and ensure representations of fact or belief are made in good faith. It defines key terms like material circumstances, whose knowledge is attributed to the insured, and what constitutes a reasonable search for information. Failure to meet this duty of fair presentation could allow insurers to avoid the policy or adjust claims.
New unfair contract terms law for small business comes in to effect 12th November 2016. This new law provides protection for small business for unfair terms in standard form contracts.
This White Paper is written by Paul J. Smith, AIF and Gary Sutherland, CIC, MLIS from NAPLIA.
The paper discusses E&O Coverages basic procedures and how the industry has arrived at this point.
The Insurance Act 2015 comes into effect today, meaning that any insurance or reinsurance contract entered into or varied from today will be governed by the Act.
The effects of the Act are far reaching: changing insurance legislation that has been in place for over a century, and impacting on any transaction governed by the laws of England, Wales, Scotland and Northern Ireland, with a potential to affect organisations across the world.
The most significant changes to insurance law in 110 years came into effect in August 2016. The Insurance Act 2015 makes some fundamental changes to what businesses have to do to ensure that their insurance policies are effective and that their claims are paid in full. This webinar looks at the changes that have been made, what businesses need to do in order to comply with new rules on disclosure and how the new remedies for breach are to be applied. The Act applies to all policies governed by the laws of England, Wales, Scotland and Northern Ireland which are taken out, renewed or varied on or after 12 August 2016. Accordingly, it is essential that all UK businesses have a full understanding of the new rules.
New unfair contract terms law for small business comes in to effect 12th November 2016. This new law provides protection for small business for unfair terms in standard form contracts.
This White Paper is written by Paul J. Smith, AIF and Gary Sutherland, CIC, MLIS from NAPLIA.
The paper discusses E&O Coverages basic procedures and how the industry has arrived at this point.
The Insurance Act 2015 comes into effect today, meaning that any insurance or reinsurance contract entered into or varied from today will be governed by the Act.
The effects of the Act are far reaching: changing insurance legislation that has been in place for over a century, and impacting on any transaction governed by the laws of England, Wales, Scotland and Northern Ireland, with a potential to affect organisations across the world.
The most significant changes to insurance law in 110 years came into effect in August 2016. The Insurance Act 2015 makes some fundamental changes to what businesses have to do to ensure that their insurance policies are effective and that their claims are paid in full. This webinar looks at the changes that have been made, what businesses need to do in order to comply with new rules on disclosure and how the new remedies for breach are to be applied. The Act applies to all policies governed by the laws of England, Wales, Scotland and Northern Ireland which are taken out, renewed or varied on or after 12 August 2016. Accordingly, it is essential that all UK businesses have a full understanding of the new rules.
The Insurance Act 2015 Finch Insurance Brokers ltdJo Kennedy
The Insurance Act 2015 is a new piece of legislation that relates to commercial insurance and comes into force on 12 August 2016. The Act will result in some changes to the way that we work, in particular to the information provided, how this is collected and presented to insurers and the way that claims are handled. If you would like more information please contact us at info@finchib.co.uk.
(http://optimuminsurance.com.au/ProductsServices/ProfessionalRisksInsurance/ProfessionalIndemnityInsurance.aspx) - Professional indemnity insurance policies protect an individual and/or company from claims made against them by a third party for financial compensation arising from a breach of their professional duty.It's essential protection for professional consultants who provide a service, including design and advice.
A surety bond is a financial instrument through which an insurance company guarantees the successful performance of an Aon
client to a third party, known as a beneficiary or employer. It is a written agreement that provides compensation in the event
that specified obligations are not performed within a stated period.
The Insurance Act 2015 Finch Insurance Brokers ltdJo Kennedy
The Insurance Act 2015 is a new piece of legislation that relates to commercial insurance and comes into force on 12 August 2016. The Act will result in some changes to the way that we work, in particular to the information provided, how this is collected and presented to insurers and the way that claims are handled. If you would like more information please contact us at info@finchib.co.uk.
(http://optimuminsurance.com.au/ProductsServices/ProfessionalRisksInsurance/ProfessionalIndemnityInsurance.aspx) - Professional indemnity insurance policies protect an individual and/or company from claims made against them by a third party for financial compensation arising from a breach of their professional duty.It's essential protection for professional consultants who provide a service, including design and advice.
A surety bond is a financial instrument through which an insurance company guarantees the successful performance of an Aon
client to a third party, known as a beneficiary or employer. It is a written agreement that provides compensation in the event
that specified obligations are not performed within a stated period.
With an ever-changing political scene and limited time left to conclude the negotiations for the United Kingdom’s (UK) exit from the European Union (EU), attention is now beginning to turn to the potential consequences of Brexit. This paper discusses the issues that insurers face and considers the interplay between insurers’ contractual obligation to continue to service policies (including paying claims) versus the practical impact that local regulation might have on their ability to do so.
IFRS Report - Important upcoming accounting changes Graeme Cross
The new IFRS 9 rules effective January 2018, and equivalent US GAAP standards (ASU 2016-13) effective in 2019, are aimed at
increasing the accuracy and transparency of how credit risk is represented on a company’s Balance Sheet and P&L. Both new
standards include requirements around the use of both historic as well as forward looking credit information in order to calculate
the provisions for credit losses (Expected Credit Losses).
Aon’s cyber capabilities can support organisations in embracing
a risk based approach. This facilitates the deployment of a
more effective cyber insurance strategy to help optimise the
total cost of risk associated with cyber exposures
Reducing an organisation’s property total cost of risk
(TCOR) is fundamental to its operational resiliency and
financial bottom line. Aon Property Laser is a unique
property and business interruption risk management
methodology that incorporates leading-edge diagnostic
and analytical tools to quantify risk exposure. By
identifying and analysing key property performance
indicators, Aon Property Laser helps organisations
to improve their risk profile, while also making the
insurance policy work more effectively should a loss
occur. Our property experts benchmark pre-loss and
post-loss risk management practices, activities and
results, to help assess and optimise an organisation’s
property risk profile.
Many businesses and governments have been reporting on environmental and climate data for over 15 years now, but the way they do is set to change. Following the UN’s Paris
Agreement to address climate risk by cutting greenhouse gas emissions, financial regulators are increasingly concerned about the systemic risks that climate change poses to the financial
system. After the 2008 financial crisis, regulators do not want any disorderly transitions in the market due to a misallocation of capital
Aon has developed a proprietary diagnostic tool to help risk leaders quickly assess their organization’s global supply chain exposures across a variety of key marketplace supply chain indicators.
In the complex and dynamic global risk environment, risk managers play an increasingly vital role in helping their organizations understand, prioritize and manage critical exposures affecting their operations and supply chains.
Today, along with catastrophic property risks, expanding cyber threats, terrorism, supplier insolvency, product integrity and reputational issues, businesses relying on global supply chains must navigate widening geopolitical challenges brought by rising nationalism.
As business leaders, planning, finance and operations executives strive to anticipate how these developments might affect their cross-border trade relationships, effective and forward-looking supply chain risk management is critical to sound decision-making. Aon’s Supply Chain Diagnostic helps clients flag supply chain vulnerabilities and improve resiliency.
Global supply chain management brochureGraeme Cross
Aon’s Approach to supply chain management recognizes the wide spectrum of risks that can negatively impact our clients’ business operations, some of which are common to all industries and others very specific to a particular segment. We bring efficiency to the process by triaging each client’s specific supply chain needs, and deploying a hand-picked team of specialists that can develop industry specific solutions ranging from risk identification and quantification to tailored risk financing programs and claim resolution strategies.
The Aon Global Client Network is the backbone of Aon Risk Solutions’ international network, connecting clients and colleagues with expertise, counsel and resources available in over 120 countries in which Aon Risk Solutions is represented. Aon’s network is the largest majority owned network, unsurpassed in geographic breadth and depth of talent.
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Are you a risk or finance leader of an organization with exposures across multiple territories?
Take our Global Optimization Index survey. The 75 questions are
directly related to international risk management and will help you to measure your company’s risk management practices as compared to Aon’s best practice standards and find areas of focus to enhance the performance of your multinational risk management approach.
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This paper provides an update on the status of the marketplace for environmental insurance as of early 2017. It starts with a look at the environmental risks associated with a number of common industrial, commercial and institutional activities, and then considers various aspects of the marketplace, with a look at the insurance companies that sell environmental coverage, a review of who buys it and what is new in the market for this year.
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Highly publicized attacks on blue chip companies, announcements of alliances formed between insurers, reports of partnerships established with cyber security firms and hiring of renowned experts have all contributed to making cyber one of the hottest topics in the insurance industry. However, behind the hype of the media and the marketing battles fought by insurers and brokers to position themselves as leaders in the market, there is the reality of a genuine opportunity. In this paper, we explore how the cyber insurance market has evolved in recent year
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The EU’s General Data Protection
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the 25th of May 2018, enforcing strict
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globally handling the personal data
of EU individuals.
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comply with GDPR and meet the
ongoing data privacy rights of their
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or 4% of your organisation’s annual
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WINDING UP of COMPANY, Modes of DissolutionKHURRAMWALI
Winding up, also known as liquidation, refers to the legal and financial process of dissolving a company. It involves ceasing operations, selling assets, settling debts, and ultimately removing the company from the official business registry.
Here's a breakdown of the key aspects of winding up:
Reasons for Winding Up:
Insolvency: This is the most common reason, where the company cannot pay its debts. Creditors may initiate a compulsory winding up to recover their dues.
Voluntary Closure: The owners may decide to close the company due to reasons like reaching business goals, facing losses, or merging with another company.
Deadlock: If shareholders or directors cannot agree on how to run the company, a court may order a winding up.
Types of Winding Up:
Voluntary Winding Up: This is initiated by the company's shareholders through a resolution passed by a majority vote. There are two main types:
Members' Voluntary Winding Up: The company is solvent (has enough assets to pay off its debts) and shareholders will receive any remaining assets after debts are settled.
Creditors' Voluntary Winding Up: The company is insolvent and creditors will be prioritized in receiving payment from the sale of assets.
Compulsory Winding Up: This is initiated by a court order, typically at the request of creditors, government agencies, or even by the company itself if it's insolvent.
Process of Winding Up:
Appointment of Liquidator: A qualified professional is appointed to oversee the winding-up process. They are responsible for selling assets, paying off debts, and distributing any remaining funds.
Cease Trading: The company stops its regular business operations.
Notification of Creditors: Creditors are informed about the winding up and invited to submit their claims.
Sale of Assets: The company's assets are sold to generate cash to pay off creditors.
Payment of Debts: Creditors are paid according to a set order of priority, with secured creditors receiving payment before unsecured creditors.
Distribution to Shareholders: If there are any remaining funds after all debts are settled, they are distributed to shareholders according to their ownership stake.
Dissolution: Once all claims are settled and distributions made, the company is officially dissolved and removed from the business register.
Impact of Winding Up:
Employees: Employees will likely lose their jobs during the winding-up process.
Creditors: Creditors may not recover their debts in full, especially if the company is insolvent.
Shareholders: Shareholders may not receive any payout if the company's debts exceed its assets.
Winding up is a complex legal and financial process that can have significant consequences for all parties involved. It's important to seek professional legal and financial advice when considering winding up a company.
1. Aon UK Limited
Insurance Act 2015 - Fair Presentation
The Insurance Act 2015: What is the duty of fair presentation? 1
The Insurance Act 2015:
What is your duty of fair presentation?
In order to meet the duty of fair
presentation, you must:
Disclose every material circumstance that you
know or ought to know, or sufficient
information to put the insurer on notice that it
needs to ask further questions to reveal those
material circumstances; and
Make disclosure in a manner which would be
reasonably clear and accessible to a prudent
insurer; and
Make sure that every material representation
as to a matter of fact is substantially correct,
and every material representation as to a
matter of expectation or belief is made in good
faith.
How does the new ‘duty to
provide sufficient information’
work?
This is not a new duty in its own right. It forms part
of the duty to disclose all material circumstances
and will only apply when you have tried but failed
to provide all material circumstances, and can
show that you have given the insurer a good base
from which to ask further questions.
Has the definition of ‘material
circumstances’ changed?
No, the definition of material circumstance stays
the same as under the current law i.e. a
circumstance (or representation) is material if it
would influence the judgement of a prudent insurer
in determining whether to take the risk and, if so,
on what terms.
Whose knowledge counts as
the ‘insured’s knowledge’?
If you are an insured who is an individual this will
be taken to include your own knowledge and the
knowledge of individuals responsible for your
insurance.
If you are an insured who is not an individual (such
as a company) this will be taken as what is known
to your senior management and the individuals
responsible for your insurance.
The Act describes senior management as “those
individuals who play significant roles in the making
of decisions about how the insured’s activities are
to be managed or organised.” It is intended to
cover the highest level of management of an entity
(for example, the board), but will vary as there is
no “one size fits all”. It will depend on your
organisation’s structure and management
arrangements.
The Act describes individuals responsible for the
insured’s insurance as “as individuals who
participate on behalf of the insured in the process
of procuring the insured’s insurance (whether the
individual does so as the insured’s employee or
agent, as an employee of the insured’s agent or in
any other capacity)”.
This definition is intended to catch all those
individuals who, for example, participate in the
insurance buying process, collate information
about the risk, and negotiate with insurers. These
people could be very junior and it isn’t limited to
people within your organisation, so would include
your broker. However, you won’t be taken to know
confidential information your broker has obtained
from another client or third party which is
unconnected with your insurance contract.
2. Aon UK Limited
Insurancer Act 2015 - Fair Presentation
The Insurance Act 2015: What is the duty of fair presentation? 2
What counts as ‘what the
insured ought to know’?
The Act states that you ought to know what would
have been revealed by a reasonable search of any
information which is available to you (whether the
search is conducted by making enquiries or by any
other means). This includes information held
within your organisation (which can include
persons in addition to senior management and
insurance procurement staff, if the knowledge they
hold is relevant to the insured risk) and by ‘any
other person’.
‘Any other person’ is intended to be interpreted
flexibly so is uncertain. It looks likely to include at
least your agents, individuals and entities that will
have cover under your contract of insurance,
outside advisers (including lawyers, accountants,
brokers and consultants), suppliers/service
providers, and outsourced service partners. What
will be regarded as a reasonable search will be
judged objectively (i.e. compared to other
businesses similar to yours) and will vary based on
the type, size, and complexity of your business.
The larger your business, the more thorough your
search will need to be. If you are only an
individual or small business you will still need to
review your records, speak with staff, and consult
outside advisers where relevant. The precise
meaning of a reasonable search is currently
uncertain. As such, make sure you discuss the
extent of your reasonable search with your broker.
You should also document the search you have
carried out.
What makes a presentation
‘clear and accessible’?
Information must be provided to the insurer in an
ordered, digestible way. This requirement is
designed to prevent, on the one hand, overly brief
or cryptic submissions and, on the other hand,
“data dumping” where the insurer is presented with
an overwhelming amount of undigested
information without any explanation or signposting
as to what is material. If the presentation isn’t
clear and accessible it could amount to a breach of
the duty of fair presentation in its own right.
What happens if I don’t provide
a fair presentation of the risk?
Where deliberate or reckless failure to provide a
fair presentation has occurred, insurers can avoid
the insurance from the date it was entered into or
varied. The insurer may retain any premiums paid.
A failure will be considered deliberate if it was
known that a fair presentation was not being
made. It will have been reckless if there was no
care as to whether or not the duty was breached.
Unless the specific terms of your insurance
contract put you in a better position than under the
Act, for any other breach (for example, an innocent
breach), the remedy will reflect what the insurer
would have done if the insured had made a fair
presentation of the risk:
If the insurer would not have written the
insurance on any terms, then the insurer may
avoid the insurance contract, or variation, and
refuse all claims. The insurer must return the
premium.
If the insurer would have written the insurance
but on different terms (other than premium),
the insurance contract will be treated as if
those different terms apply
If the insurer would have charged a higher
premium, the insurer may proportionally
reduce any claim payment e.g. if the premium
charged is 75% of what the insurer would have
charged, the claim payment will be adjusted to
75% of the total claim.
For more detailed guidance on any of these
points, please speak to your usual Aon
contact.
Copyright Aon UK Limited. All rights reserved.
Aon UK Limited is authorised and regulated by the Financial
Conduct Authority.