Tech Startup Growth Hacking 101 - Basics on Growth Marketing
The Insurance Bill 10th December 2014 Clyde & Co
1. The Insurance Bill –
Control and Consequences:
10 Things You Need To Know
December 2014
Nigel Brook and Jon Turnbull
2. 2
Key Point 1 – Basis of the Contract Clauses
Current position
•Basis of the Contract clauses
permitted in non-consumer contracts
Proposals
•Basis of the Contract clauses
abolished (no contracting out)
3. Key Point 2 – Warranties as “Suspensive
Conditions”
Current position
•Insurer discharged from
liability from date of breach
Proposals
•All warranties will be
"suspensive conditions"
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4. 4
Key Point 3 – “Fair Presentation”
Current position
•Must disclose material
circumstances/material
representations must be true
Proposals
•“Fair presentation” must be made:
Sufficient signposts/no “data
dumping”
5. Key Point 4 – Putting the Insurer “on notice”
Current position
•Not asking obvious questions
may be seen as waiver of duty
to disclose
Proposals
•Presentation may be “fair” if
puts insurer on notice that
further inquiries are needed
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6. Key Point 5 – Knowledge: Insureds/Brokers/
Insurers
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Current position
•No statutory guidance re.
whose knowledge within the
insured is important
•Knowledge of broker imputed
to insured – s.19 MIA
Proposals
•Knowledge of senior management
and those responsible for arranging
insurance
•“Reasonable Search” must be made
•Confidential information held by
Agent
•Individuals participating in the
risk/what insurers ought to know:-
7. Key Point 6 – Remedies for Misrep/ND
Current position
•Sole remedy is avoidance
Proposals
•Range of remedies – see over
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8. 8
Remedies for Misrep/ND
CIRCUMSTANCE REMEDY
Deliberate/Reckless Misrep/ND Avoidance – keep premium
Not deliberate/reckless –
would not have written the
policy at all
Avoidance – return premium
Not deliberate/reckless –
would have included a
contractual term
Include contractual term
Not deliberate/reckless –
would have charged more
premium
Reduce claim proportionately
9. 9
Key Point 7 - Fraudulent Claims
Current position
•Insurer not liable to pay claim
•Claim payments already made
can be recouped
Proposals
•Contract can be retrospectively
terminated from date of “fraudulent
act”
•Cover for period before fraudulent
act unaffected
•No obligation to return unearned
premium
10. Key Point 8 - Contracting Out
• Business insurers can contract out (apart from change to Basis
of the Contract clauses).
• Transparency required (depending on size and sophistication of
insured, whether broker is used)
• No “boiler-plate” clauses?
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11. Key Point 9 – Potential for Changes to the Bill
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•Knowledge provisions (section 4)
•Terms reducing risk of particular type of loss etc: can refuse
claim for loss only within that category of risk
•Damages for late payment
•Future Reforms to Insurance Contract Law
12. Key Point 10 – Application of the Act
•18 months from Royal Assent, but:
•Duty of Fair Presentation: new policies and variations to any policies
•Warranties: new policies and variations to such policies
•Fraudulent claims: new policies and variations to such policies
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13. Summary:
1. Basis of the Contract Clauses to be abolished
2. All warranties will be “suspensive conditions”
3. “Fair presentation” must be made
4. Putting insurer “on notice” may be “fair presentation”
5. Knowledge of Insureds/Insurers/Brokers
6. “Proportionate” remedies for misrep/non-disclosure
7. Retrospective termination from date of “fraudulent act”
8. Contracting out generally possible if “transparent”
9. Potential for changes to the Bill
10.Application of the Act
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14. Panel Discussion: Topics
- What impact will the Bill have on claims handling?
- Is the Market intending to update every wording?
- Are brokers being a bit hasty?
- How will we educate our clients?
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