06 October 2016
Insurance Act 2015 guidance updated to take account of late payment of claims
The LMA and IUA have published updated editions of their main Guide to the Insurance Act 2015 and Quick Reference Guide for Underwriters, to include the late payment of insurance claims provisions now enacted as part of the Enterprise Act 2016.
The Enterprise Act 2016 will amend the Insurance Act 2015 (which came into force on 12 August 2016) by introducing a new statutory implied term that claims will be paid in a reasonable time. The new provisions take effect on 4 May 2017, a year after the Enterprise Act was passed.
The updated guidance includes an analysis of the Enterprise Act 2016 provisions, an overview of the rules on contractual damages, information on relevant conduct of business rules of the FCA and Lloyd’s minimum standards, further guidance in the context of delegation of claims authority, the position in the subscription market and reinsurance. The Quick Reference Guide has been updated to include a new checklist for underwriters and claims staff on late payment of claims.
The main Guide has also been revised to explain the significance of the UK Supreme Court’s decision earlier this year in the Versloot Dredging BV v HDI Gerling case relating to fraudulent claims and how this refines the related sections of the Insurance Act.
Kees van der Klugt, LMA’s Director of Legal and Compliance, said: “Everyone involved in preparing and agreeing policy wordings, and claims–handling, whether acting for principals or under delegated authority, should become familiar with the new law. The plan was to ensure that the updated material on the Enterprise Act was available well before the 1/1/17 renewal season, and we have achieved that.”
Chris Jones, Director of Market Services at the IUA, said: “The changes introduced by the Enterprise Act are significant and are being carefully studied by IUA member companies. Publication of this new guidance will assist this process and help ensure firms are well prepared as the new provisions take effect.”
The updated guidance has been written by Harry Wright, Barrister of 7 King’s Bench Walk, in association with law firms Clyde & Co, Cooley LLP and Ince & Co and members of the LMA in-house counsel and wordings committees and panels.
The revised main guides are available to download from the LMA website.
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Notes to Editors
For further information please contact:
James Milne, Communications Manager
Lloyd’s Market Association
T 0207 327 8405
The Insurance Act 2015 makes substantial changes to insurance and reinsurance contract law in the UK, including amendments to the Marine Insurance Act 1906. It will therefore affect all contracts where English law is the applicable law. The Act became law in February 2015 and came into force on 12 August 2016 after an 18 month transition period. The Enterprise Act 2016 was passed on 4 May 2016, comes into force on 4 May 2017 and contains the late payment of insurance claims provisions.
About the Lloyd’s Market Association (LMA)
Formed in 2001 and located in the heart of the Lloyd’s Building in the City of London, the Lloyd's Market Association represents the interests of the Lloyd’s underwriting community. All underwriting businesses at Lloyd’s are members, together managing gross premium income of around £27billion per annum.