Although Insurance Act “day” is formally the 12 August 2016, it has been a reality for any policyholder or underwriter for some time: a placement is not (or should not be) conjured up overnight.
The “fair presentation” (and of course the disclosure of every material fact under the “old regime”) should be the result of a careful consideration of assessment of risk before inception.
For large organisations with complex programmes that are placed through brokers in to the London Market the Insurance Act will have been a reality for some time. There is a wealth of notes and guidance available (including of course all of the BLM Time for Change materials).
Yet, a persistent complaint that we hear is that there has not been enough dialogue between the those placing and accepting risk and their advisors, despite the 18 months between Royal Assent and commencement.
If this is the case, then it was not presaged by the dialogue that was so carefully marshalled by the Law Commissions under the careful steerage of David Hertzell, the then Law Commissioner for England and Wales. The Act reflected a consensus such that all of the provisions (save for “late payment”) were steered through Parliament using the “fast track” process for non-controversial legislation available to the Commission. And, of course, the new law does import some uncertainty as 110 years of the Marine Insurance Act 1906 is slowly ushered away by the new policies and variations to which the new law applies – though the Versloot judgment does confirm that the law is never as certain as we think!
It will perhaps always be the case that where new law is applied to the myriad options and alternatives that arise in the real world of commercial insurance that there can never be enough conversation. The question, to be addressed in our next blog is whether a little less conversation leads to more actions (with apologies to Elvis and to readers)!
Written by Terry Renouf, partner, BLM