15 March 2012
New Act provides protection for insurance consumers
A new Act giving greater protection to consumers who take out insurance policies has received Royal Assent.
The Consumer Insurance (Disclosure and Representations) Act 2012, which is expected to come into force next year, abolishes a consumer’s duty to volunteer information to the insurer and replaces it with a duty to answer questions honestly and reasonably.
If the consumer is careless in his or her answers then a proportionate remedy will be applied, with the test being what would have happened if the insurer had known all the facts.
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