July 17 Britain's Treasury announced reforms on
Thursday it said would to modernise commercial insurance laws,
hoping to reduce the number of claims-based legal disputes.
The new rules, based on eight years of talks between
companies, underwriters and lawmakers, focus on forcing
businesses to better disclose risk information before buying a
policy, making insurers more flexible about breaches of
warranty, and providing better fixes on dealing with fraudulent
The previous legal framework gave insurers loopholes to
refuse claims for irrelevant reasons, said Airmic, a body that
represents corporate insurance buyers and risk managers.
However, two contentious clauses recommended by lawmakers
were excluded from the Bill, according to the Financial Times.
One of these would have entitled policyholders to damages when
insurers delayed payouts, while the other would have curbed
insurers' ability to reject claims by arguing policyholders
breached terms and conditions. (on.ft.com/1ysdS6r)
The FT said some insurers had complained that these two
measures were unnecessary and risked pushing up premium rates.
"The Bill is a very welcome development," Maurice Tulloch,
CEO of Aviva UK & Ireland GI said, "We've been pushing for some
time for contracts to be easier to understand."
($1 = 0.5844 British pounds)
(Reporting by Richa Naidu in Bangalore, editing by William