The Insurance Act 2015

The Insurance Act 2015 (IA 2015) came into force on 12 August 2016 and applies to all contracts of insurance entered into on or after that date, including various categories of property insurance.  The Act represents the most comprehensive update of the statutory framework of English law for insurance contracts since the Marine Insurance Act 1906 (MIA 1906).  This blog explores what has changed, and outlines the new rules.

So, what has changed?

A key difference between the regime provided for in the MIA 1906 and the IA 2015 is the structure introduced by the new framework and the role it sets out for all parties. The IA 2015 aims to bring greater clarity while addressing historic imbalances between insurer and insured.

The IA 2015 covers five broad topics:

• duty of ‘fair presentation’
• proportionate remedies
• warranties and other terms
• fraud
• contracting out

The new duty of 'fair presentation'

Replacing the duty of full disclosure, an insured now has a duty of ‘fair presentation’ of a risk before entering into a contract of insurance. This is one of the key changes introduced overall by the Act, and is set out in detail in our Practice Note Insurance – duty of disclosure. This new duty requires the following:

• disclosure of every ‘material circumstance’ which it ‘knows or ought to know’ about (information is material if it would influence the judgement of a prudent insurer, and ought to be known if it would be revealed by a reasonable search), or
• failing that, disclosure of ‘sufficient informatio