Brokers will face teething troubles but will also benefit from Insurance Act
Brokers will face initial upheaval from the Insurance Act but should also benefit from it.
The Act, which came into force today, is the first overhaul of commercial insurance contract law in 110 years, and is expected to mean big changes for the industry.
Broking firm Yutree managing director Kevin Hancock says it could take a series of legal battles before the industry agrees a standard interpretation of the Act’s new measures.
“It is going to take a series of precedents, where there is a dispute between the insurer, broker and insured, to understand it,” he said.
A big issue for brokers is that they will need to understand their clients’ business better to ensure they comply with the Act’s duty of fair presentation of the risk to insurers.
Ryan Direct Group compliance and central services director Richard McKenzie said: “We all now have clarity but the onus is on the insurer and the broker to ensure that all questions are asked, and that answers are satisfactory.”
But he added: “This should make claims handling easier, removing underwriting and policy validity issues from the claim.”
Subscribers can read our full analysis of the Insurance Act’s implications here.
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