Consumer Insurance (Disclosure and Representations) Act 2012

Pre-contract and pre-variation information

2 Disclosure and representations before contract or variation

(1) This section makes provision about disclosure and representations by a consumer to an insurer before a consumer insurance contract is entered into or varied.

(2) It is the duty of the consumer to take reasonable care not to make a misrepresentation to the insurer.

(3) A failure by the consumer to comply with the insurer’s request to confirm or amend particulars previously given is capable of being a misrepresentation for the purposes of this Act (whether or not it could be apart from this subsection).

(4) The duty set out in subsection (2) replaces any duty relating to disclosure or representations by a consumer to an insurer which existed in the same circumstances before this Act applied.

(5) Accordingly—

(a) any rule of law to the effect that a consumer insurance contract is one of the utmost good faith is modified to the extent required by the provisions of this Act, and

(b) the application of section 17 of the Marine Insurance Act 1906 (contracts of marine insurance are of utmost good faith), in relation to a contract of marine insurance which is a consumer insurance contract, is subject to the provisions of this Act.

3 Reasonable care

(1) Whether or not a consumer has taken reasonable care not to make a misrepresentation is to be determined in the light of all the relevant circumstances.

(2) The following are examples of things which may need to be taken into account in making a determination under subsection (1)—

(a) the type of consumer insurance contract in question, and its target market,

(b) any relevant explanatory material or publicity produced or authorised by the insurer,

(c) how clear, and how specific, the insurer’s questions were,

(d) in the case of a failure to respond to the insurer’s questions in connection with the renewal or variation of a consumer insurance contract, how clearly the insurer communicated the importance of answering those questions (or the possible consequences of failing to do so),

(e) whether or not an agent was acting for the consumer.

(3) The standard of care required is that of a reasonable consumer: but this is subject to subsections (4) and (5).

(4) If the insurer was, or ought to have been, aware of any particular characteristics or circumstances of the actual consumer, those are to be taken into account.

(5) A misrepresentation made dishonestly is always to be taken as showing lack of reasonable care.