The Law Commission has been working for the last
three years on updating insurance law to the modern world.
The latest consultation paper included the
following suggestions:
Damages for late payment
Under English law, an insured is not entitled to
damages for any loss suffered through delay in receiving payment of a valid
claim. This differs from the law in Scotland, and appears increasing anomalous.
It sets out proposals for reform.
Insurers’ remedies for fraudulent claims
The law on this issue is convoluted and confused.
It proposes that fraud should not avoid the contract from the start; instead
the fraudster should forfeit the whole claim and all subsequent claims. In some
circumstances the insurer should be entitled to claim damages from a fraudulent
insured for investigating the claim.
Insurable interest
There is strong support for retaining the
principle of insurable interest for all types of insurance. For indemnity
insurance it propose to replace the mix of archaic statutes and common law with
a clear restatement of the principles. For life insurance, it proposes to widen
the categories of those who may insure the life of another.
