In Bulletin number 1 we suggested that you speak to insurers to gain their agreement to notify you if they intend to apply a proportionate remedy to any claims after 12th August 2016.
The second issue we want to raise concerns online and non-face to face business where gathering information will be much more difficult if a fair presentation is to be made.
Aviva has announced that for this type of package business they will agree a list of questions that need to be asked and answered accurately, which they will then regard as a fair presentation of the risk.
So the second action point we want to emphasise is that you should contact all the insurers with whom you conduct online package business and ascertain whether they are going to follow Aviva’s lead and if so, what their proposals are.
Where insurers are not going to provide a definitive list of questions we suggest you consider that they might be a greater risk to you and your clients.
One of the key aspects of a fair presentation is that the onus lies on you, the insurance broker (in conjunction with the client), to second guess what the insurer might consider a fair presentation. So, particularly where you do not see the client and/or the risk itself, it may be safer to do business with insurers who are willing to collaborate to ensure a fair deal for the client.
We are also looking to insurers to be much clearer about what information they require in relation to standard moral hazard questions concerning financial history and an insured’s history of convictions or formal censure.
Again we are suggesting that you should be careful about dealing with insurers who are not prepared to specify what information they want in such instances.
We will be preparing individual Insurance Act Bulletins on each topic.
