Insurance Bill receives Royal Assent

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The Insurance Act 2015, which modernises rules governing the industry has received Royal Assent.

The government estimates British insurers will benefit by about £100m over the next ten years due to lower litigation, transaction and other costs.

The provisions will come into force in August 2016.

The act amends the duty on business policyholders to disclose risk information before entering into insurance contracts, with a duty of "fair presentation" introduced.

Basis of the contract clauses will be abolished so that pre-contractual information supplied to insurers will no longer be converted into warranties.

Breaches of warranty which are irrelevant to the loss which has been suffered. 

The bill also provides clear remedies for when policyholders submit fraudulent claims for insurers.

John Hurrell, chief executive of Airmic, the risk management trade body, said: "We are delighted to see this important bill complete its passage through Parliament. The provisions of the new Insurance Act bring this country's insurance contract law for commercial insurance right up to date and fit for the modern world.

"We will be encouraging our members to have a dialogue with their brokers and insurers to secure the important benefits of the new legal framework as soon as possible."

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